Biotech Values

[DewDiligence]

Addendum on rights offerings:

I participated in one of these transactions about ten years ago (it was not a biotech company). The company eschewed the kinds of complications PRW is undertaking and tried to get away with setting a fixed price for the offering.

It didn’t work.

In a matter of a few days, the share price on the open market dropped below the offering price and the company was forced to lower the offering price accordingly.

By the time the company could prepare the SEC papers for the new, lower offering price, the same thing had happened again: the share price on the open market had fallen below the new, lower offering price.

On the third try, the offering finally went off, but the two whiffs cost the company precious time to secure the money they needed to fund their operations.