Pharmaceutical company Sonoma slides after reverse stock split announced

Sonoma Pharmaceuticals, which develops treatments for dermatological conditions and advanced wound care with its flagship product stabilized hypochlorous acid, slid almost 14% in pre-market trading today, Wednesday, August 28. This follows an announced reverse stock split to maintain the company’s listing.

Details

In trading before the open on Wednesday, Sonoma Pharmaceuticals stock fell almost 14% to about $0.18 per share. It is still up more than 20% since the beginning of the year but off nearly 75% over the last 12 months.

On the morning of August 28, the company announced that its board of directors had approved a 1-for-20 reverse stock split. No fractional shares will be issued; instead, shareholders will receive cash at the closing price on Thursday, August 29. Sonoma CEO Amy Trombly sees the reverse split as necessary to maintain the company’s listing on the Nasdaq. The exchange requires all companies to maintain a minimum bid price of at least $1.00 per share.

Sonoma notes that the reverse split will not affect its authorized shares, which will be increased from 24 million to 50 million, effective at the close on August 29 as well.

About Sonoma Pharmaceuticals

Sonoma develops and produces products based on stabilized hypochlorous acid for wound care, animal health care, eye and nasal care, oral care, and dermatological conditions. They are used to treat diabetic foot ulcers and pressure sores, and include a scar gel, eyelid cleansers, hydrogels for sunburn, and more. Some products are available only by prescription, while others can be purchased over the counter.

For the fiscal-2025 first quarter, which ended on June 30, Sonoma reported that revenue grew 20% year over year in Europe but declined in Asia and other regions, noting that these figures tend to be volatile when viewed on a quarterly basis due to customers placing larger but less frequent orders to benefit from quantity discounts and reduced shipping costs. In August, the company announced a new partnership to market and distribute its wound care products across the U.S., as well as progress in gaining Australian regulators’ approval for its product used to treat infections. These announcements had little impact on the stock, however.

Analyst recommendations

According to MarketWatch, Sonoma Pharmaceuticals is covered by one analyst, who recommends buying the stock. The target price is $1.30 per share, six times the closing price as of August 27.