Economic concerns have halted or at least delayed the plans of many companies to go public, but one biotech is braving the financial tumult, raising $69 million from its IPO to fund a pivotal test of a novel antibiotic licensed from Pfizer.
When AN2 Therapeutics set financial terms for the stock offering earlier this week, the company planned to offer 4 million shares in the range of $14 to $16 each. AN2 was able to boost the size of the deal to 4.6 million shares that priced Thursday night at the $15 per share midpoint. Those shares began trading on the Nasdaq Friday under the stock symbol “ANTX.” The biotech’s stock price opened at $16.85, up 12.3% from the IPO price.
AN2’s lead drug candidate is its only drug. Epetraborole comes from Pfizer, which got 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 went on to win FDA approval but fell short of Pfizer’s blockbuster expectations. Both Eucrisa and Epetraborole are based on boron chemistry, which brings advantages in the ability to bind to and address biological targets that have been difficult to block using traditional carbon-based molecules. Epetraborole is designed to block an enzyme that’s key to bacteria, but is not addressed by other antibiotics. The approach is intended overcome the resistance that bacteria have developed other antibiotics.
Anacor had advanced epetraborole to two Phase 2 tests with GlaxoSmithKline, a collaboration that was evaluating the drug in gram-negative infections. But early data showed signs of clinical resistance, which means the bacteria became less susceptible to the antibiotic. Those results led to the discontinuation of those studies. But AN2 noted in its prospectus that clinical resistance is possible for all antibiotics, and that risk can be mitigated with combination therapy.
AN2 aims to test epetraborole in non-tuberculous mycobacterial (NTM) lung disease, a rare, chronic, and progressive infectious disease caused by mycobacteria. The condition leads to irreversible lung damage that can become fatal. NTM lung disease is currently treated with combination therapy, and AN2 noted in its prospectus that this approach is distinct from the earlier and failed monotherapy test of epetraborole.
AN2 launched in 2019 with a $12 million Series A round of funding and an agreement with Brii Biosciences, which licensed rights to develop the biotech’s lead antibacterial program in China. That deal did not come with an upfront payment, but AN2 is eligible to receive up to $15 million in regulatory milestones for each licensed product and up to $150 million in commercial milestones for each licensed product, according to the IPO filing. If a drug or drugs reach the Chinese market, AN2 is eligible to receive royalties from its partners sales of the products. AN2 closed an $80 million Series B financing round last year. The company’s largest shareholder is Adjuvant Global Health Technology Fund, which owns 17.2% of the biotech, followed by RA Capital Management’s 14.2% stake, according to the prospectus.
With the IPO cash, AN2 plans to spend about $65 on clinical development of epetraborole for NTM lung disease that has resisted earlier lines of treatment. A Phase 1 renal impairment study is already underway; a placebo-controlled Phase 2/3 test is set 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 powered for statistical significance but will evaluate the safety, efficacy, and pharmacokinetics of the drug—in combination with standard of care treatments—compared to a placebo.
The Phase 3 portion will enroll about 234 patients. AN2 is still working with the FDA to finalize the plan for this part of the study, but the company said in the IPO filing that it expects the main goal will be to test whether epetraborole, combined with two or more standard treatments, is superior to a placebo plus standard treatments. AN2 expects to post preliminary results from the Phase 2 portion of the study expected by the middle of next year. Another $5 million of the IPO proceeds is earmarked for expanding epetraborole to other geographic markets, initially Japan. The company also plans to develop the drug for other lung disorders caused by mycobacteria.
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