Viracta Therapeutics, Inc., a micro-cap pharmaceutical company with a market capitalization of $6.7 million, has received a notice from The Nasdaq Stock Market indicating the company is not in compliance with the exchange's audit committee requirements. The notice, dated January 13, 2025, follows the resignation of Dr. Barry J. Simon from the company's board and audit committee on December 18, 2024. According to InvestingPro data, the company faces several financial challenges, with a weak overall financial health score of 1.31.
The non-compliance stems from Nasdaq Listing Rule 5605(c)(2), which mandates that listed companies must have an audit committee meeting specific criteria. Viracta now has a grace period to address this issue, either by its next annual shareholders' meeting or by December 18, 2025, whichever comes first. If the annual meeting occurs before June 16, 2025, the company must demonstrate compliance by that date. The company's financial position shows strain, with a current ratio of 0.76 indicating short-term obligations exceed liquid assets.
In other recent news, Viracta Therapeutics is facing possible delisting from Nasdaq due to non-compliance with minimum bid price and stockholders' equity requirements. According to InvestingPro analysis, the company has been notified of its failure to maintain the minimum $1.00 bid per share and its stockholders' equity has dropped below the required $2.5 million threshold. Viracta plans to appeal the delisting decision and will request a hearing before the Nasdaq Listing Qualifications Panel.
In response to these challenges, Viracta has implemented significant changes to its operational strategy, including a 42% workforce reduction to focus on its Nana-val development program for EBV-positive peripheral T-cell lymphoma (PTCL). The company has also resized its Board of Directors from ten to six members to streamline operations and reduce costs.
Promising results from the NAVAL-1 trial stages 1 and 2 have shown substantial antitumor activity, leading Viracta to plan a Randomized Controlled Trial in 2025. This could potentially support a New Drug Application filing in 2026.
Amid these developments, RBC (TSX:RY) Capital maintained an Outperform rating on Viracta's stock. Finally, Viracta appointed Michael Faerm as its new Chief Financial Officer and reported cash reserves of around $30 million as of the second quarter of 2024.
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