West Coast Editor
With an antibiotic candidate in Phase III trials, Advanced Life Sciences Holdings Inc. filed for an initial public offering that targets $86.25 million in proceeds, with an unspecified number of shares and price range.
Woodridge, Ill.-based ALS's pipeline is led by cethromycin, a novel ketolide antibiotic in late-stage development for respiratory tract infections, licensed from Abbott Laboratories, of Abbott Park, Ill. After the IPO, ALS plans a pair of Phase III trials for mild to moderate community-acquired pneumonia, the indication for which the firm hopes to gain approval of cethromycin.
Abbott already has done six Phase III trials to test safety and efficacy, and about 3,800 humans have been given cethromycin so far. The Abbott deal also provides an exclusive license for ABT-210, a novel second-generation ketolide antibiotic that could be administered intravenously.
Chemically, ketolides are made from erythromycin by substituting the cladinose sugar with a keto-group and attaching a cyclic carbamate group in the lactone ring to get a broader spectrum of action than others in their class - macrolides. That also makes them work against bacteria that defeat macrolides, because they can bind at two sites on the ribosome.
Excitement around the ketolide class kicked up a notch in April 2004 with the FDA's approval of Bridgewater, N.J.-based Aventis Pharmaceuticals Inc.'s oral Ketek (telithromycin), expected to hit the market this summer. The FDA cleared the compound for the indication targeted by ALS - including infections caused by multidrug-resistant Streptococcus pneumoniae, in patients more than 18 years old - as well as acute exacerbation of chronic bronchitis, and acute bacterial sinusitis.
Enanta Pharmaceuticals Inc., of Watertown, Mass., has a ketolide in the works, as well. The company raised $20 million last year to advance EP-013420, a first-in-class "bridged bicyclic" ketolide antibiotic for community respiratory tract infections, through Phase I development. (See BioWorld Today, Sept. 1, 2004.)
Enanta performs conformational engineering of ketolides (and other macrolides) so the molecular shape no longer is recognized by the bacterial efflux pumps, the company said, and changes structural design to add chemical moieties that interact with more binding elements of the bacterial RNA.
ALS has more in the pipeline, albeit further back. Through a joint venture with Sarawak MediChem Pharmaceuticals Inc., also of Woodbridge, ALS has Calanolide A, a non-nucleoside reverse transcriptase inhibitor for HIV. Plans are in the works for a Phase IIa trial, pending an agreement about their respective funding obligations.
At the investigational new drug application stage are ALS-886 and ALS-357. The former is for inflammation-related tissue damage, including damage associated with acute respiratory distress syndrome. ALS-357, also preclinical, targets metastatic melanoma, and has shown low toxicity and the potential for either a topical or systemic formulation. Each drug is the subject of an open IND application with the FDA.
About $18 million of the IPO proceeds would go toward the pivotal trials with cethromycin, with the remainder expected to satisfy various debts including an $8 million payment to Abbott under the licensing deal (due Sept. 1 or five days after the IPO closes), and $3 million in full repayment of a loan from Leaders Bank, of Oak Brook, Ill., along with another loan of $2.7 million from Michael Flavin, ALS's chairman and CEO.
Another $5 million is due to Abbott by Oct. 31 or, if sooner, at the start of Phase III trials with the antibiotic. The rest of the money would be used for working capital, expenditures and general corporate purposes.
As of March 31, the company had $159,951 in cash and about $1 million in total assets, with an accumulated deficit of $41.3 million. Proceeds from the IPO along with existing cash is expected to be enough to operate through next year, according to ALS's prospectus.
C.E. Unterberg, Towbin LLC will serve as sole book-running manager for the IPO, with ThinkEquity Partners LLC acting as co-lead manager for the proposed offering. Both are based in New York.