Macro Tsimmis

intelligently hedged investment

Vertex (VRTX) update #16

Posted by intelledgement on Mon, 22 Sep 08

Our development-stage biotech is replenishing the war chest with a dilutive issue of 8.6MM shares of common, priced at $25.50. The issue is in line with our expectations (we had projected dilution of about 7.2MM shares this year—a 5% dilution—in our model). The market apparently agrees, as the stock closed today down just 1.7% from the close on 16 Sep, the day before this sale was announced.

We expect the company will continue to need funding for the expensive telaprevir trials currently underway through mid-2011, and that more dilutive stock issues are likely.


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