Today’s Veterinary Business Staff
Aratana Therapeutics Inc. has abruptly terminated a plan to raise at least $35 million through a sale of common stock.
The Leawood, Kansas, developer of Galliprant and other veterinary therapeutics announced Nov. 27 that it would offer $35 million in shares to the public and allow underwriters to purchase an additional $5.25 million in stock.
One day later, Nov. 28, Aratana reversed itself.
“The company believes that current market conditions are not conducive for an offering on terms that would be in the best interests of its stockholders,” Aratana stated without elaboration.
The about-face came after Aratana’s share price dropped from $7.23 at the close of trading Nov. 27 to $5.86 24 hours later.
The Motley Fool market analyst Brian Feroldi called the initial stock offer a “surprise.” Traders, he wrote, may have interpreted it “as news that management isn’t expecting as much growth from its marketed drugs as originally thought.”
“When combined with the expected dilution, it isn’t surprising to see that shares are tumbling,” Feroldi added.
Aratana’s latest financial report, released Nov. 2, showed a third-quarter net loss of $8.9 million on net revenue of $6.2 million. Most of the revenue, $5.4 million, came from the sale of Galliprant (grapiprant tablets), a non-steroidal anti-inflammatory drug for dogs that is licensed to Elanco Animal Health.
Aratana also makes Nocita (bupivacaine liposome injectable suspension), a postoperative pain reliever for dogs, and Entyce, a canine appetite stimulant launched in late October. The company hopes to market Nocita for use in cats in 2018.
Aratana held reserves of $70.7 million as of Sept. 30, an amount the company stated “will allow it to fund the current operating plan and debt obligations through at least 2018.”