Lipella Pharmaceuticals announces 1-for-8 reverse stock split

PITTSBURGH - Lipella Pharmaceuticals Inc. (NASDAQ:LIPO), a biotech company specializing in novel therapies for diseases lacking effective treatments, has declared a 1-for-8 reverse stock split. The action is scheduled to take effect after market close on November 7, 2024, with the company's common stock trading on a split-adjusted basis at market open on November 8, 2024.

The reverse stock split was ratified by stockholders at the Annual Meeting on September 10, 2024, and later determined by the Board of Directors. This financial maneuver aims to meet the Nasdaq Capital Market's minimum bid price requirement for continued listing. Although the reverse stock split will alter the number of outstanding shares, it will not impact the total number of authorized shares, which remains at 200 million, nor the par value, which is set at $0.0001 per share.

Following the reverse split, eight current shares of common stock will consolidate into one new share. The updated CUSIP number for the common stock will be 53630L209. Nevada Agency and Transfer Company will serve as the exchange agent for this process. Shareholders holding shares in book-entry form or through a broker or nominee will not need to take any action, as adjustments will be made automatically to reflect the reverse stock split.

Lipella Pharmaceuticals, a clinical-stage company, focuses on repurposing generic drugs for new therapeutic uses, particularly in areas with significant unmet medical needs. Having completed its initial public offering in December 2022, the company continues to develop its pipeline of potential drug candidates.

The company's press release includes forward-looking statements regarding the expected effects of the reverse stock split and its ability to comply with Nasdaq's listing standards. However, these statements are subject to risks and uncertainties, and there is no guarantee that the desired outcomes will be achieved. The company acknowledges that maintaining Nasdaq listing standards and securing additional financing are among its current challenges.

This news article is based on a press release statement from Lipella Pharmaceuticals Inc.

In other recent news, Lipella Pharmaceuticals is grappling with potential delisting from the Nasdaq due to non-compliance with the exchange's listing requirements, specifically falling short of the minimum stockholders' equity threshold. The company has requested a hearing before a Nasdaq Hearings Panel to appeal the decision and has been granted a stay on the suspension of trading of its common stock on the Nasdaq Capital Market until the hearing's outcome. Lipella has also received shareholder approval to implement a reverse stock split, a strategy to regain compliance with the minimum bid price requirement.

Simultaneously, Lipella reported positive early results from a Phase 2a clinical trial for LP-310, a treatment for Oral Lichen Planus (OLP). The company has also initiated a Phase 2b clinical trial for LP-10, a potential remedy for hemorrhagic cystitis, with preliminary approval from the U.S. Food & Drug Administration.

In corporate developments, Lipella recently held its Annual Meeting of Stockholders, resulting in the election of its board of directors and the approval of a reverse stock split. To address its financial needs, Lipella has launched a registered direct offering of its common stock, aiming to raise approximately $1.28 million, with H.C. Wainwright & Co. serving as the exclusive placement agent. These are among the recent developments at Lipella Pharmaceuticals.

InvestingPro Insights

As Lipella Pharmaceuticals Inc. (NASDAQ:LIPO) implements its reverse stock split strategy, recent financial data from InvestingPro sheds light on the company's current position. The company's market capitalization stands at a modest $3.74 million, reflecting its early-stage status in the biotech sector.

InvestingPro data reveals that Lipella's revenue for the last twelve months as of Q2 2024 was $0.51 million, with a notable revenue growth of 34.99% over the same period. This growth trajectory aligns with the company's focus on developing novel therapies, although it's important to note that an InvestingPro Tip indicates analysts anticipate a sales decline in the current year.

The company's financial health presents a mixed picture. On one hand, an InvestingPro Tip highlights that Lipella holds more cash than debt on its balance sheet, which could provide some financial flexibility. However, another tip warns that the company is quickly burning through cash, a common challenge for early-stage biotech firms investing heavily in research and development.

Lipella's stock performance has been challenging, with InvestingPro data showing a 50% price decline over the past three months and a 46.77% drop over six months. This downward trend likely contributed to the decision to implement the reverse stock split to meet Nasdaq's listing requirements.

For investors seeking a deeper understanding of Lipella's financial position, InvestingPro offers 10 additional tips, providing a more comprehensive analysis of the company's prospects and challenges in the competitive biotech landscape.

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