OrbiMed Advisors Sells Passage Bio Shares Valued at Over $146,000

In recent trading activity, OrbiMed Advisors LLC has disclosed the sale of shares in Passage BIO, Inc. (NASDAQ:PASG), a biotechnology company focused on biological products. These transactions occurred over a span of three days and led to a notable reduction in OrbiMed’s equity stake in the company.

The selling began on September 16, 2024, when OrbiMed Advisors divested 63,100 shares at an average price of $0.74 each. This was followed by the sale of an additional 111,400 shares on September 17, at an average price of $0.73. On September 18, OrbiMed sold 25,631 more shares, also averaging $0.73. The SEC filing specifies that these prices are weighted averages, with actual sale prices varying from a low of $0.73 to a high of $0.78 per share.

In total, OrbiMed Advisors sold shares valued at approximately $146,726 during this period. Following these transactions, OrbiMed’s remaining ownership in Passage BIO, Inc. stood at 7,833,869 shares.

Additionally, OrbiMed Capital GP VII LLC, affiliated with OrbiMed Advisors and holding Passage Bio shares indirectly, was referenced in the filing. Both entities indicated they may possess voting and investment power over the shares held but disclaimed beneficial ownership of the reported securities, limited to their financial interests, if any.

These sales by a prominent shareholder are likely to attract the attention of investors and analysts monitoring Passage BIO, Inc. as they evaluate the company’s investment landscape.

In related news, Passage Bio, Inc. has been making noteworthy advancements. The company reported an estimated impairment cost between $3.5 million and $5.5 million associated with a recent sublease agreement and corporate restructuring. Furthermore, Passage Bio has appointed Thomas Kassberg, an experienced figure in biotech, as a Class I director and member of the Audit Committee, a decision anticipated to enhance its governance and strategic direction.

On the business front, Passage Bio successfully out-licensed treatments for GM1 gangliosidosis, Krabbe disease, and metachromatic leukodystrophy to GEMMA Biotherapeutics, Inc. This agreement includes an upfront payment of $10 million, with further potential payments contingent upon future business milestones. Moreover, the U.S. Food and Drug Administration has greenlit the company’s gene therapy treatment, PBFT02, for trials involving frontotemporal dementia patients with C9orf72 gene mutations.

However, the company is currently working to regain compliance with Nasdaq’s listing requirements after receiving a potential delisting notice due to its share price dipping below the minimum bid requirement. Research from Canaccord Genuity continues to endorse Passage Bio’s stock with a Buy rating, underpinned by promising interim data from the upliFT-D Phase 1/2 study.

As investors analyze OrbiMed Advisors’ recent sell-off in Passage BIO, Inc., it’s vital to assess the overall financial health and market sentiment surrounding the company. Current insights reveal that Passage BIO has a market capitalization of around $45.09 million, which reflects its market valuation.

One significant observation is that the company currently possesses more cash than debt on its balance sheet, suggesting a degree of financial stability—a critical factor in the biotech sector where cash flow is essential for ongoing research and development. Nevertheless, analysts have raised concerns regarding the company’s cash burn rate, indicating that Passage BIO is rapidly depleting its cash reserves.

Furthermore, the stock has witnessed a considerable decline recently, with a six-month total return of -51.99% and a one-week decline of -8.49%. This trend may have contributed to OrbiMed’s decision to decrease its stake in the company.

For deeper analytical insights, additional perspectives are available that cover the company’s gross profit margins, profitability forecasts, and valuation concerning free cash flow yield. Notably, Passage BIO is not projected to turn a profit this year and is facing challenges with its gross profit margins. These elements are crucial for investors when assessing the company’s future potential.