Elevation Oncology (ELEV) (~$17MM market capitalization) is a clinical-stage biotech that until yesterday was pursuing the development of their lead therapeutic candidate, EO-3021, in a Phase 1 study for the treatment of gastric and gastroesophageal cancers. Due to a non-competitive risk-benefit analysis, Elevation is discontinuing development of EO-3021, implementing a 70% reduction-in-force and evaluating strategic options. If Elevation Oncology sounds familiar to some readers, they bought seribantumab and other assets from Merrimack Pharmaceuticals (formerly MACK, now a non-traded liquidating trust) in 2019 for a small upfront fee and some milestone payments. ELEV discontinued development of seribantumab in January 2023. After that failure, ELEV switched their focus to EO-3021, so this is the second swing and miss, seems time to formally waive the white flag and return cash to shareholders.
ELEV is run by a skeleton captain terrified by his next steps in the job market, time for Clark Street Value to go activist?
ReplyDeleteHa, yeah I'm too small time for that. Just saying more of these should accept the liquidation style buyout that Tang usually tosses out there.
Deletesir, your account size does not reflect your influence
DeleteGood to see BML joining the party with a 10% stake.
ReplyDeleteAt a glance the 22.05mm outstanding common warrants would get a payout using a black scholes valuation in a cash merger/liquidation, another $1-3mm is not game changing though. The 30mm of expenses actually strikes me as a bit aggressive given that NCAV is from Dec'24 so half that was probably already burned in almost already finished Q1, ~90 days from today seems like a tight timeline given they're probably more focused on trying to capital raise for EO-1022 for now.
ReplyDeleteTheir losses in 2024 amounted to $44M - see here https://investors.elevationoncology.com/2025-03-06-Elevation-Oncology-Reports-Fourth-Quarter-and-Full-Year-2024-Financial-Results-and-Highlights-Recent-Business-Achievements
DeleteSo let's say around $11M per quarter. Why would their cash burn be significantly higher than that now that they are reducing their workforce already?
Management's cash runway comment implies higher cumulative average intended spend going forward (ramping for a EO-1022 trial?) so taking them at their word even if it does look pretty odd. What's your base case expectation on this?
DeleteFWIW - in a liquidation, the warrants essentially get converted to shares (black-Scholes pymt is only for a merger) so share count goes up 35% which is likely more dilutive to current shareholders than a BS payout given current figures
Deleteas far as i know this would only be the case if the liquidation value per share is above the strike price, which seems unlikely given the strike price is at $2.25 according to the annual report. some warrants are a bit lower, but still far above net asset value
DeleteAnyone looked at MURA? ~$130M in cash and crazy cash/market cap ratio (500%+)
ReplyDeleteI understand that analysts were sceptical of their pipeline, especially after a similar therapy from NKTR/BMY failed, but MURA seems determined to spend all the cash by Q1'26 anyway.
DeleteYeah, idk. They're not pursuing phase 3. I bet a RIF is announced by next week and or Tang/BML jumps in
DeleteSpeculative but it does look ridiculously cheap going off of the latest Q4 guidance.
DeleteThe BoD owns absolutely nothing. They'll gleefully burn the whole thing down just to keep putting food on their tables. I don't trust it until something changes there.
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