BOSTON - Allarity Therapeutics, Inc. (NASDAQ: ALLR), a clinical-stage biopharmaceutical company, has announced the implementation of a 1-for-30 reverse stock split of its common stock effective at 12:01am Eastern Time today. This strategic move is aimed at regaining compliance with Nasdaq's listing requirements following approval from the company's shareholders on September 3, 2024, and the Nasdaq Hearings Panel on August 15, 2024.
The company's stock will begin trading on a split-adjusted basis as the market opens today. The reverse stock split reduces the number of Allarity's issued and outstanding common stock to approximately one-thirtieth of the pre-split amount, with fractional shares rounded up to the nearest whole number. Adjustments will also be made to outstanding equity awards and authorized shares under the company's 2021 equity incentive plan.
Thomas Jensen, CEO of Allarity Therapeutics, expressed the company's commitment to maintaining its Nasdaq listing and to continue developing its precision medicine approach, particularly focusing on the advancement of stenoparib, a novel PARP/Tankyrase inhibitor for advanced ovarian cancer patients.
The new CUSIP number for Allarity's common stock post-split is 016744500. Computershare Limited has been appointed as the exchange agent to facilitate the reverse stock split process. Registered stockholders with shares in book-entry form do not need to take any action, while those holding shares through brokerage accounts will see their holdings automatically adjusted. Stockholders with physical certificates will receive instructions from Computershare on how to exchange their certificates for post-split shares.
Allarity Therapeutics specializes in personalized cancer treatments, with stenoparib currently in a phase 2 clinical trial (NCT03878849) using its DRP® companion diagnostic for patient selection. The company, based in the U.S. with a research facility in Denmark, holds exclusive global rights for the development and commercialization of stenoparib, originally developed by Eisai Co (OTC:ESAIY). Ltd.
This announcement is based on a press release statement and contains forward-looking statements subject to risks and uncertainties. These include Allarity's ability to maintain its Nasdaq listing and the volatility in the trading price of its common stock. The company has cautioned that actual results may differ materially from those expressed in forward-looking statements due to multiple factors, including the risk of insufficient capital to support clinical trials and the potential for changes in clinical study outcomes with additional data.
In other recent news, Allarity Therapeutics has seen a series of significant changes. The company's stockholders approved amendments to its 2021 Equity Incentive Plan, increasing the number of shares authorized for grant from 2.2 million to over 10.5 million. They also voted in favor of two amendments to the company's Certificate of Incorporation, decreasing the number of authorized shares of common stock from 750 million to 250 million and approving a reverse stock split at a ratio of 1-for-30.
These changes come as Allarity continues to focus on advancing its pipeline of drug candidates and personalized treatment options for cancer patients. The company has also strengthened its financial position and expects its cash balance to last into 2026. The company received a Wells Notice from the Securities and Exchange Commission (SEC) regarding disclosures about FDA meetings for its drug, Dovitinib, and intends to cooperate with the SEC.
In addition, Allarity has terminated its Phase 2 clinical trial for stenoparib early due to observable clinical benefits. The company is currently focused on the development of stenoparib, a novel PARP/Tankyrase inhibitor, for advanced ovarian cancer patients, utilizing its proprietary DRP® companion diagnostic in an ongoing phase 2 clinical trial. These are recent developments for Allarity Therapeutics.
InvestingPro Insights
In the wake of Allarity Therapeutics' announcement regarding its reverse stock split, a closer examination of the company's financial health and stock performance through InvestingPro reveals a challenging landscape. The company's market capitalization stands at a modest $4.81 million, reflecting a small-scale operation within the biopharmaceutical industry. Notably, the company's Price to Book ratio as of the last twelve months leading into the second quarter of 2024 is 0.24, indicating that the market values the company at less than its book value, which could be interpreted as the stock being undervalued.
However, the financial metrics from InvestingPro also show that Allarity Therapeutics has been operating at a loss, with an Operating Income of approximately negative $16.92 million for the same period. This is further underscored by an EBITDA of nearly negative $16.89 million, coupled with an EBITDA Growth rate of negative 8.72 percent, suggesting that the company's earnings before interest, taxes, depreciation, and amortization have been decreasing.
InvestingPro Tips for Allarity Therapeutics highlight several concerns for investors. The company holds more cash than debt, which is a positive signal for its financial stability. Nonetheless, Allarity has been grappling with weak gross profit margins and the stock has experienced a significant downturn, with a one-week total price return of negative 31.71 percent. This is part of a broader trend, as the stock has also fared poorly over the last month, quarter, six months, and year. Analysts are not optimistic about the company's profitability in the near term, which may contribute to investor hesitance.
For those interested in a deeper dive into the company's prospects and performance, InvestingPro offers additional insights. There are 11 more InvestingPro Tips available at https://www.investing.com/pro/ALLR, which could further inform investment decisions regarding Allarity Therapeutics.
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