Shuttle Pharmaceuticals Holdings Inc. (SHPH) climbed 27.87% in after-hours trading Thursday, hitting $2.34 per share. Not bad for a stock that closed the regular session down 7.58% at $1.83.
So what sparked the sudden interest? Two things: a fresh injection of capital and some regulatory paperwork that signals the company is moving forward.
Fresh Capital From Private Placement
The Maryland-based biotech closed a private placement deal that brought in approximately $2.5 million in gross proceeds. According to an SEC filing, Shuttle Pharmaceuticals entered into a securities purchase agreement with an accredited investor on November 3, and the transaction wrapped up the very next day.
WestPark Capital Inc. served as the placement agent for the deal and collected a 4% cash fee on the gross proceeds. Quick math: that's about $100,000 in fees for arranging the financing.
The S-1 Filing Explained
On Tuesday, Shuttle Pharmaceuticals filed a Form S-1 registration statement with the Securities and Exchange Commission. This isn't about raising new money—it's about allowing existing shareholders to sell their shares.
Specifically, the filing covers the resale of 625,156 common shares that would be issued if someone exercises a pre-funded warrant. These warrants have an exercise price of just $0.001, which is essentially nothing. The filing makes clear that the company won't receive any proceeds from these share sales by the selling stockholder.
As of Monday, the company had 1,603,285 shares outstanding. Adding those warrant shares would represent a meaningful dilution event for existing shareholders.
The Bigger Picture Isn't Pretty
Here's where the enthusiasm should probably be tempered a bit. This clinical-stage pharmaceutical company has had a brutal year. The stock is down 91.4% year-to-date, trading in an annual range between $1.82 and $25.25. Its market capitalization now sits at just $2.93 million.
That's remarkably small for a publicly traded company. Market data indicates that SHPH stock shows negative price trends across all timeframes, which is Wall Street's way of saying the momentum has been consistently downward.
The after-hours pop is certainly noteworthy, but investors should recognize that a 28% gain on a stock that's down more than 90% for the year is still leaving shareholders deep underwater. The $2.5 million in fresh capital gives the company some runway, but for a biotech in clinical stages, that money can burn through quickly.