What happened
Shares of Autolus Therapeutics (AUTL -2.39%) were crashing 35.9% as of 10:34 a.m. ET on Friday. The steep decline came after the biopharmaceutical company announced the price of a public stock offering after the market closed on Thursday.
Autolus said that it plans to offer 75 million American depositary shares (ADS) at a price of $2 each. The company also is giving underwriters of the public offering a 30-day option to buy up to 11.25 million additional shares at the same price.
So what
It's not unusual for biotech stocks such as Autolus to sink after announcing secondary stock offerings. Why? These offerings dilute the value of existing shares.
Autolus stock closed at $2.99 on Thursday. The offering price of $2 is 33% lower than this closing level. It's not surprising at all that shares are falling close to that same percentage today.
The good news about Autolus' stock offering is that it will raise $150 million in gross proceeds. A big portion of this will be used to fund the advancement of the company's obe-cel program.
Autolus reported positive interim results on Thursday from a phase 2 clinical study evaluating obe-cel in treating relapsed/refractory adult acute lymphoblastic leukemia (ALL). The study met its primary endpoint at a pre-planned interim analysis, achieving an overall remission rate of 70%.
Now what
Autolus' phase 2 study of obe-cell in treating ALL continues to move forward. The company plans to include follow-up data from the study as part of its Biologics License Application submission to the Food and Drug Administration (FDA). Autolus hopes to complete this FDA filing by the end of 2023.
