Rehovot-based Israeli biomedical company Advanced Inhalation Therapies (AIT) has submitted a prospectus for a Wall Street IPO. It is believed that the company plans to raise $30-40 million; at this stage, the company has not said at what company value it plans to hold the offering.
AIT, a relatively young company, was founded in 2011, but the senior company executives have experience in both the life sciences industry and on Wall Street. The company CEO is cofounder Amir Avniel, who was previously CEO of Rosetta Genomics Ltd. (Nasdaq:ROSG), which he led to a Nasdaq IPO. The chairman is Ron Bentsur, appointed to the position two months ago, probably in preparation for the IPO. Bentsur was until recently CEO of Keryx Biopharmaceuticals, serving six years in the position. Other company cofounders include chief scientific officer Prof. Yossef Av-Gay from the Faculty of Medicine Division of Infectious Diseases at the University of British Columbia and medical director Prof. David Greenberg from the Soroka Medical Center in Beer-Sheba.
AIT is developing products for the treatment of various respiratory passage infections. The company says the existing treatments are of limited utility. The company currently has four products in its pipeline, of which the most progress has been made with the one for treatment of cystic fibrosis. The US Food and Drug Administration (FDA) has granted this drug orphan drug status , and its Phase IIb trials is slated for completion in the first half of 2017.
Another product in Phase IIb clinical trials, which are schedule for completion in the second half of 2017, is designed for the treatment of bronchiolitis (an infectious disease of the respiratory passages that attacks mainly infants). The company has two more products in the earlier development stages: one for treatment of pneumonia and other for treatment of asthma. Phase II trials for both of these drugs will begin in early 2017.
AIT says that 1.5 million people are hospitalized for lower respiratory passage infections yearly in the US alone, and that such infections are a major cause of death around the world. AIT plans to use the proceeds from its offering to complete its clinical trials. $5 million will be allocated to the Phase IIb trials for the bronchiolitis drug, $4 million for the trial for the cystic fibrosis drug, and $500,000 each for the Phase II trials for the pneumonia and asthma drugs. $2 million will be used to develop a unique system for hospitals, and $500,000 for exercising the company's option to acquire patents from other companies. The remainder of the IPO proceeds will be used for general business needs, and possibly also for licensing agreements for new products.
As of now, AIT is still in the development stage, and has no revenue. Its R&D expenses totaled $1.2 million in the first half of 2015, and it had a $2 million net loss during that period. According to the auditor's report attached to the prospectus, the company's ability to continue operating is subject to obtaining additional financing, which raises doubts about its ability to continue as a going concern. At the end of the first half, the company had $331,000 in cash, and its cash flow from current activities during that period totaled negative $1.1 million.
On the eve of its IPO, the largest shareholders in the company are Roni and Ari Raved, the latter a former VP at IDB Development Corporation Ltd. (TASE:IDBD), with a combined 22.5% stake. Avniel owns 19.9% of the company, and Av-Gay 17.3%. Other shareholders include Mor Research Applications, the applications company of Clalit Health Services, with a 14.6% holding, Greenberg with a 14.3% stake, and Enrique Derzavich with 9.7%. The holdings of some of the shareholders include shares to be allocated for the conversion of a standing loan that current bears 8% annual interest. Bentsur owns 0.4% of the company.
The underwriter for the IPO is expected to be Aegis Capital, and the lawyers advising AIT are the Zysman, Aharoni, Gayer & Co. law firm.
Published by Globes [online], Israel business news - www.globes-online.com - on October 18, 2015
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