S-1/A: Actuate Therapeutics Eyes Nasdaq Listing with $29.5 Million IPO

Actuate Therapeutics files for an IPO to raise $29.5 million, aiming to advance its cancer therapies and list on the Nasdaq Capital Market.

Summary

• Actuate Therapeutics, a clinical-stage biopharmaceutical company, is planning an initial public offering (IPO) to raise capital for its cancer therapy development programs.
• The company is offering 2,950,000 shares of common stock, with an estimated initial public offering price between $8.00 and $10.00 per share.
• Actuate Therapeutics intends to list its common stock on the Nasdaq Capital Market under the ticker symbol ACTU.
• The primary use of the IPO proceeds will be to fund the ongoing Phase 2 trial of Elraglusib Injection in metastatic pancreatic cancer (mPDAC).
• Additional funds will support the pediatric refractory cancer Phase 1 trial in Ewing sarcoma and investigator-initiated trials (IITs) for Elraglusib Injection.
• The company also plans to use proceeds to pay accrued interest to UIC under its license agreement.
• Remaining funds will be allocated to working capital and general corporate purposes.
• If additional proceeds are available, Actuate aims to initiate a Phase 1 dose escalation study for Elraglusib Oral Tablet and a Phase 2 study in refractory metastatic melanoma.
• Top line results from the ongoing Phase 2 mPDAC trial are expected in the first quarter of 2025.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative aspects. The positive interim clinical data and potential for a Nasdaq listing are encouraging, but the company's financial risks and dependence on a single product temper the overall sentiment.

Positives

• Elraglusib has been granted Fast Track and Orphan Drug Designations from the FDA for pancreatic cancer.
• A Phase 1 healthy volunteer study showed favorable bioavailability (>50%) after a single dose of Elraglusib Oral Liquid.
• The company has a research and development collaboration with Lantern Pharma to leverage their artificial intelligence platform.
• The company has generated clinical data from over 500 patients that have been dosed with elraglusib to date.
• The company has an innovative seamless study design of our Actuate-1801 Phase 1/2 clinical trial.

Negatives

• The company has a limited operating history and has incurred significant operating losses since its inception.
• The company's financial condition raises substantial doubt as to its ability to continue as a going concern.
• The company currently depends entirely on the success of elraglusib, which is its only product candidate.
• Clinical and preclinical drug development involves a lengthy and expensive process with uncertain timelines and outcomes.
• The company may not be successful in its efforts to investigate elraglusib in additional indications.
• Use of elraglusib or any future product candidates could be associated with side effects, adverse events or other properties or safety risks.

Risks

• The company has a limited operating history and has incurred significant operating losses since its inception.
• The company's financial condition raises substantial doubt as to its ability to continue as a going concern.
• The company currently depends entirely on the success of elraglusib, which is its only product candidate.
• Clinical and preclinical drug development involves a lengthy and expensive process with uncertain timelines and outcomes.
• The company may not be successful in its efforts to investigate elraglusib in additional indications.
• Use of elraglusib or any future product candidates could be associated with side effects, adverse events or other properties or safety risks.
• The termination of third-party licenses could adversely affect the company's rights to important compounds or technologies.
• The company's current elraglusib drug substance (DS) manufacturer is in China, and it is unknown how current or future geopolitical relationships with China may affect the company's ability to obtain DS.
• The company relies on third parties to conduct its non-clinical studies and its clinical trials.
• If the company and its third-party licensors do not obtain and preserve protection for their respective intellectual property rights, their competitors may be able to take advantage of their development efforts to develop competing drugs.
• If the company loses key management leadership, and/or scientific personnel, and if they cannot recruit qualified employees or other significant personnel, they may experience program delays and increased compensation costs, and their business may be materially disrupted.
• The company faces significant competition from other biotechnology and pharmaceutical companies.
• Even if this offering is successful, the company will require substantial additional capital to finance its operations.
• Concentration of ownership by the company's principal stockholders limits the ability of others to influence the outcome of director elections and other transactions requiring stockholder approval.

Future Outlook

The company plans to continue clinical development of elraglusib and potentially commercialize it, as well as seek to discover and develop additional product candidates. The company expects to incur significant expenses and operating losses in the foreseeable future.

Management Comments

• Daniel Schmitt, chief executive officer and founder, and Dr. Andrew Mazar, our scientific co-founder and chief operating officer, have more than 60 years of combined experience in the management of biotechnology companies and healthcare investing.
• Mr. Schmitt has led and contributed to the successful development and launch of multiple pharmaceutical and health technology products and executed over approximately $1.0 billion in milestone value through licensing, acquisition, and development deals.
• Dr. Mazar has shepherded eleven drugs from discovery stage through Phase 2 and Phase 3 trials.

Industry Context

The biopharmaceutical industry is highly competitive, with significant activity in the cancer treatment space. Actuate Therapeutics faces competition from major pharmaceutical companies, specialty biopharmaceutical companies, and biotechnology companies worldwide.

Comparison to Industry Standards

• The mOS in patients with mPDAC is 9-11 months and the ability to extend survival by even a few months would be considered meaningful in this patient population.
• The mOS of 7.7 months in Part 1 benchmarks favorably with mOS 8-10 months for other active single agents evaluated in Phase 1.
• The elraglusib mOS of 11.9 months for the ITT also compares favorably with the mOS of 11.2 months for FOLFIRINOX, the other first line regimen used for patients with mPDAC or more recently with irinotecan liposomal injection (Onivyde) (mOS=11.1 months).
• The Actuate-1902 Phase 1 arm of the study is open to accrual, focusing on recruitment of patients with refractory Ewing sarcoma. With future funding, we plan to amend the Phase 2 portion of the Actuate-1902 protocol to focus on Ewing sarcoma.
• The proposed primary endpoint would be overall response rate (ORR), with an initial efficacy readout in approximately 12-18 months from commencement. We would anticipate enrolling up to 15 patients with Ewing sarcoma in the Phase 2 portion of the trial. This design is based on the objective responses seen in the small cohort of Ewing patients enrolled in Actuate-1902 and would be benchmarked against the recently published ORR in the rEECur phase 3 trial of 21% for CT to establish a success threshold for our study.

Related Party Transactions

• The company issued convertible promissory notes to Bios Clinical Opportunity Fund, LP, a fund affiliated with two members of the board of directors of the company and a majority shareholder.
• The company entered into a master service agreement with Pacific BioPharma Logistics, Inc. (PBL), where the Vice President of Manufacturing for the company is an unpaid advisor for PBL and his spouse is a shareholder in PBL.
• The company entered into a Collaboration Agreement with Lantern Pharma, where a current director was a director of Lantern Pharma until June 8, 2022, and certain affiliates of the Bios Equity Affiliated Funds beneficially owned greater than 10% of Lantern Pharma's common stock as of March 31, 2024.

Stakeholder Impact

• The IPO will provide Actuate Therapeutics with additional capital to advance its clinical trials and research and development programs, potentially leading to new cancer therapies.
• The success of elraglusib could improve treatment options and survival rates for patients with difficult-to-treat cancers.
• The company's growth and development could create new job opportunities.
• The IPO will provide liquidity to existing shareholders.

Next Steps

• Complete the ongoing Elraglusib Injection Phase 2 mPDAC trial (Actuate-1801 Part 3B).
• Complete the existing pediatric refractory cancer Phase 1 dose escalation trial in patients with refractory Ewing sarcoma (Actuate-1902).
• Satisfy the company's funding commitments for ongoing IIT studies.
• Satisfy the company's obligations under its amended license agreement with UIC to pay accrued interest.
• Finalize development plans and initiate and complete a Phase 1 dose escalation study for the Elraglusib Oral Tablet in patients with advanced, refractory solid cancer (subject to funding).
• Fund and complete the Phase 2 portion of the study in patients with refractory Ewing sarcoma (Actuate-1902) (subject to funding).
• Finalize development plans and initiate and enroll patients in a Phase 2 study in refractory metastatic melanoma (Actuate-2401) once the Phase 1 dose escalation was completed (subject to funding).
• Meet with the FDA to discuss the design and execution of a Phase 3 registration study, if justified by the results of Actuate-1801 Part 3B.
• Discuss the use of the Actuate-1801 Part 3B data for regulatory support and to support registration if the study achieves its primary endpoint of showing improved survival over GnP alone.
• Attend a parallel EMA-HTAb scientific advice meeting in October 2024 to discuss a priority medicine (PRIME) designation and conditional approval in the EU.

Key Dates

Keywords

elraglusib, pancreatic cancer, IPO, clinical trials, GSK-3, oncology, biopharmaceutical, FDA, metastatic, Ewing sarcoma