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.



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This article appears in: Investing , Commodities

Referenced Stocks: ZFGN

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