Repros Therapeutics Plays Three-Card Monte With Great News, Then Capital Raise (RPRX)

October 8, 2009 · Filed Under Financial 

Repros Therapeutics Inc. (NASDAQ: RPRX) was a huge winner yesterday.  The news was huge for male hormone treatment against hypogonadism that showed large returns in normal sperm counts and in testosterone.  This caused a 100% gain in the stock on an exponential volume surge.  But this morning the news is out from the company that the tiny biotech is raising capital.  This is actually of little surprise, but it always feels the same as when you play Three-Card Monte on the street of New York.

Repros said this morning that it has entered into a definitive agreement with institutional investors to raise capital.  The company is selling 3.5 million shares of common stock at $1.27 per share after closing at $1.86 yesterday.  The gross proceeds come to approximately $4.4 million.  The reason this is of no shock is that these shares are being offered under a registration statement previously filed and declared effective by the SEC.

Shares have fallen by 21% to $1.46, and the implied market cap before the effect of any securities sale is listed as $22 million.  The market capitalization rate here is so small that this is probably more of a win for the company to give it some added capital.  The June 30, 2009 balance sheet showed a mere $3.977 million in cash and equivalents.  Its current liabilities were listed as $7.481 million, but it also listed no long-term debt.

JON C. OGG
October 8, 2009

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