Investors Cheer BeiGene’s Secondary Offering

By Chris Lange Updated Jan 12, 4:22AM EST · Published Jan 18, 10:45AM EST

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Investors Cheer BeiGene’s Secondary Offering — © Thinkstock

Shares of BeiGene Ltd. (NASDAQ: BGNE) saw a handy gain on Thursday after the company announced that it would be conducting a secondary offering. Usually, companies conducting these offerings see their shares drop to account for the dilution, but in this case investors are cheering the offering, sending shares even higher.

In cases like this where investors appear to be happy with a secondary offering, they’re generally expecting the company to use the funds from the offering to better itself and the share price in the longer run.

The company is offering of 7.43 million American depositary shares (ADSs), each representing 13 of its ordinary shares, at a price to the public of $101.00 per ADS. Also, BeiGene has granted an overallotment option for an additional 495,050 ADSs.

The company expects the gross proceeds from this offering to total roughly $750 million. Keep in mind that BeiGene has a market cap of less than $5 billion, so this offering would constitute about 15% of the total cap.

[nativounit]

The offering is expected to close on January 22 and is subject to customary closing conditions.

Goldman Sachs, Morgan Stanley, Cowen and Leerink Partners are acting as joint book-running managers, and William Blair is acting as the co-manager.

BeiGene is a global, commercial-stage, research-based biotechnology company focused on molecularly targeted and immuno-oncology cancer therapeutics. The company markets Abraxane (nanoparticle albumin–bound paclitaxel), Revlimid (lenalidomide) and Vidaza (azacitidine) in China under a license from Celgene.

BeiGene intends to use proceeds from the offering for working capital and general corporate purposes, including research and development activities.

Shares of BeiGene traded up about 15% at $118.00 on Thursday, with a consensus analyst price target of $99.60 and a 52-week range of $31.74 to $118.95.

[wallst_email_signup]

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.