Arca Biopharma forms committee to plot company’s course forward

WESTMINSTER — After nearly doubling its year-over-year losses in 2021, Arca Biopharma Inc.’s (Nasdaq: ABIO) board of directors has established a special committee and hired a consultant tasked with weighing the company’s strategic options for righting the ship.

The first hint that Arca was exploring a shakeup came in the company’s most recent quarterly report that said the newly formed special committee’s purview could include the exploration of “transactions involving the merger or sale of all or part of our assets, and other alternatives with the goal of maximizing stockholder value.”

On Wednesday, Arca went public with news that it has hired Ladenburg Thalmann & Co. Inc. to serve as the company’s financial adviser. 

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It’s unclear how this hiring will affect the work of the special committee.

Arca has two drugs in its pipeline: COVID-19 drug candidate rNAPc2 and Gencaro (bucindolol hydrochloride), a beta-blocker and mild vasodilator that could be a potential treatment for atrial fibrillation in heart-failure patients.

The company posted a net loss of $19.3 million in 2021, but company leaders say in regulatory disclosures that they “believe our cash and cash equivalents as of March 31, 2022 will be sufficient to fund our operations at the current levels through at least the middle of fiscal year 2023.”

But, the disclosure added, “Our review of our strategic options may impact this projection.”

Arca is not guaranteeing a timeline for action, nor is it guaranteeing that any strategic move will materialize.

As Arca mulls its next move, its stock price hovers in the mid-$2 range, precariously close to the $1 threshold for Nasdaq listing.

“We have received three potential delisting notices from Nasdaq since 2012. In each of 2012, 2015 and 2018, we received notification from Nasdaq of potential delisting of our shares from the Nasdaq Capital Market because the closing bid price of our common stock had not met the minimum closing bid price of $1 per share during the preceding 30 business days,” the company said in its quarterly report.

Arca’s stock price has shaved off more than 30% over the last 12 months and nearly 95% over the last five years.