Inside addition

The hammering that biotechs seeking follow-on financings have taken so far this year convinced Tesaro Inc. (NASDAQ:TSRO) that a privately negotiated deal with heavy insider participation was the best way to access capital. Rather than see its market cap slashed, the cancer company is selling shares almost at market price without the aid of underwriters or placement agents.

Companies that sold follow-ons this year have seen their shares fall an average of 19% from deal announcement to pricing. At that rate, Tesaro was looking at losing almost $300 million of its $1.5 billion if it raised money in a public offering...