Jaguar Animal Health ($JAGX) has had a rough ride as a public company: First its shares lost half their value within two months of the company going public in May at $7 a share, and now investors are stomping all over its plans to raise more money in a secondary offering. The company, which is developing gastrointestinal remedies for companion and farm animals, announced Wednesday that it plans to offer an additional 2 million shares at $2.50 a piece. Its share price promptly fell more than 20% to $2.16 in morning trading.
The company expects proceeds of $5 million from the offering, which should close Feb. 8, according to a press release.
Jaguar has been trying to shore up enough cash to move its first prescription product, Canalevia, through FDA approval and to the market. Canalevia contains an ingredient derived from the Croton lechleri tree and is being developed to treat chemotherapy-induced diarrhea in dogs. Jaguar is working on several other products that contain the same ingredient.
The company is expecting Canalevia to be approved this year, and it intends to use the proceeds from the offering to support the commercial launch of the product, according to a prospectus Jaguar filed to the Securities & Exchange Commission. In August, the company secured $8 million in debt to support its Canalevia launch plans.
Still, cash is running low. Jaguar brought in just $203,195 in sales in the first 9 months of 2015, most of which came from Neonorm, its botanical product to treat calves. But the company had a net loss of $12.5 million, according to the prospectus. And Jaguar didn't raise nearly as much as it was hoping to in its IPO: The company kept delaying the offering, and then it finally downsized it from $70 million to $20 million.
Jaguar has been trying to divert investors' attention to some good news. On Jan. 28, Jaguar said a proof-of-concept study for its drug to treat ulcers in horses was successful. And late last year, it charted positive results in a study of Neonorm Foal, an oral paste to treat diarrhea in newborn horses. But gaining the support of investors may continue to be challenging. Even after regaining some ground by afternoon on Wednesday, Jaguar's shares were trading well below its planned offering price.
- here's the press release on the secondary offering
- access Jaguar's SEC filing here