Managing Editor

As the first biotech to file an S-1 since Argos Therapeutics Inc.'s late July filing, Cempra Holdings LLC has joined the shrinking ranks of firms looking to test the initial public offering (IPO) window.

Following a handful of IPO pricings earlier in the year, activity dropped off over the summer, with only one company going public: specialty pharma firm Horizon Pharma Inc. priced a $49.5 million offering in July. And, like nearly all other biotech pricings for the past few years, that offering came at a significant discount to the company's initial S-1 hopes. (See BioWorld Today, July 29, 2011.)

With the disappointing IPO market, the number of firms with pending S-1s have dropped to a mere eight companies, including Cempra, according to BioWorld Snapshots. Three of those companies – Cutanea Life Sciences Inc., NewLink Genetics Corp. and Supernus Pharmaceuticals Inc. – have had S-1s on file since late last year.

But Cempra could have a couple of points in its favor. For one, the Chapel Hill, N.C.-based firm is in late-stage development, with pivotal trials for its two lead programs slated to start next year. Second, the company is working in antibiotics, a space that has gotten hot again after many years thanks to the FDA finally bringing some stability to the regulatory pathway.

Cempra's first program is CEM-101, a macrolide antibiotic designed to allow greater potency and to incur a lower rate of resistance compared to existing macrolides such as azithromycin. The drug's structure is such that it binds to bacterial ribosomes in three sites vs. the earlier-generation macrolides that bind to only one or two sites. The advantage is that bacteria has to mutate at all three sites to become resistant to CEM-101, and Cempra said it has seen no resistance to the compound in its clinical studies to date.

CEM-101 is in development as oral and intravenous formulations for community-acquired bacterial pneumonia (CAPB), and data from a recent Phase II study showed that the oral formulation demonstrated comparable efficacy to levofloxacin, the standard of care, with an improved safety profile.

A Phase III study testing the oral formulation against a comparator drug is expected to start in the second half of 2012.

Cempra plans to complete an I.V. to oral Phase II study before moving into two Phase III trials of I.V. CEM-101, with a step-down to oral dosing.

The firm anticipates wrapping up that Phase II trial by the end of next year.

Cempra's second product, Taksta, an oral dosing regimen of fusidic acid, is in development for acute bacterial skin and skin structure infections, including those caused by methicillin-resistant Staphylococcus aureus. Phase II testing demonstrated comparable efficacy and safety to Zyvox (linezolid, Pfizer Inc.), and pivotal programs for Taksta also are slated to start next year.

Proceeds from the proposed IPO would go toward both of those programs. As of June 30, Cempra had about $9.7 million in cash and equivalents on its balance sheet, with another $8.2 million in working capital. Its net loss for the first six months of 2011 was $10.4 million, or $2.51 per share.

The company holds rights to both of its lead programs and plans to either develop them through to commercialization on its own, then either sell the drugs with its own sales force or through big pharma partnerships.

Earlier in development, Cempra is working to expand the indications of both CEM-101 and Taksta, as well as develop newly discovered compounds as antibiotics.

The company was founded in 2006 and shortly after licensed rights to CEM-101 from San Diego-based Optimer Pharmaceuticals Inc. Its principal stockholders include Wistar Morris III, Intersouth Partners, Aisling Capital, Quaker BioVentures, Blackboard Ventures and Devon Park Bioventures. (See BioWorld Today, April 14, 2006.)

Cempra currently operates as an LLC, but, according to its S-1 filing, plans to convert to a Delaware corporation prior to completing the proposed IPO.

In other financings news:

• Amarantus BioSciences Inc., of Sunnyvale, Calif., said it closed a $10 million equity funding facility with Centurion Private Equity LLC, which gives it the ability to draw down funds over the next 36 months in tranches of up to $750,000. Proceeds will support core product development, transactions such as licensing deals, M&A and other business development opportunities. Amarantus is developing products based on MANF, a protein that corrects protein misfolding.