KemPharm Prepares for Secondary Offering

By Chris Lange Updated Jan 13, 3:52PM EST · Published Dec 21, 9:10AM EST

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KemPharm Prepares for Secondary Offering — © Thinkstock

KemPharm Inc. (NASDAQ: KMPH) registered an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding a secondary offering. The company expects to price its 3 million shares around Thursday’s closing price of $18.88, with an overallotment option for an additional 450,000 shares. This would value the entire offering at roughly $65.14 million.

The underwriters for the offering are Cowen, RBC Capital Markets, Canaccord Genuity and Oppenheimer.

This is a clinical-stage specialty pharmaceutical company engaged in the discovery and development of proprietary prodrugs that it believes will be improved versions of widely prescribed, approved drugs. KemPharm employs its Ligand Activated Therapy (LAT) platform technology to create prodrugs. The company believes its prodrugs will be eligible for composition-of-matter patent protection.

For a little background: A prodrug is a precursor chemical compound of a drug that is inactive or less than fully active, which is then converted in the body to its active form through a normal metabolic process.
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At the end of November, the patent portfolio consisted of 47 granted patents and 75 pending patent applications worldwide, including a granted U.S. composition-of-matter patent covering KP201, a granted U.S. patent covering KP201-related compositions-of-matter, and granted U.S. composition-of-matter patents covering the prodrugs underlying two of its other product candidates.

The most advanced product candidate, KP201/APAP, consists of KP201, its prodrug of hydrocodone, combined with acetaminophen (APAP). The company is developing KP201/APAP as an immediate release product candidate for the short-term management of acute pain. KemPharm submitted a new drug application (NDA) to the U.S. Food and Drug Administration (FDA) in December 2015, and the company believes it will receive priority review like other abuse-deterrent opioids.

Shares of KemPharm closed Friday up 2.3% at $19.31, with a consensus analyst price target of $34.75 and a 52-week trading range of $10.90 to $26.15.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.