What happened
The hot-streak biotech stock of the moment, CymaBay Therapeutics (CBAY 0.03%), again rose in price on Tuesday. That extends the company's winning streak on the market following the impressive late-stage clinical results from a key investigative drug. The company's shares rose almost 3% higher on the day on news that it has upsized its coming stock issue.
So what
After market hours on Monday, CymaBay said that it is expanding that issue to a total of $225 million worth of its common stock and warrants; previously, it had targeted gross proceeds of $150 million. That $225 million will consist of just over 12.5 million shares and, in lieu of common shares to certain investors that it did not identify, pre-funded warrants to purchase 583,771 shares.
The stock is to be sold in a public offering at a price of $17.13 per share; the warrants will cost one-tenth of a cent less. The offering's underwriters have been granted a fairly standard 30-day option to buy additional stock, in this case a collective amount of slightly more than 1.97 million shares.
CymaBay expects the issue to close this Thursday, Sept. 17. It reiterated that it will use the net proceeds from it to finance the continued development of that investigative drug, primary biliary cholangitis (PBC) treatment seladelpar. It will also set aside some of the monies for working capital and general corporate purposes.
Now what
In the biotech world, one of the best tailwinds for a drug developer is a successful clinical trial -- the later stage, the better. That's the case for CymaBay, which reported solid results in a phase 3 trial of seladelpar. Investors clearly think the drug has a bright future, and it's very possible Tuesday's price bump won't be the stock's last.