alopexx (NASDAQ:ALPX) is the newest member of the Nasdaq, as the clinical-stage biotechnology company held its IPO today. The Company is focused on developing therapies to treat bacterial, fungal and parasitic infections. As part of the IPO, Alopexx is expected to raise $15 million by selling 5 million shares of ALPX at a starting price of $3 per share.
Alopexx is unprofitable, posting a net loss of $500,222 in the first quarter compared to a net loss of $47,971 a year ago. The company recognizes this and warns:
We have suffered significant net losses since inception and expect to continue incurring significant net losses for the foreseeable future and may never become profitable.
In addition, Alopexx has no products on the market. However, it is working on developing two compounds, F598 and AVO238, to treat infections. Let’s get down to the details.
ALPX Stock debuts on Nasdaq
F598 is a “fully human monoclonal antibody” that has successfully completed Phase 1 and Phase 2 pilot testing. The antibody is intended to prevent hospital-acquired infections, for example after emergency abdominal surgery or abdominal trauma. Meanwhile, AVO238 is a “chemically synthesized vaccine” that targets S. pneumoniae and meningococcal infections. In tests, both compounds demonstrated their effectiveness against antimicrobial-resistant (AMR) organisms.
Both compounds target poly-N-acetyl-glucosamine (PNAG), which is found on most fungal and bacterial microbes. The company notes that “virtually every microbe we’ve studied carries PNAG on its surface.”
Market Research Future estimates that the global market for the treatment of hospital-acquired infections will reach US$32.5 billion by 2030, up from US$23.7 billion in 2020. This is a compound annual growth rate (CAGR) of 1.37% and also claim a large addressable market for Alopexx.
Nevertheless, drug testing is a very expensive and extensive process. For the three months ended March 31, Alopexx recorded general and administrative expenses of $369,475 and research and development expenses of $121,578. Along with other expenses, that equated to a net loss per share of 16 cents. If the company does not get approval for F598 and AVO238, then its “business would be seriously damaged”.
At the time of publication, Eddie Pan held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
Eddie Pan specializes in institutional investing and insider trading. He writes for InvestorPlace’s Today’s Market team, which focuses on the latest news on popular stocks.
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