Shares of Biocept Inc (NASDAQ:BIOC) slumped on Wednesday, falling 34% as of 12:48PM EST, following the announcement of a dilutive equity offering.
The biotech firm priced 4,925,936 shares at $ $0.68 apiece, which was well below the $1.15 per share where the stock had been trading yesterday afternoon. In addition to that deep discount, the offering represents nearly 20% dilution for existing shareholders. No warrants to purchase shares of the Company’s common stock will be issued to the investors in connection with the offering.
That said, the offering did raise $3 million, which will allow the company to advance its clinical programs, product development, and pay for working capital and other general corporate purpose. The offering is expected to close on or about December 7, 2017, subject to satisfaction of customary closing conditions.
Dawson James Securities, Inc. and WestPark Capital, Inc. acted as placement agents in connection with the offering, with Dawson James Securities, Inc. acting as the lead placement agent. In connection with the offering, the Company has agreed to issue Dawson James Securities, Inc. a warrant, exercisable beginning in six months, to purchase 246,296 shares of the Company’s common stock with an exercise price equal to $0.85 per share.
On the ratings front, Biocept has been the subject of a number of recent research reports. In a report issued on October 4, Westpark Capital analyst Lauren Chung assigned a Buy rating on BIOC. Similary, Roth Capital’s Chris Lewis maintained a Buy rating on the stock and has a price target of $1.80.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Lauren Chung and Chris Lewis have a yearly average loss of 38.3% and a return of 13% respectively. Chung has a success rate of 8% and is ranked #4618 out of 4729 analysts, while Lewis has a success rate of 56% and is ranked #339.
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.