BOSTON - Finch Therapeutics Group , Inc. (NASDAQ: OTC:FNCH), a company specializing in microbiome technology, has announced its plan to delist its common stock from the Nasdaq Global Select Market. The firm intends to file the necessary paperwork for delisting with the Securities and Exchange Commission (SEC) and Nasdaq around October 31, 2024.
Finch's shares have been trading on an over-the-counter (OTC) market since being suspended from Nasdaq on May 28, 2024, following Nasdaq's classification of the company as a "public shell." The decision to delist was made by Finch's Board of Directors, who determined it to be in the best interest of the company and its shareholders. This move is expected to reduce significant costs related to SEC reporting requirements and compliance with the Sarbanes-Oxley Act, among other financial and administrative burdens.
The company has faced compliance issues with Nasdaq's continued listing standards, including a notice on February 16, 2024, regarding its status as a public shell and a previous deficiency notice on November 15, 2023, for not meeting the minimum market value requirement for publicly held shares. Additionally, the resignation of Susan Graf from the Board and Audit Committee on March 26, 2024, led to non-compliance with the Nasdaq's audit committee composition rules.
Post-delisting, Finch anticipates that its common stock will continue to be traded on the OTC market, although there is no guarantee that trading on the OTC will be sustained. The company's strategy focuses on realizing the value of its intellectual property through licensing and enforcing patent rights, as well as potentially generating additional data on select product candidates through academic partnerships.
This announcement is based on a press release statement, and it is important to note that statements regarding the company's plans and expectations are forward-looking and subject to various risks and uncertainties. These include potential delays in the delisting process and the possibility that the anticipated benefits may not be fully realized. The information provided is up to date as of its publication but may not remain current or accurate.
In other recent news, Finch Therapeutics Group, Inc. has emerged victorious in a significant patent trial. The biopharmaceutical company was awarded a total of $25.0 million in damages and $0.815 million in running royalties for sales of Rebyota, a treatment for recurrent Clostridioides difficile infection, up to the trial date. The U.S. District Court for the District of Delaware found that Ferring Pharmaceuticals Inc. had willfully infringed on patents held by Finch and the University of Minnesota (UMN) related to microbiome-based therapies. Despite this favorable ruling, Finch anticipates that Ferring will seek to overturn the verdict through post-trial motions and an appeal. The outcome of this litigation could have potential implications for the commercial landscape of microbiome-based treatments. These are the latest developments in the ongoing legal proceedings between Finch Therapeutics Group, Inc., the University of Minnesota, and Ferring Pharmaceuticals Inc.
InvestingPro Insights
As Finch Therapeutics Group, Inc. (NASDAQ: FNCH) prepares to delist from Nasdaq, InvestingPro data provides additional context to the company's financial situation and market performance.
Despite the challenges leading to the delisting decision, FNCH has shown remarkable price performance recently. InvestingPro data reveals a staggering 677.48% price total return over the last three months, and a 437.99% return over the past six months. This aligns with the InvestingPro Tip highlighting the company's "Strong return over the last three months" and "Large price uptick over the last six months."
However, the company's financial health remains a concern. An InvestingPro Tip notes that FNCH is "Quickly burning through cash," which may have contributed to the decision to delist and reduce compliance costs. Additionally, the tip indicating that FNCH is "Not profitable over the last twelve months" is reflected in the negative EBITDA of -19.51M USD for the last twelve months as of Q2 2024.
Interestingly, despite these challenges, another InvestingPro Tip suggests that "Analysts predict the company will be profitable this year." This could be a factor in the company's strategy to focus on realizing value from its intellectual property and potential academic partnerships.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for FNCH, providing a deeper understanding of the company's financial position and market performance.
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