Shares of MeiraGTx Holdings (NASDAQ:MGTX) -- a clinical-stage biotech company -- are down by 11.51% as of 11:55 a.m. EST on Thursday, following the company's announcement of the pricing of a public offering of common stock. Investors aren't thrilled with the prospect of MeiraGTx diluting its existing shareholders.
The company will sell 5 million ordinary shares through an underwritten public offering at a price of $12.85 per share. It is also granting underwriters a 30-day option to acquire an additional 750,000 shares. Note that MeiraGTx's shares closed Wednesday's trading session at $14.36 apiece. As of this writing, the company's stock is down to $12.83, which is more or less in line with the public offering price. The company intends to raise gross proceeds of about $64.3 million through this transaction, which should close on Nov. 23.
MeiraGTx, which is currently running half a dozen clinical trials, will likely use the funds raised through this public offering of common stock to help finance these trials, among other things. However, it is worth noting that the biotech company had $179.3 million in cash and cash equivalents as of Sept. 30, not to mention $26.6 million in receivables it expected to collect within 90 days of announcing its third-quarter financial results on Nov. 5. At the time, management said the company had enough capital to "fund operating expenses and capital expenditure requirements into 2022." Given these factors, it may have come as a bit of a surprise that MeiraGTx Holdings decided to raise additional capital by way of a public offering of common stock.