GlobeImmune shares crater on 1Q earnings report
LOUISVILLE — GlobeImmune Inc.’s share price lost nearly half its value Thursday morning after company officials disclosed that they could shut down the company if a strategic alternative, such as a buyer, is not found “in the near future.”
In the Louisville-based biopharmaceutical company’s first-quarter earnings report, officials said the company had $8.7 million in cash and equivalents as of March 31, enough to operate the company as a going concern through the middle of next year as it seeks out those strategic alternatives. But they also stated that a decision to wind down the company’s operations would burn through that cash faster.
Shares of GlobeImmune (Nasdaq: GBIM), which closed at $1.96 Wednesday, opened at $1.37 Thursday morning after the earnings report and sank as low as $1.04. The company’s stock price rebounded slightly by mid-morning but was still down 36 percent by mid-afternoon.
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GlobeImmune reported a first-quarter net loss of $862,000, down from $1.6 million for the same period a year ago, thanks mainly to lower compensation expense due to laying off all but six employees last summer. The loss amounted to 15 cents per share.
The company had revenue of $943,000 in the first quarter, down from $1.2 million a year earlier.
GlobeImmune is focused on developing products for the treatment of cancer and infectious diseases. The company has three ongoing clinical trials being conducted by Gilead Sciences Inc. and Celgene Corp.
The company’s tailspin began a year ago, when results of a trial for its Hepatitis B drug candidate being developed with Gilead failed to show a reduction of the disease at the end of a 24-week study. That news came on May 27, causing shares to plunge more than 50 percent in value that day from a closing price of $8.24 the day before.
Two weeks later, the company announced that it would lay off most of its workforce to conserve capital. In February of this year, the company announced that CEO Timothy Rodell would begin working part-time and have his $405,000 annual salary cut in half in further efforts to preserve cash.
GlobeImmune was founded in 1995 as a spinoff of University of Colorado technology. The company raised a Series A funding round in 2003 and pulled in a total of $119 million in private equity before going public in 2014 with a $17.25 million initial public offering.
