Antibiotic Firm Paratek Joins IPO Queue; Aiming for $92M
By Jennifer Boggs
The latest biotech hoping to take advantage of the new emerging growth company category under the Jumpstart Our Business Startups (JOBS) Act of 2012, antibiotic developer Paratek Pharmaceuticals Inc. filed for an initial public offering (IPO) aiming to raise $92 million as it takes thrice partner-dumped omadacycline into Phase III testing on its own.
Boston-based Paratek has not disclosed the number of shares or share price. It's planning a Nasdaq listing under the ticker "PRTK."
The company, which had about $3.3 million in cash and about $5.1 million in total assets as of June 30, needs a substantial funding round before it can launch its pivotal program for omadacycline, a tetracycline-derived, broad-spectrum antibiotic, initially in acute bacterial skin and skin structure infections (ABSSSI) and community-acquired bacterial pneumonia (CABP) and later expanding into other community-acquired bacterial infections.
In its prospectus, Paratek said it already secured two special protocol assessment agreements with the FDA, covering two planned Phase III studies in ABSSI, slated to start in the first quarter of 2013, and a Phase III study in CABP.
The small biotech is flying solo on omadacycline after losing a third partnership. In 2009, Paratek inked a potential $485 million deal, giving rights to the drug, then known as PTK 0796, to Novartis AG. But the Basel, Switzerland-based big pharma firm disclosed in its second-quarter 2011 filing that it was discontinuing development of the antibiotic program. (See BioWorld Today, Oct. 9, 2009.)
Omadacycline previously was partnered with Whitehouse Station, N.J.-based Merck & Co. Inc., but that potential $127 million 2006 deal ended in 2007, with executives citing a "difference of opinion" as to how the product should be developed. Before that, omadacycline spent about two years in the hands of Leverkusen, Germany-based Bayer AG, which returned rights to Paratek in 2005 following a pipeline reprioritization. (See BioWorld Today, Sept. 16, 2003, and March 10, 2006.)
Novartis gave no explanation in its earnings release for its discontinuation of omadacycline development, but that decision likely stemmed from shifting guidance at the FDA. The agency's tinkering with requirements for antibiotic development caused delays for several programs over the past few years, and Paratek's omadacycline was no exception.
In 2010, a Phase III trial launched by Paratek and Novartis testing the drug in complicated skin and skin structure infections (cSSSI) was terminated after enrolling only 140 of the planned 790 subjects following modifications of the FDA's guidance, which included changing eligibility requirements, revising the disease indication from cSSSI to ABSSSI and changing the primary efficacy endpoint.
The good news for Paratek going forward is that there now is a clear-cut path ahead, at least in ABSSSI, and last year's positive Phase III study for Trius Therapeutics Inc.'s second-generation oxazolidinone antibiotic tedizolid proved the new ABSSSI guidelines to be manageable. (See BioWorld Today, Dec. 20, 2011.)
More good news on the antibiotic front came earlier this year, when lawmakers included the Generating Antibiotic Incentives Now (GAIN) program in the FDA Safety and Innovation Act, which would offer incentives for antibiotics targeting a qualifying pathogen. The FDA, through the Department of Health and Human Services, has until July 2014 to come up with a list of pathogens. Omadacycline's advanced development means it isn't likely to benefit from GAIN, but Paratek has other tetracycline-derived candidates in development, including an early stage program focused on Clostridium difficile-associated diarrhea. (See BioWorld Today, Aug. 14, 2012.)
Omadacycline is being developed to overcome the limitations of existing antibiotics. For example, Paratek is developing both once-daily intravenous (I.V.) and oral formulations, which would allow physicians to start treatment in a hospital setting with the I.V. version and let the patient switch to an oral tablet following discharge. The drug also has demonstrated activity against pathogens resistant to existing antibiotics and has so far been found to be well tolerated.
In 2009, Paratek reported data from a Phase II study in cSSSI, showing success rates of 98 percent of omadacycline, compared to 93 percent from marketed antibiotic Zyvox (linezolid, Pfizer Inc.). In that trial, omadacycline was used as a single agent, while Zyvox was used for Gram-positive infections only and an additional antibiotic had to be given for Gram-negative cases.
Elsewhere in its pipeline, Paratek is working on PTK-AR01, a tetracycline-derived compound designed to treat acne and rosacea. That program gained a U.S. partner in Warner Chilcott plc, of Fajardo, Puerto Rico, in a 2007 deal, and a Phase II study in acne began earlier this year.
Paratek was founded in 1996 by Stuart B. Levy, a professor at Tuft University School of Medicine, and Walter Gilbert, a Nobel prize-winning professor emeritus at Harvard. Along with members of its board and executive team, the firm's principal stockholders include Aisling Capital, Societe Generale and Omega Fund.
As of June 30, the company had about 16.6 million shares outstanding.
Paratek is the most recent biotech to file for an IPO following the passage of the JOBS Act, which allows firms that qualify as "emerging growth companies" to take advantage of reduced disclosure requirements and reduced costs. Since the president signed the JOBS Act, several companies have filed S-1s, including GlobeImmune Inc., Regulus Therapeutics Inc. and Intercept Pharmaceuticals Inc. (See BioWorld Today, March 29, 2012, and Sept. 6, 2012.)
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