BOSTON - Galecto, Inc. (NASDAQ: GLTO), a biotech firm specializing in cancer and fibrosis treatments, has declared a 1-for-25 reverse stock split, effective from 5:00 p.m. Eastern Time on Thursday, August 29, 2024. The move aims to align the company with Nasdaq's minimum bid price requirement, ensuring its continued listing on The Nasdaq Capital Market.
Trading on a split-adjusted basis under its current symbol "GLTO" and a new CUSIP number will commence on Friday, August 30, 2024. The reverse stock split will convert every 25 shares of existing common stock into a single share, maintaining the par value at $0.00001 per share. Consequently, the number of outstanding common shares will reduce from approximately 27.1 million to around 1.1 million, while the authorized shares remain unchanged.
Adjustments will be made to outstanding stock options and restricted stock units, including their exercise prices. Shareholders will not receive fractional shares; instead, they will be rounded up to the nearest whole number. This action affects all common stockholders proportionally and does not significantly alter any shareholder's percentage of ownership, barring minor adjustments due to fractional shares.
Computershare Inc. will act as the exchange agent for the reverse stock split. Registered shareholders need not take any action to receive post-split shares. Those holding shares through brokers or nominees will see their accounts automatically adjusted.
The decision for the reverse stock split followed approval from shareholders at Galecto's Annual Meeting on June 20, 2024. Further details on the reverse stock split can be found in the company's definitive proxy statement filed with the SEC on April 29, 2024.
Galecto's strategic review process, initiated in September 2023, continues as the company explores various strategic alternatives. These may include mergers, acquisitions, or other significant business transactions.
The information in this article is based on a press release statement.
In other recent news, Galecto, the pharmaceutical company, has seen noteworthy developments. The company's annual meeting yielded significant decisions, including the approval of a reverse stock split aimed at increasing the market price of Galecto's common stock. Anne Prener, M.D., was elected as a Class I director to the Board of Directors, and EY Godkendt Revisionspartnerselskab was ratified as the independent auditor for the fiscal year ending December 31, 2024.
Furthermore, Oppenheimer adjusted its price target for Galecto from $10.00 to $9.00 following the company's Q1 2024 financial results, which reported operating expenses of $5.7 million and a cash balance of $27.2 million. This adjustment came after Galecto's Phase 2b GALACTIC-1 study of GB0139 for idiopathic pulmonary fibrosis did not meet its primary endpoints. Galecto has responded by planning to decrease operating expenses through further workforce reductions and research and development rationalization.
Moreover, Galecto is exploring strategic options including potential mergers, acquisitions, partnerships, asset sales, or other transactions. Despite setbacks in some areas, Galecto continues to advance its other clinical programs, such as the Phase 2a MYLOX-1 trial for GB2064 in myelofibrosis, which has yielded supportive topline results. The company also recently announced the commencement of a Phase 2 investigator-sponsored trial of GB1211 in combination with pembrolizumab.
InvestingPro Insights
As Galecto, Inc. (NASDAQ: GLTO) prepares for its reverse stock split, investors and analysts are closely monitoring the company's financial health and market performance. According to InvestingPro data, Galecto currently holds a market capitalization of approximately $15.1 million, reflecting its size within the biotech sector. The company's price-to-book ratio, as of the last twelve months leading up to Q2 2024, stands at 0.64, suggesting that the stock may be undervalued compared to the company's net asset value. However, the firm's operating income shows a significant loss of $22.16 million for the same period, indicating challenges in profitability.
InvestingPro Tips reveal some critical aspects of Galecto's financial situation. The company holds more cash than debt on its balance sheet, which can be a positive sign of financial stability. Additionally, Galecto's liquid assets exceed its short-term obligations, suggesting the company is in a good position to meet its immediate financial liabilities. On the downside, analysts do not expect Galecto to turn a profit this year, and the company has not been profitable over the last twelve months. It's also important to note that Galecto does not pay a dividend, which could influence investors seeking income-generating investments.
For those looking to delve deeper into Galecto's financials and future prospects, InvestingPro offers a wealth of additional tips and metrics. Currently, there are five more InvestingPro Tips available for Galecto, which can provide investors with a more comprehensive understanding of the company's potential risks and opportunities. To explore these insights, interested parties can visit https://www.investing.com/pro/GLTO.
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