Neothetics Inc (NASDAQ:NEOT)
Shares of Neothetics Inc (NASDAQ:NEOT) tumbled 18.04% after the company reported second quarter financial results that fell short of Wall Street expectations. The selloff came on the clinical stage pharmaceutical company reporting a wider than expected second quarter net loss of (-$2.8) million compared to (-$2.7) million reported a year ago.
Thursday’s sell off pushed Neothetics Inc (NASDAQ:NEOT) on the brink of its 52 week low of $0.30 as it continues to trade in a tight $0.30-$0.46 trading range. Neothetics sentiments turned sour early last month after the stock gapped lower from highs of $2.3 a share to current lows of $0.37 a share.
The stock continues to trade below its 20 days moving average having also tanked more than 60% below its 50-day moving average. The stock is currently trading at all-time lows having tanked from highs of $2.6 a share as of June.
The clinical stage pharmaceutical develops therapeutics for fat reduction and body contouring. Its lead product is LIPO-202, an injectable formulation for the reduction of localized fat deposits under the chin as well as for the deduction of central abdominal reduction.
The board of directors recently approved plans to initiate acquisitions as well as partnerships as part of an effort that seeks to expand Neothetics Inc. (NASDAQ:NEOT) footprint into new areas of growth. Pursuit of strategic alliance is also geared towards discovering and maximizing shareholder value. The company has already engaged the services of Oppenheimer and Co as its financial advisor for the new initiative.
Neothetics Inc (NASDAQ:NEOT) has also announced plans to streamline its operations as it seeks to preserve capital and cash resources. Plans are underway to trim the company’s workforce from six to two as the firm seeks to reduce its wage bill.
The cost reduction drive follows an increase in research and development expenses in the second quarter to $1.6 million from $1.4 million. However, for the six months ended June 30, 2016, R&D expenditure dropped to $3.1 million from $4.7 million a year earlier. Neothetics attributes the decline to completion of a majority of close out activities for AbCONTOUR1 and AbCONTOUR2 U.S. Phase 3 clinical trials
Neothetics Inc (NASDAQ:NEOT) General and administrative expenses soared to $1.3 million from $1.1 million a year earlier. However, for the six months ended June 30, 2017, total general administrative expenses dropped to $2.7 million from $3.6 million a year earlier. The company attributes the decline to reduced personnel expenses.
Neothetics Inc. (NASDAQ:NEOT) exited the second quarter with cash and cash equivalent of $7.6 million compared to $11.5 million as of December 31, 2016.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.