Please ensure Javascript is enabled for purposes of website accessibility

Why Impel NeuroPharma Dived by 24% Today

By Eric Volkman – Sep 10, 2021 at 5:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

For investors, the company's price for a new share issue isn't right.

What happened

One of this week's top roller-coaster stocks, biotech Impel NeuroPharma (IMPL 3.09%), experienced another queasy price lurch on Friday. The company's shares fell by almost 24% on the pricing of an upcoming share issue.

So what

After market hours on Thursday, Impel NeuroPharma set the price for its previously announced 3 million-share issue of common stock at $15 per share. The company is also granting the issue's underwriters a 30-day option to buy up to an additional 450,000 shares at that price. The issue should close next Tuesday, Sept. 14, the company said.

A doctor making a consultation.

Image source: Getty Images.

That $15 is well down from Thursday's close of just over $21 per share. It's also significantly south of the $18.65 on which Impel NeuroPharma based its proceeds estimates in the previous prospectus on the sale. 

Impel NeuroPharma reiterated that it aims to use said proceeds "to fund the initial and ongoing commercial launch activities and market development of Trudhesa, advance INP105 into a clinical proof-of-concept trial in patients with [autism spectrum disorder], and for working capital and general corporate purposes."

Now what

Which is why investors shouldn't necessarily be so downbeat about Impel NeuroPharma's cup-in-hand move.

Trudhesa -- a nasal spray that treats migraines -- is the company's first FDA-approved medicine. While it won't be the only product of its kind on the market, it will give the onetime clinical-stage biotech its crucial first source of revenue. It's also encouraging that the company will be channeling capital to develop INP105, which targets acute agitation in patients suffering from bipolar disorder and schizophrenia.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Impel NeuroPharma, Inc. Stock Quote
Impel NeuroPharma, Inc.
$2.67 (3.09%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.