Alzheon is turning to the public markets to finance a new round of testing for its experimental Alzheimer’s disease drug.
The Framingham, MA, company set a preliminary $80 million target for its initial public stock offering. That figure is expected to change as Alzheon determines how many shares to sell and at what price. But the company may need more than $80 million. FDA approval could require two Phase 3 studies. Two years ago, Alzheon pegged that cost at more than $100 million.
Alzheon’s drug, ALZ-801, is a reworked version of tramiprosate, a drug that was meant to block the formation of clumps of beta-amyloid protein that accumulate in the brains of Alzheimer’s patients. But under Montreal-based Neurochem, the drug failed in clinical trials. Alzheon licensed tramiprosate and made some tweaks to the once-a-day pill. Those changes are intended to get the active drug to its target more quickly and reduce side effects in the gut. Now the company wants to take the drug into late-stage testing.
In its filing, Alzheon says the FDA did not object to the design of the company’s Phase 3 study. But Alzheon added that the regulator said those results may need to be backed up by a second study if the drug demonstrates efficacy in the clinical trial. “The FDA indicated that a single study approval would require the Phase 3 trial to demonstrate efficacy that is robust and unquestionable,” Alzheon said in the filing.
Alzheon is pressing forward with ALZ-801 following a string of clinical trial failures by other Alzheimer’s disease drug developers. Eli Lilly (NYSE: LLY) also tried to treat Alzheimer’s with an amyloid-blocking drug, solanezumab. But Lilly stopped work on that drug in 2016 following a Phase 3 failure. A drug from Denmark-based Lundbeck failed a late-stage study a little more than a year ago. Last September, a similar pill from Axovant Sciences (NASDAQ: AXON) failed in Phase 3.
Alzheon has applied for a listing on the Nasdaq Global Market under the stock symbol “ALZH.” The company says in the filing that it will use proceeds from the IPO to continue clinical development of its Alzheimer’s drug, along with other unspecified research and development work. Alzheon also says it intends to expand its drug pipeline through licensing deals and acquisitions.
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