Butler Hall Capital LLC ("Butler Hall"), on behalf of a fund managed by it, sent the following letter to the Board of Directors of resTORbio, Inc. ("TORC" or the "Company"), regarding the PROTECTOR 1 Phase 3 study and ongoing cash burn at the Company. As discussed in more detail in the letter, Butler Hall believes it is the fiduciary duty of the Board to act quickly to shore up waning investor confidence in the Company and to consider a comprehensive strategic review, including a full liquidation of the Company.
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In its letter, Butler Hall highlights how the failed Phase 3 study has destroyed more than 90% of shareholders’ equity and has led to TORC trading at the largest discount to its net cash balance of any company in the Russel 2000. Butler Hall stresses that the Board of Directors have a responsibility to act swiftly and "prove that any further use of cash is in the best interest of stakeholders. Concurrently, [Butler Hall] strongly encourages the Board to consider all strategic alternatives including an orderly liquidation of the business." The letter indicates that a liquidation would result in 125% of upside from current trading levels.