Martin Tsvetkov

Cardiome Pharma Corp (NASDAQ:CRME) Plunge Following Dilution Plans

by Martin Tsvetkov July 26, 2016

Speak of the devil, this secondary public offering aims to sell up to 11.5 million shares at $3.00 per share for total gross proceeds of $34.5 million. Ten million of these shares will reportedly be sold at the open market while the rest will exclusively be available to underwriters should they exercise their right to buy the stock within a 30-day period. Upon full execution of the stock offering, CRME's outstanding stock will shoot up from 20.3 million to 31.8 million, which equals to a 37% dilutive effect for current stockholders.

Given that Cardiome's last two fiscal years brought about net losses in excess of $42 million, there seems to be no room for an EPS talk just yet. The company's leading drug candidate, the Brinavess, a novel agent for treating atrial fibbrilation, got the green light in Europe six years ago, and is currently on a Phase 3 trial in America, albeit this trial was put on hold by the FDA shortly after that. As of today, the drug still has not hit the shelves on American soil.

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