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On Friday, Stifel analysts downgraded Vor Biopharma Inc. (NASDAQ:VOR) stock from Buy to Hold, significantly reducing the price target to $0.30 from the previous $5.00. The downgrade triggered a dramatic 75.81% stock price decline over the past week, as shown by InvestingPro data. The downgrade comes as a result of discussions with the company’s management, indicating concerns over clinical data and a difficult financing environment in the biotech sector.
The management at Vor Biopharma has hinted at potential issues within the preliminary VCAR33 dose-escalation data, which is still expected to be presented by trial investigators at the European Hematology Association (EHA) meeting in June 2025. Despite this scheduled presentation, the data seems to present challenges that could complicate the planned second half of 2025 initiation of a trem-cel/VCAR33 Treatment System trial. InvestingPro analysis shows the company’s financial health score is weak at 1.52, with 16 additional key insights available to subscribers.
In response to these challenges, Vor Biopharma’s management is now exploring all strategic alternatives. The company has also taken a drastic step by implementing approximately a 95% workforce reduction. This reduction is anticipated to incur around $11 million in severance and restructuring expenses.
The revised price target of $0.30 per share reflects Stifel’s estimate of the net cash and equivalents that Vor Biopharma is expected to have by the end of the second quarter of 2025, which is projected to be about $43 million. This estimate takes into account the company’s financial status at the end of the fiscal year 2024, where it reported having approximately $92 million in cash and equivalents. According to InvestingPro data, the company maintains a strong current ratio of 5.19 and holds more cash than debt, though it’s quickly burning through its reserves with negative EBITDA of $117.66 million. Furthermore, Vor Biopharma had previously provided guidance suggesting their cash runway would extend into the first quarter of 2026.
In other recent news, Vor Biopharma has announced the winding down of its clinical and manufacturing operations, a move that has led to significant changes within the company. This decision was not due to safety concerns but rather a strategic review to explore alternatives that could include asset sales or a company sale. As part of this shift, the company is reducing its workforce by 95%, retaining only a handful of employees to assist with the strategic review. Analysts from Baird and Jones Trading have downgraded Vor Biopharma’s stock, with Baird setting a new price target of $0.25, reflecting the company’s revised cash position projections by the end of 2025.
Despite these operational changes, Vor Biopharma reported holding $91.9 million in cash, cash equivalents, and marketable securities as of December 31, 2024. The company is scheduled to release its first-quarter 2025 financial results on May 14, 2025, which will be closely watched by investors. Additionally, Vor Biopharma has been notified of noncompliance with Nasdaq’s minimum bid price requirement, needing to raise its share price to at least $1.00 within the next 180 days to avoid potential delisting.
Legal advisors Cooley LLP have been engaged to assist in the strategic review process, which has no set timeline for completion. The company’s challenges are compounded by the current tough fundraising environment, which has influenced its operational decisions. Vor Biopharma’s future direction remains uncertain as it navigates through these strategic alternatives.
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