ANN ARBOR, Michigan — Stem cell company Aastrom Biosciences announced an 8-for-1 reverse stock split in an attempt to avoid being delisted by the Nasdaq stock exchange.
The news promptly sent the company’s shares tumbling to a 52-week low of 16.5 cents, though its stock price did rebound somewhat. As of midday Tuesday, Aastrom shares were down 15 percent to 18 cents.
In December, Nasdaq granted Aastrom an extension until March 31 from being delisted. Aastrom’s stock price must close above $1 for at least 10 consecutive business days before that date to avoid delisting, the company said at the time. The company’s shareholders authorized plans for a reverse split that month.
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Under the terms of the split, every eight shares outstanding prior to the opening of trading on Feb. 18 will be combined into one share with no change in their par value, according to a statement from Aastrom. After the split, there will be 28.3 million shares of common stock outstanding.
Aastrom is developing products that use a patient’s own stem cells to treat a variety of conditions, including arterial disease and chronic heart failure. The company went public in 1997. Last month, the company raised $12.4 million in a public stock offering. When the company announced the pricing of that offering, its shares tumbled to what was then a 52-week low.
“We believe a reverse stock split will help our shares reflect the value we are creating through our clinical programs and help us attract more institutional ownership of our stock,” said Chief Executive Tim Mayleben.
Mayleben said the company is in the midst of “late-stage” clinical trials of its cardiac and vascular repair technologies. In May, Aastrom halted the cardiac regeneration trial when a patient died after being released from the hospital following the trial, but later restarted it. The Food and Drug Administration later determined that the patient’s death was not related to Aastrom’s treatment.
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Mayleben said Aastrom plans to report the results of the vascular trial that focuses on patients suffering from a condition known as critical limb iscehmia later this month. Critical limb iscehmia includes decreased blood supply to the limbs. The company will announce results of the cardiac trial later this year.
In its most recent financial disclosure, the company reported a loss of $3.9 million on revenue of $27,000 for the quarter ended Sept. 30.
