Shareholders of Athersys Inc. in Cleveland have voted by a 2-1 margin to approve the regenerative medicine company's proposal for a reverse stock split to bolster its share price.
At their rescheduled annual meeting on July 28, the shareholders voted to change the company's charter so it could effect a reverse stock split within a range of 1:15 to 1:30, according to a regulatory filing.
Athersys leaders want to consolidate the company's shares to raise their trading price and increase the number of shares that could be issued in the future, according to another regulatory filing.
The company's board believes the reverse stock split would:
- Better enable Athersys to maintain its stock listing on the Nasdaq Stock Market.
- Facilitate higher levels of institutional stock ownership, where investment policies generally prohibit investments in lower-priced securities.
- Better enable the company to restructure itself and raise funds to finance its planned operations.
On March 18, Athersys received a notice from Nasdaq that its shares had fallen below $1 per share for 30 consecutive business days. The electronic stock market gave Athersys until Sept. 14 to regain compliance with the bid price requirement, Athersys said.
In June, Athersys said it would cut its workforce by as much as 70% — including three of its top executives — in a restructuring aimed at reducing costs and making the company an attractive investment for potential financial or strategic partners.
The restructuring also is intended to slow the company's cash burn and accelerate a shift in its leadership and operations toward the commercialization of its adult stem cell therapy, MultiStem, and away from the product's research and development.
Athersys has been developing MultiStem adult stem cell therapy since 1994 and is in late-stage clinical trials with its Japanese partner, Healios K.K., to commercialize the therapy to treat ischemic stroke patients in Japan.
Shares of Athersys (Nasdaq: ATHX) were down 7% to about 25 cents in late afternoon trading on Tuesday.
