ObsEva provides update towards meeting Nasdaq stockholder’s equity rule

ObsEva (OBSV) announced announced an update on its progress towards meeting Nasdaq’s minimum stockholders’ equity requirement. As previously announced, on August 19, 2022, the Company received a letter from the Nasdaq Stock Exchange notifying the Company that it is not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Global Select Market. Nasdaq Listing Rule 5450(b)(1)(A) requires listed companies listed on the Nasdaq Global Select Market to maintain stockholders’ equity of at least $10M. The Nasdaq Letter was based on the Company’s Form 6-K dated August 17, 2022, disclosing financial information for the period ended June 30, 2022, which reported shareholders’ equity of negative $2,103,000. ObsEva submitted its plan to regain compliance on August 29, 2022. On November 22, 2022, the Company announced the sale of all its rights to Ebopiprant, an investigational, orally active, selective prostaglandin F2alpha receptor antagonist being evaluated as a potential treatment for preterm labor by reducing inflammation and uterine contractions, to XOMA Corporation (XOMA) for an upfront payment of $15M. Additionally, ObsEva is eligible to receive future milestone payments of up to $98M upon the achievement of certain development and regulatory milestones and sales milestones relating to the development of Ebopiprant under a license agreement with Organon. In July 2021, ObsEva granted a license to Organon for the global development, manufacturing, and commercial rights to Ebopiprant. As a result of the Transaction, the stockholders’ equity of the Company as of November 30, 2022 is approximately $11.4M. The Company therefore believes that as of the date hereof the Company has regained compliance with Nasdaq Listing Rule 5450(b)(1)(A). Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement and, if at the time of its annual report for the year ended December 31, 2022 the Company does not evidence compliance, it may be subject to delisting. There can be no assurance that the Company will be able to maintain compliance with the minimum stockholders’ equity requirement.