Apnimed, a sleep disorders drug developer whose lead therapeutic candidate is under FDA review, raised $192 million in a stock market debut that will support commercialization plans for its pill to treat obstructive sleep apnea.
Regulatory approval would wake up the sleep apnea market, where the standard of care for decades has been a medical device. Strong investor interest in Apnimed’s prospects enabled the company to boost the size of its IPO. After setting preliminary deal terms of 10 million shares in the range of $14 to $16 per share, Apnimed ended up pricing 12 million shares at the top of the targeted price range. Those shares debuted on the Nasdaq Friday under the stock symbol “APMD,” and finished their first day of trading at $25 each, up 56% from the IPO price.
In obstructive sleep apnea (OSA), the upper airway collapses while a person is asleep, interrupting breathing and leading to periods of oxygen deprivation. The medical device to manage the condition is a continuous positive airway pressure (CPAP) machine, which delivers a steady stream of pressurized air to keep the airway open. But CPAP requires patients to wear a mask, which some find uncomfortable while trying to sleep.
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Apnimed said an estimated 80 million people in the U.S. have OSA, a figure that includes both diagnosed and undiagnosed patients. In the IPO filing, the company points to third-party research showing some patients either refuse a CPAP machine or stop using one over time, leaving an unmet medical need.
“By potentially providing the first oral pill that treats an underlying cause of OSA, we believe Oxnimbi, if approved, is uniquely positioned to expand the addressable OSA market to millions of untreated patients.”
The airway collapse in OSA generally does not occur when patients are awake because the brainstem remains active in maintaining the muscles that keep the passage open. That muscle tone is lost when patients fall asleep. Apnimed’s drug Oxnimbi, (formerly AD109), is designed to target those muscles.
Oxnimbi is a pairing of two oral small molecules. The first is atomoxetine, an old attention deficit hyperactivity disorder drug that now has several generic versions. For OSA, this molecule is intended to increase nerve signals in the upper airway dilator muscles during sleep, promoting muscle tone. However, this approach also promotes wakefulness. Apnimed counteracts that with a second molecule, the novel compound aroxybutynin. In the IPO filing, the company said it hypothesizes that aroxybutynin blocks an arousal pathway that’s mediated by atomoxetine. The drug combination, which was initially discovered by Brigham & Women’s Hospital, is formulated as a pill taken each night before bed.
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Apnimed evaluated Oxnimbi in two placebo-controlled Phase 3 clinical trials that enrolled patients with mild, moderate, or severe OSA. Results showed statistically significant improvement according to a rating index that measures breathing reductions or interruptions during sleep. The study drug was well tolerated and there were no serious drug-related severe adverse events reported. Apnimed submitted a new drug application in April; two weeks ago, the FDA accepted the submission and set a Feb. 28, 2027 target date for a regulatory decision.
While Oxnimbi could become the first pill for OSA, it won’t be the first drug in this indication. That honor belongs to Eli Lilly’s Zepbound, which landed FDA approval for sleep apnea in 2024. For obesity, this once-weekly injectable peptide drug works by activating the GLP-1 and GIP receptors. Obesity is a known contributing factor to OSA. The FDA approval of Zepbound in this indication is based on clinical trial results showing reduction in body weight that led to improvement in OSA. Apnimed said Oxnimbi offers the potential to treat patients with OSA regardless of their body weight.
For most of its history, Apnimed was led by co-founder and CEO Larry Miller, a physician and biopharma industry veteran who has founded or co-founded nine companies. In June, Kevin Lind succeeded Miller as CEO. Lind was most recently the chief executive of seizure drug developer Longboard Pharmaceuticals, which Lundbeck acquired in 2024 for $2.6 billion. Miller transitioned to vice chair of Apnimed’s board of directors.
From its formation in 2017 up to the IPO, Apnimed said it had raised $389.1 million. As of the end of the second quarter of this year, Apnimed reported its preliminary cash position was $172.8 million. Apnimed’s largest shareholders are Alpha Wave with an 18.8% stake in the company, and Morningside, which owns an 18.2% stake.
In April, the company secured up to $150 million in debt financing through a royalty deal with Healthcare Royalty Partners. The agreement grants that firm a synthetic royalty, a percentage of net sales of Oxnimbi. The royalty financing will be combined with the IPO proceeds to support the OSA drug. According to the filing, Apnimed plans to spend $228.8 million on the regulatory process for Oxnimbi as well as the commercial launch, if the drug is approved. The company estimates its capital will last through mid-2028.
Photo: Roos Koole, Getty Images