Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biopharmaceutical company InterMune
So what: The offering will include 4 million shares of common stock and $100 million in convertible senior notes due in 2018 and include options for the underwriters to purchase up to 600,000 additional shares and an additional $15 million in notes. The company currently has about 60 million shares outstanding and $85 million in long-term convertible notes, so the completion of this offer will notably dilute existing shareholders while also increasing InterMune's debt and leverage.
Now what: InterMune's coffers have been running a little dry lately with cash and equivalents down to $62.5 million last quarter compared to $110.6 million at the end of 2010. The offering will give the company some much-needed cash while it plans to launch its lung disease drug Esbriet in Germany later this week and subsequently throughout Europe early next year. This offering isn't a game changer, even though it has negative implications. It has a lot riding on Esbriet, and the real test will be how the drug performs across the Atlantic and whether it can get the FDA's blessing.
Interested in more info on InterMune? Add it to your watchlist here by clicking here.
Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.