Description
ACRS is a bustedbiotech pharma micro-cap trading below its net cash with catalysts coming up.
Following a failed phase 2 trial for its primary drug candidate in November 2023, the company cut its workforce by 46% a month later.
Multiple activist investors (Kevin Tang, BML Investment Partners, Foresite Capital) are inolved.
In February 2024, the CEO Douglas Manion and the Chief Medical Officer Dr. Gail Cawkwell left the company, and the company initiated a strategic evaluation of alternatives of the company.
On March 14, 2024, Andrew Powell, a member of the board of directors (the “Board”) of Aclaris Therapeutics, Inc. (the “Company”), notified the Company of his intent to resign as a member of the Board, effective as of the date of the Company’s 2024 Annual Meeting of Stockholders, which is expected to be held on June 6, 2024 (the “Annual Meeting”). Mr. Powell’s resignation from the Board was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
A likely outcome is that Tang and/or BML and/or Foresite will do something, like they have done in the past, to monetize their stakes at a win for shareholders who come in at these prices. You can view the history of these funds with the following biotech companies in the past: TALS, GRPH, FIXX, ELYM, NLTX,JNCE, THRX, RPHM,RAIN, and KNTE.
In all the above scenarios, the companies either ended up in a reverse merger deal that was profitable for existing shareholders, or the companies were bought out by affiliated parties of the 3 activist funds at a premium to stock price and a discount to the net cash. If you use 15% discount to net cash as the buyout price, this will still yield a meaningful positive returns for shareholders who come in at these prices of $1.15 per share.
Besides the net cash position of 116M, the company has 3 development programs: 2 in atopic dermatitis and 1 in pancreatic cancer.
Net loss for the 4th quarter of 2023 was 1.5m, a very manageable amount given their 116M cash position.
The most likely scenario is that over the next 6 months, the company will sell its development programs and find a reverse merger candidate, or get bought out by funds affiliated with the 3 activist funds named above.
I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise hold a material investment in the issuer's securities.
Catalyst
- Departure of CEOS and board directors
- Involvement of 3 activist funds who have a history of working together in monetizing, liquidating the company or finding a reverse merger deal, to get a positive return for shareholders.