Clark Road Worth: Sio Gene Therapies: Small Liquidation

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Within the IMRA put up feedback, I discussed that Sio Gene Therapies (SIOX) (~$30MM market cap) was a possible liquidation candidate.  Sio Gene Therapies is among the many pre-revenue biotechnology corporations — this one was initially centered on gene remedy for Parkinson’s illness — that has given up growth and was pursuing strategic alternate options attributable to poor medical outcomes and/or robust capital elevating situations.  Usually these damaged biotechnology corporations find yourself doing a reverse merger, however right here the corporate by no means actually had its personal IP, they’d licensed the IP from third events and their NOLs are primarily domiciled in Switzerland the place company taxes are low, thus limiting their worth.  Aside from a public shell, which is not in a lot demand as of late when SPACs are all liquidating and the IPO market is pretty quiet, SIOX has little worth remaining exterior of its money.  This week, SIOX introduced the board permitted a plan of liquidation (requires shareholder approval).

The steadiness sheet is pretty easy at this level (9/30 10-Q):

They’ve already laid off most of their employees and gotten out of their workplace leases (no non-current liabilities are remaining), this needs to be a reasonably straight ahead liquidation.  The remaining money burn needs to be restricted to some remaining G&A and liquidation prices.  They do point out in the identical 10-Q that “we proceed to conduct one pre-clinical analysis and growth program” nevertheless it should be small and certain simple to pause.  Along with the above steadiness sheet, they do have a CVR-like cost of as much as $7MM after their sale of Arvelle Therapeutics, whereas that is a pleasant lotto ticket, it additionally means the long run liquidating belief may be round some time (unclear to me how lengthy these milestone funds lengthen) which might decrease the potential IRR.

The present market cap is about $30MM, versus a reasonably liquid e book worth of $49MM ($0.66/share) as of 9/30, that offers loads of room for G&A and liquidation bills.  My guess (just like a commenter within the IMRA put up) is that we find yourself with ~$0.55/share, a lot of that returned early as there’s actually not a enterprise right here remaining.  I personal a smallish/tracker place, might attempt to add extra if it falls on a delisting, and so on.

Disclosure: I personal shares of SIOX

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