Shares of Obalon Therapeutics plunge a day after stock surged 233% on upbeat product news
Shares of Obalon Therapeutics Inc (NASDAQ:OBLN) fell by double-digits Thursday, a day after its stock skyrocketed more than 200% on news that its flagship Obalon Balloon System to treat obesity is safe and effective.
The San Diego-based company announced Thursday that it’s launching a $3 million direct offering to raise working capital, apparently in a common move to take advantage of its higher stock price, which rose 233% to close at $1.30 a share Wednesday.
The stock recently traded at $0.68 a share, down 47% on higher-than-average volume.
READ: Obalon Therapeutics rockets on clinical data showing its Obalon Balloon System works safely to treat obesity
Investors typically react negatively to direct offerings because selling more shares to select investors can dilute a stock’s value.
Under Obalon’s offering, 5 million shares of common stock, with a par value $0.001 per share, are priced at $0.60 per share. The offering will close on or about May 28, according to a statement.
The medical-device company on Wednesday released expanded clinical data, compiled during a large-scale commercial-uses study of more than 1,400 patients using its ballon system, indicating that the average weight loss for patients receiving three balloons and six months of therapy was 21.7 pounds, resulting in a 10.2% reduction in total body weight.
Obalon also said that 50.7% of patients lost at least 10% total body weight and 77.9% lost at least 5%.
Non-serious adverse events occurred in only 10.3% of the patients, with the most common being abdominal pain (3.8%), nausea (3.0%), and vomiting (1.7%), the company said.
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Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/220886/shares-of-obalon-therapeutics-plunge-a-day-after-stock-surged-233-on-upbeat-product-news-220886.html
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