Passage Bio, Inc., a biotechnology company specializing in biological products, has been notified by the Nasdaq Stock Market LLC of a potential delisting due to its share price falling below the minimum bid price requirement. The Philadelphia-based company, trading under the ticker NASDAQ:PASG, received the notice on Thursday, August 1, 2024, after its common stock's closing bid price remained below $1.00 per share for 30 consecutive business days.
The notification does not immediately affect the company's listing on the Nasdaq Global Select Market. Passage Bio has until January 28, 2025, to address the issue and regain compliance with Nasdaq's minimum bid price rule. To achieve this, the company's stock must close at $1.00 per share or higher for at least 10 consecutive business days.
If compliance is not met by the deadline, Passage Bio may apply for an additional grace period of 180 days by transferring its listing to the Nasdaq Capital Market, provided it meets all other initial listing standards, except for the minimum bid price. The company may also consider a reverse stock split to rectify the bid price deficiency.
Passage Bio is currently evaluating options to regain compliance with Nasdaq's listing requirements. However, there is no guarantee that the company will successfully meet the minimum bid price criterion or maintain compliance with other Nasdaq listing standards.
The company has not yet decided on a specific course of action in response to the notice. This development comes as a significant point for investors and the market to monitor, as the company's future on the Nasdaq Global Select Market hangs in the balance. Passage Bio's adherence to SEC regulations is evidenced by its timely reporting of this material event through the required 8-K filing.
In other recent news, Passage Bio, Inc. has made significant strides in its efforts to expand treatment options for neurodegenerative diseases. The company recently out-licensed three of its clinical-stage programs to GEMMA Biotherapeutics, Inc., granting GEMMA exclusive global rights to develop and commercialize treatments for GM1 gangliosidosis, Krabbe disease, and metachromatic leukodystrophy. The deal includes an upfront payment of $10 million from GEMMA, with the potential for an additional $10 million tied to GEMMA's business milestones.
In addition, Passage Bio has received approval from the U.S. Food and Drug Administration (FDA) to evaluate its gene therapy treatment, PBFT02, for frontotemporal dementia (FTD) patients with C9orf72 gene mutations. The proposed expansion of the upliFT-D Phase 1/2 global study aims to include a new cohort of patients, specifically those with FTD-C9orf72 mutations. The company plans to submit the revised trial protocol to health authorities and ethics committees soon, with the goal of starting patient dosing in the first half of 2025.
InvestingPro Insights
As Passage Bio, Inc. navigates through its challenges with Nasdaq's minimum bid price requirement, investors may consider a deeper financial perspective. According to InvestingPro data, the company holds a market capitalization of $58.62 million. Despite the company's efforts, analysts have raised concerns about the company's financial health, noting that it is quickly burning through cash and has weak gross profit margins. The data also indicates that Passage Bio has not been profitable over the last twelve months, as of Q1 2024, with an operating income of -$96.47 million and an EBITDA of -$92.92 million, although there has been an EBITDA growth of 14.59% over the same period.
InvestingPro Tips reveal that while Passage Bio holds more cash than debt, the valuation implies a poor free cash flow yield. Additionally, the company does not pay a dividend to shareholders, which might be a concern for income-focused investors. For those interested in exploring further, there are additional InvestingPro Tips available that provide more detailed analysis and forecasts for Passage Bio. These tips can be found at the InvestingPro platform and could offer valuable insights, especially in light of the company's current predicament.
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