Catalyst Biosciences Inc (NASDAQ:CBIO)
Catalyst Biosciences Inc. (NASDAQ:CBIO) today announced the pricing of an underwritten public offering of units for gross proceeds of $18 million, prior to deducting underwriting discounts and commissions and offering expenses. That news sent CBIO shares reeling in the pre-market and continue into the regular session.
This morning, shares of nano-cap Catalyst Biosciences Inc. (NASDAQ:CBIO) traded in the pre-market at a high of $7.68 and hit a low of $5.32. This represents a large drop from its recent high on March 28, 2017 of $18.88. On that day CBIO shares more than tripled from their previous day’s close of $5.15 – and volumes were huge. The normally thinly traded CBIO averaged, at the time, about 245,000 shares traded per day but less than two hours into trading on the 28th, over 12.2 million CBIO shares traded hands. The next day CBIO shares opened at $17.80 and closed down at $10.51. The slide has continued since then and CBIO shares gapped down this morning from their $7.35 close of yesterday. This morning’s regular saw CBIO open at $5.54 on volumes approaching 30 times normal.
The offering is comprised of Class A Units, priced at a public offering price of $5.00 per unit, with each unit consisting of one share of common stock and a five-year warrant to purchase 1/2 share of common stock with an exercise price of $5.50 per share, and Class B Units, priced at $1,000 per unit, with each unit comprised of one share of preferred stock, which is convertible into 200 shares of common stock, and a warrant to purchase 100 shares of common stock, also with an exercise price of $5.50/share. A total of 930,000 shares of common stock, 13,350 shares of preferred stock convertible into 2,670,000 shares of common stock, and total warrants to purchase 1,800,000 shares of common stock will be issued in the offering.
In addition, Catalyst has granted the underwriters a 45-day option to purchase up to 540,000 additional shares of common stock and/or additional warrants to purchase up to 270,000 shares of common stock solely to cover over-allotments, if any, at the public offering price per share and per warrant, less the underwriting discounts and commissions.
In March Catalyst Biosciences Inc. (NASDAQ:CBIO) released their Q4 and full year 2016 financial results. For 2016, Catalyst had an EPS loss of -$21.75 but that figure beat analyst expectations by $0.98. However, Catalyst under-achieved in revenues as their 2016 figure of $400,000 missed expectations by $30,000. Reaction was not positive. In the following days, CBIO shares lost 20% of their value.
Catalyst Biosciences Inc. (NASDAQ:CBIO) is a clinical-stage biopharmaceutical company focused on developing novel medicines to address hematology indications. Catalyst is focused on the field of hemostasis, including the subcutaneous prophylaxis of hemophilia and facilitating surgery in individuals with hemophilia. Catalyst’s most advanced program is a potent next-generation coagulation Factor VIIa variant, marzeptacog alfa (activated), that has successfully completed an intravenous Phase 1 clinical trial in individuals with severe hemophilia A or B.
In February, Catalyst Biosciences Inc. (NASDAQ:CBIO) underwent a reverse stock split to stay in compliance with NASDAQ rules regarding low priced stock. Dilution has been an issue for shareholders of CBIO. In 2013, there were 20,000 shares outstanding. By the end of 2016 that number had ballooned to 780,000. Sales have also been going in the wrong direction. In 2012 Catalyst reported sales of $57.9 million. However, that figure was just $400,000 for FY 2016. On a diluted adjusted basis, EPS loss for 2013 was -$409.30. That loss shrank YoY and the EPS loss for CBIO was -$21.75 for 2016.
|Last Price a/o 10:08 AM EST||$ 5.83|
|Market Cap (mlns)||$ 8.38|
|Shares Outstanding (mlns)||1.14|
|Share Float (mlns)||0.92|
|Short Interest Ratio||0.11|
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.