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I have extensive knowledge on drug discovery, also I am interested in fundamental analysis of biotech/pharma stocks. See Seeking Alpha's policy on anonymous authors: http://seekingalpha.com/article/69847-seeking-alpha-policy-on-anonymous-authorship
  • Is VVUS secondary offering similar story to HGSI, DNDN? 2 comments
    Sep 16, 2009 09:47 PM | about stocks: VVUS, HGSI, DNDN
    This is a very similar story to HGSI and DNDN.

    HGSI:

    On 7/20 HGSI popped from $3.32 to $12.51 on positive drug data.

    HGSI announced a 23 million share public offering on 7/27 after the close. The shares dipped below the closing price of $14 after the close, down about 0.87 cents in aftermarket trading.

    The offering priced at $14 on 7/28, the exact closing price of 7/27.

    The stock closed at $14.63 on 7/28 and basically went up from there. It is now around $20 with a continuing upward trend.

    DNDN:

    On April 14 the stock popped from $7.30 to $16.99 on positive trial data.

    On May 7 they issued an additional 10.7 million shares priced at $18.45, a slight discount to the prior closing price.

    The stock closed at $19.24 on May 8 and never looked back. It closed above $20 the next day and continued a strong upward trend. It is now about $27.

    BOTTOM LINE:

    The secondary offerings for both HGSI and DNDN did not impact the stock price (except aftermarket dip after close upon the announcement). The stocks both closed up the next day and only went up from there.

    A secondary offering is just a way to satisfy huge institutional demand and provide the firm with a little extra cash after a blockbuster announcement.

    For VVUS, this eliminates any remaining overhang, gets stronger hands in the game, and strengthens the companies bargaining power. This after hours price is now the floor as we move quickly to the the $20 range as VVUS follows the same trajectory as HGSI and DNDN.

    (posted here for reference, original author: Bionic_research)
    Themes: Biotechnology Stocks: VVUS, HGSI, DNDN
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This post has 2 comments:

  •  
    Penn:

    Dropping in to congratulate you for your call on VVUS. Nice work bro! Just so you know, I thought I had signed up to follow you awhile back and just realized that I had not. So, I'm doing it tonight.

    Congrats again!

    Justin
    2009 Sep 17 03:37 AM Reply
  •  
    Justin,

    Congratulate you for your many good calls and good luck to you too. Nice work, and I am following you.
    On Sep 17 03:37 AM Justin M. Hall wrote:

    > Penn:
    >
    > Dropping in to congratulate you for your call on VVUS. Nice work
    > bro! Just so you know, I thought I had signed up to follow you awhile
    > back and just realized that I had not. So, I'm doing it tonight.
    >
    >
    > Congrats again!
    >
    > Justin
    2009 Sep 19 12:17 AM Reply
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