Catalyst Biosciences Sinks After Pricing Secondary Offering

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Catalyst Biosciences Inc. (NASDAQ: CBIO) watched its shares fall on Friday following the announcement of a secondary offering. The company is focused on treatments in the field of hematology and will ultimately use the proceeds from this offering to further this development.

The sole book-running manager and underwriter for the offering is Ladenburg Thalmann.

A total of 930,000 shares of common stock are being sold in the offering. This consists of 13,350 shares of preferred stock convertible into 2.67 million shares of common stock, and total warrants to purchase 1.8 million shares of common stock. There is an overallotment option to purchase up to 540,000 additional shares of common stock and/or additional warrants to purchase up to 270,000 shares of common stock.

The company noted the pricing details in the release:

The offering is comprised of Class A Units, priced at a public offering price of $5.00 per unit, with each unit consisting of one share of common stock and a five-year warrant (each, a warrant) to purchase one-half share of common stock with an exercise price of $5.50 per share, and Class B Units, priced at a public offering price of $1,000 per unit, with each unit comprised of one share of preferred stock, which is convertible into 200 shares of common stock, and a warrant to purchase 100 shares of common stock, also with an exercise price of $5.50 per share.

The conversion price of the preferred stock issued in the transaction, as well as the exercise price of the warrants, are fixed and do not contain any variable pricing features or any price-based anti-dilutive features.

Note that there are no dividend rights for the preferred stock (except to the extent that dividends are also paid on the common stock).

Catalyst expects to receive $18 million in gross proceeds from the offering. The company intends to use the net proceeds from this offering for working capital and general corporate purposes, which may include development of clinical and preclinical product candidates.

Shares of Catalyst were last seen down about 24% at $5.59, with a consensus analyst price target of $24.50 and a 52-week trading range of $4.61 to $50.70.