Novel antibiotic maker Acurx loses third of market value after new offering announced

Quotes on Acurx Pharmaceuticals, a micro-cap company developing new types of antibiotics for difficult-to-treat bacterial infections, shed 30% on Friday, March 7, hitting an all-time low. This followed the company’s announcement of a direct offering at a significant discount to the market share price. Note that this is Acurx’s second direct offering in the past two months.

On Friday, Acurx plummeted 30% to a record low of $0.46 per share. Since the company went public in June 2021, the stock has lost more than 92% of its value.

On Friday, 1.17 million shares changed hands, 3.3 times the daily average trading volume. The trigger was an announced direct offering of 2.7 million common shares (or equivalents) at $0.40 apiece, almost 40% below the closing price on March 6, the day before the announcement.

Additionally, Acurx intends to issue short-term warrants to purchase up to 8.2 million shares at the same price. For context, there are 19.53 million shares outstanding, of which 16.96 million are in free float, according to MarketWatch. If all the warrants are exercised, the number of outstanding shares could rise by about a third.

The offering, expected to close today, March 10, is projected to raise $1.1 million before deducting transaction-related expenses. According to the press release, the company plans to use the proceeds for working capital and general corporate purposes.

This marks Acurx’s second direct offering in two months: In January, it raised $2.5 million by selling shares at $1.015 apiece, which also triggered a drop of almost 27% in the share price.

Acurx develops new types of antibiotics to treat antimicrobial-resistant infections. According to the U.S. Centers for Disease Control and Prevention, someone gets an antibiotic-resistant infection every 11 seconds, while  a person dies from resulting diseases every 15 minutes. The World Health Organization warns that antibiotic resistance threatens many advances in modern medicine, making infections harder to treat and other procedures, such as surgery, cesarean sections, and cancer chemotherapy, riskier to perform.

Acurx’s lead drug candidate, ibezapolstat, is designed to treat infections caused by Clostridium difficile (CDI), a bacterium that triggers inflammation of the colon. Today, only three antibiotics are available for CDI infections, but, as the company notes, they disrupt the gut microbiota and have a recurrence rate of 20-40%. Acurx is now preparing for the final, phase III clinical trials for ibezapolstat.

In its most recent earnings report, for the third quarter of 2024, the company posted a net loss of $2.8 million, or $0.17 per diluted share. It plans to release financial results for the 2024 fourth quarter and full year on March 18.

According to MarketWatch, the two analysts who cover Acurx both have “buy” recommendations. Their average target price is $11 per share, almost 24 times the last closing price.