Precision BioSciences to Effect a Reverse Stock Split

Rhea-AI Summary

Precision BioSciences, Inc. (DTIL) announces a 1-for-30 reverse stock split to increase per share market price and meet Nasdaq listing requirements. The split will be effective on February 13, 2024, with trading under the existing symbol 'DTIL'. Shareholders will receive one new share for every 30 shares held.

Insights

Financial Analyst

The announcement of a 1-for-30 reverse stock split by Precision BioSciences is a strategic move aimed at addressing the company's compliance with Nasdaq's minimum bid price requirement. Reverse stock splits are often employed by companies to lift their stock price to meet or maintain listing standards, which in this case is essential for Precision BioSciences to retain its presence on The Nasdaq Capital Market. From a financial perspective, the split does not inherently change the company's valuation, but it does alter the market perception.

Investors should note that while the number of outstanding shares decreases, the value of the company remains the same, leading to a higher price per share. This can sometimes lead to a positive market reaction if the move is seen as a step toward future growth or stability. However, it can also be perceived negatively if investors view it as a cosmetic change that does not address underlying business challenges. The adjustment to exercise prices and shares underlying equity awards is a standard procedure to preserve the value of stock options and equity incentives post-split.

Market Research Analyst

Market dynamics for biotechnology firms like Precision BioSciences are complex, with investor sentiment often swayed by both financial health and the potential of the underlying technology. The ARCUS® platform represents a significant scientific advancement in gene editing and the company's ability to maintain its listing status can be crucial for continued investment, especially from institutional investors who may have mandates to invest only in listed securities.

Moreover, the reverse stock split could potentially increase institutional investor interest due to the higher per-share price, as some institutions avoid stocks under certain price thresholds. However, this move could also lead to a reduced liquidity due to a lower number of shares in circulation, which can increase volatility. Investors and analysts will closely monitor the company's performance post-split to assess the impact on liquidity and the stock's attractiveness to both retail and institutional investors.

Biotech Industry Analyst

Precision BioSciences' focus on in vivo gene editing therapies places it in a highly specialized and innovative segment of the biotechnology industry. The ARCUS® platform's capability to perform sophisticated gene edits is a testament to the company's scientific prowess. However, the success of biotech firms is heavily reliant on their research outcomes, regulatory approvals and the ability to bring products to market.

The reverse stock split does not directly affect the scientific or operational aspects of the company, but it does have implications for its financial stability and investor relations. Maintaining a listing on a major exchange not only provides visibility but also access to capital markets, which is crucial for funding ongoing research and development. The long-term impact of this corporate action will largely depend on the company's ability to leverage its enhanced market standing to support its core scientific endeavors and navigate the regulatory landscape.

DURHAM, N.C.--(BUSINESS WIRE)-- Precision BioSciences, Inc. (Nasdaq: DTIL), an advanced gene editing company utilizing its novel proprietary ARCUS® platform to develop in vivo gene editing therapies for sophisticated gene edits, including gene elimination, insertion, and excision, today announced that its Board of Directors has approved a 1-for-30 reverse stock split of the Company’s common stock. The reverse stock split will become effective at 5:00 p.m. Eastern Time on February 13, 2024, after close of trading on The Nasdaq Capital Market. The Company’s common stock is expected to commence trading on a split-adjusted basis when the markets open on February 14, 2024 under the existing trading symbol “DTIL.” The new CUSIP number for the Company’s common stock following the reverse stock split will be 74019P207.

The primary goal of the reverse stock split is to increase the per share market price of the Company’s common stock to meet the minimum per share bid price requirement for continued listing on The Nasdaq Capital Market. The reverse stock split was approved by the Company’s stockholders at its special meeting of stockholders held on January 18, 2024. On February 6, 2024, the Company’s Board of Directors approved the reverse stock split at the ratio of 1-for-30.

As a result of the reverse stock split, every 30 shares of the Company’s common stock issued and outstanding will be automatically reclassified into one new share of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards, as applicable, as well as to the number of shares issuable under the Company’s equity incentive plans and certain existing agreements. The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split will not affect the number of authorized shares of common stock or the par value of the common stock.

No fractional shares will be issued in connection with the reverse stock split. Stockholders who would otherwise be entitled to receive fractional shares as a result of the reverse stock split will be entitled to a cash payment in lieu thereof at a price equal to the fraction to which the stockholder would otherwise be entitled multiplied by the closing sales price per share of the common stock (as adjusted to give effect to the reverse stock split) on The Nasdaq Capital Market on February 13, 2024, the last trading day immediately preceding the effective time of the reverse stock split.

Equiniti Trust Company, LLC (“Equiniti”), the Company’s transfer agent, is acting as the exchange agent for the reverse stock split. Stockholders with book-entry shares or who hold their shares through a bank, broker or other nominee will not need to take any action. Stockholders of record who held pre-split certificates will receive their post-split shares in book-entry form and will be receiving a statement from Equiniti regarding their common stock ownership post-reverse stock split.

Additional information about the reverse stock split can be found in the Company’s definitive proxy statement (the “Proxy Statement”) filed with the Securities and Exchange Commission (the “SEC”) on December 4, 2023, as supplemented, which is available free of charge at the SEC’s website, www.sec.gov, and on the Company’s website at precisionbiosciences.com.

About Precision BioSciences, Inc.

Precision BioSciences, Inc. is an advanced gene editing company dedicated to improving life (DTIL) with its novel and proprietary ARCUS® genome editing platform that differs from other technologies in the way it cuts, its smaller size, and its simpler structure. Key capabilities and differentiating characteristics may enable ARCUS nucleases to drive more intended, defined therapeutic outcomes. Using ARCUS, the Company’s pipeline is comprised of in vivo gene editing candidates designed to deliver lasting cures for the broadest range of genetic and infectious diseases where no adequate treatments exist. For more information about Precision BioSciences, please visit www.precisionbiosciences.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the expected timing of the reverse stock split, the impact of the reverse stock split on the Company’s share price, and the Company’s ability to meet the minimum per share bid price requirement for continued listing on The Nasdaq Capital Market. In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “approach,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “goal,” “intend,” “look,” “may,” “mission,” “plan,” “possible,” “potential,” “predict,” “project,” “pursue,” “should,” “target,” “will,” “would,” or the negative thereof and similar words and expressions.

Forward-looking statements are based on management’s current expectations, beliefs and assumptions and on information currently available to us. These statements are neither promises nor guarantees, and involve a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various important factors, including, but not limited to, our ability to become profitable; our ability to procure sufficient funding to advance our programs; risks associated with our capital requirements, anticipated cash runway, requirements under our current debt instruments and effects of restrictions thereunder, including our ability to raise additional capital due to market conditions and/or our market capitalization; our operating expenses and our ability to predict what those expenses will be; our limited operating history; the progression and success of our programs and product candidates in which we expend our resources; our limited ability or inability to assess the safety and efficacy of our product candidates; the risk that other genome-editing technologies may provide significant advantages over our ARCUS technology; our dependence on our ARCUS technology; the initiation, cost, timing, progress, achievement of milestones and results of research and development activities and preclinical and clinical studies, including clinical trial and investigational new drug applications; public perception about genome editing technology and its applications; competition in the genome editing, biopharmaceutical, and biotechnology fields; our or our collaborators’ or other licensees’ ability to identify, develop and commercialize product candidates; pending and potential product liability lawsuits and penalties against us or our collaborators or other licensees related to our technology and our product candidates; the U.S. and foreign regulatory landscape applicable to our and our collaborators’ or other licensees’ development of product candidates; our or our collaborators’ or other licensees’ ability to advance product candidates into, and successfully design, implement and complete, clinical or field trials; potential manufacturing problems associated with the development or commercialization of any of our product candidates; delays or difficulties in our and our collaborators’ and other licensees’ ability to enroll patients; changes in interim “top-line” and initial data that we announce or publish; if our product candidates do not work as intended or cause undesirable side effects; risks associated with applicable healthcare, data protection, privacy and security regulations and our compliance therewith; our or our licensees’ ability to obtain orphan drug designation or fast track designation for our product candidates or to realize the expected benefits of these designations; our or our collaborators’ or other licensees’ ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations and/or warnings in the label of an approved product candidate; the rate and degree of market acceptance of any of our product candidates; our ability to effectively manage the growth of our operations; our ability to attract, retain, and motivate executives and personnel; effects of system failures and security breaches; insurance expenses and exposure to uninsured liabilities; effects of tax rules; effects of the COVID-19 pandemic and variants thereof, or any pandemic, epidemic, or outbreak of an infectious disease; the success of our existing collaboration agreements, and our ability to enter into new collaboration arrangements; our current and future relationships with and reliance on third parties including suppliers and manufacturers; our ability to obtain and maintain intellectual property protection for our technology and any of our product candidates; potential litigation relating to infringement or misappropriation of intellectual property rights; effects of natural and manmade disasters, public health emergencies and other natural catastrophic events; effects of sustained inflation, supply chain disruptions and major central bank policy actions; market and economic conditions; risks related to ownership of our common stock, including fluctuations in our stock price; our ability to meet the requirements of and maintain listing of our common stock on Nasdaq or other public stock exchanges; and other important factors discussed under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, as any such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investors page of our website under SEC Filings at investor.precisionbiosciences.com.

All forward-looking statements speak only as of the date of this press release and, except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240209962655/en/

Investor and Media Contact:

Mei Burris

Senior Director of Finance and Controller

Mei.Burris@precisionbiosciences.com

Source: Precision BioSciences, Inc.

FAQ

What is the reason behind Precision BioSciences, Inc. (DTIL) announcing a reverse stock split?

The primary goal of the reverse stock split is to increase the per share market price of the Company’s common stock to meet the minimum per share bid price requirement for continued listing on The Nasdaq Capital Market.

When will the reverse stock split of Precision BioSciences, Inc. (DTIL) be effective?

The reverse stock split will become effective at 5:00 p.m. Eastern Time on February 13, 2024, after the close of trading on The Nasdaq Capital Market.

What ratio was approved for the reverse stock split of Precision BioSciences, Inc. (DTIL)?

The reverse stock split was approved at the ratio of 1-for-30, meaning every 30 shares of the Company’s common stock issued and outstanding will be reclassified into one new share.

How will the reverse stock split affect the exercise prices of Precision BioSciences, Inc. (DTIL) outstanding equity awards?

Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards as a result of the reverse stock split.

What will happen to fractional shares after the reverse stock split of Precision BioSciences, Inc. (DTIL)?

No fractional shares will be issued. Stockholders entitled to fractional shares will receive a cash payment in lieu thereof based on the closing sales price per share on The Nasdaq Capital Market on February 13, 2024.