Offering priced at 2.08 with almost 50% of current number of shares being offered
It's about a 46% increase in shares outstanding to be exact, which is nothing short of ridiculous. Suffice to say, I am not pleased by this offering and I wish I'd taken more than 25% of my chips off the table above $3. I was hoping for at most a 5M share offering. I'm actually surprised the stock only ended up down 12% on the day. (Thankfully MNTA served as a perfect hedge for me today with its 12% rise. lol)
This has to be seen as an extremely bearish sign for ACHN landing a lucrative partnership for ACH-1625 absent Phase 2 results. ACHN is still doing at least one more cohort in the Phase 1b, but the heavy dilution lends me to believe that it will take solid Phase 2 results for them to land a nice partnership. I guess there is always the chance that the strenghtened cash position will give ACHN more power at the bargaining table and a potential partner knows they won't be able to lowball ACHN in a partnership deal. Perhaps they can now get a good deal without any additional clinical results from ACH-1625, but I'm quite skeptical.
The one silver lining from today's offering is that ACHN likely has sufficient cash now through 3Q11, if not through year-end 2011.
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