Xenon Pharmaceuticals announced a $250 million public offering following positive test results for a seizure treatment, and XENE stock toppled Thursday.
The company plans to offer nearly 7.9 million shares at $30.50 apiece. In addition, Xenon gave underwriters a 30-day option to purchase roughly 1.2 million shares on top of that. The offering came within hours of promising data for Xenon's experimental medicine, XEN1101.
Xenon is testing XEN1101 in patients with focal onset seizures, also called partial seizures. In one study, XEN1101 cut seizure frequency by 39.1%-55.4% — depending on the dosage — within one week. Placebo recipients experienced a 20.2% drop in the number of seizures they experienced.
But XENE stock dropped on the public offering. Shares tumbled 8.6% to 31.71 on today's stock market.
XENE Stock: Reducing Seizures
Xenon unveiled the results of two tests Wednesday.
In one test, patients received either XEN1101 or a placebo. Within one week, the highest dose led to a 55.4% decline in seizures. Smaller doses reduced seizures by 41.5% and 39.1%.
Nearly every patient then moved into an open-label study. In an open-label study, patients know they're receiving the test drug. Seizure frequency continued to subside during the first month. This suggests the effectiveness "has the potential to persist and may potentially improve," Xenon said in its news release.
Bullishly for XENE stock, patients who remained enrolled in the second test for three to 12 months experienced a reduction in mean monthly seizures by more than 70%-80%. A small number of patients experienced no seizures for six to 12 months.
The drug was also well tolerated. Side effects were in line with other anti-seizure medicines, Xenon said.
Highly Rated Biotech Stock
But the public offering news sent XENE stock into a plunge. Shares neared a buy point at 35.79 on Tuesday out of a consolidation, according to MarketSmith.com.
On Wednesday, shares remained above their 50-day moving average. XENE stock also has a best-possible Relative Strength Rating of 99, according to IBD Digital. This puts shares in the leading 1% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
