Adlai Nortye has established the financial foundation to show whether its bet on an ex-Novartis asset will pay off, securing $97.5 million through an IPO and private placement to fund a phase 3 trial in head and neck cancer.
The Chinese-American biotech paid Novartis $9.5 million for the candidate, a PI3K inhibitor now called AN2025, in 2018. Novartis offloaded the asset after concluding that the safety profile in a phase 3 breast cancer trial was too bad to support further development. But Adlai sees a future for the therapy, leading it to strike a deal worth up to $74 million in regulatory milestones and start a 483-subject study.
With $60 million to its name as of the end of June, the biotech needs more money to support plans for a pipeline that features AN2025 and an EP4 antagonist in-licensed from Eisai for $6 million upfront. The IPO and concurrent private placement meet the need for money.
Adlai is selling 2.5 million shares at $23 apiece, positioning it to gross $57.5 million from the IPO. The private placement will add a further $40 million to the biotech’s coffers. Adlai plans to use $46.7 million of the money to fund a registrational trial of AN2025, plus milestone payments and launch preparations. The biotech has earmarked another $29.7 million to fund the rest of its pipeline.
The phase 3 trial is testing AN2025 in patients with recurrent or metastatic head and neck squamous cell carcinomas who have progressed after taking a PD-1/L1 drug. Adlai is aiming to file for accelerated FDA approval of the drug candidate in the second half of next year and to follow up with submissions in China, Europe and Japan.
If Adlai pulls off the plan, it will have a shot at addressing an unmet need. The biotech believes AN2025 is the only drug candidate in active phase 3 development in its target indication. AstraZeneca and Innate Pharma had an anti-NKG2A antibody in development, but it failed a late-phase trial last year. Other assets such as Aveo Oncology’s ficlatuzumab are trailing AN2025 in the race to market.