Please ensure Javascript is enabled for purposes of website accessibility

Why Trevena Stock Is Plunging Today

By Prosper Junior Bakiny - Aug 12, 2020 at 12:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The biopharmaceutical company announced the pricing of a public offering of common stock.

What happened?

Shares of Trevena (TRVN -4.27%), 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. 

So what

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.

Man watching a downward bound graph and holding his head in panic.

Image source: Getty Images.

Now what

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.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Trevena, Inc. Stock Quote
Trevena, Inc.
$0.21 (-4.27%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/09/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.