AVROBIO (AVRO) (~$76MM market cap) is the newest damaged biotech that’s buying and selling under web money to announce they’re pursuing strategic alternate options. AVROBIO is a medical stage gene remedy firm that offered one in every of their belongings, AVRO’s cystinosis gene remedy program, to Novartis in Might for $87.5MM in money, whereas retaining their HSC gene remedy for Gaucher program which that they had beforehand introduced intentions to provoke a Part 2/3 trial later this yr. With the strategic alternate options announcement, AVROBIO introduced they had been pausing improvement efforts (and shedding 50% of their workforce), however the remaining IP belongings doubtless have some constructive worth in contrast to others within the damaged biotech basket. If any readers have experience on this space or perception into the potential worth, please remark under.
Doing my fast again of the envelope math on what a liquidation situation would really like (to be clear, a liquidation wasn’t talked about as one of many choices they had been contemplating, however I nonetheless discover it useful):
The above is probably going overly punitive on this situation however I needed to be per different related concepts. As a part of the asset sale, AVROBIO did signal on to supply help to Novartis for 12 months beneath a Separation Providers Settlement, which is likely to be why they nonetheless have to retain 50% of their workforce. Once more, their remaining IP doubtless nonetheless has worth, if they’ll promote it for $10+ million, then we’re nearer to $2.00 per share. A reverse merger appears to all the time be the primary choice, with the market rallying, possibly these come again in vogue as nicely.
Disclosure: I personal shares of AVRO