Biomea Fusion Inc‘s (NASDAQ:BMEA) stock price plummeted after the company priced its public offering.
The public offering includes 11.2 million shares of common stock and accompanying warrants to purchase an equal number of shares.
Certain investors will receive pre-funded warrants for up to 1 million shares, with warrants to purchase an additional 1 million shares.
The offering also includes a 30-day option for underwriters to purchase up to 1.83 million additional shares and warrants.
The common stock and pre-funded warrants are sold with warrants to purchase one share of common stock at an exercise price of $2.50.
The offering is expected to raise approximately $25 million in gross proceeds, with the offering closing on Oct. 8, subject to customary conditions.
Jefferies is the sole book-running manager, and H.C. Wainwright & Co. is the lead manager.
The sharp decline in Biomea Fusion’s stock price was likely driven by concerns over stock dilution, as the issuance of new shares could reduce the value of existing holdings. Additionally, the offering price of $2.05 per share—below the stock's previous market value—may have signaled a potential discount sale.
The inclusion of warrants with an exercise price of $2.50 and the company's ongoing challenges, including the clinical hold on its trials, likely contributed to the market's negative reaction.
The news comes just one day after Biomea Fusion announced 52-week results from its Phase 2 COVALENT-111 study, evaluating the efficacy and safety of icovamenib in type 2 diabetes patients.
After an FDA-imposed clinical hold, the analysis focused on 163 patients who completed at least 80% of their treatment. In severe insulin-deficient patients, icovamenib achieved a durable HbA1c reduction of 1.2%, with the best results seen in patients receiving 12 weeks of treatment (1.5% reduction).
Additionally, patients on GLP-1 therapy showed a 1.3% reduction in HbA1c. Icovamenib maintained a favorable safety profile with no serious adverse events or discontinuations, and was generally well tolerated.
Biomea’s Planned Next Steps
- Food Effect Study (COVALENT-121) is ongoing to optimize the dosing criteria for icovamenib, and data is expected to be completed by December 2025.
- Phase 2b trial (COVALENT-211) in severe insulin-deficient type 2 diabetes patients is expected to be initiated in the fourth quarter of 2025
- Phase 2 trial (COVALENT-212) with GLP-1-based therapy in type 2 diabetes patients is expected to be initiated in the fourth quarter of 2025
- Phase 1 trial (GLP-131) Biomea’s oral GLP-1 RA (BMF-650) in obese, otherwise healthy volunteers, initiation is ongoing, and data are anticipated in the first half of 2026
Price Action: BMEA stock is down 33.9% to $1.76 as of the last check on Tuesday.
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