BAINBRIDGE, Ga. - Danimer Scientific, Inc. (NYSE: DNMR), a company specializing in the development and production of biodegradable materials, has successfully defended itself in a legal battle as the United States Court of Appeals for the Second Circuit upheld a dismissal of a putative class action lawsuit. The decision, which was originally made by the United States District Court for the Eastern District of New York, was announced on September 27, 2024.
The appellate court's affirmation concludes the class action complaint titled In re Danimer Scientific, Inc. Securities Litigation. Following this outcome, plaintiffs in three related shareholder derivative lawsuits, which were on hold in Delaware state and federal courts pending the Second Circuit's decision, voluntarily dismissed their complaints.
"We are pleased that the Second Circuit upheld the District Court's decision as we expected and to have the other derivative cases dismissed," stated Richard Altice, Danimer's Interim Chief Executive Officer. He added that the company is looking forward to focusing on its core mission of "partnering with our current and future customers to bring sustainably-sourced and biodegradable products and packaging to the market."
Danimer Scientific is recognized for pioneering sustainable and renewable biopolymer solutions, which are used in a variety of everyday plastic products. The company boasts a portfolio of more than 480 granted and pending patents across over 20 countries for its manufacturing processes and biopolymer formulations.
The press release also contained forward-looking statements, cautioning that these are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company highlighted potential risks including, but not limited to, consumer demand, economic conditions, market disruptions, the financial strength of customers, regulatory changes, and the impact of global events such as the conflict in Ukraine.
This news is based on a press release statement and does not include speculation or promotional content. Danimer Scientific's stock is traded on the New York Stock Exchange under the ticker DNMR.
In other recent news, Danimer Scientific reported a rise in Q3 2024 revenue to $6.7 million, largely due to a 20-million-pound cutlery contract in the quick service restaurant sector. Stockholders approved a reverse stock split and an amendment to increase the authorized shares of Class A common stock from 200 million to 600 million. The company also secured a $1.36 million contract from the U.S. Department of Defense to develop biobased polyols for high-performance coatings.
In leadership changes, Stephen Croskrey stepped down as CEO, with Richard Altice stepping in as the Interim CEO. However, TD Cowen and Jefferies have downgraded the company's stock from Buy to Hold, with TD Cowen reducing the price target to $1 and Jefferies to $0.80. These adjustments followed slower-than-expected growth at the company's Kentucky facility and the announcement of a CEO transition. These are the recent developments concerning Danimer Scientific.
InvestingPro Insights
As Danimer Scientific (NYSE: DNMR) emerges from its legal challenges, investors may be interested in the company's current financial position. According to InvestingPro data, Danimer's market capitalization stands at $47.61 million, reflecting its current valuation in the market.
The company's financial metrics paint a complex picture. Danimer's revenue for the last twelve months as of Q2 2024 was $39.74 million, but it experienced a significant revenue decline of 21.4% during this period. This downturn in revenue aligns with the company's focus on legal matters and may have impacted its operational performance.
InvestingPro Tips highlight some challenges facing Danimer. The company is currently not profitable over the last twelve months and is quickly burning through cash. These factors may be contributing to the stock's volatility and the significant price decline over the past year.
On a more positive note, InvestingPro Tips also indicate that Danimer's liquid assets exceed its short-term obligations, which could provide some financial flexibility as the company refocuses on its core mission following the legal resolution.
For investors considering Danimer's potential, it's worth noting that the stock is trading at a low Price / Book multiple of 0.2, which could suggest undervaluation. However, this should be weighed against the company's current challenges and market position.
InvestingPro offers 13 additional tips for Danimer Scientific, providing a more comprehensive analysis for those interested in deeper insights into the company's financial health and market prospects.
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