Shares of OvaScience, Inc. (NASDAQ:OVAS) Plunge After it Cuts 30% of Workforce, New CEO Resigns

Waltham, MA-based OvaScience, Inc. (NASDAQ:OVAS), has laid off a third of its workforce and CEO, Harald Stock steps down, sending shares down the well.

Waltham biotech OvaScience is laying off almost a third of its workforce, likely around 30 employees, and its CEO is resigning after less than six months on the job as the company slows efforts to expand its fertility treatments globally.

The company’s share price fell about 30 percent to $2.07 in after hours trading late Wednesday after the changes were announced. The company’s value was already down by 69 percent for the year as of the close of markets Wednesday, having lost about $200 million in market value in 2016.

Harald Stock has stepped down as CEO of OvaScience less than six months after assuming the role.

Courtesy OvaScience

Late Wednesday, OvaScience (Nasdaq: OVAS) announced “a business update” regarding commercial plans for its Augment treatment, intended to make a woman’s eggs more fertile and increase her chances of becoming pregnant. The company said it will “slow its commercial expansion, reassess its ongoing and planned clinical studies of Augment, and undertake a corporate restructuring” in order to allow the money it has on hand — it last reported $131 million in cash and short-term investments as of the end of September — to last “into the first quarter of 2019.”

It also said it plans to increase its focus on the development of two technologies in development, called OvaPrime and OvaTure, hoped to produce more eggs from a woman’s own “precursor cells.”

The plans include a workforce reduction of 30 percent. While the company didn’t say how many jobs would be cut now where the cuts would be made, as of August, OvaScience had about 100 employees, the vast majority of which were in Waltham.

The company also said that Harald Stock, who took over the role of president and CEO from founder Michelle Dipp in July, as well as Chief Operating Officer Paul Chapman, have both decided to step down. Dipp, the company’s chairwoman and former CEO, will oversee the search for new leadership.

OvaScience, which was founded in 2011 by Dipp, Christoph Westphal and Richard Aldrich, has struggled in recent years with an inability to sell its products in the U.S. without conducting expensive and lengthy trials. The lack of large, definitive trials has also made investors skeptical of how well its treatments really work.

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OvaScience, Inc. (NASDAQ:OVAS) shares are trading -54.88% on the news and in the range of $1.30 – 2.28 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $9.50 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $-0.59 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-2.53 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -61.19% away from its 50-day moving average of $3.45.  Based on the most recent available data, the equity is -88.51% off of its 52-week high of $11.66 and +3.08% away from its 52-week low which is $1.30.

Today, the stock opened at $2.24 and the last bid at the time of writing stood at $1.34.  During the session thus far, the equity dipped down to $1.30 and touched $2.28 as the high point.  OvaScience, Inc. (NASDAQ:OVAS) has a market cap of $47.71M and has seen an average daily volume of 533,288 over the past three months.

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