Bionovo’s New Offering (NASDAQ:BNVI)

Bionovo Inc that have always focused on developing treatments for women’s health and breast cancer announced that they might raise around US$ 20 million in gross proceeds from an offering of up to 3.2 million units priced at $6.20 per unit. Each unit consists of ten shares of common stock and ten warrants and each warrant entitles its holder to purchase one share of Bionovo common stock at a price of $0.85. The warrants will expire after five years and can be exercised six months after the closing of the offering. Despite, the news of this offering, Bionovo’s shares fell 14 cents in the morning trading.

Bionovo is a drug discovery and development company that develops safe and effective drugs for treatment of unmet medical needs in women’s health and breast cancer. Menerba is Bionovo’s estrogen receptor oral formulation made out of 18 botanically derived active pharmaceutical ingredients that help to reduce the frequency and severity of menopausal hot flashes. Bionovo plans to use the offerings net proceeds for the Phase III trial of its postmenopausal drug candidate Menerba, and the remaining funds would be used for general corporation use.

The Emeryville, California-based company has given Dawson James Securities a 30-day option to arrange for the sale up to 484,649 additional units to cover any overallotments. The offering is likely to close on Wednesday.