- Shares soar almost 50% on unsolicited approach
- Board hoists ‘for sale’ sign amid strategic review
- Discussions to raise new equity and debt
An unsolicited takeover approach for kidney diagnostics specialist Renalytix (RENX:AIM) sent its shares soaring 46% higher to 58.5p on Monday, taking year-to-date gains to the best part of 160%.
On 9 February, the shares jumped 35% after the US CMS (Centers for Medicaid and Medicare services) published a draft LCD (local coverage determination) for the company’s KindneyIntelX and kidneyintelX.dkd testing.
The draft LCD specifies coverage for use of the tests for patients diagnosed with type-two diabetes and early-stage chronic kidney disease.
FORMAL SALE PROCESS
Following the approach from a ‘large and well-capitalised publicly listed strategic diagnostics company’, the board has begun a review of all strategic options including a formal sale of the company.
It is also considering possible sources of new funding including equity and debt and is in advanced discussions with certain existing shareholders and potential new equity and debt providers.
As of 3 March, Renalytix had cash on hand of $2.3 million and marketable securities worth approximately $1.4 million.
On 15 February, Renalytix announced a cost cutting plan aimed at reducing cash burn by a third compared with the prior quarter and circa half the level in the first quarter ended 30 September 2023.
The company has struggled to gain commercial traction since receiving a De Novo marketing authorisation from the US FDA (Food and Drug Administration) in June 2023. The US population eligible for testing is estimated to be around 14 million.
In a research note published in November 2023, analysts at Stifel commented: ‘Renalytix remains a show-me story, with a revamped sales team and order and requisition process as the company aims for an inflection point in sales following the expected launch of the FDA-approved version of KidneyIntelX this fiscal year.’
