VICTORIA, BC- Clinical-stage drug developer Aurinia Pharmaceuticals has announced the pricing of a secondary public offering for gross proceeds of approximately $150.5 million US.
As part of the offering the company is selling 22.3 million shares at $6.75 per share.
Prior to the announcement, which was made on March 14, Aurinia’s stock had hit an all-time high of $10.50 per share on March 13.
In response Canada’s Motley Fool reported that by offering its shares at $6.75 the next day, new investors received a 36 percent discount. “While it may seem as if investors are getting a raw deal, it should be noted that the stock began 2017 at just $2 per share,” Maxx Chatsko at the Motley Fool said. Chatsko further commented that “there are only 53.45 million shares outstanding today, and the company ended 2016 with less than $40 million in cash. In other words, while the number of shares will be diluted by 41.7%, the company will more than quadruple its cash.”
The Victoria-based company intends to use the cash to initiate a Phase 3 trial for its lead drug candidate, voclosporin, in treating lupus nephritis. The trial will commence in the second quarter.
The drug successfully went through a positive 48-week data Phase 2b trial in 2016 and 2017, and seems on track to becoming the first drug to demonstrate a clear benefit for the disease.
Leerink Partners LLC and Cantor Fitzgerald & Co. are acting as joint book-running managers for the Offering, that is expected to close March 20th.