Eledon Pharmaceuticals Inc. (NASDAQ:ELDN) shares tumbled 17.8% in premarket trading on Wednesday after the biopharmaceutical firm announced the pricing of a $50 million underwritten public offering, sparking investor concerns over dilution.
The company said it will issue 15,152,485 shares of common stock at $1.65 per share and pre-funded warrants to purchase up to 15,151,515 additional shares at $1.649 per warrant. The offering is expected to raise approximately $50 million in gross proceeds before deducting underwriting fees and expenses.
Eledon also granted underwriters a 30-day option to purchase up to 4,545,600 additional shares at the same public offering price to cover potential over-allotments. The deal is scheduled to close around November 13, 2025, subject to customary conditions.
Leerink Partners, Cantor, and LifeSci Capital are serving as joint book-running managers for the offering.
The company plans to allocate the net proceeds toward advancing clinical development of its product candidates, progressing pipeline programs, and supporting general corporate purposes.
The sharp drop in share price reflects a typical market response to equity offerings, which tend to dilute existing shareholder ownership and can pressure short-term valuations.