Chembio Diagnostics plans $11 million stock offering
A Chembio scientist works on the company's test for HIV-syphilis on Oct. 24, 2014. Credit: Joseph D. Sullivan
Chembio Diagnostics Inc. hopes to raise about $11 million by selling more stock to the public to support expansion projects, including improvements to its Medford factory and headquarters.
The manufacturer of rapid tests used to diagnose HIV, syphilis, Ebola, Zika and other infectious diseases said Friday it intends to sell an additional 1.8 million shares.
Chembio had 12.3 million shares outstanding on Thursday when it announced plans for the stock sale but did not disclose details.
The shares for sale have been priced at $6.75. The sale will close “on or about February 13,” the company said.
On Thursday, Chembio shares closed down 30 cents, or nearly 4 percent, to $7.75 on the Nasdaq market.
The company said it would use proceeds from the stock sale for development of rapid tests, robots for the Medford factory, clinical trials, sales, marketing and other work.
Chembio lost $4.4 million in the first nine months of 2017 compared with a loss of $10.8 million in the same period of 2016. The 2016 loss included a $5.8 million charge for a deferred tax asset that the company can no longer use.
Revenue in the January-September period totaled $18 million, up 32 percent, year over year.
Chembio will announce its full 2017 financial results in coming weeks.
Separately, Chembio announced Thursday that it has received its largest single order: $16 million from the Ethiopian government for the company’s HIV tests.
Executives said the company had won a “three-year tender” from the Ethiopia Pharmaceuticals Fund and Supply Agency, which will begin receiving shipments of the tests in the April-June period.
“We are excited about the business award in Ethiopia which represents the largest single tender in the company’s history,” said CEO John J. Sperzel.
Details of the stock offering came before the stock market opened. Chembio shares closed down 7.1 percent, to $7.20.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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