Brickell Biotech, Inc. (BBI) Stock Faltering in Premarket, Here’s the Reason

Brickell Biotech, Inc. (BBI), a clinical-stage pharmaceutical company, has declined 19.75% in the premarket trading session. Consequently, BBI was trading at $0.43 when last checked. The decline could be attributed to the announcement of a public offering of common stock. On Wednesday, BBI increased 3.24% during regular trading hours and closed the day at $0.54.

Why is BBI declining?

On Wednesday, BBI announced that it have commenced a proposed underwriting public offering of its common stock. In connection with the offering, the company said that it expects to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares of common stock at the public offering price minus the underwriting discount. The offering was subjected to market and other conditions. There were no assurances that whether and when the offering would be completed as well as about the actual size and term of the offering. The company intended to use the net proceeds for R&D, working capital, business development and general corporate purpose.

Positive results from clinical studies

On 7th October, BBI reported the positive topline results from the phase 3 Cardigan I and Cardigan II studies. The studies evaluated the sofpironium bromide gel, 15% as a once-daily tropical formulation in patients with primary axillary hyperhidrosis. The clinical program was comprised of two pivotal studies. The Cardigan I and Cardigan II studies enrolled 350 and 351 subjects respectively. The participants were 9 years of age and older and had primary axillary hyperhidrosis. The primary and secondary efficacy endpoints demonstrated significant differences between sofpironium bromide gel, 15% (SB) and vehicle.

Q2 2021 financial highlights

On 12th August, BBI reported the financial results for the second quarter of the fiscal year 2021 which ended on 30th June. The company had cash and cash equivalents of $24.4 million on 30th June. The company generated total revenue of $0.2 million during the quarter against $0.6 million for the same period of 2020. The R&D expenses for the period were $8.8 million against $2.7 million for the same period of 2020. The general and administrative expenses were $2.9 million against $3 million for the same period of 2020. The company suffered a net loss of $11.1 million during the period against $5.1 million for the same period of 2020.

Executive commentary

Commenting on the results, Robert Brown, Chief Executive Officer of BBI said that the company has made some tremendous progress during the year. For him, the company remains on track to achieve financial stability during the quarters to come.

Future for BBI

During the last 6 months, BBI has declined approximately 50%. But as evident from the statement of executives, the company is well on track to mark a significant improvement in the near future. So, investors should keep a close eye on fluctuations of BBI stock.