Brinson Patrick, a boutique investment bank that specializes in at-the-market (ATM) offerings, reported last week that a record $90 million was raised by life science companies through ATM offerings in the first quarter of this year. Raised through 20 ATM offerings, this dollar amount represents the highest single-quarter usage of ATMs by companies in the healthcare industry segment.
This amount represents a 36% increase in funds raised through ATMs compared to the first quarter of 2011. Life sciences companies that utilized ATMs to raise capital in the first quarter included Threshold Pharmaceuticals Inc., Cerus Corp., Celldex Therapeutics Inc. and Avanir Pharmaceuticals Inc.
An ATM provides an efficient means of raising equity capital over time by enabling a publicly traded company to tap into the existing secondary market for its shares on an as-needed basis. With an ATM, the company incrementally sells newly issued shares into the trading market through a designated broker-dealer at prevailing market prices, rather than through a traditional underwritten offering of a fixed number of shares at a fixed price all at once. This allows capital to be raised incrementally over time, an idea option for raising general working capital, funding specific projects, funding research and development and/or paying off debt.
Russo Partners is currently working with Brinson Patrick to raise awareness of the benefits of ATMs for public companies. In order to highlight the increasing use of ATMs, we have worked with Brinson Patrick to publish data each quarter about ATM offerings that the company collects for internal use, and this strategy has effectively generated media interest.
Read more about Brinson Patrick and the increasing use of ATMs by life sciences companies to raise capital in the following article from the San Diego Business Journal: