Shares of the Krystal Biotech, Inc. (KRYS) stock were falling in the intraday session today on December 1, 2021. KRYS stock price saw a downtrend of 7.32% to drop at $74.65 a share at the time of this writing. The trading volume was 793,589 on the last check. Let’s understand the reason behind this bearish sentiment.
What’s Happening?
Krystal Biotech recently announced the pricing of its previously announced underwritten public offering of 2,666,667 shares of its common stock. The per-share price under this public offering is $75.00 per share. Moreover, KRYS stock and its certain stockholders granted the 30-day options to the underwriter to buy additional 400,000 shares of its common stock at a public offering price. The company anticipates the gross proceeds of approximately $200 million before excluding the underwriter discounts, commissions, and other offering-related expenses. The offering is expected to end on or about December 3, 2021, after meeting customary closing conditions.
KRYS stock intends to use the net proceeds resulting from this offering along with its existing cash and cash and cash equivalents
- For the preparation of potential commercialization of VYJUVEKTM if it approves for dystrophic epidermolysis bullosa
- To advance the clinical and pre-clinical development of KB105 and KB104
- For the advanced development of KB407 and KB408 for cystic fibrosis and alpha-1 antitrypsin deficiency
- To speed up the emerging respiratory pipeline of KRYS stock.
- For the increased investment in technology platform development.
- For working capital as well as general corporate purposes.
Financial View of KRYS stock:
According to third-quarter 2021 financial results, KRYS stock spent $6.1 million in research and development expenses. These expenses were $5.1 million in the same quarter of last year. The general and administrative expenses were $9.6 million for the KRYS stock in the recently reported quarter. This represents a significant increase as compared to $4.6 million in the same period of the previous year. The company suffered a net loss of $15.6 million in the third quarter of 2021. Net loss for the first nine months of 2021 was $47.8 million. By the end of the third quarter, KRYS stock had $362.3 million in cash, cash equivalents, and investments.
Conclusion:
The announcement of underwritten public offering is the obvious reason for the falling per share price of the KRYS stock. The stock has performed well in 2021 as it gained almost 25% year to date.
