Arsanis is joining the IPO queue, filing for a stock offering that would raise cash to support a drug that combines two monoclonal antibodies with the goal of preventing pneumonia infections.
The filing comes seven months after the Waltham, MA, company raised $45.5 million in a Series D investment round to finance Phase 2 studies of that lead drug, ASN100. The Arsanis filing sets a preliminary $57.5 million offering price, though that figure is expected to change as the company determines how many shares it will sell and at what price. Arsanis has applied for a listing on the Nasdaq exchange under the stock symbol “ASNS.”
Arsanis is trying to harness the body’s immune system to tackle infectious diseases. Immunotherapy approaches have already been developed into treatments for some cancers, as well as some autoimmune disorders. Arsanis develops monoclonal antibody-based therapies meant to treat or even prevent bacterial and viral infections, bringing potential advantages compared to current treatments, the company says in its filing. Antibiotics can lead to drug resistance, affect beneficial bacteria, and have off-target effects. But Arsanis says its monoclonal antibodies would more precisely hit its intended target, thus avoiding unintended effects.
Staphylococcus aureus, or S. aureus, the bacterium that causes pneumonia, is Arsanis’ first target. ASN100 was developed to neutralize six cytotoxins critical to the bacteria. The company says this targeted approach could prevent pneumonia in patients using mechanical equipment that helps them breathe—equipment that pathogens can use as a conduit directly into the lungs. Arsanis says published epidemiology data suggest that up to 20 percent of mechanically ventilated patients develop respiratory secretions colonized with S. aureus, which puts them at risk of developing pneumonia. In these patients, pneumonia is deadly and expensive. As many as half of mechanically ventilated patients diagnosed with pneumonia die, at a cost of $40,000 per case, Arsanis says.
Arsanis is currently enrolling a 354-patient Phase 2 study of ASN100. The double-blind, placebo-controlled study is designed to measure how many patients develop pneumonia within three weeks after getting a single dose of the intravenously administered Arsanis drug. The company expects to have dosed a third of the patients by mid-2018. At that point, an independent committee will review the data to assess whether the trial should continue.
Arsanis was founded in 2010 by veteran biotech entrepreneur Tillman Gerngross based on antibody technology from another company that Gerngross started, Adimab. Lebanon, NH-based Adimab has two agreements that give it exclusive options to acquire or license Arsanis’ monoclonal antibody therapies, according to the filing. The company also notes that any dispute between Arsanis and Adimab would pose a conflict of interest to Gerngross because of his responsibilities to both companies.
In its IPO filing, Arsanis lays out a host of details about its previous venture funding and finance deals, along with its plans for its drug pipeline.
—The Series D round earlier this year was led by the Bill & Melinda Gates Foundation, which was joined by GV and Alexandria Venture Investments. At the time, Arsanis said that the Gates Foundation has the option to license two drug programs that would focus on global health. In the IPO filing, Arsanis says a drug program targeting respiratory syncytial virus will proceed with funding from the Gates Foundation. The company expects to bring this therapy, ASN500, into clinical trials in 2019.
—To date, Arsanis has raised $75.1 million in equity financing, and $14.4 million in debt financing. Polaris Ventures, SV Life Sciences, and Orbimed are the largest shareholders in the company, each owning 17.79 percent stake. Those three firms were also early investors in Adimab.
—Arsanis spent $17.8 million on research and development in 2016. The company has already eclipsed that total through the first nine months of this year, having spent $18.8 million on R&D. Arsanis reported cash reserves totaling $26.2 million of Sept. 30. The company says it will combine that cash with the IPO proceeds to complete the Phase 2 study of ASN100, as well as finance research on other diseases that could be treated with the drug. The proceeds would also support Arsanis therapies in preclinical development.
Computer generated image of Streptococcus pneumoniae by the CDC.