What happened
After the company announced the launch and pricing of its latest public stock offering, shares of BELLUS Health (BLU) are down by around 12.1% as of 10:53 a.m. Thursday. The offering is for 16,540,541 shares, priced at $9.25 per share, which is currently a slight premium over its open market price of near $8.87. That means the company could raise around $153 million dollars by the time the offering closes on July 18, at the expense of diluting the value of its stock for its shareholders.
There's also a clause that leaves the door open for the purchase of up to another 2,481,081 shares over the next 30 days, which would raise an additional sum of more than $22.9 million.
So what
Management plans to use the cash to proceed with research and development (R&D) of BLU-5937, its therapy for refractory chronic cough that's likely about to enter phase 3 clinical trials. Right now, BELLUS has negligible revenue, nearly $234 million in cash, and trailing-12-month operating expenses of around $72.6 million. So with the help of the capital raised by the offering, it'll have a few years' worth of runway to try to get BLU-5937 commercialized.
Now what
Given how much cash the biotech will have sitting around after the offering closes, initiating new programs might be on the table. Aside from the one that's on the verge of starting phase 3, BELLUS has only one other project, and it's another formulation of BLU-5937 that is still in preclinical testing. The formulation is slated to enter phase 1 trials sometime in the rest of the second half of this year.
