London based biotech Motif Bio PLC (LON:MTFB) just filed for a NASDAQ listing by way of an IPO in the US, and it’s drawing quite a lot of attention in the infectious disease space. The company’s management believes (and hope markets in the US fall in line with its opinion that) the AIM listing is holding it back from a value perspective, and that a listing in the States will help close the gap on some of its competitors.
It’s just published a circular seeking authority to allot up to 100 million ordinary shares ahead of the offering, and hopes (expects) to pull in circa $60 million on list day. The US biotech IPO space has been a little soft since mid-2015, and there’s every chance the company will fall short of its target. There’s no real point in speculating on that right now, however. Instead, let’s take a look at what Motif’s main value proposition is, in an attempt to gauge its worth if it carries through with the listing.
The company’s primary candidate, and the root of its value right now, is an experimental antibiotic called Iclaprim. Readers may have heard of this one before – it tried and failed to get approval in the US a little over a half decade ago (we’ll come back to this shortly). It’s what’s called a diaminopyrimidine antibiotic, and its MOA is rooted in the inhibition of dihydrofolate reductase (DHFR). DHFR is an enzyme that works to produce something called tetrahydrofolate. Tetrahydrofolate is a type of folic acid, and it’s required to produce bacterial DNA and RNA. Without the tetrahydrofolate, bacteria cannot produce these two essential building blocks, and as such, cannot replicate or survive. The inhibition of tetrahydrofolate’s production, therefore, should theoretically serve as an effective cure for patients with gram positive infections. And it does – or so the swathes of data we’ve already seen on this drug suggests. So why didn’t it get approved first time around? Well, in the phase III on which the NDA was based, Arpida, the then sponsor, pitched the drug against an approved antibiotic called linezolid. When it came to advisory panel review time, the panel decided that the data didn’t quite show clinical equivalence. A look at the numbers supports this – Iclaprim generally fell short of linezolid’s cure rate by between 2-8%. Safety and AE rate was pretty similar between the two drugs.
So why does Motif think things will be different this time around? Well, all the company has really let out (officially) is that it believes by altering the trial slightly (what it calls improvements to the original development program) the odds of approval increase dramatically. It also believes that the need for new antibiotics is greater now than it was juts five or six years ago, and this improves the outlook (there’s precedence here, with dalbavancin and oritavancin).
Here’s another thought, however.
Motif is comparing its candidate to a first line skin infection antibiotic called vancomycin. Data to date has revealed a similar cure rate between the two drugs, but more importantly, that Iclaprim doesn’t have the same toxicity effect in the kidneys that vancomycin does. The latter is a dangerous option for patients with renal issues, and this means careful dosing necessity, potential complications, etc. Say Motif was to go after a skin infection indication in patients with renal issues (renal impairment affects up to an estimated 936,000 of the approximately 3.6 million patients hospitalized with the sort of skin infection the company is targeting annually in the United States), then it has a far higher chance of approval. The market is still large, and it could go after a first line target indication. If Arpida had done this to start with, there’s every chance the advisory panel (and in turn, the FDA) would have accepted a slightly inferior cure rate in lieu of zero renal toxicity, and the safety implications this has for renal complication patients.
Maybe this is exactly what Motif is thinking, and it just hasn’t told us yet. There’s a hint in its just released F1, but that’s all. We’ll keep an eye on things as they play out to see if this theory holds water.