Damaged Biotech, Reverse Merger Threat

Eliem Therapeutics (ELYM) ($67MM market cap) is a damaged biotech that beforehand was targeted on growing therapies for psychological sicknesses and central nervous system problems. Again in February of this yr, Eliem paused growth on ETX-155 as a consequence of “difficult capital setting” regardless of having FDA assist for a Section 2 trial to deal with main depressive dysfunction.  Factors to some doable worth and expense self-discipline.  The corporate did a discount in workforce of 55% and refocused on the pre-clinical ETX-123. As we have seen with others, they ended up totally pausing all analysis and growth in July, introduced plans to discover strategic alternate options and accomplished an extra workforce discount (which is captured within the severance prices under).

This one is fairly straight ahead, there isn’t any debt, minimal lease obligations, ~$100MM of money and a 49% shareholder in RA Capital.

RA Capital is an institutional participant in life sciences, they make investments throughout the pre-revenue/income spectrum, Andrew Levin from RA Capital is the chairman of the board for ELYM. He seems to be extra of a scientist than an investor, however I am certain straddles each.  All that to remain this example most likely leans in the direction of a reverse merger — it has been 4+ months for the reason that strategic alternate options announcement, a scientist as chairman and controlling shareholder (might need one thing they personal privately and need to deliver public), however given the possession alignment, hopefully a nicely thought out transaction.  The IP may also be value one thing right here to somebody desirous to pursue a Section 2 trial for ETX-155.