TLDR
- Olema Pharmaceuticals revealed plans for a public stock offering Tuesday evening
- The offering includes common shares and pre-funded warrants for select investors
- Stock dropped approximately 7% in after-hours trading on the news
- TD Cowen will manage the offering with a 15% greenshoe option for underwriters
- No pricing or size details were disclosed in the announcement
Olema Pharmaceuticals shares slid in extended trading Tuesday after the company unveiled plans for a public offering. The stock fell roughly 7% as investors digested the news.
Olema Pharmaceuticals, Inc., OLMA
The clinical-stage biopharmaceutical company will sell common stock through the offering. Some investors will have the option to purchase pre-funded warrants instead.
Olema will be the sole seller of securities in this transaction. All proceeds from the sale will go directly to the company.
Offering Structure and Terms
The deal includes standard provisions for public offerings. Underwriters will receive a 30-day option to purchase additional shares.
This greenshoe option covers up to 15% more shares than the base offering. The option applies to both common stock and shares underlying pre-funded warrants.
TD Cowen has been tapped as the book-running manager. The investment bank will lead the offering process.
Olema has not revealed the offering size. Pricing details remain undisclosed at this time.
The company stressed that market conditions will determine the final outcome. The offering may not complete as planned.
Market Reaction and Investor Concerns
The after-hours selloff reflects typical market behavior around new stock issuances. Investors worry about dilution when companies add shares to the market.
Each new share reduces the ownership percentage of current stockholders. This explains the immediate pressure on the stock price.
Pre-funded warrants serve a specific purpose in these deals. They allow certain investors to participate while working around ownership restrictions.
These warrants carry minimal exercise prices. They function almost like common stock for practical purposes.
Company Operations
Olema focuses on breast cancer treatments in its development pipeline. The company operates as a clinical-stage firm testing potential therapies.
The stock trades on the Nasdaq exchange under ticker OLMA. Regular trading had concluded before the offering announcement hit the wires.
The November 18 announcement came after market close. The stock’s reaction played out entirely in after-hours trading.
Olema will deploy the offering proceeds for general corporate uses. Most clinical-stage biotech firms use such capital to fund drug development and operations.
The 30-day greenshoe option gives underwriters flexibility. They can use it to stabilize trading if the stock becomes volatile after pricing.
Market conditions and investor appetite will determine when the offering prices. The company and underwriters will gauge demand before setting final terms.
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