Infectious disease has been rough going for all comers the past few years, as companies have floundered. Appili Therapeutics Inc.’s CEO, Armand Balboni saw the troubles others encountered with the indication and also saw companies with thin pipelines struggle, but it hasn’t stopped him from forging on.
“From the beginning, there was an understanding that there were probably lots of reasons not to go into this space from a market perspective,” Balboni told BioWorld. “I only saw it as an opportunity to do well. You only have to look at Melinta and Achaogen to understand that single-product portfolios are challenged.”
Appili, of Halifax, Nova Scotia, just closed its public offering by issuing 12.8 million units at CA80 cents each for aggregate gross proceeds of CA$10.25 million ($7.7 million). The offering will be used for prepping its new asset, ATI-2307, an antifungal agent for a phase II trial. The money will also be used for developing the company pipeline, which includes selecting a clinical candidate for its negamycin antibiotic program, delivering proof-of-concept one-year data on its biothreat vaccine candidate and working toward its first commercial product with partner Saptalis Pharma Inc. on ATI-1501 for treating bacterial infections.
The dangers are real. Melinta Therapeutics Inc., with four marketed antibiotics, went into chapter 11 bankruptcy on Dec. 27. In the nine months to the end of September, Melinta had a net loss of $276,000 and said it did not expect to break even within the next 12 months. Achaogen Inc. was forced to filed for chapter 11 bankruptcy nine months after the U.S. launch of its antibiotic, Zemdri (plazomicin), to treat complex urinary tract infections and carbapenem-resistant Enterobacteriaceae. Some estimates gauging the rise of antimicrobial-resistant infections and the lack of new antibiotics to treat them are dour.
“We are in a space now where it’s a payer problem,” Balboni said. “It hasn’t been worked out how to sufficiently compensate companies.”
Success can be found, he continued, by not just concentrating on the science but by putting together the right team by leveraging deep expertise from across a number of different domains. That means being realistic about what his company can and cannot do. He designed Appili, which launched in 2015, as a transactional company in infectious disease, one that will partner when it knows a job needs more than just the in-house expertise. He pointed to Appili’s collaboration with Saptalis to commercialize Appili’s ATI-1501, a treatment against bacterial infections, and its acquisition of Fujifilm Toyama Chemical Co. Ltd.’s antifungal agent, now labeled ATI-2307.
“It’s a fantastic partnership and a profitable one,” he said. “We have expertise that they don’t.”
Appili pursues indications leveraging its strengths as well as that of others.
“We have a team, being transactionally oriented, that’s good at diligence to find creative ways forward,” he added, “to find a balance of high unmet need and what kind of incentives are out there to lower the cost.”
In April 2019, Appili said it was set to receive a CA$476,000 (US$357,246) repayable contribution through the Atlantic Canada Opportunities Agency's Regional Economic Growth through Innovation program. The funds will be used to procure materials for continued development of the company's pipeline of antibiotic and anti-infective candidates and to explore the listing of its common shares on the TSX Venture Exchange.
Balboni's career spans R&D work in commercial, academic and military settings. As a partner at Bloom Burton & Co., he was senior advisor for regulatory and medical affairs. He has also been a staff officer at the Army Research Institute of Infectious Diseases and completed a military staff fellowship at the FDA. He said his philosophy is to “do good and do well,” which he said resonates with shareholders.
The company has about a dozen employees right now, but the public offering will allow it to staff up for the clinical trials it intends to launch.
“It’s a balance of high unmet need and the do well part, finding what kind of incentives are out there to lower the cost,” he added. “It’s difficult to do and time consuming.”
The company stock (TSXV:APLI) closed Thursday at CA79 cents, up 1.28% on the day.