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Neoleukin Therapeutics: Strategic Review Play

Apr. 19, 2023 4:04 AM ETNeoleukin Therapeutics, Inc. (NLTX)5 Comments


  • Neoleukin Therapeutics is a failed biopharma that recently laid off the majority of its workforce and announced a strategic review.
  • The company currently trades at a wide 36% discount to its estimated net cash upon strategic review conclusion.
  • While the strategic review outcome is uncertain, a highly credible management team gives some confidence in a shareholder-friendly outcome.
  • This idea was discussed in more depth with members of my private investing community, Special Situation Investing. Learn More »

Chain of amino acid or bio molecules called protein - 3d illustration

Christoph Burgstedt

This is an interesting “strategic review of a busted biopharma” type of situation which was initially highlighted to Special Situation Subscribers in March. The stock has gone up 29% since my write-up, however, there seems to be substantial potential upside left here.

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This article was written by

Dalius Taurus profile picture

Dalius Taurus has professional experience in investment banking and strategy consulting. He holds a number of finance degrees. He has been investing and specializing in event-driven opportunities for the past decade.

Dalius is the leader of the investing group Special Situation Investing, where he provides actionable advice on high conviction event-driven investments. Features of the group include: 1-4 premium special situation ideas per month, 1-7 quick investment ideas per week, weekly updates on all ideas for quickly synthesizing analysis, and chat for questions. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in NLTX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

Nice under the radar pick. Note that Baker Brothers were a massive shareholder of SGEN, over $6 billion! and NLTX CFO as you note is from SGEN. Baker Brothers are one of the highest regarded biotech investors and would have some the best access to deal flow or own a private that needs to go public. Very unlikely they will payout shareholders the cash, they would prefer to use this as a go public vehicle. Tough for a biotech to go public right now but with this pedigree hard not to expect success.
Curve Tech Investing profile picture
Nice catch. Fine analysis. I have been long for some time. The cherry on top is their technology. If I were running the biologics unit of a large biotech, I might pay a few million over breakup value just to see the details of their phase 1 trial. The topline results that they released were intriguingly positive using their original protein design, yet they shifted to a new design before calling it quits. Something in the details of those results must have warned them off even as they were seemingly setting up a new paradigm in biologics. It's a curious situation that hints at something more than has been made public.
itamarro profile picture
@Curve Tech Investing Just bumped into them for the first time (never owned the stock), love the science, too bad it didn't work out but we all know this shit is hard. Not sure if it's interesting to get into now, would love to hear your updated view if you're willing to share.
Dalius Taurus profile picture
@itamarro I think at current levels NLTX has become interesting again. My thoughts on the situation here: seekingalpha.com/...
itamarro profile picture
@Dalius Taurus Thank you very much!
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