Sector Update: Healthcare Stocks Close With Narrow Gains; Zafgen Jumps Nearly 23% After Pricing Upsized IPO


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Healthcare stocks were slightly higher today with the NYSE Healthcare Sector Index advancing about 0.3% and shares of healthcare companies in the S&P 500 also climbing about 0.3% as a group.

In company news, upstart biotechnology company Zafgen Inc ( ZFGN ) Thursday leapt out of the starting gate after pricing an upsized initial public offering of stock, selling 6 million shares of its common stock at $16 each, the top of its expected price range.

ZFGN shares recently were up nearly 23% at $19.64 each, slowly drifting lower after pushing to an early high of $21.01 soon after opening at $20 a share.

The company added 1 million shares to the offering shortly before pricing earlier this morning. It also issued 30-day options to underwriters to purchase up to 900,000 additional shares to cover possible overallotments.

After deducting underwriter discounts and commissions, ZFGN expects to pocket around $89.2 million in net proceeds, increasing to $100.2 million if underwriters fully exercise their options, according the final prospectus for the deal.

It plans to use around $23 million to fund Phase III testing of beloranib drug candidate to treat obesity as well as $10 million for a Phase IIa trial of beloranib as a potential treatment for craniopharyngioma-associated obesity and $6 million for a Phase II trial of the drug to treat severe obesity in the general population.

Remaining funds will be used for ongoing research and development.

In other sector news,

(+) STEM, Climbs to 52-week high after reporting 65% decrease in the pace of geographic atrophy during Phase I/II testing of its human neural stem cell platform in patients with dry age-related macular degeneration.

(-) PETX, Begins enrolling canine patients for a pair of nationwide trials to evaluate its AT-005 monoclonal antibody, which is conditionally licensed by the Department of Agriculture to aid in the treatment of T-cell lymphoma in dogs.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities

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