Reneuron issues administration warning as biotech firm puts jobs at risk
Biotech business Reneuron Group has warned it could enter administration and is preparing to make redundancies as its shares were suspended from trading.
The AIM-listed company, which is headquartered in Pencoed, Wales, is in a “highly constrained financial position” and that it requires additional financing “urgently, in order to continue as a going concern”.
Reneuron Group added that it has found itself in this position after not being able to secure a “validating, revenue generating industry partnership” or additional equity funding.
As a result, the company said it now needs to put staff at risk of redundancy, initiate discussions with its creditors and establish the precise solvency status of the business.
Shares in Reneuron Group were trading at 3.38p before they were suspended at 2.30pm on Monday, February 5, giving it a market capitalisation of just under £2m.
In a statement issued to the London Stock Exchange, Reneuron Group said: “As also announced in the interim results, potential corporate actions that were under consideration by the board included raising additional equity financing and/or securing a financing facility and/or entering into M&A discussions.
“The group also noted in the interim results that as at 30 September 2023, the group had cash, cash equivalents and bank deposits of £5.1m and that the group’s latest internal projections (assuming no new revenues or funding) meant there was a cash runway to April 2024, ahead of which point further revenues and/or a capital injection would be required.
“In the intervening period, despite great scientific progress having been made in further developing and exemplifying the CustomEX exosome delivery platform and progressing several ongoing third-party business development discussions, the group has not yet been able to conclude a validating, revenue generating industry partnership nor been able to secure additional equity funding.
“Accordingly, throughout the period the group has been carefully managing its working capital, but it is now in a highly constrained financial position and requires additional financing urgently, in order to continue as a going concern.
“In the absence of any additional financing being available in the immediate term, the group now needs to take steps to preserve and maximise value for its creditors.
“Whilst the group continues to explore a number of corporate options, including seeking to realise value for its physical and intellectual assets, the board recognises that in the absence of an immediate injection of capital and in view of the current financial uncertainty, it needs to put staff at risk of redundancy, initiate discussions with its creditors and establish the precise solvency status of the business.
“Should the company fail to achieve a solution in the short term, the board would have no option but to place the company into administration.
“Should administrators be appointed, it is not known how much, if any, value would be returned to shareholders.”
In Reneuron Group’s interim results, for the six months to September 30, 2023, its revenue stood at £157,000 while its pre-tax losses were £3.2m.
For the year to March 31, 2023, its revenue was £530,000 and its pre-tax losses were £6.6m. According to those accounts, the company employed 34 people during that financial year.