Instil Bio, Inc. (NASDAQ:TIL), a biotechnology company specializing in biological products, reported on Monday a significant restructuring plan to shut down its Manchester, UK operations. The Dallas-based company's Board of Directors approved the plan on September 1, 2024, which includes the elimination of its remaining workforce in the UK.
The company anticipates that the workforce reduction will be largely completed by the end of 2024. Instil Bio estimates that the restructuring will incur costs up to $5.5 million, consisting of asset impairment charges up to $2.2 million, employee termination costs up to $2.0 million, and contract termination costs up to $1.3 million. These projected charges, exclusive of any tax implications, are based on current assumptions, but actual outcomes may vary significantly.
Instil Bio has cautioned that additional costs not presently anticipated may arise due to unforeseen events related to the restructuring process. These forward-looking statements, as clarified by the company, are based on management's current expectations and are subject to various risks and uncertainties that could lead to material differences in the actual results.
The company's recent quarterly report on Form 10-Q for the quarter ended June 30, 2024, available on the SEC's website, details the risk factors associated with this decision. Instil Bio has also stated that future filings with the SEC will provide updated information as it becomes available.
In other recent news, Instil Bio has entered into a significant agreement with ImmuneOnco Biopharmaceuticals, securing an exclusive license to develop and commercialize antibodies targeting PD-L1 and VEGF. The deal could potentially yield up to $2.1 billion for ImmuneOnco based on future milestones. In addition, Instil Bio has finalized a 15-year lease with AstraZeneca (NASDAQ:AZN) Pharmaceuticals for its facility in Tarzana, California, aligning with its broader business interests.
In terms of governance, R. Kent McGaughy, Jr. and Dr. Gwendolyn Binder were reelected to the company's board of directors, and Deloitte & Touche LLP was ratified as its independent registered public accounting firm for the fiscal year ending December 31, 2024. However, the company has halted the clinical development of its ITIL-306 program, leading Jefferies to downgrade its stock rating from Buy to Hold.
Instil Bio is now exploring manufacturing feasibility for '306 with a China-based partner, potentially initiating investigator-initiated trials in non-small cell lung cancer. The company is also actively seeking to acquire novel candidates to address diseases with significant unmet medical needs.
InvestingPro Insights
In light of Instil Bio's restructuring announcement, a glance at the company's financial health and market performance provides valuable context. According to InvestingPro data, Instil Bio holds a market capitalization of approximately $93.01 million. Despite the challenges outlined in their restructuring plan, the company has experienced a strong return over the last year, with a 64.15% price total return. Additionally, the stock is trading near its 52-week high, at 96.61% of this peak value.
InvestingPro Tips highlight that Instil Bio is not expected to be profitable this year, as analysts predict continued losses. This aligns with the company's negative P/E ratio of -0.76 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at -1.18. Furthermore, the company is quickly burning through cash and suffers from weak gross profit margins, which could be contributing factors to the decision to restructure and reduce costs. However, on a positive note, Instil Bio holds more cash than debt on its balance sheet, suggesting some degree of financial flexibility amid these changes.
For readers interested in deeper financial analysis and more InvestingPro Tips, additional insights are available at InvestingPro's platform, which includes numerous tips to guide potential investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.