Mural Oncology: Update

Mural Oncology (MURA) ($~30MM market cap) has turned into a bit of a battleground busted biotech in the comments section of my original post.  I always appreciate feedback on ideas, in this case it helped me avoid the fall in MURA's stock price after their recently published business update.  The cash burn has been significantly higher than expected as they wind down their R&D and clinical efforts, but included in the press release were a few nuggets worth pointing out making the stock interesting at current price levels.

First, MURA gives a cash estimate for year-end, this is a positive change as they didn't in the original April strategic alternatives announcement:

As of June 30, 2025, the company had approximately $77.1 million in cash and cash equivalents. The company estimates that, if it has not consummated a transaction or other strategic alternative by December 31, 2025, its cash and cash equivalents as of such date will total approximately $43 to $48 million.

At the mid-point, that equates to approximately $2.50/share.  In addition, most companies will warn that any forward estimates could come in lower than anticipated or sale processes take longer than expected, etc., but MURA sort of did the opposite:

This cash guidance is subject to a number of assumptions and actual cash balances may differ materially, particularly if the Company consummates a transaction or other strategic alternative prior to December 31, 2025.

"Actual cash balances may differ materially" then cite a positive type surprise, just found that interesting to note.  Maybe something is already in the works?  Lastly, MURA snuck in language around a liquidation or wind down being a possibility which they hadn't mentioned previously:

any strategic alternative it may pursue, including, but not limited to, an offer for or other acquisition of the company, merger, business combination or other transaction, including a possible wind- down and liquidation of the company

The simple back of envelope math is below, my guess is someone like XOMA or Tang (although one negative here is neither Tang nor BML are known shareholders) come in and make an offer that amounts to a liquidation dressed up as an acquisition (helps with the Irish takeover rules, gives management change of control bonuses, etc.) for 90% of the projected year-end cash:

There is some acknowledged hair on this situation, it is a former spin that hasn't reached the two year safe harbor (would do that in November) and it has also let go of over 90% of their employees bringing into question whether the IRS would still consider this an active trade or business.  My uneducated take is MURA is still in the drug development business, they haven't sold their assets/business (other biotechs, SYBX comes to mind, seem very aware to avoid being classified as a cash shell and continue to mention their IP in filings despite similarly stopping all development efforts), usually there is some grace period but I admit it's a risk.  

It has been several months now since the strategic alternatives announcement, if such a tax issue were a concern, MURA's advisers or legal would have popped it up by now?  Management hasn't hinted at any issues, would be an epic mistake to blatantly shoot yourself in the foot regarding taxes, but I'm sure its happened before and I could have egg on my face with this one.

Disclosure: I own shares of MURA, bought back in recently.