Immunomedics Falls Sharply on Secondary Offering

By Chris Lange Updated Jan 13, 2:45AM EST · Published Oct 5, 12:35PM EDT

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Immunomedics Falls Sharply on Secondary Offering — © Thinkstock

Shares of Immunomedics Inc. (NASDAQ: IMMU) dropped sharply on Wednesday after the company announced the pricing of its secondary offering. Essentially, the company will price its 10 million shares, each with an accompanying warrant, at $3.00. At this price, the company expects to receive gross proceeds of $30 million from the offering.

Each warrant will be exercisable six months following the date of issuance, and will expire on the second anniversary of the date of issuance and have an exercise price of $3.75.

Wells Fargo is the only underwriter for the offering, and it is acting as the sole book-running manager. The offering is expected to occur on or around October 11.

For some background, Immunomedics is a clinical-stage biopharmaceutical company developing monoclonal antibody-based products for the targeted treatment of cancer, autoimmune disorders and other serious diseases. The company’s advanced proprietary technologies allow it to create humanized antibodies that can be used either alone in unlabeled or “naked” form, or conjugated with radioactive isotopes, chemotherapeutics, cytokines or toxins.

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Using these technologies, Immunomedics has built a pipeline of eight clinical-stage product candidates. Its portfolio of investigational products includes antibody-drug conjugates (ADCs) that are designed to deliver a specific payload of a chemotherapeutic directly to the tumor while reducing overall toxic effects that are usually found with conventional administration of these chemotherapeutic agents.

The most advanced ADCs are sacituzumab govitecan (IMMU-132) and labetuzumab govitecan (IMMU-130), which are in Phase 2 trials for a number of solid tumors and metastatic colorectal cancer, respectively.

The company expects to use the net proceeds from this offering primarily in support of clinical and regulatory activities for IMMU-132, including submission of a NDA to the U.S. Food and Drug Administration (FDA) for accelerated approval in metastatic triple-negative breast cancer, and for working capital and general corporate purposes.

Shares of Immunomedics were down 25% at $2.44 midday Wednesday, with a consensus analyst price target of $5.00 and a 52-week trading range of $1.61 to $5.44.

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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.