Economic concerns have halted, or at least delayed, many companies’ plans to go public, but one biotech is braving the financial turmoil and raising $69 million from its IPO to fund a crucial test of a novel Pfizer-licensed antibiotic .
When AN2 Therapeutics finalized the financial terms of the stock offering earlier this week, the company planned to offer 4 million shares in the range of $14 to $16 apiece. AN2 increased the size of the deal to 4.6 million shares, which traded at an average of $15 per share on Thursday evening. These shares traded on the Nasdaq on Friday under the stock symbol “ANTX.” The biotech’s share price opened at $16.85, up 12.3% from the IPO price.
AN2’s lead drug candidate is the sole drug. Epetraborole is from Pfizer, which received the small molecule as part of its $5.2 billion acquisition of Anacor Pharmaceuticals in 2016. The key piece of that deal was Eucrisa, an atopic dermatitis drug that later received FDA approval but fell short of Pfizer’s blockbuster expectations. Both Eucrisa and Epetraboroles are based on boron chemistry, which brings advantages in the ability to bind to and target biological targets that have been difficult to block with traditional carbon-based molecules. Epetraborole was designed to block an enzyme that is vital to bacteria but unaffected by other antibiotics. The approach aims to overcome the resistance that bacteria have developed to other antibiotics.
Anacor had advanced epetraborole in two Phase 2 trials with GlaxoSmithKline, a collaboration studying the drug in Gram-negative infections. But early data showed signs of clinical resistance, meaning the bacteria became less susceptible to the antibiotic. These results led to the discontinuation of these studies. But AN2 noted in its prospectus that clinical resistance is possible for all antibiotics and that the risk can be mitigated with combination therapy.
AN2 aims to test epetraborole in nontuberculous mycobacterial (NTM) lung disease, a rare, chronic and progressive infectious disease caused by mycobacteria. The condition causes irreversible lung damage that can be fatal. NTM lung disease is currently treated with combination therapy and AN2 noted in its prospectus that this approach differs from the previous and failed epetraborole monotherapy trial.
AN2 launched in 2019 with a $12 million Series A funding round and an agreement with Brii Biosciences, which licensed the rights to develop the biotech’s leading antibacterial program in China. This deal did not involve an upfront payment, but AN2 is entitled to up to $15 million in regulatory milestones for each licensed product and up to $150 million in commercial milestones for each licensed product, as per the IPO filing emerges. When a drug or medicines enter the Chinese market, AN2 is entitled to royalties from the sales of the products by its partners. AN2 closed an $80 million Series B funding round last year. The company’s largest shareholder, according to the prospectus, is the Adjuvant Global Health Technology Fund, which owns 17.2% of the biotechnology company, followed by RA Capital Management’s 14.2% stake.
With the proceeds from the IPO, AN2 plans to spend approximately $65 on clinical development of epetraborole for NTM lung disease, which has resisted previous lines of treatment. A phase 1 renal impairment study is underway; a placebo-controlled phase 2/3 trial is scheduled to begin in the first half of this year. According to the prospectus, 80 patients will be enrolled in the phase 2 portion of the study, which is not designed for statistical significance, but will instead evaluate the safety, efficacy and pharmacokinetics of the drug – when combined with standard treatments – compared to a placebo.
The Phase 3 portion will enroll approximately 234 patients. AN2 is still working with the FDA to finalize the plan for this portion of the study, but the company said in the IPO filing that it expects the primary goal will be to test epetraborole in combination with two or more Superior to Standard Treatments is a placebo plus standard treatments. AN2 expects to announce preliminary results from the Phase 2 portion of the study by the middle of next year. An additional $5 million of the proceeds from the IPO will be earmarked for Epetraborole’s expansion into other geographic markets, starting with Japan. The company also plans to develop the drug for other lung diseases caused by mycobacteria.
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