Zogenix, Inc. (NASDAQ:ZGNX), a pharmaceutical company developing and commercializing products for the treatment of central nervous system (CNS) disorders, announced that at the annual general meeting of shareholders held earlier today, shareholders voted to approve a proposal authorizing the board of directors of the Company to amend the Company’s certificate of incorporation to effect a reverse stock split of Zogenix’s outstanding common shares at an exchange ratio of 1-for-8, and a change in the number of authorized shares of common stock to 50,000,000 shares.Zogenix’s board of directors had previously directed that the proposal be submitted to the shareholders for approval and has subsequently determined that the reverse stock split will take effect on July 1, 2015. Beginning with the opening of trading on July 1, 2015, the Company’s common stock will trade on a split-adjusted basis.
“We appreciate the support of our shareholders in granting our board the authority to affect a reverse split. After in-depth consideration of our options, the board determined that a reverse split of the Company’s common shares is in the best interest of shareholders,” said Stephen Farr, Ph.D., Chief Executive Officer of Zogenix. “As we have now shifted our strategic focus to CNS disorders and orphan drug development, the execution of this reverse stock split supports a per share valuation for Zogenix that is more in line with our peers.”
An additional objective supporting the reverse stock split at this time is to potentially allow a broader range of institutions to invest in the Company’s common stock – namely, funds that are prohibited from buying stocks with a price per share below a certain threshold. (Original Source)
Shares of Zogenix closed today at $1.60, up $0.015 or 0.95%. ZGNX has a 1-year high of $2.39 and a 1-year low of $1.07. The stock’s 50-day moving average is $1.51 and its 200-day moving average is $1.42.
On the ratings front, Zogenix has been the subject of a number of recent research reports. In a report issued on June 12, Brean Murray Carret analyst Difei Yang reiterated a Buy rating on ZGNX, with a price target of $2.50, which represents a potential upside of 57.2% from where the stock is currently trading. Separately, on May 11, Oppenheimer’s Akiva Felt maintained a Buy rating on the stock and has a price target of $2.50.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Difei Yang and Akiva Felt have a total average return of 22.6% and 35.5% respectively. Yang has a success rate of 73.7% and is ranked #166 out of 3632 analysts, while Felt has a success rate of 68.8% and is ranked #25.
Zogenix Inc is a pharmaceutical company engaged in commercializing & developing therapies that address clinical needs for people living with pain-related and CNS disorders that needs treatment alternatives to help return to normal daily functioning.