SOUTH SAN FRANCISCO, Calif. - Kezar Life Sciences , Inc. (NASDAQ:KZR), a clinical-stage biotechnology company, has announced a reverse stock split of its common stock at a one-for-ten ratio, effective 5:00 p.m. Eastern Time on Tuesday. The move is aimed at meeting Nasdaq's minimum bid price requirement for continued listing. Trading on a post-split basis will commence on Wednesday.
The reverse stock split was approved by Kezar's stockholders at the Annual Meeting on June 18, 2024, with the Board finalizing the ratio on September 23, 2024. This action will reduce the outstanding common stock from approximately 72.96 million shares to about 7.30 million shares, with adjustments made for fractional shares. The authorized shares and par value per share will remain unchanged.
Stockholders do not need to take any action if their shares are held electronically in book-entry form or in brokerage accounts. Those entitled to fractional shares will have their shares rounded up to the nearest whole number. The company's transfer agent, Computershare Trust Company, N.A., will act as the exchange agent for the reverse stock split.
This strategic decision is part of Kezar's efforts to comply with Nasdaq's listing standards and enhance shareholder value. The company specializes in developing therapies for immune-mediated diseases. Further details about the company can be found on its website.
The information in this article is based on a press release statement from Kezar Life Sciences.
In other recent news, Kezar Life Sciences has been at the heart of several significant developments. The company successfully resisted a takeover attempt by Concentra Biosciences, LLC, with the board of directors unanimously rejecting Concentra's offer to purchase all outstanding Kezar shares for $1.10 each, plus a contingent value right (CVR). The board deemed the offer, totaling a cash value of $80 million, as significantly undervaluing the company, given Kezar's cash balance was approximately $148 million as of September 30, 2024.
In response to this, Kezar implemented a limited duration stockholder rights plan, designed to deter potential takeovers that do not align with the best interests of the company and its shareholders. The rights plan, which allows the board to engage with potential acquirers, includes a dividend of one preferred share purchase right for each share of common stock held as of October 28, 2024.
On the clinical front, Kezar's PALIZADE Phase 2b clinical trial for lupus nephritis treatment was discontinued due to serious adverse events. However, the PORTOLA Phase 2a trial for autoimmune hepatitis treatment remains on track, with results expected in 2025. Financially, Kezar reported a second-quarter net loss of $22 million. Amid these developments, H.C. Wainwright maintains a Neutral rating on Kezar Life Sciences, while TD Cowen and Jones Trading maintained their respective Buy and Hold ratings.
InvestingPro Insights
In light of Kezar Life Sciences' recent announcement of a reverse stock split, additional financial insights from InvestingPro provide context to the company's current position.
According to InvestingPro data, Kezar's market capitalization stands at $57.33 million, reflecting its status as a small-cap biotechnology firm. The company's revenue for the last twelve months as of Q2 2024 was $7 million, indicating a relatively early stage in its commercial development.
Two relevant InvestingPro Tips highlight Kezar's financial situation. First, the company "holds more cash than debt on its balance sheet," which could provide some financial flexibility as it navigates the challenges of clinical-stage development. However, it's also noted that Kezar is "quickly burning through cash," a common characteristic of biotechnology companies investing heavily in research and development.
The reverse stock split decision aligns with another InvestingPro Tip, which indicates that Kezar has seen a "strong return over the last month," with a 44.46% price total return. This recent performance, coupled with the split, may help address the Nasdaq listing requirements mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insights into Kezar's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.