Shares of Sio Gene Therapies Inc. (SIOX) are plunging down in the premarket today, on April 28, 2022. So far, SIOX stock has declined by 34.54% registering a new low of $0.3947 in the premarket against its previous 52-week low of $0.5401. This downward move comes after a slight gain of 2.20% in yesterday’s trading which had the stock valued at $0.6030 at the close.
The reason for the current downfall is yesterday’s corporate updates which brought forth some concerning news.
SIOX’s Corporate Update
Yesterday, the company said that it has sent a notice to the University of Massachusetts for terminating its licensing agreement for developing and commercializing its gene therapy product candidates. The licensing agreement also covered its lead gene therapy products AXO-AAV-GM1 and AXO-AAV-GM2 for GM1 and GM2 gangliosidosis including Tay-Sachs and Sandhoff diseases.
Furthermore, the company also said that as of March 31, its cash balance was $64 million and hence it plans to explore various strategic alternatives for increasing stockholder value. It is considering various options like company sale, merger, business combination, etc. For the purpose of the review, SIOX is working with SVB Securities as its financial advisor.
Additionally, the update also included plans for headcount reduction and wind-down of all trials related to the programs.
What’s going on??
In a run for reserving cash and reducing operating expenses, the company has terminated its lead gene therapy program’s license agreement. Not only this but it has also decided to wind down all related clinical trials and manufacturing operations.
It was only in January that the company announced a portfolio prioritization with a focus on the GM1 and GM2 programs. It all came falling down when the company’s previous CEO left in January while earlier chief R&D officer had also left and thus, the prioritization was a means for extending its cash runway. The new interim CEO, David Nassif had then shared his expectations for the GM1 and GM2 programs that were said to bring meaningful value.
What Does This Mean for SIOX?
It seems the company is going through some real tumulus times as it has slowly ceased all R&D activities. After narrowing its portfolio to only the GM1 and GM2 programs, it has now even halted those. On top of this, it is also reducing headcount to conserve capital. Unless SIOX brings about a successful outcome from the review process to rise from the ashes like a phoenix, its future is seemingly very bleak.