CNAT stock plunged more than 60% Tuesday. Why? The significant drop comes after Conatus Pharmaceuticals (NASDAQ:CNAT) said twenty-four hours prior that it will be implementing a restructuring plan due to its liver disease drug failing in a mid-stage trial.
Here’s everything we know.
CNAT Stock Goes for a Cold Plunge
On Monday, June 24, Conatus Pharmaceuticals said it’ll be exploring new options, as well implementing a restructuring plan after its drug emricasan failed to meet its end goals in a mid-stage trial. In this restructuring plan, Conatus plans to reduce staff by around 40%, in addition to halting the development of CTS-2090.
Explaining the situation, CEO Steven J. Mento said Conatus is still excited by “the potential of CTS-2090 as a uniquely positioned inflammasome disease compound,” however, the company “must preserve our remaining resources to extend our cash runway to better explore strategic alternatives that can benefit the shareholder.”
Now, while the San Diego-based company remains optimistic, investors on the market are not handling the news well.
According to Yahoo Finance, as of 2:23 PM EDT, CNAT stock is trading at $0.31 on the Nasdaq; this puts CNAT stock down a whopping 66.37%.
An Updated Guide
As CNAT will be implementing a restructuring plan, the company has also had to update its financial guidance. Now, Conatus Pharmaceuticals is expecting a year-end 2019 net balance of cash equivalents, cash, and marketable securities to come between the range of $10 million and $15 million.
What do you think about the CNAT news? Did you expect CNAT stock to plunge more than 60% because of it? Let us know your thoughts in the comments below, and don’t forget to follow along with this story for the rest of the week! It will be interesting to see if CNAT stock finds a way to turn around before Friday, the last day of trading, rolls around.
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