Shares of Ontario-based Bioniche Life Sciences (TSX: T.BNC, Stock Forum) tumbled 28% to 38 cents Tuesday, after the biopharmaceutical firm said after Monday’s market close that it is expanding internal cost cutting measures introduced over the last two quarters to help address near-term liquidity requirements.
Bioniche notes that one of its near-term objectives is a partnering transaction related to its Mycobacterial Cell Wall-DNA Complex, formulated as Urocidin for the treatment of non-muscle-invasive bladder cancer.
“While the Company has received significant interest in Urodicin from a number of potential partners, it has not yet finalized a transaction and the timeline for doing so has exceeded management's expectations,” says Bioniche.
As a result of delays and the company's near-term cash needs, Bioniche says it has decided to broaden its fundraising strategies to include possible asset dispositions.
Bioniche also announced Monday afternoon that it has amended the maturity date of its existing secured revolving credit facility with Valens U.S. to June 30, 2009. The amendment will replace the previously agreed "on demand" status, with an additional fee applicable at maturity of the facility.
The company’s Bullboard was buzzing Monday afternoon and into Tuesday, with posters weighing in on the news, including CorporateStooge who said: “Reading between the lines....they're starting from scratch on partnership if they're considering asset sales. No way in hades would they do something so severe if they were not back at the starting line....and it gets better in that they (if this wasn't the case before) they will be in a position of extreme weakness in their negotiations[sic]”…
Gobbles added:
What amazes me is that the company has come out of left field with a possible sale of assets rather than a partnership agreement. Now money is the main problem. OK, here is a solution for them. Extend the warrants and lower the price to say $0.50. If they can get the stock back close to the 60 range than some warrant holders may exercise the warrants thus putting money in BNC's bank account. Getting an extra $3.5 million at this time would go along way for them, and the dilution would be minimal compared to another financing at lower prices[sic].
lorneg replied:
Not a bad idea Gobbles, if it could work. Even though I feel horribly let down like many of you, I'm sure the BNC Team are very down about this latest turn also. Good to hear they took a pay cut. We need to focus on some of the good things this Company has to offer. The most important is it is a good money maker if you take away the development costs of Urocidin and Econiche. Hopefully we'll see another good increase quarter over quarter on May 6. If this is the case, we'll see some upside to the roller coaster ride on sp. Remember, they were very close to doing a partnership deal, so there is good interest out there. Even big $ companies are very skittish these days[sic].