TESARO Inc (NASDAQ:TSRO) announced that it intends to offer and sell, subject to market and other conditions, 1,750,000 shares of its common stock at an offering price to the public of $135.00 per share, 9% discount to yesterday’s closing price.
The public offering would dilute shareholders’ investments, and as such TESARO shares are currently dropping nearly 14% in early trading.
The gross proceeds from the offering will be approximately $236.3 million. In addition, TESARO has granted the underwriters an option to purchase up to an additional 262,500 shares of its common stock. TESARO estimates that the net proceeds from the offering will be approximately $224.1 million after deducting the underwriting discount and other offering expenses payable by TESARO, but excluding any exercise of the underwriters’ option.
The offering is expected to close on or about November 18, 2016, subject to customary closing conditions. Citigroup, Leerink Partners, Credit Suisse and Wells Fargo Securities are acting as bookrunners, and Baird, FBR, Guggenheim Securities, Raymond James, SunTrust Robinson Humphrey, and Wedbush PacGrow are acting as co-managers for the offering. (Original Source)
On the ratings front, Tesaro has been the subject of a number of recent research reports. In a report issued on November 7, Lake Street Capital analyst Bruce Jackson reiterated a Buy rating on TSRO, with a price target of $150, which represents a potential upside of 13% from where the stock is currently trading. Separately, on November 4, FBR’s Edward White reiterated a Buy rating on the stock and has a price target of $133.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Bruce Jackson and Edward White have a yearly average return of 2.9% and 2.7% respectively. Jackson has a success rate of 58% and is ranked #1770 out of 4214 analysts, while White has a success rate of 38% and is ranked #1213.
Overall, one research analyst has assigned a Hold rating and 9 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $130.17 which is -2.3% under where the stock opened today.
TESARO, Inc. engages in the research and development of biopharmaceutical products. It focuses on oncology-based therapeutics and consists of the following portfolio: Rolapitant IV and Niraparib. The company was founded by Leon Moulder, Jr., Mary Lynne Hedley, and Richard J. Rodgers on March 26, 2010 and is headquartered in Waltham, MA.