Spruce Biosciences gets Nasdaq delisting notice, suspension set for April 29, cuts staff 55%

Spruce Biosciences, Inc. (Nasdaq: SPRB) said in a Form 8-K filed April 25, 2025 that Nasdaq will suspend trading in its stock at the open on April 29, 2025 and delist it, and that it is cutting 55% of its workforce. The two items are reported under Items 2.05 and 3.01. The stock is expected to trade on the over-the-counter market under "SPRB" from April 29.

The delisting

Nasdaq first told Spruce on April 26, 2024 that its closing bid price had been below $1.00 for 30 consecutive business days, breaching Listing Rule 5450(a)(1). On October 24, 2024 the staff approved moving the stock to the Nasdaq Capital Market, effective October 28, 2024, and granted a further 180 calendar days, until April 21, 2025, to cure. The company did not. On April 22, 2025 Nasdaq sent the Delisting Notice, and the company expects Nasdaq to file a Form 25-NSE with the Securities and Exchange Commission to remove the securities from listing and registration.

Spruce has appealed to the Nasdaq Hearings Panel, but the 8-K says a timely hearing request does not stay the trading suspension because the company had already used its second 180-day period. Its plan is to seek stockholder approval at the 2025 annual meeting for a reverse stock split in a range from 1-for-5 to 1-for-30, with the ratio set by the board, and to give the Panel a plan to regain compliance. The filing says there are no assurances that the Panel will grant continued listing. President and Chief Financial Officer Samir Gharib signed it.

The workforce cut

The board approved the 55% reduction on April 21, 2025, with a termination date of May 2, 2025 for affected employees. The company says the purpose is to prioritize development and potential accelerated approval of tralesinidase alfa enzyme replacement therapy, known as TA-ERT, for Sanfilippo Syndrome Type B. Affected people will be offered separation benefits including severance and healthcare coverage assistance. Spruce estimates approximately $0.9 million in cash charges, mostly recorded in the second quarter of 2025, and says other costs not yet contemplated could arise.

Losses and going-concern doubt

The annual report for 2024, filed April 15, 2025, says the company does not have sufficient working capital to fund planned operations for the next twelve months and that substantial doubt exists about its ability to continue as a going concern. For 2024 it reported a net loss of $53.0 million and used $56.0 million of cash in operations. At December 31, 2024 it had an accumulated deficit of $250.3 million and cash and cash equivalents of $38.8 million. It has said it will have to finance itself through equity offerings, license agreements, debt financings or other transactions.

One program carries the plan

TA-ERT is a fusion protein intended to replace the missing NAGLU enzyme in the central nervous system, given by infusion into the cerebrospinal fluid because it is not expected to cross the blood-brain barrier. Its evidence comes from three clinical studies sponsored by an earlier company, Allievex. Study 201, a Phase 1/2 open-label study, enrolled 22 patients, and 21 completed it. A follow-on study was discontinued in October 2023 because of the prior sponsor's financial constraints. The company says TA-ERT normalized heparan sulfate levels. On cognition, in patients with early disease, seven of ten demonstrated disease stability, and three of twelve with more progressed disease did, in an open-label setting without a control group.

In March 2024 the FDA told Allievex that the heparan sulfate marker could support accelerated approval and that the completed studies were sufficient for a biologics license application. The FDA also outlined a confirmatory Phase 3 trial, a placebo-controlled 5-year study with a 2-year interim analysis in 14 patients, which must start before any accelerated approval. Spruce intends to submit the application in the first half of 2026. The annual report also lists tildacerfont, SPR202 and SPR204 among its product candidates.

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