Shares of Celcuity (CELC 1.33%) were crashing 19.3% lower as of 10:54 a.m. EDT on Tuesday. The big decline came after the biotechnology company announced the pricing of a secondary stock offering.
It's not surprising in the least that the biotech stock fell hard today. Celcuity plans to issue 2.25 million new shares at a price of $25 per share. Not coincidentally, the company's share price dropped to around that level.
Nor is it surprising that Celcuity decided to conduct a secondary stock offering. Its share price had soared nearly 240% prior to today. Companies like to issue new shares when their stocks are trading near highs because they're able to set the price tag at a higher level.
The good news is that Celcuity expects to raise around $56.25 million in gross proceeds from the stock offering. The company intends to use this money for various purposes, potentially including funding its clinical trials and research and development.
The main thing to watch with Celcuity now is its pipeline progress. The company expects to soon enroll patients in a phase 2 study evaluating its CELsignia diagnostic test with Pfizer's Vizimpro and Xalkori. Interim results from this study should be available in the second half of 2022. Celcuity also hopes to begin a phase 2/3 clinical study evaluating gedatolisib in treating breast cancer in the first half of next year.