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id: 908

Histogen (HSTO) Failed Business Case

  • In September 2023, Histogen's BoD approved the liquidation of the Company, after failing to find strategic alternatives.
  • $HSTO shareholders lost over 98% since the Company decided to switch focus to the COVID treatment development.
  • Investors may have reasons to suspect Histogen & its Leaders overestimating its capabilities and misleading about business prospects and priorities.
On September 18, 2023, Histogen Inc. (HSTO) announced that its Board of Directors approved and adopted a Plan of Dissolution that would include the distribution of remaining cash to stockholders following an orderly wind-down of the company’s operations, including any proceeds from the potential sale of any pipeline assets.

On this news, $HSTO fell 40% and lost over 98% since the Company decided to switch focus to COVID vaccine development.

Earlier, on July 05, 2023, Histogen announced that it completed a review of its business, including the status of programs, resources, and capabilities, and decided to pause further development of its programs and commence a process to explore strategic alternatives with the intent to enhance shareholder value. Histogen engaged Roth Capital Partners to act as a strategic advisor in this process.

The unfavorable outcome for shareholders was preceded by a Saga lasting 3 years:
  • On January 28, 2020, Conatus Pharmaceuticals Inc. (CNAT) and Histogen Inc., a privately held regenerative medicine company merged in an all-stock transaction. The combined company started operating under the name Histogen, Inc., trading on the Nasdaq and focusing on the advancement of its patented technology for dermatological and orthopedic indications. “After completing a comprehensive review of multiple strategic alternatives, we determined that the proposed merger with Histogen would provide the best opportunity for Conatus shareholders moving forward,” said Steven J. Mento, Ph.D., President, CEO, and co-founder of Conatus. “We believe that Histogen’s clinical-stage dermatological and orthopedic product development programs offer significant potential to drive future value for the combined company.”
  • On October 27, 2020, Histogen (HSTO) announced entering into a collaboration with Amerimmune to jointly develop emricasan, an orally active caspase inhibitor, for the treatment of COVID-19.
  • On November 28, 2022, after counter-complaints, the collaboration between Histogen and Amerimmune was terminated.
  • In December 2022, Histogen closed the regenerative medicine pipeline and reprioritized trying emricasan for other indications. It announced the termination of the Phase 1/2 clinical study of HST 003. In the third quarter of 2022, it announced the suspension of all IND-enabling activities on the HST 004 program.
On October 3, 2023, after liquidation was approved, Histogen sold to Allergan certain assets, including patents and IP rights related to fibroblast cell-based bioengineering technology at $2,050,000 and agreed to assume certain liabilities.

Considering all representations and factual actions, Investors may have reasons to suspect Histogen's leaders of overstating its capabilities to bring shareholder value, misleading about business prospects and priorities, and negligence in conducting strategic management of the Company.
Case Status
Attorney Investigation
Alleged Offence
Misleading Statements
Failure to Disclose
Suspected Party
Security Type
Trade Direction
Shock Event Date
19 September 2023
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