What happened

After the close of Thursday's trading session, Evofem Biosciences (EVFM 9.22%) released its financial results for the fourth quarter and full year ending Dec. 31. Investors did not like what they saw, and the biopharmaceutical company's stock is dropping sharply on Friday as a result. As of 12:28 p.m. EST, Evofem Biosciences' shares were down by 35.6%.

So what

For the fourth quarter of its fiscal year 2020, net sales were $168,000, a significant improvement over the year-ago period, during which it did not report a single dollar in sales.

Still, the company's top line fell short of the $1.7 million consensus analyst estimate. On the bottom line, Evofem Biosciences reported a net loss of $40.6 million, or $0.50 per share, compared to a net loss of $12.7 million ($0.27 per share) it recorded during the prior-year quarter.

The company's bottom line also fell well short of the $0.36 net loss per share analysts on average were expecting. Missing estimates on both the top and bottom lines is never ideal, and it explains why shares of the healthcare company are falling off a cliff today.

Downward-bound graph on a blackboard.

Image source: Getty Images.

Now what

Unfortunately, there is more bad news for investors. Evofem Biosciences filed for a $150 million mixed-shelf offering. A shelf offering allows a company to issue securities periodically, as opposed to all at once. In a mixed-shelf offering, the company in question can issue a mix of securities, including common stock, warrants, and debt securities. These transactions can lead to share dilution over time. Evofem Biosciences' announced mixed shelf offering is probably contributing to its underperformance in the market today.