Shares of Chapel Hill drug-development company Cempra fell 10.5 percent Thursday in the wake of its announcement that it expects to reap $93.7 million in net proceeds from its secondary offering.
Cempra reported after the markets closed Wednesday that the nearly 4.2 million shares of stock it is selling were priced at $24 per share, which would generate about $100 million in gross proceeds when the sale is expected to close next week. That’s less than the $175 million target that the company set when it announced the offering a day earlier.
The company’s shares closed at $22.15, down $2.59.
Cempra intends to use the money it raises from its stock sale for the launch of its first drug and for further research and development.
The company is hoping that its lead experimental drug, solithromycin – which is being developed for patients who require antibiotic injections because they are too weak to swallow pills – will be approved by federal regulators later this year as a treatment for community-acquired bacterial pneumonia, a common and potentially fatal infection.
The company’s shares fell 28 percent to $19.29 in October after the company reported unexpected side effects from solithromycin, but the stock has recovered somewhat since then.
Despite side effects that prompted nine patients to drop out of a worldwide clinical trial, the company considered the trial results a success based on its effectiveness. Analysts said they don’t expect the adverse reactions to prevent the drug from being approved, but they could hurt its sales potential.
Cempra also is developing solithromycin for pediatric use and for the treatment of gonorrhea and chlamydia. And on Tuesday the company announced that it had initiated a Phase 2 clinical trial exploring the drug as a treatment for nonalcoholic steatohepatitis, which can lead to complications such as cirrhosis in patients with nonalcoholic fatty liver disease.
Cempra, which has no products on the market, lost $27.6 million in the third quarter after spending $23.5 million on research and development. The company had $182 million in cash as of Sept. 30.
The underwriters of the stock offering have the option to purchase an additional 625,000 shares, which would generate net proceeds of $14.1 million for the company.