SAN DIEGO - Avidity Biosciences, Inc. (NASDAQ: RNA), a biopharmaceutical company focused on RNA therapeutics, announced its intention to launch a $300 million public offering of its common stock. The company also plans to give underwriters a 30-day option to buy up to an additional $45 million in shares. The offering's completion, size, and terms are currently uncertain.
This move is aimed at raising funds to further develop Avidity's clinical programs and support research and development for its proprietary Antibody Oligonucleotide Conjugates (AOC) platform. The raised capital, along with existing resources, is expected to cover working capital and general corporate expenses.
The securities are offered pursuant to an effective shelf registration statement with the Securities and Exchange Commission (SEC). Avidity has appointed TD Cowen, Leerink Partners, Cantor, Barclays (LON:BARC), and Wells Fargo (NYSE:WFC) Securities as joint bookrunners for the transaction.
Avidity is known for its AOCs, which seek to combine the specificity of monoclonal antibodies with the precision of oligonucleotide therapies. The company's AOC platform has shown the first successful targeted delivery of RNA into muscle tissue and is actively developing treatments for rare muscle diseases such as myotonic dystrophy type 1, Duchenne muscular dystrophy, and facioscapulohumeral muscular dystrophy. Additionally, Avidity is working on expanding its pipeline to include cardiology and immunology programs.
The company's forward-looking statements indicate that the offering's success depends on market conditions and meeting customary closing conditions. These statements are not guarantees of future performance, and actual outcomes may vary.
In other recent news, Avidity Biosciences has been garnering attention from prominent analysts. Wells Fargo reaffirmed its Overweight rating on Avidity Biosciences, highlighting the critical unmet medical needs in the Facioscapulohumeral muscular dystrophy (FSHD) patient community that the company could potentially address. Wells Fargo's price target for the biopharmaceutical company remains steady at $50.00.
In another development, Cantor Fitzgerald initiated coverage on Avidity Biosciences with an Overweight rating, indicating potential for outperformance. The firm's confidence in Avidity's growth prospects and the success of its product pipeline was underlined in their analysis.
Simultaneously, Avidity Biosciences has expanded its board of directors with the appointment of Simona Skerjanec, a pharmaceutical industry veteran. Skerjanec's experience in product commercialization and her background in neurology, cardiology, and rare diseases are expected to enhance Avidity's global presence and advance its clinical programs.
Furthermore, the U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation to Avidity's lead investigational drug, delpacibart etedesiran (del-desiran), for the treatment of myotonic dystrophy type 1 (DM1). This designation is expected to expedite the drug's development and review, potentially addressing the unmet medical need in DM1 treatment. These are some of the recent developments that investors and stakeholders in Avidity Biosciences should closely monitor.
InvestingPro Insights
As Avidity Biosciences (NASDAQ: RNA) seeks to fund its innovative RNA therapeutics through a substantial public offering, potential investors are closely monitoring the company's financial health and market potential. According to InvestingPro data, Avidity holds a market capitalization of $3.67 billion, reflecting the market's optimism about its proprietary AOC platform and pipeline.
Despite the company's ambitious growth plans, its current financials show a negative gross profit margin, with a gross profit of -$199.16 million over the last twelve months as of Q1 2024. This indicates challenges in cost management relative to revenues, which stood at $10.87 million over the same period. Moreover, the company has not been profitable over the past year, with an adjusted P/E ratio of -12.09, suggesting that investors are pricing in future growth rather than current earnings.
However, the company's stock performance tells a story of significant investor confidence, with an impressive 147.18% return over the past year and a 307.32% surge over the last six months. This bullish trend is also supported by the fact that the stock is trading near its 52-week high, at 96.76% of the peak price.
For those considering an investment in Avidity, InvestingPro tips highlight the company's strong liquidity position, with cash reserves exceeding short-term obligations, and its high return over the last year. Yet, the weak gross profit margins and the anticipation by analysts that the company will not be profitable this year are factors to consider. With 11 additional InvestingPro tips available to help investors make informed decisions, those interested can access these insights at https://www.investing.com/pro/RNA. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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