TrovaGene Inc (NASDAQ:TROV)
The impressive rise of TrovaGene Inc (NASDAQ:TROV) came to an abrupt end in Friday’s trading session after the stock gapped lower on the announcement of a new $7.1 million registered direct offering. The stock had spiked earlier in the week after the company announced an agreement with Novogene for the Chinese launch of NextCollect.
Shareholder Dilution Concerns
TrovaGene Inc (NASDAQ:TROV) is a leading developer of molecular genetic diagnostics for use in clinical research and medical testing. The company boasts of a proprietary technology designed to detect and monitor specific types of tumors using urine and blood samples. The company also offers a Precision Cancer Monitoring (PCM) platform that tracks and quantifies levels of ctDNA in samples under study.
Shares of TrovaGene Inc (NASDAQ:TROV) shed 20.57% in market value in Friday trading session to end the week at $1.12 a share. Friday’s sell-off threatens to push the stock lower as it continues to trade in a $1.10 to $1.17 trading range. 13% of the share’s float are held by short-sellers.
Last week’s sell-off came on growing concerns about the stock’s potential dilution. The company has entered into a securities purchase agreement that will reportedly raise $7.1 million through the sale of 6,191,000 shares of its common stock in the public offering.
The company has also issued warrants for the purchase of up to 4,643,626 shares of common stock in a private placement. The combined purchase price for one registered share of common stock and one unregistered warrant of purchase will be $1.15. TrovaGene Inc (NASDAQ:TROV) expects the offering to close on July 19, 2017 subject to satisfaction of customary closing conditions.
The public and private offering comes on the heels of the company inking a deal with Novogene for the validation of its urine collection and nucleic acid preservation device in the Chinese market. Under the terms of the agreement, the company is to sell to the Chinese company the device in addition to reagents and methods for the extraction of cfDNA.
“We are delighted to work with Trovagene. We look forward to validating their proprietary urine collection, stabilization and cfDNA extraction technology in our laboratories, and to developing innovative urine-based tests for the Chinese market,” said David Jiang, Novogene Senior Vice President.
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: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.