PASG.NASDAQPassage Bio, INC

SCHEDULE: OrbiMed Advisors Significantly Reduces Stake in Passage Bio Following Reverse Stock Split

Sentiment:

Beneficial Ownership Update

📋All filings for Passage Bio, INC
🔒Login to Follow

OrbiMed Advisors and OrbiMed Capital GP VII have reduced their beneficial ownership in Passage Bio, Inc. to 7.82% after a series of share sales and a 1-for-20 reverse stock split.

Worse than expectedOrbiMed Advisors and OrbiMed Capital GP VII significantly decreased their beneficial ownership in Passage Bio, Inc. by more than 1%.The company underwent a 1-for-20 reverse stock split, which is often a sign of a struggling stock price and can be perceived negatively by the market.

Summary

  • OrbiMed Advisors LLC and OrbiMed Capital GP VII LLC (Reporting Persons) filed Amendment No. 8 to their Schedule 13D for Passage BIO, Inc.
  • The filing reports a decrease in their beneficial ownership of Passage Bio's common stock by more than 1%.
  • As of the filing date, the Reporting Persons beneficially own 243,878 shares, representing approximately 7.82% of the issued and outstanding shares.
  • Passage Bio, Inc. implemented a 1-for-20 reverse stock split, approved on June 26, 2025, and effective on July 14, 2025. All share numbers in the filing are presented on an after-Reverse Stock Split basis.
  • OrbiMed Private Investments VII, LP (OPI VII), managed by the Reporting Persons, sold a total of 88,621 shares between June 24, 2025, and July 17, 2025, at prices ranging from $0.33 to $6.77 per share, with higher prices reflecting post-split values.

Sentiment

Score: 3

Explanation: The sentiment is negative due to a significant reduction in ownership by a major institutional investor and the occurrence of a reverse stock split, which often signals underlying financial challenges for the company.

Negatives

  • A significant reduction in beneficial ownership by a major institutional investor (OrbiMed) by more than 1% indicates a decreased commitment.
  • The 1-for-20 reverse stock split, while aiming to increase share price, often signals underlying financial distress or low share price issues for the company and can be perceived negatively by the market.

Risks

  • The Reporting Persons may dispose of some or all of their currently owned shares in the future, which could put downward pressure on the stock price.
  • The Issuer's business, financial condition, results of operations, and prospects, as well as general economic and industry conditions, could negatively impact the investment.
  • The reverse stock split may not achieve its intended effect of improving market perception or liquidity, and could be a sign of underlying financial weakness.

Future Outlook

The Reporting Persons intend to continuously review their investment in Passage Bio, Inc. based on various factors including the Issuer's business, financial condition, results of operations, prospects, general economic and industry conditions, and the securities markets. They may acquire additional shares or dispose of existing shares in the future, depending on their assessment of investment attractiveness.

Industry Context

This filing reflects an institutional investor's adjustment of its stake in a biotechnology company. The reverse stock split is a common maneuver in the biotech sector for companies whose stock price has fallen significantly, often to maintain listing requirements or improve market perception. OrbiMed is a prominent healthcare-focused investment firm, and their reduction in stake could signal a re-evaluation of Passage Bio's prospects within the competitive biotech landscape.

Comparison to Industry Standards

  • The document does not provide company-specific performance metrics for direct comparison to industry standards.
  • Reverse stock splits are often viewed negatively in the biotech industry, as they can indicate a company struggling to maintain investor confidence or meet exchange listing requirements, unlike more stable, larger pharmaceutical companies.

Corporate Governance

Change TypeDescriptionEffective DateImpact Assessment
Investors' Rights AgreementAn Amended and Restated Investors' Rights Agreement, dated August 21, 2019, grants certain registration rights (Demand, Piggyback, Form S-3) to holders of registrable securities, including OrbiMed Private Investments VII, LP.August 21, 2019Provides significant shareholders with mechanisms to register and sell their shares, potentially increasing liquidity but also allowing for large share dispositions.

Stakeholder Impact

  • Shareholders: The reduction in stake by a major institutional investor could lead to negative market sentiment and potential downward pressure on the stock price. The reverse stock split impacts the number of shares held but not the total value of their investment immediately, though it's often a precursor to further price volatility.
  • Company (Passage Bio): The decrease in a significant investor's stake might signal a loss of confidence, potentially affecting future capital-raising efforts or partnerships.

Next Steps

  • The Reporting Persons will continue to review their investment in Passage Bio, Inc.
  • The Reporting Persons may acquire additional shares or dispose of existing shares in the future.
  • The Reporting Persons undertake to provide full information regarding the number of shares sold at each separate price upon request by the SEC staff or the Issuer.

Key Dates

DateDescription
August 21, 2019Date of the Amended and Restated Investors' Rights Agreement.
March 9, 2020Original Schedule 13D filing date by OrbiMed Advisors LLC and OrbiMed Capital GP VII LLC.
January 28, 2021Amendment No. 1 to Schedule 13D filed.
May 5, 2022Amendment No. 2 to Schedule 13D filed.
June 29, 2023Amendment No. 3 to Schedule 13D filed.
April 12, 2024Amendment No. 4 to Schedule 13D filed.
December 26, 2024Amendment No. 5 to Schedule 13D filed.
April 25, 2025Amendment No. 6 to Schedule 13D filed.
June 24, 2025OrbiMed Private Investments VII, LP (OPI VII) sold 11,580 shares at $0.35 per share.
June 25, 2025OPI VII sold 6,940 shares at $0.33 per share.
June 26, 2025OPI VII sold 10,662.85 shares at $0.33 per share; Issuer's Board of Directors approved a 1-for-20 reverse stock split.
June 27, 2025OPI VII sold 552.15 shares at $0.34 per share.
July 7, 2025OPI VII sold 1,198 shares at $0.48 per share.
July 8, 2025OPI VII sold 2,535 shares at $0.43 per share.
July 9, 2025OPI VII sold 2,855.30 shares at $0.44 per share; Amendment No. 7 to Schedule 13D filed.
July 10, 2025OPI VII sold 6,361.70 shares at $0.40 per share.
July 14, 2025The 1-for-20 reverse stock split became effective; Issuer's Current Report on Form 8-K filed with the SEC.
July 15, 2025OPI VII sold 3,700 shares at $6.77 per share (post-reverse stock split).
July 16, 2025OPI VII sold 20,048 shares at $5.86 per share (post-reverse stock split).
July 17, 2025OPI VII sold 22,188 shares at $5.83 per share (post-reverse stock split); Date of event requiring the filing of this statement.
July 21, 2025Date of signing of the Schedule 13D Amendment No. 8.

Recommendation

sell

Keywords

Passage BIO, OrbiMed Advisors, OrbiMed Capital, Schedule 13D, beneficial ownership, reverse stock split, share sales, institutional investor, biotechnology, SEC filing

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.