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MIRAMAR, Fla. - HCW Biologics Inc. (NASDAQ: HCWB), a clinical-stage biopharmaceutical company with a market capitalization of $12.6 million, announced today that its Board of Directors has approved a 1-for-40 reverse stock split. The action is aimed at regaining compliance with Nasdaq’s minimum bid price requirement for continued listing, following an 83% decline in share price over the past year. The reverse stock split is scheduled to take effect at 12:01 a.m. Eastern Time on April 11, 2025, and the company’s common stock will begin trading on a split-adjusted basis on the same day.
The reduction will decrease the number of HCW Biologics’ issued and outstanding shares of common stock from approximately 44.9 million to around 1.1 million. Despite this significant reduction, the total number of authorized shares and the par value per share will remain unchanged. This move will not alter any shareholder’s percentage ownership in the company, except for adjustments due to fractional shares, which will be rounded up to the nearest whole share. According to InvestingPro data, the stock currently trades with high price volatility and has declined over 42% in the past six months.
The reverse split will proportionately affect the number of shares available for issuance under the company’s equity incentive plans and the shares issuable upon the exercise of outstanding stock options and warrants. Correspondingly, the exercise prices of these instruments will be adjusted as per their terms.
The company has completed the necessary amendments to its Certificate of Incorporation with the Delaware Secretary of State to effectuate the reverse split. Equiniti Trust Company LLC, the transfer agent for HCW Biologics, will act as the exchange agent for the reverse stock split. Shareholders holding electronic shares will see the change reflected in their accounts automatically, while those holding physical shares will receive instructions from their respective banks, brokers, or nominees.
HCW Biologics specializes in creating immunotherapies to extend health span by targeting the link between chronic inflammation and age-related diseases. The company has developed two drug discovery platforms, TOBI™ and TRBC, to generate novel multi-functional fusion molecules with immunotherapeutic properties. Financial metrics from InvestingPro indicate significant challenges, with an EBITDA of -$28.3 million and concerning liquidity metrics. InvestingPro subscribers have access to 8 additional key financial health indicators and exclusive analysis tools to better assess investment opportunities in the biotech sector.
This announcement is based on a press release statement and contains forward-looking statements regarding the expected impact of the reverse stock split and the company’s ability to comply with Nasdaq listing requirements. Investors are advised to consult the full press release and the company’s filings with the Securities and Exchange Commission for a complete understanding of the risks involved.
In other recent news, HCW Biologics Inc. announced the approval of a reverse stock split following a Special Meeting of Stockholders, with the final ratio set at one-for-forty. This move aims to maintain the company’s listing on The Nasdaq Stock Market LLC. Additionally, the company amended a key agreement with WY Biotech Co., Ltd. due to delays on the partner’s end, restructuring the payment schedule for a $7.0 million license fee. HCW Biologics also received an extension from the Nasdaq Hearings Panel to meet continued listing requirements, with deadlines set for April and June 2025.
Furthermore, HCW Biologics gained FDA clearance to start a Phase 1 clinical trial for its drug candidate HCW9302, targeting moderate-to-severe alopecia areata. This trial will assess the safety and optimal dosing of the treatment, which leverages the company’s TOBI platform technology. The company maintains its Opt-In Right to assume development responsibilities for HCW11-006 in certain regions, despite the altered agreement with WY Biotech. These developments reflect HCW Biologics’ strategic efforts to advance its platform technologies and secure potential revenue opportunities.
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