Human Genome Sciences Inc. announced its second 2-for-1 stock split this year yesterday after shares rode investor excitement about genomics in general, and the company's experimental drugs in particular, to gain nearly 50 percent since the previous split.
The split, which will result in shareholders getting an additional share of common stock for each share held as of the close of trading Sept. 28, was announced after the close of regular trading yesterday. Shares fell $13.50, or 8.57 percent, to close at $144 on the Nasdaq stock market.
The shares, to be distributed Oct. 5, will bring the total on the market to about 112 million, up from 56 million as of Friday and 25.3 million in January.
"It's a barometer of the success our stock has had in the market, absolutely," company Chief Financial Officer Steven C. Mayer said.
The company, he said, considers a number of factors when deciding when to split the stock, including its affordability to a broad range of investors and the ability of large institutional investors, in particular, to quickly find buyers for blocs of the stock when they want to sell at a particular price.
The decision to go ahead with this split comes as shares trade at the price they did when the previous split was announced Jan. 5. That time, Human Genome shares had gained more than 330 percent in 12 months.
Even after the price fell yesterday, shares still had gained nearly 47 percent since they closed at a split-adjusted price of $98 Jan. 31, the first full trading day after the previous split took effect Jan. 27. The split is the second since Human Genome went public in December 1993.
The company has four gene-based drugs in clinical testing, including one designed to heal wounds associated with varicose veins and another designed to stimulate the body's ability to fight disease, helping people with immune deficiencies.