PropThink: Achillion Raises Cash but Market Reacts Positively
August 31, 2012 -
In a press release after the markets closed on Thursday, Achillion Pharmaceuticals (NASDAQ:ACHN) announced that the company will be selling $41.8M in common stock to funds managed by QVT Financial LP. The shares were priced according to Thursdays closing price, at $6.57. The market is taking the fair-value pricing as a good sign for ACHN and shares are up 6% to $7.01 in early trading. Most stock offerings are sold at a discount to the market price. The capital raise also comes at a good time for ACHN; as of its most recent quarterly report released in August the company had enough capital for a little over a year of operations. Achillion is now well ahead of the curve and should be able to sustain operations beyond 2013.
Hepatitis C treatments have been a hot topic this month with the failure of Bristol-Myers Squibb's (NYSE:BMY) developmental compound and the suspension of two of Idenix Pharmaceuticals' (NASDAQ:IDIX) candidates. But alongside these two setbacks, Achillion's HCV program presents a nice play in the weakened field. See our most recent reports on Achillion by clicking here and here.
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