Drug development company DARA BioSciences (NASDAQ:DARA) could lose its listing on the NASDAQ exchange today.
DARA received notification from the NASDAQ that based on its last quarterly report, the Raleigh, North Carolina company no longer maintained the minimum $2.5 million in stockholders’ equity required for a listing. DARA said in a securities filing that the notification warned that DARA’s shares could be suspended from trading “effective at the opening of the market on Nov. 29, 2011.”
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Stockholders’ equity is the measure of the equity stake that a company’s shareholders have in a company. According to DARA’s third-quarter financial report, the total stockholders’ equity was $2.3 million, just shy of the $2.5 million listing requirement.
Falling short of the requirement does not automatically trigger de-listing. Under NASDAQ rules, a company found to be noncompliant with the requirement will be notified by letter requesting submission of a compliance plan within 45 days. After reviewing that plan, the NASADAQ will make a decision about the company’s compliance. From there, the exchange can either grant an extension or de-list the company’s securities.
DARA said that it plans to request a hearing before the NASDAQ Listing Qualifications Hearings Panel to present its plan for regaining compliance. But the company added in the filing that there are no assurances it will be granted a request for continued listing.
DARA does not yet have any U.S. Food and Drug Administration-approved drugs. The company’s compound KRN5500 is in phase 2 clinical trials as an experimental treatment for neuropathic pain caused by chemotherapy. The compound has fast-track status from the FDA and its clinical studies are being funded by the National Cancer Institute. The compound DB959 is set to advance into phase 2 clinical trials as potential type 2 diabetes treatment. DARA has said that it wants to find a drug partner to commercialize its drug candidates.
