Achaogen Prices Secondary Offering

By Chris Lange Updated Jan 12, 4:46PM EST · Published Dec 14, 10:05AM EST

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Achaogen Prices Secondary Offering — © Thinkstock

Achaogen Inc. (NASDAQ: AKAO) shares pulled back slightly early in Wednesday’s session after the company announced the pricing of its secondary offering. This company has been on a roll over the past week, going from a $5 stock to as high as the $16 mark. Now Achaogen is looking to cash in on its success and continue to fund its development with this offering.

The company announced that it has priced its 6.5 million share offering at $13.50 per share, with an overallotment option for an additional 975,000 shares. At this price, the entire offering is valued up to roughly $100.9 million. All of the shares in this offering are being offered by Achaogen.

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.

Keep in mind that this company posted an incredible gain on Monday after the firm reported positive results from a 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 seen on Wednesday up fractionally at $14.92, with a consensus analyst price target of $20.20 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.