TransCode Therapeutics' Desperate Gamble: Can a 1-for-28 Reverse Split Save Its Nasdaq Listing?

TransCode Therapeutics (NASDAQ: RNAZ) has made a drastic move to stave off delisting: a 1-for-28 reverse stock split, reducing its share count from 23.3 million to 833,620 and artificially inflating its stock price from $0.51 to roughly $14.29. The move, announced on May 2, 2025, aims to meet Nasdaq’s $1 minimum bid requirement—a lifeline for a company whose shares have plummeted 97% over the past year. But the decision has sparked skepticism, with shares dropping 15.8% in post-market trading, underscoring the precarious balance between survival and speculation.

Ask Aime: "Should I buy TransCode Therapeutics stock after their reverse split?"

The Financial Tightrope

TransCode’s reverse split is not about growth but sheer survival. The company has no revenue, a cash runway projected to expire by late 2025, and a market cap of just $12 million—a fraction of its $5.00 share price peak in early 2024. Even with a $10 million raise via a March 2025 registered direct offering, cash burn outpaces incoming capital. The reverse split does nothing to address this; it merely avoids an immediate Nasdaq delisting, which would force the stock onto over-the-counter markets and further erode liquidity.

Ask Aime: "Is TransCode's stock split a signal of hope or a last desperate gambit for survival?"

This chart would show a steep decline from $5.00 to $0.51, highlighting the 97% drop that necessitated the split.

The Clinical Gamble

The company’s last hope lies in its lead candidate, TTX-MC138, an antisense oligonucleotide targeting microRNA-10b in metastatic cancer. Early Phase 1 data shows modest promise: 13 patients treated with no dose-limiting toxicities, and two achieving stable disease for seven months—a rare achievement in a deadly indication. However, these results are preliminary, and the trial is still in its early stages, with Cohort 4 just beginning to test higher doses.

Analysts are divided. While one analyst’s $10.00 price target (pre-split) implies an 1,852% upside, TipRanks’ AI analyst Spark labels RNAZ “Underperform,” citing financial instability and speculative risks. The brokerage consensus leans bullish at “Outperform,” reflecting faith in TTX-MC138’s potential but ignoring near-term cash crunches.

The Delisting Deadline

The reverse split’s success hinges on RNAZ’s post-split price staying above $1—a threshold it must meet by May 5, 2025, or face delisting. Yet the stock’s post-announcement drop suggests investors doubt its ability to sustain this. Compounding concerns is TransCode’s history of reverse splits: a 1-for-33 split in November 2024 failed to stabilize the stock long-term, raising questions about its strategy of “kicking the can” rather than addressing fundamentals.

Key Risks and Milestones

• Cash Burn: Without additional funding, TransCode’s cash reserves will be exhausted by late 2025.
• Clinical Milestones: Phase 1 completion by late 2025 and potential Phase 2 initiation in 2026 are critical to attract partnerships.
• Earnings Report: The May 14, 2025, report will clarify cash reserves and spending plans.

This data would show a steep downward trajectory without external capital, emphasizing the urgency of fundraising.

Conclusion: A Lifeline, Not a Cure

TransCode’s reverse split is a necessary stopgap to avoid delisting but does nothing to address its core issues: financial fragility and lack of revenue. The stock’s fate now rests on two factors: whether it can maintain a post-split price above $1 and whether TTX-MC138 delivers clinically meaningful results.

While the $10.00 price target suggests a potential 1,852% return from the pre-split $0.51, this assumes a perfect storm of clinical success, investor confidence, and funding access—all of which are far from certain. The market’s 15.8% post-announcement decline signals skepticism about these odds.

For investors, RNAZ is a high-risk, high-reward bet. Those willing to gamble on early-stage oncology breakthroughs may find value, but the odds favor TransCode needing another lifeline before 2025 ends. As one analyst noted, “This isn’t a cure—it’s an EpiPen.” The question is whether the EpiPen will be enough.