After pricing an equity offering that will dilute current investors but help shore up its balance sheet, shares in Heat Biologics Inc (NASDAQ:HTBX) are tumbling 20% as of 9:30 a.m. EST.
This morning, the drug maker announced the pricing of an underwritten public offering of 5,813,950 shares of its common stock, at a public offering price of $0.43 per share, a 23% discount to yesterday’s closing price.
The gross proceeds to Heat from this offering are expected to be approximately $2.5 million before deducting underwriting discounts and commissions, and other estimated offering expenses payable by Heat. In addition, Heat has granted the underwriters a 45-day option to purchase up to 872,093 additional shares of common stock at the public offering price, less the underwriting discounts and commissions. The offering is expected to close on or about November 21, 2017, subject to customary closing conditions.
On the ratings front, Griffin analyst Keith Markey initiated coverage with a Buy rating on HTBX and a price target of $2.25, in a report issued on September 12. The current price target represents a potential upside of 302% from where the stock is currently trading.
To back his bullish call, the analyst wrote, “Heat Biologics has developed a T cell activation platform (TCAP) to initiate or enhance an immune attack against solid tumors. The therapy utilizes an off-the-shelf approach to present a large number of tumor-associated antigens in vivo to drive an immune response. The two central elements of the ImPACT platform are cancer cell lines that are representative of the tumor being treated and a fusion protein consisting of the heat shock protein gp96 and the secretory, constant portion (Fc) of the immune globulin G. Heat is developing a third element for inclusion in its second-generation ComPACT platform. The new addition is a costimulatory agonist that has the ability to augment the initial T cell activation and thereafter favor memory T-cell formation. This therapy has the potential to promote a durable immune response and clinical benefit, notably in two groups that account for most cancer cases, the elderly and individuals with compromised immune systems. As such, we view the Company’s immunotherapies to be far more sophisticated than “vaccines” that also use an antigen-based approach to stimulate the immune system.”
According to TipRanks.com, Markey has a yearly average loss of 33.5%, a 9% success rate, and is ranked #4621 out of 4706 analysts.
Heat Biologics is a clinical-stage biopharmaceutical company. It focuses on developing proprietary cell based immune pan-antigen cytotoxic therapy (ImPACT). The company’s ImPACT platform technology is used to treat patients with a wide array of cancers and infectious diseases. This technology also develops product candidates that consist of live, genetically-modified and irradiated human cancer cells together with immune response stimulator, gp96.