What Happened? Alzheon Leaves IPO on the Table for the Second Time

IPO letters on blocks on edge of table

The third time may be the charm for Framingham, Mass.-based Alzheon when it comes to an initial public offering – because the company has balked the first two times it attempted to go public on the stock exchange.

In April 2018, the company initially planned an $80 million IPO, but then withdrew the offer. Then, in August, the company announced intentions for a more modest $40 million IPO, but has once again, opted to withdraw that option. The company notified the U.S. Securities and Exchange Commission on Jan. 16 of its decision to withdraw the IPO plan.

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The latest filing with the SEC did not provide any reasoning behind the decision to withdraw its IPO. It noted though that Alzheon is “no longer pursuing an initial public offering of its common stock,” according to the filing signed by Chief Executive Officer Martin Tolar. Alzheon did say in its latest filing that it could “undertake a subsequent private offering” for its stock.

Alzheon is a company working in the risky area of Alzheimer’s disease, a treatment space where many companies have seen their products crash and burn in countless studies. Alzheon’s lead product is ALZ-801, an orally-administered inhibitor of beta-amyloid misfolding. Beta-amyloid has been one of the leading targets for Alzheimer’s researchers as a primary cause of memory loss and cognition issues that are associated with the dreaded disease. Many of the drugs that have failed, such as Eli Lilly’s solanezumab were focused on amyloid-beta. However, with those failures, many researchers are questioning that avenue, but Alzheon continues that route, particularly in light of a recent discovery.

In August, Alzheon announced the discovery of an endogenous substance in the human brain that inhibits the formation of neurotoxic beta-amyloid (Aβ) oligomers, which are key drivers of Alzheimer’s disease pathogenesis. The substance was identified as 3-sulfopropanoic acid (3-SPA), the primary metabolite of tramiprosate and of its prodrug ALZ-801 in humans, the company said. ‘

Alzheon CEO Tolar said the results from the discovery suggest a potential protective role of endogenous 3-SPA in normal human brains, guarding against the formation of beta-amyloid oligomers that cause neurodegenerative disorders such as Alzheimer’s.

“In addition, our results suggest a potential contribution of 3-SPA to the clinical efficacy of ALZ-801 and connect it more closely to the protective effects against neurotoxic amyloid oligomers. While targeting soluble amyloid aggregates is the only therapeutic approach to date that has shown a disease-modifying effect in Alzheimer’s patients, no drugs have been approved yet that can slow or stop the disease. This new discovery and mechanistic data strongly support our therapeutic approach and strengthen Alzheon’s commitment to confirm the efficacy of ALZ-801 in APOE4 carriers, a genetically-defined subset of Alzheimer’s patients,” Tolar said at the time.

Alzheimer’s and other forms of dementia are a growing healthcare concern. In the United States, Alzheimer’s disease is the sixth-leading cause of death across all ages and the fifth-leading cause of death in people over 65 years of age. By 2050 the number of global patients is expected to hit 131.5 million.

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