Archive by date | February 26th, 2013

More on the Shelf

More on the Shelf

In my last post, I wrote about shelf registration filings among small cap biotech companies. I defined a small cap biotech company as one engaged in drug development with a market capitalization of less than $1 billion. Often referred to by their SEC form designation, S-3, shelf registrations are prospectuses that allow companies to issue securities at any time within three years of the date of filing. Data from the past four years, specifically second quarter of 2010 to second quarter 2012, revealed that approximately 1/3 of US small cap biotechs use S-3 shelf registrations. Of those, however, around 80% of shelf-filing companies subsequently employ them, i.e., sell securities and raise additional capital, though the timing and the size of the first financing varies considerably. Thus, a company’s decision to put a shelf in place does indeed foreshadow a likely future financing, usually within six months.  Read more