Recro Pharma Secondary Offering (UPDATE)

Health and Healthcare

Published: December 8, 2016 11:50 am

Last Updated: January 12, 2020 4:58 pm

This story has been amended due to updated information from the filing. Recro Pharma Inc. (NASDAQ: REPH) saw its shares fall on Thursday after the company announced an update to its secondary offering.

An amended SEC filing showed that the company intends to offer roughly 5.72 million shares and was valued at up to $40 million based upon the last closing price of $6.99 per share. The original filing from a week earlier showed that the offering was originally valued at $57.5 million based upon an $8.00 prior share price.

It’s worth noting that this is coming after the company recently won in its late-stage IV metoxicam trial. The sole book-running manager and underwriter for this offering is Piper Jaffray.

This revenue-generating, specialty pharmaceutical company is primarily focused on developing innovative products for hospitals and ambulatory care settings. Its lead product candidate, injectable meloxicam, is a proprietary injectable form of meloxicam, a long-acting preferential COX-2 inhibitor that has successfully completed five clinical trials in the treatment of moderate to severe pain, including a two recently completed pivotal Phase 3 clinical trials.

As injectable meloxicam is not in the opioid class of drugs, the firm believes it will overcome many of the issues associated with commonly prescribed opioid therapeutics, including addiction, misuse/diversion, respiratory distress and constipation while maintaining analgesic, or pain relieving, effect.

Additionally, Recro is leverage its formulation expertise to develop and manufacture pharmaceutical products using its proprietary delivery technologies for commercial partners who commercialize or plan to commercialize these products. These collaborations result in revenue streams including royalties, profit sharing, research and development and manufacturing, which support continued operations for its subsidiaries as well as research and development of proprietary product candidates.

The company intends to use the net proceeds from this offering to fund the New Drug Application (NDA) filing and regulatory approval process and the initiation of commercial activities for IV meloxicam, its planned IV meloxicam Phase 3B program, investments in pipeline product candidates and for general corporate purposes. Recro will need additional capital to fund the completion of its commercial infrastructure, including milestone payments and post-launch activities for IV meloxicam, subject to regulatory approval.

Shares of Recro Pharma were down 5% at $6.63 in midday trading on Thursday, with a consensus analyst price target of $22.20 and a 52-week trading range of $5.59 to $12.50.

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