Last week, Diffusion Pharmaceuticals (NASDAQ:DFFN), a clinical-stage biotechnology company based in Charlottesville, Virginia, soared nearly 40% on the market after CEO David Kalergis presented an overview of the company to the crowd at San Francisco’s 10th Annual Biotech Showcase. Based on the surge, it appeared, at the time, investors were pleased with the overview.
As for this week, things seem to have taken a different route. Currently, Diffusion Pharmaceutical is trading at $0.69, which puts the stock down $0.42, or 38.22%. Interestingly, on January 9, Diffusion Pharmaceuticals was trading up 38% and it is now trading down 38% one week later.
The Company
Diffusion Pharmaceuticals trades on the Nasdaq exchange, under the stock ticker DFFN. The company is involved in improving the effectiveness of various cancer treatments, such as chemotherapy and radiation therapy, in order to help extend the life expectancy of these patients.
As of right now, Diffusion Pharmaceuticals main product candidate is trans sodium crocetinate (TSC); the company stated on December 27th that it had commenced Phase 3 of the clinical trial with TSC.
Despite making a number of positive announcements over the course of the past couple months, such as its Q3 financial earnings report, which was posted on December 13, Diffusion has marginally struggled on the marketplace, reaching new 52-week lows every few weeks or so, starting on November 7 of last year and continuing through to today, January 18, 2018.
As mentioned, Diffusion is now trading at $0.69. Over the last week, the stock has performed -35.84%.
Thursday’s Slump
So, what caused this week’s slump? It’s likely the drop stems from the news that the company disclosed today: Diffusion Pharmaceuticals announced a $12M underwritten public offering.
The offering consists of a total sum of 15,000,000 shares of common stock of the Virginia-based company, combined with warrants to buy roughly 15,000,000 shares of common stock of Diffusion. The public offering price is set at $0.80 per share and associated warrant.
In regards to who will take on the role of book-running manager for the underwritten public offering, H.C. Wainwright & Co., one of the oldest financial institutions, has stepped up to the plate.
Personally, I would like to know what investors are thinking because it doesn’t seem like they are too pleased with the announcement. However, it’s not as if the announcement was necessarily bad. In fact, Diffusion Pharmaceuticals even announced that they plan to use all of the net proceeds from the public offering to finance development and research of TSC, which is a good thing, right? After all, it is the company’s lead candidate.
Regardless, it will be interesting to see if the stock continues to plunge on the market tomorrow and if it will move past -40% today.
Featured Image: Twitter
