Shares of Trevena (NASDAQ:TRVN), a biopharmaceutical company, were down by 16.2% as of 11:27 a.m. EDT on Wednesday, after the drugmaker announced the pricing of a public offering of common stock this morning. Investors aren't thrilled with the company's decision to dilute its existing shareholders.
Trevena intends to offer 21,739,131 shares of its common stock for $2.30 each. The company is also granting underwriters a 30-day option to purchase an additional 3,260,869 shares. Trevena's shares ended Tuesday's trading session at $2.74. As of this writing, the company's stock is priced at $2.30, exactly the same as its public offering. Trevena is aiming for $50 million in gross proceeds through this round of fundraising, which should close by Aug. 14.
On Monday, Trevena announced that the Food and Drug Administration had approved Olinvyk for the management of acute pain. The drug should become commercially available in the fourth quarter. With more than 45 million patients in the U.S. alone, the market for pain management is vast. Trevena estimates that its core area of focus should allow it to bring in more than $1.5 billion in sales within this market. The healthcare company will use the proceeds from its public offering of common stock to support the commercial launch of Olinvyk.