Shares of Aptose Biosciences (NASDAQ:APTO) were sinking 13.7% lower as of 3:22 p.m. EDT on Thursday. The decline came after the company announced the pricing of a stock offering Wednesday evening.
Secondary stock offerings typically cause share prices to fall. That makes sense. The addition of new shares dilutes the value of existing shares.
Aptose plans to sell 10.5 million new shares at a price of $5.25 per share. The volume of shares being offered represents nearly 14% of the company's total outstanding shares. The price of the offering reflects a 16% discount from the Wednesday closing price of the biotech stock.
The good news for Aptose with its stock offering, though, is that it will raise gross proceeds of around $55 million. Even after paying commissions and netting out underwriting discounts and offering expenses, the company will still have plenty of additional cash to fund clinical trials and use for other purposes.
Aptose's stock offering should close around July 20. The company is currently evaluating two pipeline candidates in phase 1 clinical studies -- CG-806 and APT-253. Aptose expects to expand its study of CG-806 as a potential treatment for B-cell malignancies to include acute myeloid leukemia in the second half of 2020.