ESSA Pharma (EPIX) ($72MM market cap) is the latest addition to the broken biotech basket. EPIX is a clinical stage pharmaceutical company that was previously focused on developing therapies for the treatment of prostate cancer. On Thursday (10/31/24), the company announced they were terminating all of their clinical studies and an initiating a review of strategic alternatives.
In the press release the company gave us 9/30 cash numbers:
Liquidity and Outstanding Share Capital
| · | As of September 30, 2024, the Company had available cash reserves and short-term investments of $126.8 million and net working capital of $124.3 million (unaudited figures). The Company has no long-term debt facilities. |
| · | As of September 30, 2024, the Company had 44,388,551 common shares issued and outstanding, and there were 2,920,000 common shares issuable upon the exercise of prefunded warrants at an exercise price of $0.0001. |
This one is fairly clean, although we don’t have a severance charge estimate (the company has 50 employees), EPIX hasn’t been burning much cash, only approximately $7MM a quarter prior to the termination of their R&D program. My back of the envelope math is pretty straight forward, I’m assuming about $20MM of the expenses to wind down the company from here or get it to a place where a reverse merger can be done, feel free to make your own assumptions.
My liquidation value is about 40% higher than where shares traded Friday following the news.
Disclosure: I own shares of EPIX
