Dallas, Texas 06/30/2015 (Financialstrend) – Zogenix, Inc. (NASDAQ:ZGNX) the pharma company developing treatment for Central Nervous System ailments, failed to remain impressive on Monday. The share prices declined, indicating that all is not well with company, following recent developments.
Earlier, on June 19 the company had filed that it would amend its certificate of incorporation because of a reverse stock split. The common shares outstanding at 1-for-8 exchange ratio, besides a change in the authorized shares of common stock were approved by the shareholders. The number of authorized shares of common stock was increased to 50,000,000 shares.
The reverse stock split is now scheduled for July 1, 2015, following the approval of the same by shareholders. Chief Executive Officer of Zogenix, Inc. (NASDAQ:ZGNX) Stephen Farr, stated that the reverse-split was recommended as it would be in the best interest of shareholders, after careful consideration of several options. He added that the reverse split will allow Zogenix to gain per share valuation as that of the peers, now that the company has strategically moved to specific drug development for CNS disorders and orphan drug development.
Industry experts forecast that, by such a financial move, the company will now be able to accept investments via common stock, from wide-range of institutions. This is because many fund investors are bound by in-house rules which prohibit them from investing in stocks which are below a threshold price per share.
Zogenix, Inc. (NASDAQ:ZGNX) common stock post the reverse split now stands at roughly 19.2 million shares issued and outstanding. However on Monday, share prices of the company declined, indicating the company is headed for a purple patch in the coming trading sessions, unless damage-control is optimized. The re-focus of the core drug development sphere by the company does portend good share price growth in the long-term, as it works on niche CNS therapies.