BLU - Why BELLUS Health Stock Fell Today
After the company announced the launch and pricing of its latest public stock offering, shares of BELLUS Health (NASDAQ: BLU) are down by around 12.1% as of 10:53 a.m. Thursday. The offering is for 16,540,541 shares, priced at $9.25 per share, which is currently a slight premium over its open market price of near $8.87. That means the company could raise around $153 million dollars by the time the offering closes on July 18, at the expense of diluting the value of its stock for its shareholders.
There's also a clause that leaves the door open for the purchase of up to another 2,481,081 shares over the next 30 days, which would raise an additional sum of more than $22.9 million.
Management plans to use the cash to proceed with research and development (R&D) of BLU-5937, its therapy for refractory chronic cough that's likely about to enter phase 3 clinical trials. Right now, BELLUS has negligible revenue, nearly $234 million in cash, and trailing-12-month operating expenses of around $72.6 million. So with the help of the capital raised by the offering, it'll have a few years' worth of runway to try to get BLU-5937 commercialized.
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Why BELLUS Health Stock Fell Today