Company just sold 7.4m shares at $32. Company had $180m of cash and investments last quarter, and was burning about $9m a quarter. This rate should go down as drug sales kick in, debt pay down will help eventually too. Not sure what the cash is for - my guess is they are going to either ramp up spending to drive Gattex sales or maybe small acquisition? Maybe they are just being prudent and raising cash because they can. Thoughts?
This was dealt with and the company put out a press release immediately that day. No dillution. Read it if you want to know the facts. Anyway, what does that have to do with today, which is startling.
NPS did not sell any shares! Takeda sold their position to Jeffries and Jeffries had to move 7.4 MM shares. Takeda took a $1.15 haircut at $32 and Jeffries thought they would clean up. Cramer spooked the biotechs and Jeffries has a big loss on their hands. Once the shares are liquidated, the stock should bounce back. No new shares were issued!
One final point. Cramer is too broad brush. NPS has 2 big orphan drugs and a substantial royalty stream of $70 MM annually. IMO at the current price The royalty and Gattex support the current market value. Basically you are getting natpara for free. It could potentially double the price a few years out.
I don't agree with you guys! This was a very stupid move. They will be cash flow positive starting next quarter. Why the need for such a massive dilution ... This will retest $26s either today or next week IMO.
Cash does provides cushion just in case - prudent move!
Nice to see 7.4M shares sold at $32 and company strengthening the balance sheet!
For me, it is a positive move by the company.
Also the pricing of $32 is also strong!