Catalyst Pharmaceuticals, Inc. Announces Pricing of Public Offering of Common Stock
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Insights
Catalyst Pharmaceuticals' decision to price an underwritten public offering of 10 million shares at $15.00 each indicates a strategic move to raise capital, totaling $150 million in gross proceeds. This capital infusion is significant for the company's financial health and strategic initiatives. It's essential to assess the offering's price relative to the current market price to understand the potential dilutive impact on existing shareholders. If the offering price is at a discount, it could indicate a willingness by the company to ensure the success of the offering at the expense of immediate shareholder value. Conversely, a premium pricing could reflect strong investor confidence.
The additional 1.5 million share option for underwriters serves as a potential buffer to cover over-allotments, which is a common practice in public offerings. The short-term implications for stakeholders include share dilution, which could depress the stock price temporarily. Long-term implications, however, could be positive if the company utilizes the raised capital effectively for growth initiatives, R&D and potential strategic acquisitions, which could enhance the company's market position and future earnings potential.
The biopharmaceutical sector, where Catalyst operates, is capital-intensive with a high cost of research and development. The success of such a substantial offering reflects investor sentiment towards Catalyst's potential to generate value. It's crucial to analyze the company's pipeline and current market dynamics to gauge whether the raised funds will likely lead to products that meet unmet medical needs or improve upon existing therapies. The timing of the offering and the use of proceeds should align with Catalyst's strategic goals and operational milestones.
Additionally, the market's reception to the offering can influence peer companies considering similar capital-raising efforts. A successful offering by Catalyst may lead to a more favorable fundraising environment for the sector, while a lackluster response could signal investor caution. This offering could set a precedent in the biopharmaceutical industry, particularly for companies of similar size and stage of development.
Public offerings are subject to regulatory scrutiny and Catalyst Pharmaceuticals must adhere to securities laws and regulations. The underwriters' option to purchase additional shares introduces legal complexities, including regulatory disclosures and compliance with the Securities Act of 1933. The offering's success depends on Catalyst's adherence to these regulations, ensuring transparency and fairness in the process. It's imperative for stakeholders to understand the legal framework governing such offerings, as non-compliance could result in severe penalties and undermine investor confidence.
Furthermore, the terms of the underwriting agreement, including discounts and expenses, impact the net proceeds Catalyst will receive. Stakeholders should review these terms carefully as they can significantly affect the actual funding available to the company post-offering. Legal due diligence is crucial in assessing the true financial benefit of the offering to Catalyst and its shareholders.
CORAL GABLES, Fla., Jan. 05, 2024 (GLOBE NEWSWIRE) -- Catalyst Pharmaceuticals, Inc. (“Catalyst” or the “Company”) (Nasdaq: CPRX) announced today the pricing of an underwritten public offering of 10,000,000 shares of its common stock at a public offering price of
BofA Securities, Citigroup, Piper Sandler & Co., Cantor, and Truist Securities are acting as bookrunners for the offering. H.C. Wainwright & Co. and Oppenheimer & Co. are acting as co-lead managers for the offering.
Catalyst plans to use the net proceeds from the offering: (i) to fund the potential acquisition of new product candidates, and (ii) for general corporate purposes.
This offering is being made pursuant to an automatic shelf registration statement (including a prospectus) filed by Catalyst with the Securities and Exchange Commission (“SEC”) on September 8, 2023. The offering is being made only by means of a prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and accompanying prospectus relating to the offering were filed with the SEC and a final prospectus supplement and the accompanying prospectus relating to the offering will be filed with the SEC and will be available at the SEC’s website at https://www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus, when available, may also be obtained by contacting BofA Securities, Attention: Prospectus Department, NC1-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, or by email at dg.prospectus_requests@bofa.com; or Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by telephone at (800) 831-9146.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Catalyst Pharmaceuticals
With exceptional patient focus, Catalyst is committed to developing and commercializing innovative first-in-class medicines that address rare neurological and epileptic diseases. Catalyst's flagship U.S. commercial product is FIRDAPSE® (amifampridine) Tablets 10 mg, approved for the treatment of Lambert Eaton myasthenic syndrome ("LEMS") for adults and for children ages six to seventeen. In January 2023, Catalyst acquired the U.S. commercial rights to FYCOMPA® (perampanel) CIII, a prescription medicine approved in people with epilepsy aged four and older alone or with other medicines to treat partial-onset seizures with or without secondarily generalized seizures and with other medicines to treat primary generalized tonic-clonic seizures for people with epilepsy aged 12 and older. Further, Canada's national healthcare regulatory agency, Health Canada, has approved the use of FIRDAPSE for the treatment of adult patients in Canada with LEMS. Finally, on July 18, 2023, Catalyst acquired an exclusive license for North America for AGAMREE® (vamorolone) oral suspension 40 mg/mL, a novel corticosteroid treatment for Duchenne Muscular Dystrophy. AGAMREE previously received FDA Orphan Drug and Fast Track designations and was approved by the FDA for commercialization in the U.S. on October 26, 2023.
Forward-Looking Statements
This press release contains forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. These include statements regarding Catalyst’s expectations, beliefs, plans or objectives regarding the closing of the public offering and the intended use of net proceeds therefrom. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Catalyst's actual results in future periods to differ materially from forecasted results. A number of factors, including those factors described in Catalyst's Annual Report on Form 10-K for the fiscal year 2022 and its other filings with the U.S. Securities and Exchange Commission (“SEC”), could adversely affect Catalyst. Copies of Catalyst's filings with the SEC are available from the SEC, may be found on Catalyst's website, or may be obtained upon request from Catalyst. Catalyst does not undertake any obligation to update the information contained herein, which speaks only as of this date.
Source: Catalyst Pharmaceuticals, Inc.
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