The shares of Ocugen Inc, a clinical stage biopharmaceutical company based in United States (US), more than tripled on massive volume yesterday (8 February), after it announced a direct offering of stock to institutional investors at a 27 per cent premium, reports marketwatch.com.
The stock offering comes about a week after the company carved out a deal with Bharat Biotech to develop and commercialize the COVID-19 vaccine developed by Bharat Biotech - Covaxin - for the US market.
Covaxin is India's first Indigenous COVID-19 vaccine.
Ocugen’s stock led the Nasdaq's gainers list with a 238.9 per cent rally in afternoon trading, and was the most actively traded on the Nasdaq with volume of 504.7 million shares, which compares with the full-day average of about 63.1 million shares over the past 30 days.
The company said earlier that it entered into agreements with health care-focused institutional investors for the sale of 3 million shares of common stock at $7.65 a share, which was well above Friday's closing price of $5.25.
This is surprising as following the announcement of the deal, the investors were bracing for dilution, writes Joe Tenebruso.
Ocugen ended the third quarter with only $19.3 million in cash reserves and clinical trials are expensive. So, it was expected that the company would sell stock to obtain the cash it needed to fund Covaxin's development in the US.
However, Ocugen was able to price its shares at $7.65, or roughly 46 per cent higher than the price at which they closed on Friday. The high value indicates the optimism of investors in Covaxin.
Investors are confident that Ocugen will finish Covaxin's clinical trials and eventually gain emergency use authorization for the COVID-19 vaccine candidate in the US. If that’s the case, Ocugen would receive a 45 per cent share of the drug's US profits.
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