On Monday, our favorite biotech stock Hemispherx Biopharma (HEB), announced that it had agreed to sell up to $18.3 million in common stock and warrants in a registered offering to two institutional investors.
In return for $15 million cash, the new investors received common shares of HEB’s stock at $1.10 per share. Additionally, they will receive Series A warrants to purchase 6,136,364 shares of Hemispherx’ common stock at an exercise price of $1.65 per share. The investors also received 3,000,000 Series II warrants that are exercisable at $1.10 and have a 45 day term.
We believe the terms of the agreement are positive for current shareholders as HEB’s stock was only trading around 60 cents a few days before the announcement. So if these new investors are willing to pay $1.10 per share, that’s a good thing.
Additionally, with this money in bank, Hemispherx is in a much stronger position to negotiate with other parties to help bring Ampligen to market if it’s approved by the FDA for Chronic Fatigue Syndrome (CFS). If they didn’t have this money, they could have been forced to make a deal at less favorite terms.
What’s going on with the volume and stock price? Well, the Company doesn’t know either. Of course, the May 25 PDUFA date is getting closer and may explain, is some part, the extremely high volumes of the past two weeks.