Shares of eFFECTOR Therapeutics fell sharply in premarket trading Wednesday after the clinical-stage biopharmaceutical company said it was raising $8.7 million in a registered direct stock offering.
The Solana Beach, Calif., company said it is selling more than 7.76 million shares to a healthcare-focused institutional investor at $1.125 apiece, 19% below Tuesday’s closing price of $1.39.
The company said it has also agreed to issue unregistered warrants to buy up to an additional 7.76 million shares. The 5.5-year warrants are immediately exercisable at $1 a share.
eFFECTOR said it plans to use proceeds from the offering for general corporate and working-capital purposes, including funding research and development.
Shares of eFFECTOR were recently down nearly 14% at $1.20 in premarket trading.