Ribozyme Pharmaceuticals Inc.'s stock shot up 56 percent Thursday after shareholders voted in favor of the company's plans for financing, a name change and a reverse stock split.
As part of the actions, Ribozyme changed its name to Sirna Therapeutics Inc. and has $50 million to $52 million, or enough cash to run the business for four years. "That's pretty good in biotech," said Howard Robin, Sirna's president and CEO, who told BioWorld Today that morale at the company is "very high." Sirna has 28.17 million shares outstanding on a post-split basis.
Before Thursday, Sirna was looking at possible delisting on Nasdaq because the company failed to comply with the $1 minimum bid price and the $10 million minimum stockholders' equity requirements for continued listing.
But after a 1-for-6 reverse stock split as part of its initiative to regain compliance with Nasdaq, the company's stock, under a new "symbolic" symbol, "RNAI," closed at $4.22, up $1.56, or 56.3 percent, on a post-split basis. The stock was at 45 cents before the split and would have opened on a post-split basis at $2.70.
"I can only say that I think this company has been for quite some time an undervalued company, and now that we have the validation from such a high-quality group of investors and people see the progress we are making in this very exciting field of RNAi, I would like to think that the stock will start to reflect the appropriate value," Robin said.
"We'll have a meeting with Nasdaq in a week or two and of course now, our stock, with the reverse split, is $2.70, so we are now well above the Nasdaq $1 requirement, our market cap [$120 million after Thursday's close] is well above the $10 million requirement," Robin said. "I still need to present the business plan and have them make a judgment on it, but I'm hopeful that between meeting their cutoff requirements and our high-quality business plan, that they will let us stay on Nasdaq National."
The symbol RNAI represents Sirna's science, a focus on RNA interference (RNAi) technology. RNAi "silences" gene expression by deploying small interfering RNA, called siRNA, to degrade messenger RNA, which is the link between DNA and proteins. Incidentally, Robin said the name "Sirna" was selected because it sounds pleasant and it represents what the company does - silencing RNA.
In previous conversations with BioWorld Today, Robin said the company sees itself as a leader in RNAi and believes it will be the first company in the clinic with an RNAi compound. (See BioWorld Today, April 14, 2003.)
Sirna already is using RNAi applications for research in hepatitis B and C, and macular degeneration. Robin expects to have animal data in hepatitis B by the middle of the year, and overall, the company plans to have targets for the clinic in all three areas by the end of the year.
The promising RNAi technology attracted investors, who in February agreed to purchase $48 million in stock and warrants as part of a plan to gain a controlling interest in a company focused on RNAi. They are The Sprout Group, of New York; Venrock Associates, of New York; Oxford Bioscience Partners, of Boston; Techno Venture Management, of Munich, Germany; and Granite Global Ventures, of Menlo Park, Calif. (See BioWorld Today, Feb. 13, 2003.)
Also, as part of the deal, the investors have the right to appoint four designees to Sirna's seven-member board, which, along with the 86 percent stock ownership, will give them a controlling interest.
In other business, last week Elan Corp. plc, of Dublin, Ireland, transferred its 19.9 percent interest in Medizyme Pharmaceuticals Ltd. (established for the development of Herzyme) to Sirna in exchange for a portion of any future license fees, development revenues and royalties on commercial sales of Herzyme, a breast cancer candidate.
Elsewhere in the pipeline, Sirna and Chiron Corp., of Emeryville, Calif., recently completed a Phase II trial of Angiozyme, an anti-angiogenesis drug in metastatic colorectal cancer, and are scheduled to present the data at the American Society of Clinical Oncology meeting in June. Last year the companies failed to achieve statistical significance in a Phase II trial of Angiozyme in metastatic breast cancer.
Sirna discontinued a study last year of Heptazyme, also a ribozyme-based drug, after one animal in a yearlong study developed a detached retina. (See BioWorld Today, May 1, 2002.)
Robin said the stockholders' vote will not impact the structure of the company in terms of employees. The company has about 70 employees, down from about 130 after a restructuring last summer. (See BioWorld Today, Feb. 13, 2003, and Aug. 16, 2002.)