Artiva Biotherapeutics: Busted Biotech

Apologies for the long layoff, I suddenly found myself important at work and have had to reduce my time spent on investing/blogging.  No promises, but I hope to be more active again.  A quick return to blogging post:

Artiva Biotherapeutics (ARTV) (~$210MM market cap) was a development stage biotech focused on its lead asset, AlloNK, a treatment for autoimmune diseases.  This past May, the company raised $300MM to fund AlloNK's development, however things quickly turned tragic when the company announced on 10/27 they were shutting down clinical trials, terminating 94% of their workforce and pursuing strategic alternatives following two deaths occurring in their trial.  

The combination of significant cash on the balance sheet and a complete white flag on development makes this a compelling busted biotech.  Below is my back-of-envelope liquidation math:

RA Capital owns about 38% of the company, a near controlling stake, which could lean towards a reverse merger.  Although, I would expect a reverse merger to include a pre-closing dividend, possibly a CVR (although the IP might not be worth much here) and a PIPE of new investors, the current price of $4.12 provides nice downside protection.

Disclosure: I own shares of ARTV