Cibus Adjusts Strategy Following Price Target Update by Canaccord

Canaccord Genuity Lowers Price Target for Cibus

Canaccord Genuity recently updated its price target for Cibus (NASDAQ:CBUS) to $20.00, down from $21.00. Despite this adjustment, the firm has maintained a Buy rating on the stock, reflecting confidence in the company's future performance. This change comes on the heels of Cibus's announcement for a public offering aimed at raising $12 million by selling an additional 3 million shares of common stock at $4.00 each.

Details of the Public Offering

The offering, which is expected to close shortly, grants underwriters an option to purchase up to 450,000 additional shares to balance any potential over-allotments within 45 days following the closing. Importantly, this offering includes participation from Cibus’s existing investors, including CEO Rory Riggs, in conjunction with various institutional investors.

Use of Funds from the Offering

The $12 million raised from this public offering is earmarked for pivotal initiatives like the advancement of seed trait development utilizing Cibus's innovative gene editing platform, Trait Machine. Additionally, these funds will support general corporate activities and working capital needs crucial for the company's operations.

Insights into Canaccord Genuity's Analysis

The revised price target accounts for the anticipated dilution stemming from the increased share count post-offering. Analysts at Canaccord Genuity have developed this new target based on a discount cash flow (DCF) analysis projected through 2032. It’s worth noting that despite the reduced target, Canaccord Genuity retains a positive outlook for Cibus, highlighting its ongoing Buy rating.

Cibus's Progress in Agricultural Biotechnology

In the broader spectrum of advancements, Cibus, a frontrunner in agricultural biotechnology, has made notable progress in its late-stage activities. The company is on the verge of launching its first three traits in crop programs, which signify substantial advancements in its technology. It has initiated a series of cost-cutting measures to allocate resources effectively towards priority goals, particularly the launches of Pod Shatter Reduction, HT1, and HT3 traits in canola, Winter Oilseed Rape, and Rice.

Development of the Trait Pipeline

Cibus is proud of its robust trait pipeline, which includes six productivity traits, three of which have been validated through field trials and incorporated into elite lines with seed company partners. The ongoing development reflects Cibus's commitment to incorporating cutting-edge technology in agricultural practices.

Current Financial Footprint

Recently disclosed financial results reveal Cibus's increase in research and development expenditure and a rise in net losses compared to the prior year; however, the company maintains a healthy cash balance of $30 million. It is especially focused on advancing its non-GMO herbicide-tolerant traits targeting a 2027 market launch and has made meaningful strides in canola traits aimed at enhancing disease resistance and improving nutrient use efficiency.

Executive Changes within Cibus

In terms of leadership, Cibus has announced that its CFO, Wade King, will be taking an indefinite leave of absence for family reasons. In his place, Carlo Broos, the Senior Vice President of Finance, will step in as the interim CFO. Despite this transition, Cibus is poised with strategic initiatives to break into new markets and establish valuable partnerships, paving the way for future growth.

Regulatory Approvals Impacting Market Reach

Cibus's products have recently secured approvals in Canada, which opens up extensive market opportunities for canola, wheat, and soybeans. This regulatory progress is essential for Cibus as it bolsters its market presence and enhances its operational capabilities.

Canaccord Genuity's Continued Support for Cibus

Despite the recent CFO transition, Canaccord Genuity continues to uphold its Buy rating on Cibus. They perceive this movement as largely immaterial to the stock’s performance, pointing out that the situation is temporary and has no relation to the company's operational activities.

Frequently Asked Questions

What is the new price target for Cibus set by Canaccord Genuity?

The new price target for Cibus is set at $20.00, down from the previous target of $21.00.

What are the funds from Cibus’s public offering intended for?

The funds are intended for advancing seed trait development, general corporate purposes, and working capital needs.

Who will lead Cibus during the CFO's leave of absence?

Carlo Broos, the Senior Vice President of Finance, will assume the interim CFO role during the leave.

What is Cibus’s strategy regarding its trait pipeline?

Cibus is focusing on the launch of new traits while keeping resources concentrated on priority developmental objectives.

Is Canaccord Genuity optimistic about Cibus’s future?

Yes, despite the price target reduction, Canaccord Genuity maintains a positive outlook and a Buy rating on Cibus's stock.

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