If the economic tide is finally rising, it’s not lifting all boats. More than a dozen small drug companies received notice just over a week ago that their share prices had fallen so low that their stocks might cease trading on one of the better regarded markets.
The NASDAQ stock market, known as the home for technology companies, warned most of the companies that they weren’t meeting its criteria because their share prices had fallen below $1.00 for 30 consecutive business days. The companies have until March 15, 2010, to comply or face delisting. Others had market capitalizations that were too low to meet NASDAQ limits.
Biotech stocks have suffered the “summer blahs” and lagged the general stock market this year, the investment bank Burrill & Co. observed in a report earlier this month. As a result, it’s been difficult for many firms to find capital to build their businesses and support their stock values. For most of the year, NASDAQ had held off on enforcing its rules in light of the economic crisis.
For Altus Pharmaceuticals, Metabasis Therapeutics, La Jolla Pharmaceutical, and Repros Therapeutics, the warning wasn’t a surprise because they already were looking to sell or close down operations. Insmed, which sold its follow-on biologics unit to Merck & Co. for $128 million in June, is exploring alternatives for its remaining business.
Meanwhile, DeCode Genetics is trying to refocus on diagnostics, and Sunesis is pushing ahead with the help of $43 million it raised in April. Nucryst Pharmaceuticals, GTC Biotherapeutics, Bionovo, GenVec, and Hollis-Eden Pharmaceuticals are looking for ways to comply as they attempt to advance products and improve their outlook.