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Spruce Biosciences, Inc. (SPRB), a pharmaceutical company with a market capitalization of $5.5 million, has announced a significant workforce reduction and is confronting a delisting from the Nasdaq stock market. According to InvestingPro data, the company maintains a stronger cash position than debt, though its overall financial health score is classified as weak. The South San Francisco-based company disclosed in a recent SEC filing that its board has approved a plan to reduce its workforce by 55% effective immediately, with the aim of prioritizing the development and potential accelerated approval of tralesinidase alfa, an enzyme replacement therapy for the treatment of Sanfilippo Syndrome Type B.
The reduction, which will result in terminations by May 2, 2025, is expected to incur about $0.9 million in cash charges primarily due to severance and healthcare coverage assistance. This restructuring comes as the company faces significant financial challenges, with InvestingPro data showing an EBITDA of -$56.1 million in the last twelve months and a concerning gross profit margin of -845%. The company anticipates most of these charges will be recorded in the second quarter of 2025, with the workforce reduction process completed within the same quarter. However, these are preliminary estimates and the final costs may vary.
Separately, Spruce Biosciences has received a notice from Nasdaq indicating that its common stock will be delisted due to non-compliance with the minimum bid price requirement. Trading of the company’s stock will be suspended from April 29, 2025. The company has appealed the delisting decision but will begin trading over-the-counter under the same ticker "SPRB" on the same date.
In efforts to regain compliance, the company plans to seek shareholder approval for a reverse stock split, with a ratio yet to be determined by the board, at the upcoming 2025 Annual Meeting of Stockholders. This plan will be submitted to the Nasdaq Hearings Panel, although there is no guarantee that the panel will grant a continued listing or that compliance will be achieved within any extension period that may be granted.
This news comes amid a challenging period for the company, which is also navigating the complexities of drug development and approval processes. The forward-looking statements included in the SEC filing reflect the company’s current expectations and are subject to change. Investors and stakeholders are keeping a close eye on the unfolding events and their potential impact on the company’s future. Despite the stock’s current challenges, including an 81% decline over the past year, InvestingPro analysis suggests the stock may be undervalued at current levels. For deeper insights into SPRB and other biotech opportunities, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. This report is based on a press release statement.
In other recent news, Spruce Biosciences announced plans to submit a Biologics License Application (BLA) for tralesinidase alfa (TA-ERT) to the FDA in the first half of 2026. This enzyme replacement therapy targets Sanfilippo Syndrome Type B and has shown promising results in clinical studies. The company has received fast-track, rare pediatric disease, and orphan drug designations for TA-ERT in the U.S. and EU. Additionally, Spruce Biosciences is expanding its pipeline with the acquisition of two preclinical candidates, SPR202 and SPR204, both undergoing IND-enabling studies. Citizens JMP has maintained a Market Perform rating on the company, noting its ongoing development of therapies for rare endocrine disorders. In financial updates, Spruce Biosciences reported cash and cash equivalents of $38.8 million as of December 31, 2024, with an expected cash runway through the end of 2025. The company also filed a Notification of Late Filing with the SEC for its Annual Report, providing preliminary financial estimates for the fiscal year 2024. These developments reflect Spruce Biosciences’ strategic focus on addressing unmet medical needs and advancing its drug pipeline.
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