LianBio Announces Voluntarily Delisting from Nasdaq
- None.
- LianBio's decision to delist its ADSs may raise concerns among investors about the company's future growth and potential access to capital through the public markets. Delisting could impact the liquidity and trading volume of LIAN shares, potentially leading to decreased investor interest and valuation. Shareholders may face challenges in selling their holdings if the company is no longer listed on a major exchange.
Insights
The decision by LianBio to delist from the Nasdaq Global Market is a significant strategic move that warrants a close examination of its financial implications. Delisting can sometimes be a cost-saving measure for companies that find the expenses associated with maintaining a listing, such as regulatory compliance and listing fees, to be burdensome. However, it also reduces a company's visibility to investors and can limit access to capital markets.
For existing shareholders, the delisting could affect the liquidity of LianBio's ADSs, potentially making them harder to buy or sell. This may lead to increased volatility in the share price. Furthermore, institutional investors often have mandates that restrict investing in non-listed securities, which could lead to a sell-off as these institutions exit their positions.
From a broader market perspective, LianBio's delisting might be interpreted as a lack of confidence in the company's financial health or growth prospects. This could have a ripple effect on investor sentiment towards other biotech firms with a significant presence in Asia, particularly if LianBio's delisting is seen as part of a wider trend in the industry.
Voluntary delisting from a major stock exchange like Nasdaq is a process governed by strict legal and regulatory frameworks. LianBio must adhere to SEC requirements by filing a Form 25 to notify regulators and the public of its intent to delist. The company must also fulfill any contractual obligations to ADS holders, ensuring their rights are preserved post-delisting.
Additionally, the company's decision to delist may raise questions about compliance with ongoing disclosure obligations. While delisted companies are not bound by the same rules as those listed on Nasdaq, they still have a legal responsibility to maintain transparency with their shareholders. This includes providing accurate financial reporting and material information that could affect shareholder value.
It is also crucial to consider the potential for legal challenges from shareholders who may feel the delisting adversely affects their investment. Such challenges could lead to litigation, which can be costly and time-consuming for the company.
Understanding the context of LianBio's market environment is essential to assess the impact of its delisting. As a biotechnology firm operating in China and other major Asian markets, the company is subject to unique market dynamics, including regulatory challenges, competition and intellectual property rights issues.
The biotech sector in Asia is rapidly evolving and companies like LianBio are often at the forefront of innovation. However, delisting from an international market such as Nasdaq could signal a strategic pivot towards local markets or alternative financing strategies, such as partnerships or private funding rounds.
It is important to analyze the competitive landscape to determine if LianBio's delisting might provide an advantage to other players in the region. Conversely, it could also be a sign of a strategic realignment in response to market pressures or a shift in the company's business model that could ultimately strengthen its position in its core markets.
SHANGHAI, China and PRINCETON, N.J., Feb. 28, 2024 (GLOBE NEWSWIRE) -- LianBio (Nasdaq: LIAN) (“LianBio” or the “Company”), a biotechnology company dedicated to bringing innovative medicines to patients in China and other major Asian markets, today announced that it has provided notification to The Nasdaq Stock Market, Inc. (“Nasdaq”) of its intent to delist the Company’s American Depositary Shares (“ADSs”), each representing the right to receive one ordinary share of the Company, from the Nasdaq Global Market. LianBio expects to file a Form 25 (Notification of Removal from Listing) with the Securities and Exchange Commission (the “SEC”) and Nasdaq relating to the voluntary delisting of its ADSs on or about March 11, 2024.
Following the delisting, any trading in the Company’s ADSs would only occur in privately negotiated sales and potentially on an over-the-counter market. The Company expects that its ADSs will be quoted on a market operated by OTC Markets Group Inc. (the “OTC”) so that a trading market may continue to exist for its ADSs. There is no guarantee, however, that a broker will continue to make a market in the ADSs and that trading of the ADSs will continue on an OTC market or otherwise.
As previously announced, the Company has initiated the wind down of its operations, including the voluntary delisting and deregistration of the Company’s ordinary shares and ADSs, following the completion of a comprehensive strategic review of the Company by the Board of Directors (the “Board”). The Board believes that the decision to delist the ADSs from the Nasdaq and deregister and suspend its reporting obligations under the Exchange Act is in the best interests of the Company and the holders of its ordinary shares and ADSs. As the Company undertakes steps to wind down operations and return value to the shareholders through its asset sales, out-licensing efforts and the payment of dividends, the Board has determined that the burdens associated with operating as a registered public company outweigh any advantages to the Company and its holders of ordinary shares and ADSs. The Board’s decision was based on careful review of numerous factors, including the potential for curbing the significant costs associated with preparing and filing periodic reports with the SEC and the legal, audit and other expenses associated with being a reporting company, as well as the substantial costs and demands on management’s time under the Sarbanes-Oxley Act of 2002, SEC rules and Nasdaq listing standards.
About LianBio
LianBio is a cross-border biotechnology company on a mission to bring transformative medicines to historically underserved patients in China and other Asian markets. For more information, please visit www.lianbio.com.
Cautionary Note Regarding Forward-Looking Statements
Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute forward-looking statements. The words “anticipate,” “expect,” “believe,” “intend,” “continue,” “potential,” “may,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements in this press release include, but are not limited to, statements concerning the Board’s comprehensive strategic review; the Company’s plans for payment of dividends and the potential for payment of any future dividends upon the culmination of the wind down of the Company’s operations; the Company’s plans with respect to the delisting and deregistration of its securities; the perceived benefits and timing of the wind down; the Company’s ability to pursue the sale of its remaining pipeline assets and termination of its outstanding licenses; the timeline in which the Company expects to be able to wind down its operations; and the limitations on the future trading of the Company’s ADSs following the voluntary delisting of the ADSs from Nasdaq. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the risk that the delisting, deregistration and wind down process will take longer than expected and that the benefits of such actions may not be realized; general market conditions; the impact of changing laws and regulations and those risks and uncertainties described in LianBio’s filings with the SEC, including LianBio’s Annual Report on Form 10-K for the year ended December 31, 2022 and its subsequent filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof, and LianBio specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. Readers should not rely upon this information as current or accurate after its publication date.
For investor inquiries, please contact:
E: IR@lianbio.com
For media inquiries, please contact:
Katherine Smith, Inizio Evoke
E: katherine.smith@inizioevoke.com
T: +1 619 849 5378
FAQ
Why is LianBio (LIAN) delisting its American Depositary Shares (ADSs) from the Nasdaq Global Market?
What form will LianBio (LIAN) file with the SEC and Nasdaq for the delisting process?
How will the delisting of LianBio (LIAN) ADSs impact shareholders?
