Biopharmx Corp (BPMX) Shares Dip on Share Dilution
Biopharmx Corp (NYSEMKT:BPMX) investors are heading for the hills after the healthcare firm announced that it has entered into securities purchase agreements with existing institutional investors to purchase and sale of 6,410,258 shares of common stock at a price of $0.78 per share with 50% warrant coverage (representing warrants to purchase up to 3,205,129 shares of common stock) in a registered direct offering. The warrants will be exercisable at an exercise price of $0.90 per share beginning six months following the closing date and will expire five years from the date they become exercisable. The gross proceeds of the offering are expected to be approximately $5.0 million.
Net proceeds of the offering will be used to advance the BioPharmX dermatology-focused drug delivery and clinical programs, including advancing the company’s lead product BPX-01, and general corporate purposes. The offering is expected to close on April 28, 2017, subject to customary closing conditions.
The agreements would dilute shareholders’ investments, and as such BioPharmX shares are currently dropping nearly 7% to $0.70. BPMX has a 1-year high of $1.22 and a 1-year low of $0.19. The stock’s 50-day moving average is $0.58 and its 200-day moving average is $0.43.
On the ratings front, BPMX has been the subject of a number of recent research reports. In a report issued on March 28, Roth Capital analyst Scott Henry reiterated a Buy rating on BPMX, with a price target of $3.00, which implies an upside of 311% from current levels. On March 27, H.C. Wainwright’s Swayampakula Ramakanth reiterated a Buy rating on the stock and has a price target of $3.00.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Scott Henry and Swayampakula Ramakanth have a yearly average loss of 2.6% and 15.3% respectively. Henry has a success rate of 39% and is ranked #4119 out of 4571 analysts, while Ramakanth has a success rate of 29% and is ranked #4505.
BioPharmX Corp. engages in providing healthcare products through platform technologies for pharmaceutical, over-the-counter and supplement applications in dermatology.