Arcutis Biotherapeutics Inc shares slid more than 18% in pre-market trading on Friday after the early commercial-stage medical dermatology company announced its intention to raise $100 million in a public equity offering.
Arcutis said it plans to issue 32.5 million of its common shares at a public offering price of $2.50 per share, a notable discount to Thursday’s closing price on the Nasdaq of $3.03.
The financing will also include 7.5 million warrants and the company has granted the underwriters a 30-day option to purchase up to an additional six million shares at the public offering price.
The financing would be significantly dilutive to the existing shareholders of Arcutis Biotherapeutics as the company currently has about 62 million shares outstanding.
Arcutis said it intends to use the net proceeds from the offering to fund the continued development, approval and commercialization of its multiple programs, including for its potential launches in seborrheic dermatitis and atopic dermatitis and further patient expansion within psoriasis, with the remainder being used for working capital and other general corporate purposes.
Morgan Stanley (NYSE:MS), TD Cowen and Guggenheim Securities are acting as book-running managers for the offering.
The financing is expected to close on October 24, 2023.
Shares of Arcutis Biotherapeutic have plunged 80% year to date as of Thursday’s closing price.
Contact Sean at sean@proactiveinvestors.com