Synta Pharmaceuticals Inc. (NASDAQ: SNTA) announced Friday that the pharmaceutical company expects to raise as much as $26.6 million by selling new shares of stock, according to Associated Press.
The company priced an offering of 5.6 million shares at $4.50 per share, which would give it $25 million in gross proceeds and $23.1 million after discounts and expenses are deducted. The underwriters of the offer will have the option to buy another 833,000 shares to cover over allotments, which would bring the company another $3.5 million after expenses.
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As of Oct. 30, Synta had about 34 million shares on the market and the offering could raise that figure 18.8 percent to about 40.4 million shares. The stock closed at $5.46 Thursday, making the offer price a 17.6 percent discount.
In afternoon trading, the shares dropped 92 cents, or 17 percent, to $4.54.
Synta said the offering will close on Wednesday. It will use the proceeds to fund research and development, clinical trials, manufacturing, protecting its intellectual property, and working capital, among other purposes.
Lazard Capital Markets is the bookrunning manager for the offering, while RBC Capital Markets is the co-manager.
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