Shares of Celldex Therapeutics (CLDX -2.08%) were jumping 10.8% higher as of 3:10 p.m. EDT on Tuesday. This marked the second day of big gains for the stock. Celldex's shares skyrocketed on Monday on the company's positive results from a phase 1b study evaluating CDX-0159 in treating the two most common forms of chronic inducible urticaria (hives).
Today's move is likely partially a continuation of momentum related to the encouraging clinical results. However, Celldex also announced after the market closed on Monday that it plans to conduct a public stock offering to raise additional cash.
Normally, biotech stocks fall when a stock offering is announced. That's because these offerings dilute the value of existing shares.
In this case, though, investors appear to be pleased with Celldex's decision to issue new shares. The timing of this move is smart since it takes advantage of the spike in the biotech's share price.
The company should generate gross proceeds of $175 million from the public offering. That's a nice cash stockpile that Celldex will be able to use to advance its pipeline candidates and for other purposes.
Celldex hasn't announced the pricing of its public stock offering yet. It's possible that the company's share price could fall when the price is known. The most important thing to watch with Celldex, though, is its ongoing phase 1b study of CDX-0159. Celldex also plans to target other indications for the experimental drug in the future.