Biocept Inc (NASDAQ:BIOC) shares are tumbling nearly 24% in Friday’s trading session. The reason? The double-digit fall today is occurring in the face of a sizable secondary offering.
Specifically, the company announced an underwritten public offering of 33,333,333 of its common shares. Each share of common stock is being sold together with a common warrant at a combined effective price to the public of $0.45. The warrants will be exercisable immediately at an exercise price of $0.50 per share and will expire five years from the date of issuance.
Biocept is also offering, in lieu of purchasing common stock, Series A convertible preferred stock, to those purchasers whose purchase of common stock in the offering would otherwise result in such purchaser beneficially owning more than 4.99% of Biocept’s outstanding common stock immediately following the consummation of the offering.
Under normal circumstances, a secondary offering that equates to a capital raise of $15 million would tank a small-cap biotech’s share price — especially when it’s priced below the previous day’s closing price like this one (Biocept’s shares closed yesterday at a price of $0.55).
As a reminder, on December 6, Biocept shares tumbled nearly 33% after the company announced that it will be selling 4,925,936 shares of its own stock at a price to the public of $0.68 per share.
On the ratings front, Westpark Capital analyst Lauren Chung assigned a Buy rating on BIOC, in a report issued on October 4. According to TipRanks.com, Chung has a yearly average loss of 39.1%, an 8% success rate, and is ranked #4685 out of 4760 analysts.
Biocept is an oncology laboratory service company, which focuses on the development and marketing of novel laboratory products in the detection of rare cells to include circulating tumor cells. It develops and commercializes proprietary circulating tumor cell and circulating tumor DNA tests utilizing a standard blood sample. The company utilizes cell enrichment and extraction technology for the detection and analysis of circulating tumor DNA tests. It also offers services to other laboratory testing providers, academic institutions, research organizations, biopharmaceutical companies and clinical trial support.