MannKind Corporation (NASDAQ:MNKD) shares inched lower on Wednesday after rising to 52-week highs in the previous session. The reason? The drug maker announced that it entered into definitive agreements with certain institutional investors providing for the purchase of 10,166,600 shares of common stock at a price of $6.00 per share, nearly 11% discount to yesterday’s closing price. The offering is expected to close on or about October 13, 2017, subject to the satisfaction of customary closing conditions.
While offering 11% discount to investors, the public offering would dilute shareholders’ investments,. As such, MannKind shares are dropping nearly 8% to $6.15 in per-market trading. MNKD has a 1-year high of $6.96 and a 1-year low of $0.67. The stock’s 50-day moving average is $2.43 and its 200-day moving average is $1.58.
“With this offering, we have made substantial progress in our efforts to recapitalize the company,” said Michael Castagna, Chief Executive Officer of MannKind.
After deducting the placement agent’s fees, the net proceeds to MannKind are expected to be approximately $57.7 million. MannKind intends to use the net proceeds from the offering for working capital and general corporate purposes.
On the ratings front, MNKD stock has been the subject of a number of recent research reports. In a report released yesterday, H.C. Wainwright analyst Oren Livnat initiated coverage on the stock with a Buy rating and price target of $7.00, which represents a slight upside potential from current levels. Similarly, on October 9, Maxim’s Jason Kolbert maintained a Buy rating on the stock and has a price target of $7.00.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Oren Livnat and Jason Kolbert have a yearly average loss of -3.4% and -4.6% respectively. Livnat has a success rate of 40% and is ranked #3828 out of 4696 analysts, while Kolbert has a success rate of 37% and is ranked #4549.
MannKind is a biopharmaceutical company. It focuses on the discovery, development and commercialization of therapeutic products for diseases, such as diabetes and cancer.