Second time lucky? Alzheon tries for much-reduced IPO

After an aborted attempt earlier this year, Alzheon is having another go at an IPO to help fund new trials of its Alzheimer’s candidate tramiprosate.

However, the biotech has dialed down its target for the fundraising, and bookrunners on the IPO have also changed from Piper Jaffray and Citi to ThinkEquity, notes Renaissance Capital. After looking to raise around $80 million at its first attempt at a Nasdaq listing in March, Alzheon’s latest proposal is for up to $40 million, which it says will "fund our current operating plans through at least the next 12 months."

That would cover the start of a planned phase 2b trial of tramiprosate (ALZ-801), but it won’t be enough to bring the drug completely though development and onto the market, it says.

After a failed trial in a general Alzheimer’s population, tramiprosate is now being targeted at a subcategory of patients genetically predisposed to develop the disease who represent around 10% of all Alzheimer’s patients.

Last month, Alzheon presented new data suggesting tramiprosate performed better than placebo at maintaining cognitive function in subjects who have two copies of the APOE4 gene, known as APOE4/4 homozygotes. All told, 57% of patients in this category remained "cognitively stable" over the 18-month trial period, compared to just 20% of those on placebo.

The company wants to reproduce that finding by running a phase 2b trial in the U.S. and possibly other countries in the first half of next year involving APOE4/4 homozygotes only, and says it is also planning a phase 1b trial in patients with either one or two copies of the APOE4 gene later this year.

Nevertheless, there’s no question that tramiprosate remains a high-risk project. It’s another amyloid-targeting drug, like many others that have tried and failed to improve memory and cognition in Alzheimer’s. When Alzheon pulled its first IPO, it blamed lackluster investor sentiment caused by negative newsflow on amyloid drugs.

Since then, there have been additional failures for Eisai and Biogen’s elenbecestat and AstraZeneca/Eli Lilly’s lanabecestat, both BACE inhibitors designed to interrupt amyloid formation, offset by glimmerings of efficacy with Eisai/Biogen’s anti-amyloid beta protofibril antibody BAN2401, which targets soluble amyloid fibrils.

Alzheon maintains that its drug also targets this element of the amyloid pathway and has a better chance of showing an elusive disease-modifying effect in Alzheimer’s.

It will be hoping not to follow in the footsteps of Axovant, the Roivant group company that went publicin 2015 on the hope of an Alzheimer’s candidate that ultimately failed to deliver in a phase 3 trial, forcing the company to reinvent itself this year as a gene therapy player.

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