Alopexx (NASDAQ:ALPX) is the newest member of the Nasdaq, as the clinical-stage biotechnology company held its initial public offering today. The company has a focus on developing therapies to treat bacterial, fungal, and parasitic infections. As part of its IPO, Alopexx is expected to raise $15 million by selling 5 million shares of ALPX stock at a starting price of $3 apiece.
Alopexx is unprofitable and reported a net loss of $500,222 during the first quarter, up from a net loss of $47,971 a year ago. The company acknowledges this and warns that:
We have incurred significant net losses since inception and anticipate that we will continue to incur substantial net losses for the foreseeable future and may never achieve profitability.
In addition, Alopexx does not have any products on the market. However, it is working to develop two compounds, F598 and AVO238, to treat infections. Let’s get into the details.
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F598 is a “fully human monoclonal antibody” that has successfully completed Phase 1 and Phase 2 pilot trials. The antibody seeks to prevent hospital-acquired infections, such as after emergency abdominal surgery or abdominal trauma. Meanwhile, AVO238 is a “chemically synthesized vaccine” that targets S. pneumoniae and meningococcal infections. Through testing, both compounds have shown effectiveness against antimicrobial-resistant (AMR) organisms.
Both of these compounds target poly N-acetyl glucosamine (PNAG), which is found on most fungal and bacterial microbes. The company notes that “virtually every microbe we have examined has PNAG on its surface.”
Market Research Future estimates that the global market for treating hospital-acquired infections will reach $32.5 billion by 2030, up from $23.7 billion in 2020. That represents a compound annual growth rate (CAGR) of 1.37% and also a large addressable market for Alopexx to take advantage of.
Still, taking drugs to trial is a highly costly and extensive process. For the three months that ended March 31, Alopexx reported general and administrative expenses of $369,475 and research and development expenses of $121,578. Along with other expenses, that was equivalent to a net loss per share of 16 cents. If the company fails to achieve approval for F598 and AVO238, then its “business would be significantly harmed.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
