Shares of early commercial-stage medical dermatology company Arcutis Biotherapeutics Inc witnessed a significant drop of over 22% on Friday following the announcement of its intention to raise $100 million through a public equity offering.
At the time of this publication, Arcutis Biotherapeutics Inc. stock (ARQT) has witnessed a decline.
Arcutis Biotherapeutics Inc
Current Price: $2.34
Change : -0.70
Change (%): (-22.94%)
Volume: 11.1M
Source: Tomorrow Events Market Data
The California-based company disclosed its plan to issue 32.5 million common shares at a public offering price of $2.50 per share, marking a notable discount from Thursday’s Nasdaq closing price of $3.03.
In addition to the common shares, the financing will include 7.5 million warrants, and Arcutis has granted the underwriters a 30-day option to acquire up to an additional six million shares at the public offering price.
This financial move is anticipated to result in significant dilution for existing shareholders of Arcutis Biotherapeutics, given the company’s current outstanding shares stand at approximately 62 million.
Arcutis has earmarked the net proceeds from the offering to bolster the ongoing development, approval, and commercialization of its various programs. These initiatives encompass potential launches in seborrheic dermatitis and atopic dermatitis, as well as further patient expansion within psoriasis. The remainder of the funds will be allocated towards working capital and other general corporate purposes.
Morgan Stanley (NYSE:MS), TD Cowen, and Guggenheim Securities have been enlisted as book-running managers for the offering, overseeing the intricate financial details of the transaction.
The financing is slated to conclude on October 24, 2023.
Shares of Arcutis Biotherapeutics have experienced an 80% plummet year to date, as observed from Thursday’s closing price.
The decision of Arcutis Biotherapeutics to initiate a $100 million public equity offering, resulting in over 22% drop in pre-market trading, underscores the company’s strategic move to secure funding for the development and commercialization of its dermatological programs, amid a challenging year for its shares. Investors and industry experts will closely monitor the aftermath of this strategic financial move in the coming weeks.
