Following an update, shares of ObsEva SA (NASD: OBSV) were up 14.29% to $0.18 at the time of the most recent check.
What update has OBSV given us?
Yesterday, ObsEva (OBSV) provided a status report on its efforts to reach Nasdaq’s minimal shareholder equity requirement. ObsEva was informed by the Nasdaq Stock Exchange (“Nasdaq”) in writing on August 19, 2022, that it did not meet the minimum shareholder equity threshold necessary to maintain its listing on the Nasdaq Global Select Market. This was previously disclosed.
Companies listed on the Nasdaq Global Select Market are required to maintain shareholder ownership of at least $10.0 million in accordance with the Nasdaq Listing Rule. The OBSV Form 6-K dated August 17, 2022, which disclosed financial data for the quarter ended June 30, 2022, and declared shareholders’ equity of ($2,103,000), served as the basis for the Nasdaq Letter. On August 29, 2022, OBSV presented its proposal to return to compliance.
Ebopiprant is an investigational, orally active, selective prostaglandin F2 (PGF2) receptor antagonist being investigated as a possible therapy for preterm labor by reducing inflammation and uterine contractions. On November 22, 2022, OBSV announced the sale of all its rights to Ebopiprant to XOMA Corporation (XOMA) for an upfront payment of $15 million (the “Transaction”).
Additionally, as part of a licensing agreement with Organon, OBSV is qualified to receive future potential incentive awards of up to $98 million upon reaching specific development, regulatory, and commercial milestones associated with the advancement of Ebopiprant. ObsEva licensed Organon in July 2021 to use Ebopiprant for commercial, manufacturing, and development purposes worldwide.
The Transaction increased the Company’s shareholders’ equity to around $11.4 million as of November 30, 2022. As a result, according to OBSV, the Company has resumed compliance with the Nasdaq Listing Rule as of the date hereof.
What steps will OBSV take to further this?
If at the time of the Company’s annual report for the year ended December 31, 2022 OBSV does not demonstrate compliance with the stockholders’ equity requirement, Nasdaq may delist OBSV. Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement. Additionally, on December 9, 2022, ObsEva (OBSV) submitted a plea to the Swiss court asking for permission to end the previously stated moratorium because its over-indebtedness situation had been rectified thanks to the Transaction’s upfront funds.