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After a monster run-up on Monday, MyoKardia Inc. (NASDAQ: MYOK) climbed another 145.9% as of 3:30 p.m. during Tuesday's session. It seems investors still giddy about positive clinical trial data released Monday are more than willing to overlook the secondary share offering proposed Monday afternoon.
It wasn't just the data that showed MyoKardia's lead new drug candidate, mavacamten, was capable of lowering a signal associated with irreparable heart damage that thrilled investors. The icing on the cake was the company's intentions to design the upcoming Explorer trial in a manner that could support a new drug application. This would allow the company to send an application to the FDA sooner than expected, and reduce the amount of capital necessary to keep the doors open until it has a product to sell.
The modest proposal to sell 3.5 million shares, and offer another 525,000 to underwriters shows MyoKardia believes it has a shot at shortening the time between now and the submission of its first new drug application.
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The company finished June with 35.46 million shares outstanding, which means longtime shareholders will probably see the count rise by 11.3% after the offering. That stings, but they were probably expecting much worse.
The company finished June with a $117.3 million cash balance after losing about $12.8 million during the second quarter. Selling all 4.025 million shares at recent prices would net the company about $146.3 million before fees.
The company intends to enroll between 200 and 250 patients into the Explorer trial, which is slated to begin before the end of the year. Investors will want to keep an eye open for FDA meeting dates and details that might lengthen the company's anticipated timeline. If all goes according to plan, it looks like MyoKardia could become a commercial stage company before it needs to visit the equity tap again.
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