Why Neos Therapeutics Shares Are Hitting a New Low

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Neos Therapeutics Inc. (NASDAQ: NEOS) saw its shares sink to a new 52-week low after the company announced that it had priced its secondary offering of common stock. Neos priced its 5.0 million shares at $5 each, with an overallotment option for an additional 750,000 shares. At this price, the entire offering is valued up to $28.75 million. The offering is expected to close on February 8.

Cowen and BMO Capital Markets are acting as joint-book running managers, and JMP Securities is acting as a lead manager for the offering.

This pharmaceutical company is focused on developing, manufacturing and commercializing products utilizing its proprietary modified-release drug delivery technology platform, which it already has used to develop its approved product Adzenys XR-ODT and two product candidates for the treatment of attention deficit hyperactivity disorder (ADHD).

The approved product and two product candidates are extended-release (XR) medications in patient-friendly, orally disintegrating tablets (ODT), or oral suspension dosage forms.

Neos received approval from the U.S. Food and Drug Administration (FDA), for Adzenys XR-ODT, its amphetamine XR-ODT, on January 27, 2016, and began the commercialization of this product on May 16, 2016.

In July 2016, the firm announced that it had completed the bridging study demonstrating that the Cotempla XR-ODT to-be-marketed product was bioequivalent to the clinical trial material, and in December 2016, Neos announced the resubmission of its NDA for Cotempla XR-ODT. Additionally, in November 2016, it announced the submission of an NDA for NT-0201, an amphetamine XR oral suspension.

The company intends to use the proceeds from this offering to further develop its pipeline and fund its studies, as well as paying down its debt. The remainder will be used for working capital and general corporate purposes.

Shares of Neos were last seen down 14% at $4.97 on Friday, with a consensus analyst price target of $21.00 and a 52-week trading range of $4.90 to $11.75.