AN2 Therapeutics is rethinking its business in response to lackluster midphase data, vowing to lay off half its employees and stop a phase 3 study as part of a pivot to early-stage projects.
The California-based biotech sounded an alarm about its lead candidate, the antibiotic epetraborole, in February. At that time, AN2 was five months into a phase 3 trial but paused enrollment in response to a blinded analysis of phase 2 results in treatment-refractory Mycobacterium avium complex lung disease. The biotech has now reviewed the unblinded data—and made the pause permanent.
AN2 designed the study to assess a novel patient-reported outcome tool. The biotech hailed that part of the trial as a success, noting that the study validated the tool and showed a higher response rate in the epetraborole arm, 39.5%, than the control cohort, 25.0%. The p value was 0.19.
While AN2 said the trial met its primary objective, the biotech was less pleased with the results on a key secondary endpoint. Sputum culture conversion was similar in the epetraborole cohort, 13.2%, and the control arm, 10%. The p-value was 0.64. AN2 CEO Eric Easom called the results “deeply disappointing” in a statement.
Investors were braced for that disappointment. The study pause disclosed in February sent the biotech’s share price plummeting from $20 to just above $5. AN2’s stock suffered further losses over the following months, leading to a closing price of $2.64 on Thursday. Investors wiped around 9% off that figure after learning of the termination of the phase 3 trial after the market closed.
AN2 is continuing to assess the results before making a final decision on whether to study epetraborole in other settings. In the near term, the biotech is focusing on its boron chemistry platform, the source of research-stage programs in infectious disease and oncology.
As part of the pivot, AN2 is laying off half of its workforce. The biotech had 41 full-time employees at the end of February. Paul Eckburg, M.D., the chief medical officer at AN2, is among the people leaving the business. AN2, which ended March with $118.1 million, said it expects the cash runway of the slimmed-down company to extend through 2027.