Damaged Biotech, Reverse Merger Threat

Eliem Therapeutics (ELYM) ($67MM market cap) is a damaged biotech that beforehand was centered on growing therapies for psychological well being and central nervous system problems. Again in February of this yr, Eliem paused growth on ETX-155 attributable to “difficult capital setting” regardless of having FDA assist for a Section 2 trial to deal with main depressive dysfunction.  Factors to some attainable worth and expense self-discipline.  The corporate did a discount in workforce of 55% and refocused on the pre-clinical ETX-123. As we have seen with others, they ended up absolutely pausing all analysis and growth in July, introduced plans to discover strategic options and accomplished an extra workforce discount (which is captured within the severance prices under).

This one is somewhat straight ahead, there isn’t any debt, minimal lease obligations, ~$100MM of money and a 49% shareholder in RA Capital.

RA Capital is an institutional participant in life sciences, they make investments throughout the pre-revenue/income spectrum, Andrew Levin from RA Capital is the chairman of the board for ELYM. He seems to be extra of a scientist than an investor, however I am certain straddles each.  All that to remain this case in all probability leans in direction of a reverse merger — it has been 4+ months for the reason that strategic options announcement, a scientist as chairman and controlling shareholder (may need one thing they personal privately and need to deliver public), however given the possession alignment, hopefully a effectively thought out transaction.  The IP may also be price one thing right here to somebody eager to pursue a Section 2 trial for ETX-155.