On April 14, the biomaterials and biotech company, InVivo Therapeutics Holdings Corp. (NVIV) announced a reverse split of its common stock by the ratio of 1-for-25 along with a proportionate reduction in its authorized shares. Reacting negatively to the news, investors escalated the ongoing selloff in the stock. Thus, after losing 12.27% during regular trading, NVIV lost a further 23.20% in the after-hours due to the announcement. The stock was then trading at a price of $0.2311 per share in the after-hours while it closed the earlier session at $0.3009 apiece.
NVIV’s Reverse Stock Split
The reverse stock split is expected to become effective on April 26, at 5:00 pm Eastern Time. Therefore, the company’s stock will trade on a post-split basis on April 27 when the market opens.
According to the reverse split, every 25 shares of NVIV common stock would be combined into a single share. Moreover, the number of authorized shares of the company will thus shrink to just 2 million from 50 million shares. Consequently, the issued and outstanding shares of the company’s common stock will reduce from 34.3 million to 1.4 million approximately. Fractional shares would also be determined upon issuance. Furthermore, the exercise prices of the outstanding stock options and warrants and the number of shares issued and issuable under existing stock incentive plans would also be adjusted.
Additionally, the reason for the reverse stock split is regaining compliance with Nasdaq’s minimum bid price requirements. NVIV hopes that the stock split will help increase the per share trading price of its common stock for continued listing on Nasdaq.
Market Outlook
Both the wider biotechnology market and the narrow biomaterials are expected to demonstrate a positive CAGR with growth in the upcoming years. Valued at 497 billion in 2020, the biotechnology market is expected to grow at a CAGR of 9.4% from 2021 to 2027. On the other hand, the global biomaterials market is projected to grow at a CAGR of 12.7% between 2021 and 2030.
NVIV’s Overview & Conclusion
In 2021, the company raised a good deal of funds through multiple public offerings. It also received FDA acceptance for complete HDE submission and had data published in a peer-reviewed journal.
While the market is largely bullish despite headwinds from the geopolitical situation and economic instability, it is unclear what or how NVIV will perform. The company has been awfully quiet in 2022, seemingly focused on regaining compliance with Nasdaq.
