Portage Biotech Shares Tumble After Announcing Proposed Stock Offering
Portage Biotech (NASDAQ; PRTG) is a clinical stage immuno-oncology biotechnology company centred around the development of therapies and treatment towards cancer treatment resistance. The company just announced the pricing of its proposed underwritten public offering of 1,000,000 ordinary shares. Shares are currently down over 26%
The proposed pricing details that each ordinary share will be priced at $23 and the company has also allowed underwriters a 30 day option to purchase up to an additional 150,000 ordinary shares at the public offering price, minus underwriting discounts and commissions. The expecting closing date for the offering is to be June 28, 2021, subject to closing conditions. Cantor Fitzgerald & Co. and Oppenheimer & Co. Inc. are acting as books running managers for the offering.
The offering will accumulate to $23,000,000 in gross proceeds for the company prior to deducting underwriting discounts and offering expenses. Portage Biotech intends on using the money to further develop and accelerate their current projects, specifically, its PORT-2 and PORT-3 clinical programs. The company also plans on preparing the next products to enter the clinic. Finally, a sum of the money will go towards working capital as well as any other general corporate purposes.
A large sum of the money will go towards the acceleration of both the PORT-2 and PORT-3, which are cancer targeting therapies that are still in the clinical stage and awaiting results. The company recently provided an update on a study of another product, the PORT-1. The PORT-1 is intratumoral amphiphilic formulation which safely delivers up to 3 times the cancer killing agents directly to the tumor to immediately reduce cancer burden, break down the cytokine wall, and recruit immune cells to attack residual disease. Preliminary safety and survival data shows that the therapy is well tolerated with direct tumor killing effects.
Upon the news, share prices took a major hit, tumbling nearly 30% in premarket trading and is currently down 26.44% throughout the trading day. Despite the massive hit today, from a broader perspective, the company has shown impressive improvement over this past year, even reaching an impressive new 52W high of $44.98 on June 17. It’s currently up over 238% this year. Currently trading at around $25.60, it has fallen a bit since then. This sort of volatility is far from unknown in the biotech industry, especially of those in the clinical stage.
Today’s dip has many investors anxious about the future ahead. Of course, many are uncertain about the financial stability and volatility of the company. Like many other clinical stage companies, the investors rely not on revenue or financial statements, but the promise of something great in the future. Yet many companies make these promises but burn through the cash and go bankrupt before they can deliver.
However, optimistic investors are hopeful that the current PORT-1, PORT-2 and PORT-3 clinical studies show successful results and that the money raised from the offering can successfully go towards the acceleration and implementation of current and new products, as well as creating a stronger sense of financially stability for both the short and long term.
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Written by Jessica Fang