What happened
Shares of Seres Therapeutics (MCRB +0.93%) jumped 21% on Thursday after the biotech company announced the details of its capital raise.
So what
Seres will sell 10.5 million shares for $21.50 per share. Underwriters have the right to sell an additional 1,575,000 shares at the same price. Notably, Seres will also sell 959,002 shares to international food titan Nestle (NSRGY 1.35%).
Seres Therapeutics' stock rose sharply on Thursday after raising a boatload of cash from investors. Image source: Getty Images.
Seres expects to raise at least $245 million from its stock offering, which is expected to close on Aug. 17. Seres plans to use the cash to fund the development of its microbiome therapies.
Now what
Seres' capital raise comes after it reported positive results from a phase 3 study of its experimental therapy for colon infections. Seres said its drug helped reduce the number of patients who experienced a recurrence of C. difficile infection within an eight-week period by 30.2% compared to a placebo. It was also well-tolerated, with no treatment-related serious adverse events observed during the trial. Seres' stock soared an incredible 389% on the news.
As for today's gains, investors may be finding comfort in the fact that Nestle is boosting its stake in Seres. Having a $340 billion company in your corner can't hurt, and Nestle's increased investment can rightfully be viewed as a vote of confidence in Seres' future.
