Shares of Spero Therapeutics (NASDAQ:SPRO) are sliding today, down 9.5% as of 11:17 a.m. EDT, after the company announced the pricing of a public stock offering.
On Wednesday, Spero announced that it planned to conduct a public offering of 8 million shares, including common stock and shares of non-voting Series D preferred stock. The biotech stock fell 12% on Thursday following the news.
But the slide continued today after Spero revealed that the shares in the public offering will be priced at $10. That's well below yesterday's closing price of $11.12 per share.
Such sell-offs on the heels of public stock offering announcements are common. The good news for Spero is that it expects to raise gross proceeds of around $80 million. The company intends to use this cash for funding the advancement of lead candidate tebipenem HBr and other pipeline candidates, as well as for working capital and other general business purposes.
Spero reported positive results from a phase 3 study of tebipenem HBr in treating adults with complicated urinary tract infection and acute pyelonephritis (kidney infection). The company plans to file for FDA approval of the antibiotic drug candidate in the second quarter of 2021.