One of the most basic lessons of economics is that which is not scarce will probably never be particularly valuable. Basic economics hit cell therapy firm Gamida Cell (NASDAQ:GMDA) full-force today, sending it slumping over 7.5% at the time of writing.
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Gamida Cell offered up a new set of shares for purchase in a bid to raise around $22.8 million in total. The new set of shares consists of 17.5 million ordinary shares plus warrants to purchase 17.5 million shares. Each share and warrant will sell for $1.30. That’s a good chunk of new stock by itself, but it goes further than that. Underwriters will get access to a 30-day option that allows them to buy another 2.625 million ordinary shares, or warrants for shares, on the same terms.
Gamida Cell already has plans for much of that cash. The ever-popular “general corporate purposes” does make an appearance, but so too does financing for the launch of Omisirge and the ongoing development of its GDA-201 system. Given that Gamida Cell just picked up FDA approval for Omisirge, that gives it a little extra credibility. GDA-201, meanwhile, is showing some promise as a natural killer (NK) therapy for non-Hodgkin lymphoma, which could make it a very big deal in open markets if it can pass the testing phase successfully.
A look at the last five days in trading for GMDA stock shows a company that’s been on the rise quite a bit lately. First, the FDA approvals gave it a lot of extra life. Then, the new plans to raise capital hit and sent shares down quite a bit. However, Gamida Cell gained so much from the bump following FDA approvals that even its new stock plan didn’t cut share prices enough to where they’re trading where they were just five days ago. Share prices have nearly doubled during this timeframe.
