ProKidney, the biotech company that’s planning a $458 million facility in Greensboro, , may have a very bright future.
However, investors in the publicly traded company didn’t show much optimism on Thursday, Oct. 12, when a new selloff caused the stock to plummet 30 percent.
That drop Thursday, which left the stock at $2.60 per share at noon, removed nearly a third of the company’s market cap in one morning – and that fall, from a price of over $4 a share the previous day, followed in the wake of another precipitous drop over late summer.
ProKidney stock was trading at over $13 a share on August 1, 2023, right after the company closed on the purchase of a 210,000 square-foot building in Greensboro and 22 acres of surrounding land, that’s planned to be the new facility where the company will make “REACT” – the company’s flagship product meant to treat and hopefully even reverse some forms of kidney disease. By late September, the stock had fallen to under $5 a share. In other words, ProKidney had lost roughly two-thirds of its value in less than two months before dropping by another 30 percent Thursday morning.
The fall of the stock price on October 12 was apparently caused by the same thing that helped lead to the previous huge drop, Security and Exchange Commission filings that revealed a large sell of stock by a company insider.
The company, which is based out of Winston-Salem, has stated its plans to create 330 new jobs at the coming Greensboro facility.
The City of Greensboro, Guilford County, the State of North Carolina and Duke Energy approved incentives packages that total over $35 million for ProKidney.
All those incentives are conditional. They’re based on the company following through with the creation of at least 330 new jobs before December 31, 2028, and a project investment of approximately $458 million by the company by the last day of 2027.
Thanks for the hyper localization of your explanation for the stock tanking, but it’s way bigger than what you printed.
From Seeking Alpha:
“There were two things that helped drive the stock down on Thursday. First, the news on Wednesday that Novo Nordisk weight loss and diabetes drug Ozempic (semaglutide) did well in trials to prevent chronic kidney disease (CKD) negatively hit a lot of dialysis companies and companies such as ProKidney with CDK therapies.
The other factor that brought the stock’s shares down was that Chamath Palihapitiya, one of the company’s largest shareholders, sold 277,627 shares over the past two weeks, worth roughly $1.23 million, according to a Securities and Exchange Commission (SEC) filing. Palihapitiya is a venture capitalist and founder of the firm Social Capital.
The amount that positive trial news regarding Ozempic drove down other stocks seemed a bit overblown. Ozempic will not wipe out CKD, even if approved for that indication. However, it could certainly cut into ProKidney’s future revenue or even injure the chances for approval for ProKidney’s lead product candidate, REACT (Renal Autologous Cell Therapy). REACT is a cell therapy made from a patient’s own renal cells. It is designed to end the need for kidney dialysis by reversing kidney disease in type 2 diabetics and is in phase 3 trials.”
a major shareholder is a ‘company insider’ ? does he have a salaried position in the company ? scientist ? lawyer ? accountant ?
Journalism 101. Report the facts, reader makes their own conclusion. I made mine in August.
Something in rotten in Denmark.
I agree with Brad Krantz re the Ozempic story. The same story had a similar effect on much larger and more stable companies in the dialysis business. The sale by a principal shareholder is another matter and may be more distressing for ProKidney prospects. More fine local reporting from the Rhino!
Wonder if you could research and find the names of those who shorted the stock?
Check with the SEC. Many insider trades are on record.