Adlai revives Novartis’ abandoned cancer drug, raises $57.5M in IPO to fund phase 3 trial

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Adlai Nortye has solidified its financial footing, paving the way to determine the fate of its strategic investment in an ex-Novartis asset. The Chinese-American biotech recently secured a substantial $97.5 million in funding through a combination of an IPO and private placement. These funds are earmarked to propel a pivotal phase 3 clinical trial for AN2025, an erstwhile Novartis PI3K inhibitor acquired by Adlai in 2018. The compound, rebranded as AN2025, was divested by Novartis due to safety concerns emerging from a phase 3 breast cancer trial. However, Adlai remains optimistic about the therapeutic potential of AN2025, inking a lucrative deal potentially worth $74 million in regulatory milestone payments and embarking on a clinical study involving 483 subjects.

As of June, Adlai had $60 million in its financial reserves, a sum insufficient to support its ambitious pipeline, which encompasses not only AN2025 but also an EP4 antagonist licensed from Eisai for $6 million upfront. The IPO, complemented by a concurrent private placement, admirably bridges this financial gap.

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Adlai is offering 2.5 million shares at a price of $23 each in its IPO, projecting a total raise of $57.5 million. The private placement will further bolster the biotech’s coffers by $40 million. Of these funds, Adlai has allocated $46.7 million for the execution of a registrational trial for AN2025, encompassing milestone payments and preparatory measures for its market launch. Additionally, the biotech has earmarked $29.7 million to advance the remainder of its promising pipeline.

The pivotal phase 3 trial centers on assessing AN2025’s efficacy in patients with recurrent or metastatic head and neck squamous cell carcinomas who have experienced disease progression after receiving treatment with a PD-1/L1 drug. Adlai is aiming to initiate the filing for accelerated FDA approval for AN2025 in the latter half of the upcoming year, with subsequent submissions planned for regulatory authorities in China, Europe, and Japan.

If Adlai successfully executes this plan, it could potentially fill an unmet medical need. The biotech asserts that AN2025 stands as the sole drug candidate currently in active phase 3 development targeting this specific indication. Notably, AstraZeneca and Innate Pharma previously pursued an anti-NKG2A antibody, but it encountered a setback when it failed a late-phase trial last year. Other contenders, such as Aveo Oncology’s ficlatuzumab, trail behind AN2025 in the race to market.

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