In response to the release of the pricing details of its just-announced secondary common stock offering, shares of Acadia Pharmaceuticals (NASDAQ: ACAD), a commercial-stage biopharma, jumped as much as 16% in early-morning trading on Wednesday. Shares were up about 10% as of 10:34 a.m. EST.
Acadia stated that it is selling 16.2 million shares to the public at a price of $17 per share. The gross proceeds from the deal will be about $275 million before subtracting fees. The underwriters of the deal will also be granted an option to purchase an additional 2.4 million shares.
Image source: Getty Images.
In total, the company could raise about $316 million. That's $86 million more than was previously announced.
What's more, the $17 offering price is the exact same figure as Tuesday's closing price. That suggests that the company didn't have to offer a big discount in order to attract enough demand.
Traders appear to be cheering based on the super-sized deal terms.
If you add this cash infusion to Acadia's existing cash hoard, its bank balance at the end of the year should be around $450 million or so. That should be plenty of capital to fund the company's continued commercial expansion and ongoing clinical trials for at least two more years if current spending rates persist.
With plenty of cash in the bank, investors can now turn their attention to Nuplazid's ramping sales growth and the drug's label expansion potential. There's still a lot of work to do on both fronts, but bulls have plenty of reasons to remain optimistic.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- 3 Stocks That Are Absurdly Cheap Right Now
- 5 Warren Buffett Principles to Remember in a Volatile Stock Market
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- The Must-Read Trump Quote on Social Security
- 10 Reasons Why I'm Selling All of My Apple Stock