Saturday, June 22, 2024

Section 2 Research Misses, Pre-SA Damaged Biotech

The theme round right here continues on — Reneo Prescribed drugs (RPHM) (~$45MM market cap) is one other damaged biotech, this week the firm introduced their Section 2 examine of Mavodelpar in grownup sufferers with mitochondrial myopathies didn’t meet its main or secondary efficacy endpoints.  The inventory responded by crashing 80+% as this can be a one shot on purpose biotech with out a lot of a remaining pipeline.  Reneo is now buying and selling properly beneath liquidation worth, whereas the corporate has but to announce a strategic assessment, it does not have many choices left, I’d count on the official strategic options declaration quickly.

That is one other pretty clear steadiness sheet, Reneo disclosed that present money is roughly $100MM as of yesterday, subtracting out their 9/30 liabilities, severance funds and an estimate of money burn/liquidation prices (they solely have roughly 12 workers following their discount in workforce), I get an NAV or liquidation worth of ~$2/share.  The corporate did put in place an ATM in November, it does not seem they’ve used it primarily based on present money and historic burn price, however the share depend above is perhaps value confirming.  

I might see just a little bump in value if and when the corporate does formally announce strategic options after which a second on some conclusion, whether or not a deal or liquidation of Reneo.

Disclosure: I personal shares of RPHM

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