Mural Oncology (MURA) (~$40-45MM market capitalization, trading has been highly volatile today) is a former November 2023 spinoff of Alkermes (ALKS), in late March the company announced they were not continuing with a Phase 3 trial of nemvaleukin in combination with Merck's Keytruda for the treatment of ovarian cancer as it didn't significantly improve overall survival rates. The stock was already trading below cash and crashed further, but I sucked my thumb on buying it. MURA was still pursuing a Phase 2 trial of nemvaleukin for the treatment of melanoma and was only projecting their cash runway to last into the first quarter of 2026.
Today, the company announced after reviewing the melanoma Phase 2 data, they were discontinuing all development of nemvaleukin, conducting a 90% workforce reduction and pursuing strategic alternatives. Shares are up over 100%, but still at a reasonable discount to my estimated net liquidation value.
MURA is trading wildly today, it is not the normal setup where a drug disappoints in the clinic and science based biotechnology investors exit quickly, here they've long given up on MURA and the discontinuation of development is a welcomed surprise.
One interesting tidbit that a reader found, in the press release, MURA includes:
Mural plans to explore potential strategic alternatives including, but not limited to, an offer for or other acquisition of the company, merger, business combination, or other transaction.
This one reads less as a pursuit of a reverse merger and possibly more of an invitation for a Tang-style cash buyout as a substitute for a liquidation? As others in the market have commented, seems like we're seeing some momentum build behind these broken biotechs doing the right thing and returning cash to shareholders, hopefully its a trend that continues here too.
Disclosure: I own shares of MURA
Anything obvious that would make this not a PFIC now? Seems like it would be after the RIF given not a US domicile so would need to keep in a retirement account to avoid extra tax filing work.
ReplyDeleteThat's a good point, is there a grace period or a threshold date to qualify?
DeleteWhy do you ascribe value to the prepaid expenses?
ReplyDeleteIt's just a swag estimate, some of those prepaid expenses will likely be necessary in the next few months, but sure, maybe not all.
DeleteI was looking at this one last year around a similar time that you wrote up Instil Bio. Mural was originally a spin-off from Alkermes that was an interesting trade because of its enormously negative EV that didn't show up in screeners or in filings (or Bloomberg for that matter) because of the timing of Alkermes's prospectus, which was before they planned to give MURA $250 million on the spinoff. I have since followed it very closely, and recently after the drop due to their failed drug, it looked to me extremely attractive with a small chance of strategic review as a huge catalyst due to the amount of cash they held. It reminded me of an Instil set-up (which ended quite differently than expected, though also far more profitable than expected)! Thoughts on comparison between the two?
ReplyDeleteHey MDC, where did you get the shares o/s figure ? I'm seeing the below as per 10-k.
ReplyDeleteAs of February 28, 2025, the registrant had 17,228,291 ordinary shares outstanding.
Also, seeing some details in section 11. Net Loss per Share (As of December 31, 2024 and 2023, the number of ordinary shares underlying potentially dilutive securities consist of:
3,697,107)
I only included the outstanding RSUs (~835k), might have been in too much of a rush to hit publish.
DeleteAny view on the Irish rules in relation to liquidation or merger? Not too well versed but think some nuances and complexities.
ReplyDeleteI think this is a major unknown that could possibly prevent or decrease likelihood of liquidation.
DeleteI don't know anything about Irish takeover laws, but from the sounds of the press release, specifically the yellow highlighting the post, they seem to be looking to get acquired versus a formal liquidation although for shareholders it could look very similar.
DeleteYes any structure would have to occur as an acquisition. I reached to mgmt, and it seems like they would only stay on only in a scenario where there was a large amount of $ raised along with a very exciting asset. In this environment not sure how likely that is so my hope is that it looks something like an AVTE which Lucid also advised on.
Deletefeels like they hired Lucid Capital Markets to help them find a reverse merger partner.
ReplyDeleteApparently someone(s) think they are going to destroy a lot of capital. I am getting paid 30% on my stock to loan it...
ReplyDeleteI wouldn't want to own this one here if you're not ready to fight like hell if they try to waste your money on another science experiment instead of return it. They will try to keep their jobs if they can find the slightest excuse. It absolutely should work but will take effort from owners.
ReplyDeleteThat's doesn't sound appealing, is this sentiment derived from speaking with management?
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