Shares of commercial-stage biotech company Insmed (NASDAQ: INSM) dropped by 14.7% on Wednesday. The stock closed on Tuesday at $22.01, but opened sharply lower on Wednesday at $21.08. It fell as low as $18.42 during the session before closing at $18.78. The stock is still closer to its 52-week low of $16.41 than its 52-week high of $34.44, and is down more than 31% this year.

Insmed, which specializes in treatments for rare diseases, announced on Wednesday morning that it was undergoing a $775 million financing round to raise funds for key clinical trials and the potential launches of Arikayce (a treatment for the infection that can cause nontuberculous mycobacterial (NTM) lung disease) and brensocatib (a treatment for bronchiectasis, a condition where damage causes the tubes in the lungs to widen or develop pouches).

The funding round will include a $275 million sale of stock. The dilutive nature of that action will reduce the value of those shares already outstanding, which explains why investors bid them down Wednesday.

Continue reading

Source Fool.com