Achaogen Gears Up for Secondary Offering

By Chris Lange Updated Jan 12, 4:48PM EST · Published Dec 13, 3:54PM EST

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Achaogen Gears Up for Secondary Offering — © Thinkstock

Achaogen, Inc. (NASDAQ: AKAO) saw its shares continue to rise late on Tuesday after the company reported that it would conduct a secondary offering. The company said that it would be offering up to 5.75 million shares of common stock with an overallotment option for an additional 862,500 shares. No price has been set for the offering, but at Monday’s closing price ($13.03) this offering would be valued up to roughly $86 million.

Leerink Partners, Stifel and Guggenheim Securities are acting as joint book-running managers for the offering, while SunTrust Robinson Humphrey is acting as lead manager for the offering.

Keep in mind that this company recently posted an incredible gain on Monday after the firm reported positive results from its late-stage trial. Essentially, the company announced that plazomicin met the objective of non-inferiority compared to meropenem for the U.S. Food and Drug Administration (FDA) and achieved superiority for the European Medicines Agency (EMA) primary efficacy endpoints in the Phase 3 EPIC registration trial in patients with complicated urinary tract infections and acute pyelonephritis.

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In the EPIC trial, plazomicin successfully met the objective of non-inferiority compared to meropenem for the FDA-specified primary efficacy endpoints and achieved superiority for the EMA-specified primary efficacy endpoints.

The company will be offering the shares for this secondary offering and thus intends to use the net proceeds:

To fund the ongoing development and preparation for potential commercialization of plazomicin, including the preparation and submission of Achaogen’s New Drug Application (NDA) with the FDA and a Marketing Authorization Application (MAA) with the EMA for plazomicin.
To support its activities during the FDA’s and the EMA’s review and approval process and pre-commercialization marketing activities for plazomicin.
With any remaining proceeds going towards working capital and general corporate purposes, including research and development of additional product candidates.

Shares of Achaogen were last trading up over 16% at $15.18, with a consensus analyst price target of $15.40 and a 52-week trading range of $2.59 to $16.20.

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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.