Ardelyx Inc (NASDAQ:ARDX) shares fell double digits after the biotech’s latest move to raise capital dilutes shares.
The company will offer 12.5 million shares of its common stock priced at US$4 per share, aiming to raise around US$50mln, as per a Wednesday announcement.
The biotech announced on Tuesday that it received a US$50mln loan from Solar Capital Ltd and the Life Sciences Group. The secured term loan has a 7.45% interest rate and is due in November 2022.
"By using this debt instrument, we are able to reduce dilution to our shareholders in a meaningful way," said CEO Mike Raab of the loan agreement.
The California-based company intends to use the proceeds to support the clinical development and commercialization of the medicines in its portfolio.
Ardelyx develops treatments for patients with renal diseases. Its Phase 3 drug Tenapanor is an oral medication that can be used to treat irritable bowel syndrome and hyperphosphatemia, a condition that occurs when there are elevated phosphate levels in the blood.
Shares of the pharma company were down nearly 15% to US$3.88.