MARLBOROUGH - Phio Pharmaceuticals Corp. (NASDAQ: PHIO) has announced a reverse stock split of its common stock at a 1-for-9 ratio, effective at the start of trading on July 5, 2024. This move aims to elevate the per-share trading price to comply with the Nasdaq Capital Market's minimum bid price requirement.
The reverse stock split is intended to maintain the company's listing on the Nasdaq by meeting the $1.00 minimum bid price. Currently, Phio's common stock is under the threshold. The split will reduce the number of outstanding shares from about 4.6 million to approximately 0.5 million. The par value of the shares will remain unchanged at $0.0001.
Shareholders will not receive fractional shares but will be compensated with a cash payment for any fractions they would have received. The adjustment will also apply to outstanding equity awards and warrants. The company's common stock will continue trading under the ticker "PHIO" but with a new CUSIP number, 71880W501.
Phio has retained Computershare Trust Company, N.A. as the exchange agent for the reverse stock split. Shareholders with certificate-held shares will receive instructions from Computershare on exchanging their certificates.
Those with book-entry shares or held in brokerage accounts will not need to take action, as the changes will reflect automatically in their accounts, though they may contact their respective banks or brokers for specific procedures.
The decision for the reverse stock split followed approval by Phio's Board of Directors and was disclosed in a definitive proxy statement filed with the U.S. Securities and Exchange Commission on May 8, 2024.
Phio Pharmaceuticals is a clinical-stage biotech company focusing on its proprietary INTASYL® RNAi technology, targeting the enhancement of immune cells' effectiveness in combating tumor cells. The company's approach does not require specialized delivery systems, distinguishing it within the immuno-oncology therapeutics landscape.
This strategic move is based on a press release statement from Phio Pharmaceuticals and is part of the company's efforts to align with Nasdaq's listing standards. It is not a reflection of the company's operational performance or its proprietary technology's clinical results.
In other recent news, Phio Pharmaceuticals has been making significant strides in its immuno-oncology research. The biotech firm recently secured a South Korean patent for its RXI-185 compound, a skin aging treatment that also targets skin disorders. This new patent adds to Phio's extensive portfolio, which includes 81 issued patents, chiefly related to its INTASYL siRNA gene silencing technology.
Phio also advanced to the next dose concentration in its Phase 1b clinical trial of PH-762, following positive safety data from the initial cohort. This trial is assessing the safety and tolerability of PH-762 when administered directly into tumors. In addition, Phio presented new preclinical data on its INTASYL Compound PH-905 at the 10th Immunotherapy of Cancer Conference in Munich, Germany.
On the investment front, Phio secured a notable investment from TRITON Funds, which resulted in the purchase of approximately 18.8% of Phio's common shares. This transaction is expected to yield gross proceeds of up to $621,000.
These developments indicate the ongoing progress in Phio's research and investment initiatives. The company's unique INTASYL technology, which directly targets proteins that impede the body's anti-cancer defenses, continues to be a key factor in its advancements.
InvestingPro Insights
In the context of Phio Pharmaceuticals' recent announcement of a reverse stock split, a closer look at the company's financial health and market performance may offer investors additional insights.
According to InvestingPro data, Phio's market capitalization stands at a modest $3.12 million USD, reflecting the challenges small-cap biotech companies often face in a competitive market. The company's Price / Book ratio, as of the last twelve months leading into Q1 2024, is 0.55, suggesting that the stock may be undervalued relative to its assets, which could be an attractive point for value investors.
However, the company's financials also show significant challenges. With a Gross Profit of -$5.35 million USD and Operating Income adjusted to -$9.23 million USD in the same period, Phio's fiscal position underscores the difficulties inherent in the biotech sector, where profitability often remains elusive until a company's products reach commercialization. The Price Total Return over the last year, at -76.6%, reflects investor concerns and the market's response to the company's performance.
Despite these challenges, InvestingPro Tips highlight a couple of potentially positive aspects for Phio. The company holds more cash than debt on its balance sheet, which is a reassuring sign of financial stability.
Moreover, analysts predict that the company will be profitable this year, which could signal a turning point for Phio's financial trajectory. For investors looking for more in-depth analysis, there are 12 additional InvestingPro Tips available, providing a comprehensive view of the company's financial status and market potential.
For those considering an investment in Phio Pharmaceuticals or seeking to expand their understanding of the company's stock, InvestingPro offers a wealth of information and analysis. Remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, which includes access to all the valuable tips and insights.
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