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Follow @SmithOnStocks on Twitter for more updates (http://twitter.com/#SmithOnStocks Please read this section carefully for some important disclosures. Who Am I? My name is Larry Smith. My career was spent on Wall Street as a biotechnology and pharmaceuticals analyst and also as Director of... More
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  • Celldex: Equity Offering Is A Positive For The Stock (CLDX, $25.88) 0 comments
    Dec 5, 2013 10:35 AM

    Celldex (NASDAQ:CLDX) has just announced a financing in which the Company has issued 7.0 million shares and will receive net proceeds of $163 million. If the Green Shoe is exercised, as seems likely, shares issued and net proceeds would be 8.05 million and about $187 million, respectively.

    The Company had $136 million of cash as of the end of 3Q, 2013. On a pro forma basis, it has raised the cash position to $323 million. The recent operating cash burn has been $17.5 million per quarter so that at that rate the Company can fund 18.5 quarters of operations as opposed to 7.8 quarters pre-offering.

    The number of shares outstanding is increased from 81.0 to 89.1. At the recent price of $25.88 the market capitalization is now $2.3 billion. This removes the financing overhang for the Company, which was emerging as an issue, and this is a positive for the stock. I think that it is inappropriate to use the term fortress balance sheet for a company burning through $70 million a year. However, this is an exceptionally strong balance sheet for an emerging biotechnology company.

    I have an update on recent rindopepimut results as presented at SNO in the works and I will update my investment thinking in that report.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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