Epizyme Inc (EPZM) Shares Plunge On Proposed Secondary Offering

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Epizyme Inc (NASDAQ:EPZM) today announced that they plan to sell up to $120 million in stock to the public, in order to raise capital to expand their operations. Additionally, they will be giving the underwriters a 30-day option to purchase up to another $18 million in shares. According to Epizyme Inc (NASDAQ:EPZM) the new capital would be used for all of the following:

– Development costs of tazemetostat outside of Japan
– General corporate purposes
– R&D for expanding drug pipeline
– Prepare global launch of tazemetostat

While the market isn’t taking kindly to this news, ultimately the funds were required for continued operation and expansion.

The stock has fallen 15.81% or $2.39 following this negative news, hitting $12.73 per share. About 492,808 shares traded hands or 41.50% up from the average. EPZM has declined 19.53% since June 2, 2015 and is downtrending. It has underperformed the S&P500 by 14.84%.

From a total of 4 analysts covering Epizyme (NASDAQ:EPZM) stock, 4 rate it a “Buy”, 0 a “Sell”, and 0 a “Hold”. This means that 100% of the ratings are positive. The highest target price is $42 while the lowest target price is $26. The mean of all analyst targets is $33.67 which is 164.49% above today’s ($12.73) stock price. Epizyme was the topic of 5 analyst reports since August 6, 2015 according to the firm StockzIntelligence Inc. RBC Capital Markets maintained shares on September 28 with a “Outperform” rating. Mizuho maintained EPZM stock in a recent report from August 6 with a “Buy” rating.

The institutional sentiment decreased to 1.47 in Q2 2015. It’s down 0.03, from 1.5 in 2015Q2. The ratio dived, as 14 funds sold all their Epizyme Inc shares they owned while 24 reduced their positions. 17 funds bought stakes while 39 increased their total positions. Institutions now own 42.10 million shares which is 24.69% more than the previous share count of 33.76 million in 2015Q2.

Ecor1 Capital Llc holds 8.74% of its total portfolio in Epizyme Inc, equating to 1.49 million shares. Nea Management Company Llc owns 5.15 million shares representing 4.36% of their total US portfolio. Moreover, Foresite Capital Management Ii Llc has 3.94% of their total portfolio invested in the company, equating to 1.01 million shares. The Massachusetts-based Mpm Asset Management Llc has a total of 3.42% of their portfolio invested in the stock. Palo Alto Investors Llc, a California-based fund reported 2.12 million shares owned.

Since May 6, 2015, the stock had 0 buys, and 4 insider sales for a total of $1.52 million in net activity. Copeland Robert A sold 4,185 shares worth $60,380. Gould Robert J sold 60,000 shares worth $1.19M. Ho Peter Tai-Ching bought 800 shares worth $13,084.

Epizyme, Inc. is a clinical-stage biopharmaceutical firm that discovers, develops and plans to commercialize epigenetic therapies for cancer patients. The company has a market cap of $641.13 million. The Company’s product platform creates small molecule inhibitors of a 96-member class of enzymes known as histone methyltransferases, or HMTs. It currently has negative earnings. The Company’s lead product candidate, EPZ-6438 is an inhibitor that targets the EZH2 HMT.

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