What happened

Shares of Belite Bio (BLTE -0.14%) were down 38% Wednesday morning after the clinical-stage biopharmaceutical company said it planned to do an underwritten public stock offering. The company specializes on therapies to treat blindness, diabetes, and liver disease. The stock is down more than 47% to start the year, though it is up more than 4% since its initial public offering on April 29, 2022.

So what

The biotech stock hit a new 52-week low of $14.22 on Wednesday morning after it said that it planned to raise $30 million in a dilutive public offering of 2 million American depository shares (ADS). The offer price is set at $15 per ADS and will expire five years from the issue date. It will have an exercise price of $18 per ADS.

The offering is expected to close around June 2. The dilutive effect of the offering makes the stock worth less to current investors. 

Now what

Though the company doesn't have any approved therapies, its lead candidate, Tinlarebant, has shown promise in late-stage trials to reduce the accumulation of toxins in the eye that lead to Stargardt disease, and contribute to geographic atrophy and dry age-related advanced macular degeneration (AMD). While Stargardt disease is a rare genetic disease -- affecting roughly 10 to 12.5 per 100,000 people, AMD affected roughly 196 million people globally in 2020, and that figure is expected to increase to 288 million by 2040, according to a study published in The Lancet.

To get Tinlarebant to market, the company needs more money. As of the first quarter, it reported it had $37.8 million in cash and lost $6.9 million in the quarter. At that burn rate, the company would run out of cash sometime late next year.