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AVROBIO (AVRO) (~$76MM market cap) is the most recent damaged biotech that’s buying and selling under web money to announce they’re pursuing strategic alternate options. AVROBIO is a scientific stage gene remedy firm that bought certainly one of their property, AVRO’s cystinosis gene remedy program, to Novartis in Might for $87.5MM in money, whereas retaining their HSC gene remedy for Gaucher program which that they had beforehand introduced intentions to provoke a Part 2/3 trial later this 12 months. With the strategic alternate options announcement, AVROBIO introduced they have been pausing improvement efforts (and shedding 50% of their workforce), however the remaining IP property possible have some constructive worth in contrast to others within the damaged biotech basket. If any readers have experience on this space or perception into the potential worth, please remark under.
Doing my fast again of the envelope math on what a liquidation situation would really like (to be clear, a liquidation wasn’t talked about as one of many choices they have been contemplating, however I nonetheless discover it useful):
The above is probably going overly punitive on this situation however I wished to be in step with different comparable concepts. As a part of the asset sale, AVROBIO did signal on to supply assist to Novartis for 12 months beneath a Separation Providers Settlement, which is perhaps why they nonetheless must retain 50% of their workforce. Once more, their remaining IP possible nonetheless has worth, if they’ll promote it for $10+ million, then we’re taking a look at nearer to $2.00 per share. A reverse merger appears to at all times be the primary choice, with the market rallying, perhaps these come again in vogue as effectively.
Disclosure: I personal shares of AVRO
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