Shares of Spectrum Pharmaceuticals (SPPI -2.21%), a small-cap biopharmaceutical company that focuses on cancer treatments, are down by 20.2% as of 12:18 p.m. EDT on Thursday, after the drugmaker announced the pricing of a public offering of common stock before the market opened today. Naturally, investors aren't thrilled at the prospect of Spectrum Pharmaceuticals diluting its shareholders, which explains why its stock is plunging today.
Spectrum Pharmaceuticals is offering 21,666,667 shares of its common stock for $3 per share. Also, the company is granting underwriters a 30-day option to purchase an additional 3,250,000 shares. It expects to raise about $65 million in gross proceeds through this public offering of common stock, which should close on Aug. 3. Note that at the end of yesterday's trading session, its shares were worth $3.88 apiece. As of this writing, they're down to roughly $3.08.
On Tuesday, Spectrum Pharmaceuticals' shares soared by more than 20%. The catalyst for these gains was the release of positive data from a clinical trial for one of its pipeline candidates called Poziotinib, which is an experimental treatment for non-small cell lung cancer. Meanwhile, the U.S. Food and Drug Administration is currently reviewing Rolontis, a potential treatment for neutropenia due to myelosuppressive chemotherapy Spectrum Pharmaceuticals submitted for review last year. The healthcare company will use the proceeds from this round of fundraising to prepare for the launch of Rolontis and to advance the development of Poziotinib and other pipeline candidates.