EDIT - After It Fell 15% in 1 Day Should You Buy The Dip on Editas Stock?
2023-06-20 10:23:00 ET
On June 15, Editas Medicine (NASDAQ: EDIT) saw its shares collapse by 15% after announcing it would be issuing new stock to raise approximately $125 million. The biotech will almost certainly use the funds to continue advancing gene-therapy candidates through its pipeline. And if the stock offering's underwriters are tempted, it could raise an additional $18.8 million.
So is the dip in its shares an opportunity for investors to load up on a growth stock that could one day succeed with its moonshots? Or is it a trap for those chasing a bargain?
To answer the question, it's important to understand the context of the latest share issuance. As a pre-revenue biotech, Editas has two drug development programs in clinical trials, both of which are early-stage; thus, they're at least a handful of years away from being approved for sale, if they ever are. One program aims to treat sickle cell disease (SCD), and the other is seeking an indication for transfusion-dependent beta thalassemia (TDT).
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After It Fell 15% in 1 Day, Should You Buy The Dip on Editas Stock?