Why The Future Looks Bleak For GlobeImmune Inc. (NASDAQ: GBIM)

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As its quarterly losses extends, GlobeImmune Inc. (NASDAQ: GBIM) faces a bleak future that could culminate in its wind-down. The company is struggling with cash shortage and the available cash can only push it forward until the middle of 2017. As such, the company remains in the process of looking for strategic alternatives, which might include a sale or winding down operations, according to management.

The streak of losses continues at GlobeImmune Inc. (NASDAQ: GBIM)

GlobeImmune Inc. (NASDAQ: GBIM) suffered a loss of $0.9 million or $0.15 per share in 1Q2016. Although the quarterly loss narrowed compared to $1.6 million or $0.27 per share in the corresponding quarter in 2015, quarterly losses continued, thus exacerbating the company’s financial woes.

The decrease in GlobeImmune’s losses in the latest quarter compared to a year ago was not that the company’s financial performance improved, but because the company underwent a slimming process last year. GlobeImmune laid off most of its workers and only remained six full-time employees out of 22 employees it had before the mass retrenchment.

Cash shortage

Despite slimming, it has been difficult for GlobeImmune Inc. (NASDAQ: GBIM) to kick out its financial troubles. The company revealed that the $8.7 million cash in hand it has can only keep it in operation until the middle of next year. As much, the company must find alternative financing if it is to continue with operations. Without it, the company will have to suspend operations.

GlobeImmune has three clinical programs underway. It is working on those clinical programs with certain partners including Celgene Corporation and Gilead Sciences.

Living on debt

Last year, GlobeImmune Inc. (NASDAQ: GBIM) borrowed more than $225 million to at least keep it in business through the end of the year. But with mounting losses and nothing to replenish the lost cash, the company’s cash holding has continued to shrink, thus making it difficult to fund operations until the end of 2017.

GlobeImmune Inc. (NASDAQ: GBIM) has retained Cantor Fitzgerald & Co. as an advisor to helping with exploring strategic alternatives. The management said that their desire is to maximum shareholder value in any deal they get into, but retaining an advisor doesn’t mean that a deal must be closed.

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