What happened
Coronavirus stock Ocugen (OCGN) didn't end the week on a high note. Shares of the biotech took a more than 4% tumble on Friday on the back of financing news that didn't please investors.
So what
Ocugen divulged in a pair of regulatory filings that it will sell up to $160 million worth of its common stock in an at-the-market (ATM) public offering. This follows the company's original disclosure in late March that it would be launching a new ATM; at the time, the amount was not specified.
In the original prospectus on the issue, Ocugen said it would use the proceeds for "general corporate purposes," a common catchall term frequently used by companies floating new stock. The biotech added that these purposes could be research and development activities and clinical trials, among other items.
Depending on how much freshly issued stock it sells, Ocugen's move could end up being quite dilutive; $160 million equates to nearly 74 million shares. At the moment, according to data compiled by Yahoo! Finance, there are just under 216 million company shares outstanding.
Now what
Ocugen has always been a bit of an outlier among coronavirus stocks. It isn't developing a jab itself, rather it has acquired the exclusive North American commercial rights to Covaxin from its originator, India's Bharat Biotech.
The road to Food and Drug Administration (FDA) authorization in this country has been bumpy, though, with the regulator suspending a phase 2/3 clinical trial of the vaccine earlier this year. Although that suspension has been lifted, it's getting rather late in the day for underdog coronavirus shots. After all, the three authorized or approved for use here have collectively established a strong grip on the market.
So these days, investors are looking for positive news from Ocugen. A dilutive new share issue hardly qualifies.
