Instil Bio (TIL) (~$70MM market cap) is a clinical stage biotech focused on developing tumor infiltrating lymphocyte (“TIL”) therapies for the treatment of cancer. Instil was an early 2021 IPO, at the time it had a melanoma treatment, ITIL-168, that was beginning a Phase 2 clinical trial. They had ambitious dreams which included building a brand new laboratory and manufacturing facility in Tarzana, California to go along with leased manufacturing space in the UK.
ITIL-168 failed to impress and in December 2022, the company laid off 60% of their workforce and decided to put their remaining resources behind ITIL-306, a pre-clinical treatment for lung, ovarian and kidney cancers. In early 2023, the RIF was further expanded that resulted in reducing their US workforce by 96% and their UK workforce by 42%. Additionally, Instil scrapped plans to occupy the newly completed Tarzana facility. A Phase 1 study was initiated in the UK, but earlier this month Instil announced another 61% workforce reduction in the UK alongside the closing of their UK facilities and a partnership with a Chinese firm that essentially outsources further early development of ITIL-306.
Two wrinkles with this idea:
- Instil hasn’t fully put itself up for sale or declared strategic alternatives, while they have essentially laid off everyone in a series of RIFs, as far as I can tell Instil hasn’t hired advisors to run a formal process at this point.
- Instil owns a 128,000 square foot, brand new, never occupied facility (18408 West Onxard St) in Tarzana, California that they’ve put up for lease or sale. In the third quarter, they marked down the value of the facility to $132.5MM and have an $82.4MM mortgage loan out against it that matures in July 2027.
If Instil is able to get $132.5MM for the facility (welcome any thoughts from medical/industrial CRE experts) and assuming some further cash burn over the next 12 months, I get a stock that’s trading less than half of NAV with no value to their IP.
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| Note: TIL did a 1-for-20 reverse split in December, some data providers have the old share count. |
This company lacks much in terms of public disclosures, they don’t hold quarterly conference calls or have much in the way of conference transcripts following their IPO. Biotech venture firm Curative Ventures owns approximately 30% of the stock and Curative’s founder, Bronson Crouch, is the CEO and Chairman of Instil. While their execution has been poor, seems like they’ve found religion by prioritizing cash preservation, hopefully a sale or liquidation follows in due time.
Disclosure: I own shares of TIL
