After the market close, Cell Therapeutics (NASDAQ:CTIC) announced the sale of $20M of its common stock at $1.25 per share along with warrant coverage to a single institutional investor. CTIC plans to use $17.8M in cash on hand and/or raised through this sale to pay for its anticipated 'Modified Dutch Auction' tender offer to retire between $83.2-89.2 million of convertible debt within an expected range of $250-300 per $1,000 par value of the bonds.
The sale announced yesterday includes 30% warrant coverage on the $20M offering price with an exercise price of $1.40 per warrant share for total additional proceeds to CTIC of up to $6.7M if all of the warrants are exercised before their termination date of 5/11/14.
Rodman & Renshaw was the exclusive agent in this transaction and the deal yesterday follows a sale announced last month through which CTIC raised $23.8M through the sale of newly-issued preferred stock to a single institutional investor and the exercise of common stock warrants associated with the transaction. All shares of preferred stock in the deal were subsequently converted into common stock by the investor so that CTIC has no preferred stock outstanding at this time.
I like what CTIC is doing in terms of its turnaround from the brink – including raising cash and reducing its burn rate; but the stock is up over 15-fold since I first wrote about it at 8 cents in early February. While there are still significant upside catalysts for the stock starting with the finalization of the pixantrone NDA filing in June and priority review ruling by the FDA, the risk/reward is drastically different at current levels compared to when it was trading below a dime.
Below are some recent articles to generate new ideas for investors and traders looking for the next big thing in the biomed space.
Disclosure: Long ACCP.OB