On Wednesday, Canaccord Genuity (TSX:CF) adjusted its price target for Cibus (NASDAQ:CBUS) to $20.00, down from the previous $21.00, while reaffirming a Buy rating for the stock. The adjustment follows Cibus's announcement of a public offering to raise $12 million by selling an additional 3 million shares of common stock at $4.00 each. The offering is scheduled to close on September 19, 2024.
The underwriters of the deal have been granted an option to purchase up to 450,000 additional shares to manage potential over-allotments within 45 days after the closing. Notably, the investor base for this offering includes some of Cibus's current investors, such as CEO Rory Riggs, alongside institutional investors.
The funds raised from this offering, amounting to $12 million in gross proceeds, are earmarked for the advancement of seed trait development using Cibus's gene editing platform, Trait Machine, as well as for general corporate purposes and working capital needs for the company's operations.
Canaccord Genuity's revised price target reflects the dilutive impact of the increased share count post-offering. The firm's analyst indicated that the new price target is derived from a discounted cash flow (DCF) analysis projecting through 2032. Despite the price target reduction, Canaccord Genuity maintains a positive outlook on Cibus's stock, as indicated by the ongoing Buy rating.
In other recent news, Cibus, a leader in agricultural biotechnology, is making significant strides in advancing its late-stage activities, particularly the launch of its first three traits in crop programs. The company has initiated cost reduction measures to concentrate resources on priority objectives, such as completing the launch of Pod Shatter Reduction, HT1, and HT3 traits in Canola, Winter Oilseed Rape, and Rice. Cibus' trait pipeline includes six productivity traits, with three developed traits validated in field trials and edited into elite lines of seed company partners.
Cibus recently reported an increase in R&D expenses and a higher net loss compared to the previous year, while maintaining a cash balance of $30 million. The company is advancing its non-GMO herbicide-tolerant traits in rice, targeting a 2027 launch, and has made significant progress in canola traits for disease resistance and nutrient use efficiency.
In executive changes, Cibus announced that its CFO, Wade King, will take an indefinite leave of absence for family reasons. In his absence, Carlo Broos, the Senior Vice President of Finance, will assume the interim CFO role. Despite these changes, Cibus continues to make strategic moves to enter new markets and form partnerships. The company's products recently gained approval in Canada, preparing Cibus to access substantial markets for canola, wheat, and soybeans.
Canaccord Genuity maintained its Buy rating on Cibus despite the CFO's leave. The firm views this development as immaterial to the stock, considering the leave is temporary and unrelated to Cibus' operations.
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