What happened

Shares of specialty healthcare company EyePoint Pharmaceuticals (EYPT -1.06%) zoomed into the stratosphere on Wednesday. Investors were obviously very pleased with the company's pricing of an upcoming share-and-warrant issue, expressing their delight by pushing the stock up a whopping 31% on the day.

So what

In sharp contrast to certain previous rounds of capital raising, EyePoint managed to set the new issue at a level only slightly lower than its closing stock price. The stock is priced at $13.75 per share, only 2% below the $14.05 EyePoint closed at on Tuesday.

Eye doctor examining a patient.

Image source: Getty Images.

All told, EyePoint is selling nearly 4.03 million shares of its common stock in the new issue in a public offering. Meanwhile, "certain investors in lieu of common stock" will be able to obtain pre-funded warrants to buy up to more than 3.27 million shares of said equity, at a price of $13.74 apiece. That, plus the exercise price of $0.01 apiece, matches the $13.75 price of the direct share issue.

EyePoint stands to earn just over $100 million from the sale of the stock and warrants. It might take in slightly more as it has granted the issue's underwriters an option to collectively buy an additional 1,095,000 shares of stock at the common offering price.

The specialty biotech hasn't always managed to price its stock at such a narrow discount. With a February 2020 share issue, for example, the unpopularity of its shares at the time necessitated a precipitously steep discount of nearly 26%.

Now what

EyePoint said that it plans to utilize the proceeds of the upcoming issue to advance EYP-1901. This is a promising pipeline drug which recently demonstrated good results, according to interim data in an early-stage clinical trial against wet age-related macular degeneration (wet AMD), a disease that can result in severe loss of vision.

The issue should close on or about this Friday, Nov. 19.