Biotech startup Intensity sinks 30% after stock offering announced

Quotes on Intensity Therapeutics, a biotech startup focused on developing new cancer treatments, fell almost 30% yesterday, April 23, after the company revealed plans to raise $8 million through a public offering, which is set to dilute shareholders.

Yesterday, Intensity dropped 28% on the Nasdaq to an all-time low of $1.30 per share. The day before, the company filed a registration statement with the U.S. SEC for a public offering of common stock and warrants.

The company plans to offer up to 4.3 million common shares, along with warrants to purchase up to 8.5 million additional shares, according to the filing. Each share will be sold with a common warrant to purchase one share and an additional common warrant. Under the terms of the offering, each common share and warrant must be bought together but will be separable after purchase.

The price of one share and the accompanying warrants is $1.88. Intensity expects net proceeds of about $7.2 million, after deducting fees and expenses. The offering price matches the market price of shares on April 21.

Over the last 12 months, Intensity Therapeutics has lost 68% of its market value. Despite positive results from clinical trials of its tumor-killing drug, the company faces financial headwinds. According to its most recent earnings report, the net loss grew 55% to $16.3 million in the full-year 2024, and R&D expenses increased 119% to $10.5 million. Meanwhile, the company had only $2.6 million in cash.

In mid-March, the company’s auditor, EisnerAmper LLP, expressed doubt about Intensity’s ability to continue operations without additional funding.

Benchmark has reiterated its “speculative buy” rating on Intensity with a target price of $4 per share. Two other investment firms — Brookline Capital Markets and Alliance Global Partners — also issued “buy” recommendations after the latest earnings. According to Zacks, the four analysts who cover Intensity have an average target price of $9.88 per share, more than 600% above the current market price.

Intensity Therapeutics is a late-stage clinical biotech company focused on developing new cancer therapies. Its key technology platform, DfuseRx, is designed to create new drug formulations that can be injected directly into tumors to kill cancer cells while minimizing side effects. The company’s most significant achievement to date is the advancement of its lead candidate, INT230-6, into the global clinical trial INVINCIBLE-3 on patients with certain types of soft tissue sarcoma.

In March, due to funding constraints, the company was forced to halt new site activations and patient enrollments for its flagship study, as stated in its recent SEC filing. The company plans to resume the study once it secures sufficient funding.