Cytokinetics Announces Pricing of Public Offering of Common Stock

Rhea-AI Summary

Cytokinetics announced the pricing of a public offering of 9,803,922 shares of its common stock at $51.00 per share.

Expected gross proceeds are approximately $500 million before underwriting discounts and other expenses.

The offering is set to close on May 28, 2024, subject to customary conditions.

The company has also given underwriters a 30-day option to buy an additional 1,470,588 shares at the public offering price, less underwriting discounts and commissions.

J.P. Morgan, Goldman Sachs, and Morgan Stanley are acting as joint book-running managers for the offering.

Positive

• Gross proceeds from the offering are expected to be approximately $500 million.
• The offering is likely to close soon, on May 28, 2024, assuming all conditions are met.
• Underwriters have a 30-day option to purchase up to an additional 1,470,588 shares, potentially increasing funds.
• J.P. Morgan, Goldman Sachs, and Morgan Stanley, reputable financial firms, are managing the offering.

Negative

• Dilution of shares: Issuing 9,803,922 new shares will dilute the current shareholders' value.
• Underwriting discounts and commissions will reduce the actual funds received by Cytokinetics.
• The expected gross proceeds calculation does not account for other offering expenses.

Financial Analyst

The recent public offering by Cytokinetics is a significant development for investors to consider. The company has priced 9,803,922 shares of its common stock at $51.00 per share, projecting gross proceeds of approximately $500 million. This influx of capital can be viewed positively as it provides Cytokinetics with substantial funds that can be used for various operational and strategic initiatives.

The offering also indicates a large degree of confidence from underwriters like J.P. Morgan, Goldman Sachs and Morgan Stanley, which are reputable and prominent financial institutions. Their involvement typically signals a level of due diligence and confidence in the company’s prospects. However, potential investors should be watchful of the dilution impact on existing shareholders since the issuance of new shares increases the total shares outstanding, potentially diluting earnings per share (EPS).

In the short-term, this capital raise can cause some volatility in the stock price as the market absorbs the new supply of shares. In the long term, if the capital is deployed effectively, it could support growth initiatives, pipeline development and other strategic objectives, thus enhancing shareholder value. Investors should keep an eye on how Cytokinetics plans to utilize these funds and any forthcoming announcements regarding deployment strategies.

Market Research Analyst

From a market perspective, Cytokinetics' decision to raise capital through a public offering comes at a strategic time. The company has set a per-share price of $51.00, which can be considered a reflection of the current market valuation and investor sentiment. The demand for these shares will be a strong indicator of market confidence in Cytokinetics’ growth potential and strategic direction.

One key aspect to monitor is the investor's reaction post-offering. The 30-day option to purchase an additional 1,470,588 shares can further impact market dynamics. If the overall demand is strong, underwriters will likely exercise this option, leading to increased capital but also further dilution. Conversely, a lack of demand might signal market skepticism about the company’s future prospects.

Additionally, the use of a shelf registration statement expedites the process, enabling Cytokinetics to quickly react to favorable market conditions, which is a savvy move from a timing perspective.

Legal Expert

Analyzing the legal facets, the public offering by Cytokinetics follows regulatory compliance and reporting standards, including the filing of a shelf registration statement and the subsequent prospectuses. Such filings ensure transparency and provide investors with essential details about the offering. The involvement of reputable financial institutions further underscores the legitimacy and adherence to legal protocols.

However, investors should be mindful of the customary closing conditions mentioned. These conditions are routine in offerings but can sometimes introduce final hurdles that need to be cleared before proceeds are realized. It is also important to note the jurisdictional compliance statements, ensuring that the offering is conducted within the legal frameworks of relevant states and regions.

SOUTH SAN FRANCISCO, Calif., May 22, 2024 (GLOBE NEWSWIRE) -- Cytokinetics, Incorporated (Nasdaq: CYTK) today announced the pricing of an underwritten public offering of 9,803,922 shares of its common stock at a price to the public of $51.00 per share, before underwriting discounts and commissions. The gross proceeds to Cytokinetics from the offering, before deducting underwriting discounts and commissions and other offering expenses payable by Cytokinetics, are expected to be approximately $500 million. The offering is expected to close on May 28, 2024, subject to customary closing conditions. Additionally, Cytokinetics has granted the underwriters a 30-day option to purchase up to an additional 1,470,588 shares of its common stock at the public offering price, less underwriting discounts and commissions. All of the shares of common stock in the offering will be sold by Cytokinetics.

J.P. Morgan, Goldman Sachs & Co. LLC and Morgan Stanley are acting as sole joint book-running managers for the offering.

The securities described above are being offered by Cytokinetics pursuant to a shelf registration statement (including a base prospectus) filed on November 18, 2022 with the Securities and Exchange Commission (SEC), which has become automatically effective. A preliminary prospectus supplement and accompanying prospectus relating to the offering have been filed, and a final prospectus supplement and accompanying prospectus relating to the offering will be filed, with the SEC and can be accessed for free on the SEC's website at http://www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus relating to the offering, when available, may be obtained from: J.P. Morgan Securities LLC, Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282, by telephone at (866) 471-2526, or by email at Prospectus-ny@ny.email.gs.com; or Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2^nd Floor, New York, New York 10014, by telephone at 866-718-1649 or by email at prospectus@morganstanley.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Cytokinetics

Cytokinetics is a late-stage biopharmaceutical company focused on discovering, developing and commercializing first-in-class muscle activators and next-in-class muscle inhibitors as potential treatments for debilitating diseases in which muscle performance is compromised and/or declining.

Forward-Looking Statements

Certain of the statements made in this press release are forward looking, such as those, among others, relating to Cytokinetics’ expectations regarding the completion of the offering. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include, without limitation, risks and uncertainties related to market and other conditions and the satisfaction of customary closing conditions related to the public offering. There can be no assurance that Cytokinetics will be able to complete the public offering on the anticipated terms, or at all. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this press release. Additional risks and uncertainties relating to the public offering, Cytokinetics and its business can be found under the heading “Risk Factors” in Cytokinetics’ Quarterly Report on Form 10-Q for the first quarter of 2024, which was filed on May 10, 2024, and other filings with the SEC, and in the preliminary prospectus supplement related to the public offering, filed with the SEC on May 22, 2024. Except as otherwise required by law, Cytokinetics does not undertake any obligation to update forward-looking statements and expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Contact:
Cytokinetics
Diane Weiser
Senior Vice President, Corporate Affairs
(415) 290-7757

FAQ

What is the share price for Cytokinetics' public offering?

The share price for Cytokinetics' public offering is set at $51.00 per share.

When is Cytokinetics' public offering expected to close?

The offering is expected to close on May 28, 2024, subject to customary conditions.

How many shares is Cytokinetics offering in its public offering?

Cytokinetics is offering 9,803,922 shares of its common stock.

What are the gross proceeds expected from Cytokinetics' public offering?

The expected gross proceeds from the offering are approximately $500 million.

Who are the joint book-running managers for Cytokinetics' public offering?

J.P. Morgan, Goldman Sachs, and Morgan Stanley are the joint book-running managers for the offering.

Does Cytokinetics have an option for additional shares in the public offering?

Yes, the underwriters have a 30-day option to purchase up to an additional 1,470,588 shares.