AVROBIO (AVRO) (~$76MM market cap) is the newest damaged biotech that’s buying and selling under internet money to announce they’re pursuing strategic options. AVROBIO is a medical stage gene remedy firm that bought one among their belongings, AVRO’s cystinosis gene remedy program, to Novartis in Could for $87.5MM in money, whereas retaining their HSC gene remedy for Gaucher program which that they had beforehand introduced intentions to provoke a Part 2/3 trial later this yr. With the strategic options announcement, AVROBIO introduced they had been pausing growth efforts (and shedding 50% of their workforce), however the remaining IP belongings seemingly have some constructive worth in contrast to others within the damaged biotech basket. If any readers have experience on this space or perception into the potential worth, please remark under.
Doing my fast again of the envelope math on what a liquidation state of affairs would really like (to be clear, a liquidation wasn’t talked about as one of many choices they had been contemplating, however I nonetheless discover it useful):
The above is probably going overly punitive on this state of affairs however I wished to be in step with different related concepts. As a part of the asset sale, AVROBIO did signal on to supply assist to Novartis for 12 months beneath a Separation Providers Settlement, which could be why they nonetheless have to retain 50% of their workforce. Once more, their remaining IP seemingly nonetheless has worth, if they’ll promote it for $10+ million, then we’re taking a look at nearer to $2.00 per share. A reverse merger appears to at all times be the primary choice, with the market rallying, perhaps these come again in vogue as properly.
Disclosure: I personal shares of AVRO
