Jaguar Health Inc. (NASDAQ:JAGX)
Jaguar Health Inc. (NASDAQ:JAGX) shares fell over 50% after the natural-products pharmaceutical company announced the pricing of an underwritten public offering of 21.3 million shares. The company expects gross proceeds of $4.25 million from the offering priced at $0.20 a share. The offering should close on or about October 3, 2017.
Investors pushed the stock to a new all-time low on the public offering news after the stock broke a key support level. Jaguar Health Inc. (NASDAQ:JAGX) has already recorded a new 52-week low of $0.17 a share as it remains under immense selling pressure.
The offering appears to have spooked some investors given that it could plunge the company into more debt. The offering could also result in further stock dilution. Jaguar Health Inc. (NASDAQ:JAGX) plans to use proceeds from the offering for general corporate purposes as well as for working capital.
Part of the funds are also to be used for commercialization of the company’s FDA approved human prescription drug Mytesi. The company’s subsidiary Napo Pharmaceuticals has already filed a Chemistry Manufacturing and Controls (CMC) supplement with the U.S Food & Drug Administration (FDA).
Mytesi is approved for symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS. The two companies are currently pursuing approval for its use in the treatment of chemotherapy-induced diarrhea for patients undergoing chemotherapy for cancer. The drug is also being tried for the treatment of rare disease indications for infants and children with congenital diarrheal disorders.
“Chronic diarrhea remains a significant complaint of people living with HIV/AIDS, particularly those who are older and have lived the virus in their gut for over 10 years. This is a growing demographic of the HIV community, and Mytesi® is the only antidiarrheal studied in and U.S. FDA-approved for the symptomatic relief of noninfectious diarrhea,” said Pete Riojas, Napo’s national sales director for Mytesi
Jaguar Health Inc. (NASDAQ:JAGX) subsidiary has already expanded its national sale force as it moves to market Mytesi in the U.S. For starters, the company will target sales in New York, Miami, Atlanta and surrounding regions. The drug is currently available in all the 50 states through the Medicaid program. It is also covered by the top 10 commercial insurance plans, which represent more than 245 million American lives.
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: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.