Shares of Oncorus ONCR were down 37.1% on Jun 2 after management announced that the company’s board of directors approved a workforce reduction of around 55 employees, which represents “substantially all” of its workforce.
The move has been taken in response to challenges being faced by the company in raising additional capital and pursuing strategic alternatives to secure additional funding. The workforce reduction includes stepping down of current chief executive officer, chief operating officer and chief of staff, and chief medical officer. Oncorus expects to complete this plan by August 2023. However, current interim chief financial officer Alexander Nolte will remain with the company.
Despite these cost saving measures undertaken by Oncorus, management expects cash runway to fund the company’s operations only till third-quarter 2023. It also could not provide any assurance of being able to secure funding beyond that period.
In the year-to-date period, Oncorus stock has plunged 55.0% compared with the industry‘s decline of 7.6%.
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Oncorus is currently evaluating all available strategic options, including merger and divestiture of assets, to ensure its survival as a going concern. In case it is unable to do so, it will file for bankruptcy.
Currently, ONCR does not have any pipeline candidates in clinical development. Its lead product candidate ONCR-021, which is being developed for non-small cell lung and other cancers, is still under preclinical development. Last month, management had announced that it intends to submit investigational new drug (“IND”) application to begin clinical studies on ONCR-021 provided it receives additional funding for its clinical development.
ONCR suffered a major setback last November when it announced discontinuation of its HSV program, ONCR-177, which was being evaluated in an early-stage clinical study. Instead, the company decided to reprioritize focus on ONCR-021 development. At that time, it also reduced its workforce by 20% to curb cash burn.
Zacks Rank & Stocks to Consider
Oncorus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the overall healthcare sector are Ligand Pharmaceuticals LGND, Novo Nordisk NVO and Novartis NVS. Ligand Pharmaceuticals and Novo Nordisk sport a Zacks Rank #1 (Strong Buy) at present, and Novartis carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, the Zacks Consensus Estimate for Ligand’s 2023 and 2024 earnings per share has increased from $4.15 to $5.25 and $4.57 to $4.69, respectively. Shares of Ligand have risen 6.6% in the year-to-date period.
Ligand Pharmaceuticals beat earnings estimates in two of the last four quarters and missing the mark on the other two occasions. On average, the company’s earnings witnessed an earnings surprise of 21.50%. In the last reported quarter, LGND delivered an earnings surprise of 121.36%.
In the past 60 days, the consensus estimate for Novo Nordisk’s 2023 and 2024 earnings per share has increased from $4.51 to $5.07 and $5.26 to $5.91, respectively. Shares of Novo Nordisk have gained 16.1% in the year-to-date period.
Earnings of Novo Nordisk beat estimates in two of the last four quarters, met the mark one occasion while missing the mark on another. On an average, the company witnessed an average earnings surprise of 0.35%. In the last reported quarter, Novo Nordisk’s earnings met estimates.
In the past 60 days, estimates for Novartis’ 2023 and 2024 earnings per share have increased from $6.56 to $6.67 and $7.05 to $7.22, respectively. Shares of Novartis have moved up 9.0% in the year-to-date period.
Earnings of Novartis beat estimates in each of the last four quarters, witnessing an average earnings surprise of 5.15%. In the last reported quarter, Novartis’earnings beat estimates by 10.32%.
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