The news comes after the two most active trading sessions of 2010 for DARA Biosciences' common shares. Even as the broad market saw thin volumes as the typical lull following the Christmas holiday was exacerbated by the blizzard blanketing the Northeast United States, the stock jumped nearly 75% on Monday to $3.90 with 3.2 million changing hands, far eclipsing its trailing three-month daily average of around 85,000. That move was followed up by Tuesday's plus 20% pullback to $3.11 on volume of 1.1 million after the company declared effective a previously disclosed shelf registration statement, filing a one-page "notice of effectiveness" with the Securities and Exchange Commission. Tuesday's filing referred back to an amended Form S-1 originally filed on Nov. 12 that provided details of a proposed offering of $4 million worth of preferred stock and warrants representing an additional $4 million worth of common stock. A call to DARA Biosciences for comment on the recent movement in the share price wasn't returned on Tuesday, and a message stated the company was on holiday break this week. In its press release, DARA Biosciences said it plans to use the proceeds of the offering for ongoing development of its lead candidates, working capital and general corporate purposes. DARA Biosciences was last able to raise funds in October when it agreed to sell more than 600,000 units of common stock and warrants to several institutional investors, receiving gross proceeds of $1.4 million. In May, shortly after implementing a 16-for-1 reverse stock split, the company launched an underwritten public offering of $10 million worth of securities but it indefinitely suspended the offering on July 1.
NEW YORK ( TheStreet) -- At least there's a headline now to go along with the volatility in shares of DARA Biosciences ( DARA). After Tuesday's closing bell, the Raleigh, N.C.-based drug developer announced it's commenced a registered direct offering to sell up to $4 million worth of units consisting of Series A preferred stock and warrants. The proposed sale represents substantial dilution to existing shareholders, as the company's market capitalization is around $11.4 million.
As of Sept. 30, the company's cash and cash equivalents were just below $875,000, down from $3.2 million as of Dec. 31, 2009. Its loss totaled $1.8 million, or 56 cents a share, for the three months ended Sept. 30, wider than its loss of $873,300, or 38 cents a share, in the same period a year earlier. DARA is currently developing drugs for the treatment of neuropathic pain, type 2 diabetes and psoriasis. Its leading drug candidate is KRN5500, a proposed treatment for neuropathic pain in cancer patients, which is currently in phase IIa clinical trials. On Nov. 11, the Nasdaq granted the company's request for an extension of a deadline to comply with a minimum stockholders' equity requirement of $2.5 million by Dec. 31 in order to maintain its listing on the Nasdaq Capital Market. The stock was last quoted at $2.85, down 8.4%, in after-hours action on volume of 16,400, according to Nasdaq.com. -- Written by Michael Baron in New York. >To contact the writer of this article, click here: Michael Baron. >To submit a news tip, send an email to: firstname.lastname@example.org