Intellia Therapeutics (NASDAQ:NTLA) stock closed 7.2% higher on November 30. However, shares of this clinical-stage biotech company are down 3.8% in the pre-market session on December 1, following the pricing of the public offering of its common stock. A secondary equity offering to raise funds dilutes the existing shareholders’ value.
NTLA priced an underwritten public offering of 6,550,219 shares at $45.80 per share. Further, it granted the underwriter (Goldman Sachs & Co. LLC) a 30-day option to buy up to an additional 982,532 shares. The company expects to raise approximately $300 million from the public offering.
Earlier, JMP Securities analyst Silvan Tuerkcan warned of an equity dilution. He stated, “We anticipate that Intellia Therapeutics is likely to seek additional equity financing in the form of a secondary offering in order to complete the development of its drug candidates, creating dilution risk for existing shareholders.”
Nevertheless, Tuerkcan is bullish about NTLA stock, and his price target of $111 represents 115.7% upside potential.
Is Intellia a Good Stock to Buy?
Intellia Therapeutics stock has lost over 58% year-to-date and carries a Moderate Buy consensus rating on TipRanks. It has received 15 Buys, three Holds, and one Sell recommendation. Furthermore, analysts’ average price target of $102.24 implies 98.7% upside potential.
While analysts are cautiously optimistic, hedge funds bought 167K NTLA stock last quarter. Overall, Intellia Therapeutics scores a seven on TipRanks’ Smart Scoring system, implying a Neutral outlook.
