CNS Pharmaceuticals, a maker of drugs to treat brain cancer, has received a notice of noncompliance with listing standards from Nasdaq, with delisting a possibility. In after-hours trading on Wednesday, September 18, the stock retreated more than 3%, followed by a similar decline at the open this morning, Thursday, September 19.
Details
CNS Pharma disclosed that last week, on September 12, it received a letter from Nasdaq notifying the company of noncompliance with Nasdaq listing requirements, specifically for 30 consecutive days the stock had closed at less than $1.00 per share.
Earlier, the company managed to boost the share price, conducting a 1-for-50 reverse split of common shares, among other measures. Meanwhile, just two days before the Nasdaq notice came, on September 10, the company was informed that it had regained compliance with a separate requirement (on stockholders’ equity).
Typically, Nasdaq grants companies 180 days to remedy the issue, CNS Pharma notes in an SEC filing from Wednesday, September 18; however, it is ineligible for this grace period due to the recent reverse stock split.
The notice does not entail the immediate delisting of the stock, CNS Pharma points out. The company must request a hearing with Nasdaq, which it intends to do. Until the hearing, trading will continue as usual.
Market reaction
CNS Pharma informed investors about the letter after the close on Wednesday. In after-hours trading that day, the stock dropped 3.12% to $0.16 per share. Thursday morning also began with sharp losses. Since the beginning of the year, the stock has lost nearly all its value. Over the summer, the company carried out several additional share issues, significantly diluting existing shareholders and driving a further drop in the share price.
According to MarketWatch, CNS Pharma is covered by one analyst, who recommends buying the stock, with a target price of $0.50 per share.
About CNS Pharmaceuticals
CNS Pharma is developing drugs to treat brain cancer and central nervous system lymphoma. Its lead drug candidate is Berubicin, which can cross the blood-brain barrier. This barrier protects the brain from various infections but also hinders the treatment of certain diseases, perceiving drugs as a threat. At the end of July, the company announced an agreement with Cortice Biosciences that gives CNS Pharma the intellectual property rights to another brain cancer treatment molecule in four countries in exchange for shares and royalties from future sales. This announcement triggered another drop in the stock.
