Shares of Definium Therapeutics Inc (NASDAQ:DFTX) fell 3.1% in after-hours trading Monday, following the company's disclosure that it intends to pursue a public offering of common shares and pre-funded warrants totaling $500 million.
The late-stage clinical biopharmaceutical firm said the planned offering would be underwritten and conditioned on market factors. In addition to the initial $500 million proposal, Definium plans to give underwriters a 30-day option to acquire up to $75 million more in common shares at the public offering price, less underwriting discounts and commissions.
Definium stated that net proceeds from the transaction would be allocated to research and development of its product candidates, to activities preparing for potential commercialization of DT120 ODT if it receives approval, and to working capital and general corporate purposes.
Several investment banks have been named to manage the deal. J.P. Morgan, Jefferies, Leerink Partners, and BofA Securities are serving as joint lead bookrunners. Evercore ISI and Stifel are listed as bookrunners, while Oppenheimer & Co. and LifeSci Capital are acting as co-lead managers.
The company reiterated that the offering is subject to market conditions and that there is no assurance as to whether or when the offering might be completed or what the final size or terms would be.
Definium is developing therapeutics aimed at addressing the underlying causes of psychiatric and neurological disorders. The company is headquartered in New York.
Context and immediate market reaction
The announcement of the planned sale coincided with an after-hours decline in Definium's share price. The company framed the offering as a means to fund continued development work, to prepare for potential commercialization of DT120 ODT contingent on approval, and to support general corporate needs.
Operational details
- The offering is planned as an underwritten public sale of common shares and pre-funded warrants totaling $500 million.
- Underwriters have a 30-day option to purchase up to an additional $75 million of common shares at the public offering price, less standard discounts and commissions.
- The allocation of net proceeds includes research and development, commercialization preparation for DT120 ODT if approved, and working capital.
No timeline for the offering's completion was provided, and the company noted that market conditions will determine whether and how the transaction proceeds.