Synta Pharmaceuticals Corp. (NASDAQ:SNTA) announced on Tuesday that it has come up with a public offering amounting to 22,000,000 shares of the company’s common stock. The stocks has been priced an underwritten offering of $1.75 for each share. This public offering would result in gross proceeds amounting to approximately $38.5 million before choosing to discount any discounts, commissions or estimated expenses for offering payable by SNTA.
About The Offering
The offering is estimated to close on or duly after April 6, 2015, only on satisfaction of certain customary closing conditions. All the underwriters have been granted a one month (30 days) period in order to purchase additional shares numbering up to an upper limit of 3,300,000.
Cowen and Company, LLC and Jefferies LLC are acting as book-running managers conjointly, for this public offering. Roth Capital Partners, LLC and JMP Securities LLC are co-managers for SNTA public offering.
The securities are offered by SNTA authorities to a statement for shelf registration, previously filed and declared effective by the regulator, Securities and Exchange Commission – SEC.
However, the shares of the eminent clinical stage biopharma company dropped significantly by 20% post-announcement of the public offering of its common stock shares. Such financing deals are quite commonplace in the biopharma landscape, especially pertaining to clinical stage companies that are small yet considerate. It is seen that such events and offerings lead to dropping of investors’ jaws, as is visible in the latest drop in the share prices.
What’s In Focus?
Apparently, SNTA’s future now depends on the pivotal role that last stage trial of GALAXY-2, for treatment of non-smell cancer caused in the lung’s cells. If this test or experiment yields positive results, this might lead SNTA’s clinical candidate would evolve into a primary driver for growth and revenues for Synta Pharmaceuticals Corp. (NASDAQ:SNTA).
Investors need to understand and keep in their minds that SNTA’s heat-shock inhibitor protein 90 does not have certain confidence-inspiring record especially when it comes down to late stage trials. Hence, what happens next should be under scanner and how the company utilizes its proceeds would be assessed from all quarters.