Akari Therapeutics PLC (ADR) (NASDAQ:AKTX)
Shares of Akari Therapeutics PLC (ADR) (NASDAQ:AKTX) fell 29.7% after the biopharmaceutical company announced the pricing of an underwritten public offering of 3.5 million American Depository Shares at $5 per ADS. The company has also granted underwriters a 30-day option for the purchase of additional 522,000 ADS shares.
The company expects gross proceeds of $17.4 million from the offering – assuming underwriters don’t exercise the option to purchase additional shares. Net proceeds from the offering are to be used to fund ongoing clinical development efforts as well as for working capital and other general corporate purposes. The offering should close on or about October 20, 2017, subject to satisfaction of customary closing conditions.
Akari Investors’ Reaction
News of the public offering has not gone well with investors given that, in addition to plunging the company into more debt, the offering will lead to further dilution of the stock. Wednesday’s sell-off accompanied a downtrend that has gripped the stock in recent weeks.
Akari Therapeutics PLC (ADR) (NASDAQ:AKTX) has shed more than 40% in market value over the past month as sellers continue to push the stock lower. The stock is down by more than 30% for the year and on the brink of dropping to multi-year lows.
Amidst the recent sell-off, William Blair upgraded shares of Akari Therapeutics PLC (ADR) (NASDAQ:AKTX) from ‘Market Perform’ to ‘Outperform’ in a research note to investors. The upgrade came at a time when the stock was trading at the $8.80 per share. The firm, at the time, said the shares of the biopharmaceutical Company were undervalued given the value proposition on the development of candidate drug Coversin.
Separately, the developer of inhibitors for acute and chronic inflammation has enrolled three additional patients in the ongoing Phase II COBALT clinical trial of Coversin, in patients with paroxysmal nocturnal Hemoglobinuria (PNH). The addition brings to eight the total number of patients under trial. Four of the patients have already moved to the long-term safety study, Converse.
Akari Therapeutics is to issue an update on al PNH patients at the American Society of Hematology Annual Meeting to be held next month. The company has also announced plans to advance Coversin towards Phase III trials in naïve PNH patients. William Blair puts the success probability of the PNH program at 55% with an estimated peak U.S. sales target of $500 million.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.