CAMBRIDGE, Mass. - Eterna Therapeutics Inc. (NASDAQ:ERNA), a biotechnology firm engaged in cell therapy development, has announced a stock repurchase program that authorizes the buyback of up to $1 million of its common stock. This initiative is part of the company's strategy to bolster shareholder value and reflects the Board's confidence in Eterna's long-term business plan.
The repurchase program will be conducted through various means, including open market transactions and privately negotiated deals, subject to market conditions and other considerations. Management will decide the timing and volume of stock repurchases, with no predetermined expiration date for the program. The program can be halted, amended, or terminated at any time at the company's discretion.
Sanjeev Luther, President and CEO of Eterna, expressed that the buyback underscores the company's belief in its future prospects. Eterna Therapeutics specializes in off-the-shelf cell therapies aimed at treating advanced solid tumors, with a focus on triple-negative breast cancer and platinum-resistant, TP53-mutant ovarian cancer. The company's leading product, ERNA-101, is an induced allogenic mesenchymal stem cell therapy designed to enhance anti-tumor immunity by delivering pro-inflammatory cytokines to the tumor microenvironment.
This press release includes forward-looking statements that involve risks and uncertainties, and actual results may differ materially. The company cautions that the stock repurchase program does not guarantee the buyback of shares or the anticipated benefits to Eterna and its shareholders. The information is based on a press release statement, and investors are advised to review the company's SEC filings for a more detailed understanding of associated risks.
In other recent news, Eterna Therapeutics has regained Nasdaq compliance and is now focusing on its preclinical cell therapy programs. The company has also finalized a private placement stock sale, raising around $1.1 million for general working capital. Additionally, Eterna has entered into an exclusive license and collaboration agreement with Factor Bioscience Limited, granting Eterna the exclusive rights to develop certain technologies for cancer, autoimmune disorders, and rare diseases.
Eterna has issued approximately 1.4 million shares of common stock and pre-funded warrants to purchase 115,000 shares. The company also converted approximately $3.9 million in senior convertible notes into 6.2 million shares of common stock and pre-funded warrants to purchase 1.8 million shares. Following these transactions, Eterna Therapeutics has approximately 51.4 million shares of common stock outstanding.
Despite these developments, the company is facing potential delisting from the Nasdaq Stock Market due to an equity shortfall. Eterna plans to appeal this decision, which will temporarily delay the suspension of trading. The company has also announced a significant change in the date of its annual meeting of stockholders, now scheduled for late September. These are some of the recent developments at Eterna Therapeutics Inc.
InvestingPro Insights
Eterna Therapeutics' recent announcement of a stock repurchase program comes at a time when the company faces significant financial challenges, as revealed by InvestingPro data. The company's revenue for the last twelve months as of Q3 2023 stands at a modest $0.6 million, despite a remarkable revenue growth of 1072.55% over the same period. This growth, however, has not translated into profitability, with the company reporting an operating income of -$20.32 million.
InvestingPro Tips highlight that Eterna is "quickly burning through cash" and that "short term obligations exceed liquid assets." These factors may raise questions about the wisdom of allocating funds for share repurchases instead of reinvesting in the business or strengthening the balance sheet.
The stock's recent performance has been particularly concerning. InvestingPro data shows a one-month price total return of -48.57% and a three-month return of -71.89%. This aligns with the InvestingPro Tip noting that the "stock has taken a big hit over the last week" and has "fared poorly over the last month."
Given these financial metrics and market performance, investors might want to carefully consider the implications of the buyback program. While management sees it as a vote of confidence, the company's cash burn rate and volatile stock price suggest a complex financial situation.
For a more comprehensive analysis, InvestingPro offers 14 additional tips for Eterna Therapeutics, providing deeper insights into the company's financial health and market position.
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