Why ImmunoGen, Inc. Dropped Today
Shares of ImmunoGen (NASDAQ: IMGN) are down 11% at 3:29 p.m. EDT after announcing yesterday that it plans to sell 13 million shares through a secondary offering. Investors could be further diluted if the underwriters exercise their option to sell almost 2 million additional shares. The company has about 112 million shares outstanding, so this certainly isn't a minor dilution, but it isn't horrible, either.
The secondary offering will allow ImmunoGen to raise about $100 million of much-needed cash. At the end of the second quarter, the biotech said it had enough cash to fund operations into the second half of 2018, which isn't that long of a runway.
ImmunoGen has made some moves to generate cash, partnering assets and renegotiating previous deals to trade future royalties for upfront cash. Those deals don't dilute shareholders, but they also haven't brought in as much cash as this secondary can.
Source: Fool.com
