LOUISVILLE — Having failed in a yearlong quest to find a buyer or other “strategic transaction” for the company, officials for GlobeImmune Inc. disclosed in a regulatory filing on Tuesday that they plan to delist the firm’s common stock from the Nasdaq Capital Market exchange.
The move continues the downward spiral for the Louisville biopharmaceutical company, which suffered a crippling blow last year when clinical trial results for its hepatitis B drug candidate revealed that the drug did not show a reduction of the disease at the end of a 24-week study.
Down to 2.5 full-time employees, GlobeImmune (Nasdaq: GBIM) in May of this year received a delisting warning from Nasdaq for falling out of compliance with a rule requiring minimum stockholders equity of $2.5 million, as well as alternative benchmarks for market cap and net income from continuing operations. At that time, GlobeImmune had a 45-day grace period to submit a plan for regaining compliance but has instead opted to voluntarily delist.
GlobeImmune’s share price plunged 36 percent Wednesday on the news of the delisting plans. Shares were trading at $1.15 apiece by late afternoon.
The company will making a formal filing with the U.S. Securities and Exchange Commission on July 15 officially notifying the regulatory body of its plans to delist and deregister its common stock. GlobeImmune expects the filing to become effective July 25, at which time the company will request the suspension of its financial reporting obligations as well.
Following the effectiveness of the delisting, GlobeImmune officials expect the company’s stock to begin trading on the OTC Market’s Pink market tier under the company’s current ticker symbol of GBIM.
“The Board made the decision to allow the Common Stock to be delisted from NASDAQ and to seek deregistration under the Exchange Act following the Company’s review and careful consideration of several factors including the inability to find a suitable strategic transaction despite a comprehensive year-long process, the ongoing listing, legal, administrative and additional accounting costs associated with being a publicly listed company, the non-compliance letter received from NASDAQ for the continued listing requirements, the inordinate amount of executive time and Company resources consumed in regulatory compliance obligations and the lack of investor interest as shown in the low daily trading volumes of the Common Stock on NASDAQ,” company officials wrote in the Form 8-K filed Tuesday. “The Board determined that delisting and deregistration are in the overall best interests of the Company and its stockholders.”
In the company’s first-quarter earnings report in May, GlobeImmune officials disclosed that they could be forced to shut down the company if a strategic alternative, such as a buyer, is not found “in the near future.” They added that the company has enough cash to operate as a going concern through the middle of next year, but that a decision to wind down the company would burn through its cash more quickly.
GlobeImmune laid off all but six of its 22 employees last summer following the negative trial results. As of the company’s most recent quarterly report, only vice president Jeffrey Dekker and a scientist remained onboard full-time, while chief executive Timothy Rodell is a half-time employee at this point.
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.
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.