Pharma, BioPharma

With lung drug from Pfizer in hand, AN2 tests IPO waters in turbulent market

Two biotechs are braving the roiling financial markets to raise money for clinical trials. AN2 Therapeutics is preparing for a pivotal test of its boron-based drug candidate for a rare, chronic lung disease. Okyo Pharma also filed IPO paperwork as it looks to advance to the clinic with its dry eye disease drug.

Pfizer executives thought they had a blockbuster in waiting after inking a $5.2 billion deal to acquire Anacor Pharmaceuticals and its atopic dermatitis drug candidate. The product won FDA approval in 2016, but fierce competition kept it from meeting the lofty expectations. Pfizer has since tried to monetize other Anacor assets, and one of them is now in the hands of AN2 Therapeutics. The small molecule is on track for a pivotal test in a rare lung disease, and AN2 plans to finance the clinical research by going public.

AN2 filed preliminary IPO paperwork with securities regulators late Friday. The Menlo Park, California-based company has not yet set the deal size or any pricing terms for the proposed stock offering. AN2 has applied for a listing on the Nasdaq under the stock symbol “ANTX.”

The research of AN2 now, and Anacor before it, is based on boron chemistry. The ability of the fifth element of the periodic table to bind with biological targets is a key feature that gives it the potential to address targets that have been difficult to drug with traditional carbon-based molecules, AN2 said in its IPO paperwork. Because boron-based drugs are selective for their biological targets, the risk of off-target effects are minimized. The element also enables “tuning” of a drug’s properties.

Before crisaborole, the Anacor atopic dermatitis drug (now marketed under the name “Eucrisa”) that was the key target of the Pfizer acquisition, the biotech previously won FDA approval for a different boron-based drug. Tavaborole (marketed by Pfizer as Kerydin) is an antifungal that blocks protein synthesis. AN2’s drug candidate epetraborole is a boron-containing analog of tavaborole that is designed to target protein synthesis in bacteria. The lead disease target of AN2’s drug is non-tuberculous mycobacterial (NTM) lung disease, a rare, chronic, and progressive infectious disease. This disease, which is caused by mycobacteria, leads to irreversible lung damage that can become fatal.

The AN2 drug offers a broad spectrum of activity against mycobacteria, the company said. AN2 is developing the drug, an oral product designed for once-daily dosing, for treating Mycobacterium avium complex (MAC) lung disease, which is the most common type of NTM lung disease.

Patients who have tough-to-treat cases of MAC lung disease have one FDA-approved therapy available to them. Insmed won approval in 2018 for Arikayce, an inhaled formulation of the injectable antibiotic amikacin. But AN2 points out in its IPO filing that clinical trial results showed that Arikayce, combined with standard-of-care antibiotics, led to the resolution of MAC infection in only 29% of patients, leaving plenty of room for alternative treatment options. The Insmed drug also has tolerability and safety issues that are outlined in a boxed warning on its label.

“We believe improved treatment of NTM lung disease will require an efficacious, safe, and well-tolerated antibiotic with a novel mechanism of action that is not affected by resistance to existing antibiotics, and that has a convenient, once-daily oral dose,” AN2 said in the IPO filing.

AN2 is led by President and CEO Eric Easom, Anacor’s former vice president of neglected diseases. According to the biotech’s prospectus, the company formed in 2017 and formally launched in 2019 backed by a $12 million Series A round of funding. At that time, AN2 also unveiled a partnership with Brii Biosciences, which licensed rights to develop the biotech’s lead antibacterial program in China. 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.

As of the end of last year, AN2 reported its cash position was $62 million. Combined with the IPO proceeds, the company plans to deploy its cash toward clinical development of epetraborole in both an ongoing Phase 1 renal impairment study and the planned Phase 2/3 clinical trial. The company said the pivotal study is expected to begin in the first half of this year; preliminary data from the Phase 2 portion are expected in mid-2023. AN2 also plans to use some of the cash to develop its lead drug for other geographic markets, with an initial focus on Japan, as well as the development of the molecule for other lung indications.

The timing of AN2’s IPO, or any stock offering, is uncertain. The financial markets were already buffeted by concerns about inflation and stock volatility. Now any company planning to sell stock must also factor in Russia’s invasion of Ukraine, and the effects that the conflict will have globally, Bill Smith, co-founder and CEO of IPO research firm Renaissance Capital, wrote in his weekly IPO update.

“Fear and uncertainty over the war in Ukraine overshadowed a strong jobs report in the U.S., and growth stocks took a beating,” Smith said. “That means the IPO window will remain closed. Any investor willing to buy would rather pick up their favorite IPOs when they’re 50% off recent highs than spend time researching new deals.”

London-listed Okyo Pharma files for a U.S. IPO

Okyo Pharma filed paperwork with U.S. securities regulator for an initial public offering of American depositary shares. United Kingdom-based Okyo has traded on the London Stock Exchange under the stock symbol “OKYO” since 2018. The biotech did not say how many shares it planned to offer in its U.S. securities offering, nor were any pricing details disclosed. Okyo has applied to list on the Nasdaq under the same stock symbol as its London listing.

Okyo aims to treat eye disorders by targeting G protein-coupled receptors (GPCR), membrane receptors found throughout the body that are key to a variety of biological functions. Okyo’s lead therapeutic candidate, OK-101, is peptide drug designed to target chemokine-like receptor 1, a GPCR that is important to the way inflammatory eye diseases develop. This GPCR target can be activated and modulated by chemerin, a protein found in the body. But chemerin has a short half-life. OK-101 is an analog of chemerin that is designed to be more stable. Okyo’s drug candidates are based on technology licensed from On Target Therapeutics.

The lead disease target of OK-101 is dry eye disease. Okyo said in the IPO paperwork that OK-101 also has potential application treating nerve pain in the eye, eye inflammation, and allergic conjunctivitis. In the prospectus, Okyo said it plans to use the cash from its U.S. IPO to advance OK-101 toward the filing of an investigational new drug application and clinical development in dry eye disease. That application is expected to be filed with the FDA in the third or fourth quarter of this year, the filing states.

Photo: Jackie Niam, Getty Images

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