Several biotechs trading below cash position - Evercore ISI

iTeos Therapeutics

01/06/2022 11:42

** Evercore ISI lists ~30 biotech companies that are trading
at a negative enterprise value with a cash position greater than
the market value, with Galapagos NV  GLPG.AS  trading at 42%
cash premium to its market capitalization 
    ** Cos combined have $14 bln cash in hand, while they trade
at a combined market capitalization of $8 bln 
    ** "With so much excess cash in the hands of struggling
companies, it's possible that some does get deployed in ways we
aren't accustomed to," says analyst Josh Schimmer
    ** Says private cos may be vying for this cash via reverse
mergers, given recent struggles with IPOs and SPACs 
    ** But factoring in estimated cash burn, Schimmer estimates
only eight cos including Galapagos and Connect Biopharma
Holdings  CNTB.O  would still have a negative enterprise value
of $100 mln or lower by year-end 2022 
    ** Says these cos shouldn't be forced to return capital to
investors but may be considering the most value-creating way to
deploy cash 
    ** Shares of biotech cos have slumped in recent months after
rapid growth in 2020 and the first half of 2021 due to lower M&A
in the sector and investors preferring private markets over
public 

 (Reporting by Manas Mishra)
 ((Manas.Mishra@thomsonreuters.com;
www.twitter.com/Manaswrites15))