Why Endocyte’s Secondary Offering Is Actually Pushing the Stock Higher
Endocyte filed with the SEC for a secondary offering. In most cases where a company does this, we see the stock drop. However, in this case investors are cheering Endocyte and its secondary offering.
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Endocyte Inc. (NASDAQ: ECYT) filed with the U.S. Securities and Exchange Commission (SEC) for a secondary offering. In most cases where a company does this, we see the stock drop. However, in this case investors are cheering Endocyte and its secondary offering.
The company intends to sell $175 million in common stock, with an overallotment option for underwriters to purchase up to an additional $26.25 million of its common stock.
The underwriters for the offering are Jefferies, Wells Fargo and RBC Capital Markets.
Endocyte intends to use the net proceeds from the proposed offering, if completed, to fund the continued clinical development of its pipeline products and preparation for the commercial launch of 177Lu-PSMA-617, if approved, as well as for working capital and general corporate purposes.
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This offering comes after the company announced an update from the U.S. Food and Drug Administration on Monday. After a meeting with the FDA, it was determined that radiographic progression free survival (rPFS) is an appropriate efficacy endpoint in the ongoing phase 3 VISION trial to support the submission of a New Drug Application (NDA) for full FDA approval of 177Lu-PSMA-617 for the treatment of metastatic castration-resistant prostate cancer.
Should 177Lu-PSMA-617 meet the primary endpoint in the rPFS assessment, with no unexpected safety issues arising and no detriment in overall survival relative to the control arm, then Endocyte intends to submit an NDA to seek full approval in the United States.
In a sense, Endocyte is capitalizing on its success with the FDA to further fund its operations with more money from the gains that it saw earlier this week.
Shares of Endocyte were last seen up about 3% at $19.49, with a consensus analyst price target of $20.67 and a 52-week trading range of $1.36 to $20.85.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
