Bio-Path Holdings Inc (NASDAQ: BPTH) is having an interesting day in the market today. After starting the day off in the red at the bell, the stock climbed for the top and seems to be tracking back down at the moment.
The movement follows the company’s announcement surrounding a registered direct offering that will drive crucial funding, but will also dilute the stock. Today, we’ll talk about:
- The offering;
- why there’s such a mixed reaction;
- what we’re seeing from BPTH stock; and
- what we’ll be watching for ahead.
BPTH Stock Goes On A Ride After Offering Announcement
As mentioned above, Bio-Path Holdings has been on a wild ride this morning after the company announced offering news. The news came via press release early this morning.
In the release, the company said that it has entered into multiple definitive agreements with healthcare focused institutional investors. According to the agreements, the company will issue and sell 712,910 shares of BPTH common stock in a registered direct offering.
The offering will take place at a rate of $25.95 per share, and is expected to generate gross proceeds in the amount of around $18.5 million. In the release, the company said that it expects for the transaction to close on or about March 14, 2019. The company also said that it will be using the raised funds for working capital and general corporate purposes.
Why Isn’t BPTH Tanking
In general, when we see a dilutive offering announcement, like the one made by Bio-Path, the stock tends to fall hard in the market. So, why isn’t that the case here?
Investors are looking forward to the company’s continued work to develop a strong pipeline of nanoparticle drugs. The company’s lead candidate, prexigebersen or BP1001, has been the topic of great news as of late.
The treatment has shown strong early results in the treatment of both liquid and solid tumors. Also, BPTH is working on an asset known as BP1002, a drug that is entering into the clinic to be evaluated as an option for lymphoma.
With strong clinical success to date and the targeted indications being such high value ones, investors are excited about the future. They also know that continued development comes at a cost and that BPTH needs funds to operate. As a result, while this transaction was dilutive, it provides the company with necessary funding to continue the development of its robust pipeline and provide increasing value to investors.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. When it comes to Bio-Path Holdings, the news proved to be mixed, and we are seeing an interesting reaction.
As mentioned above, the stock has traded both strongly in the red and far into the green this morning following the news. At the moment, the trend seems to be an upward one.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. CurrentlY (10:16), BPTH is trading at $34.32 per share after a gain of $1.88 per share or 5.80% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on BPTH. In particular, we’re intrested in following the story surrounding the company’s continued work to bring it’s various RNAi targeted therapies to market. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!