Tonix Pharmaceuticals, a clinical-stage biopharmaceutical company, announced that it will effect a 1-for-32 reverse stock split of its outstanding common stock. This will be effective for trading purposes as of the commencement of trading on May 17, 2022.
The reverse stock split was previously approved by the Board of Directors of Tonix in accordance with Nevada law, under which no stockholder approval is required, and is intended to increase the per share trading price of Tonix’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market. Tonix’s common stock will continue to trade on the NASDAQ Capital Market under the symbol “TNXP” and under a new CUSIP number, 890260862. As a result of the reverse stock split, every thirty-two pre-split shares of common stock outstanding will become one share of common stock. The reverse stock split will also proportionately reduce the number of shares of authorized common stock from 1,600 million to 50 million shares. The reverse split will also apply to common stock issuable upon the exercise of Tonix’s outstanding warrants and stock options, reported on the company’s website.
After Tonix (TNXP -23.60%) announced a reverse stock split, shares plummeted 22.7% as of 10:54 a.m. ET Tuesday.
Reverse stock splits aren’t a sign that things are going well for a company. That’s certainly the case for Tonix.
The company’s board of directors approved the 1-for-32 reverse stock split to boost Tonix’s share price. This move was needed to meet the $1 minimum bid requirement for the stock to remain listed on the Nasdaq Stock Market.
Prior to the announcement of the reverse split, Tonix’s shares had lost nearly two-thirds of their value year to date. The reverse stock split artificially inflates the share price. However, it doesn’t change anything about the underlying reasons behind the steep decline. Tonix doesn’t have any products on the market yet and continues to burn through its cash.
The reverse stock split buys Tonix some time to advance its pipeline. The company expects to report interim results from a phase 3 study of TNX-102 SL in treating fibromyalgia in the first quarter of 2023. Tonix has previously reported results from two other late-stage studies of TNX-102 SL in treating fibromyalgia. One study met its primary endpoint, while the other didn’t.