Exelixis, Inc.'s (NASDAQ:EXEL) small cap stock was down by double-digit percentage points on Monday after the biotechnology company announced it plans to offer 20 million shares and $225 million in debt to raise money to perform more clinical trials.
According to The Wall Street Journal, the company is focusing on developing a new small molecule therapy to treat cancer, and to do so, hopes to raise about $105.6 million in net proceeds through the common stock offering. Exelixis expects to offer the shares at a price of $5.58 each.
The proceeds will also go toward research and development, capital expenditures and working capital, and will also be used to generate funds for the escrow account that will be used for the first six interest payments.
Exelixis said it has already has received interest from Deerfield Management Company L.P. for as many as $75 million worth of shares.
The company's stock was down 12.5 percent on news of the sale, falling to $4.88 as of 3:48 p.m. on August 6, 2012.