The stock of Cerevel Therapeutics Holdings (CERE -1.09%) is under pressure in response to a secondary offering the company priced this morning. Investors unhappy about the dilutive effect of the offering pushed the stock 11.3% lower as of 12:42 p.m. on Friday.
On Tuesday, shares of Cerevel Therapeutics spiked when the clinical-stage biopharmaceutical company reported successful results for its lead candidate. They're sinking today because the company is offering 16.1 million new shares at $25, which is significantly lower than the company's closing price yesterday.
Cerevel Therapeutics expects to raise about $350 million to fund the development of neuroscience drug candidates that Pfizer (PFE 0.08%) spun off into what is now Cerevel back in 2018. In the lead is CVL-231, a novel new candidate for the treatment of schizophrenia and psychosis-related disorders.
After six weeks, schizophrenia patients treated with 20 mg of CVL-231 per day showed a 17.9-point improvement on the positive and negative syndrome scale (PANSS), and patients treated with 30 mg improved by 19.5 points. As is usually the case with neuroscience trials, the placebo group also improved, but not as much.
The difference between the high-dose cohort and the placebo group was strong enough to elicit a p-value of 0.023. That is enough to be considered statistically significant, but hardly a slam dunk. Everyday investors probably want to keep an eye open for more confirmation from Cerevel Therapeutics before making any bets on CVL-231's success.