IPO Update: Alopexx Stock Prepares $15M IPO (pending: ALPX) – Seeking Alpha | Jewelry Dukan

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What is Alopexx?

Based in Cambridge, Massachusetts, Alopexx (ALPX) was formed to develop vaccines and antibodies expressing the target poly-N-acetyl-glucosamine for the prevention and treatment of fungal, parasitic and bacterial infections [PNAG].

Management is headed by co-founder, president and CEO Daniel R. Vlock, MD, who has been with the company since its inception and previously held senior medical and research positions at GPC Biotech, Pharmacia and Ethicon Endo-Surgery, a Johnson & Johnson subsidiary.

The company’s lead candidates are vaccine AV0328, to treat pneumonia and meningococcal infections, and monoclonal antibody F598, to treat ICU-acquired infections and prevent postoperative abdominal infections.

Below is the current status of the Company’s drug development pipeline:

corporate pipeline

Corporate Pipeline (SEC – EDGAR)

According to a 2022 market research report by Market Research Future, the global market for the treatment of hospital-acquired infections was estimated at US$23.7 billion in 2020 and is projected to reach US$32.5 billion in 2030 reach.

This equates to a projected compound annual growth rate (CAGR) of 1.37% through 2030.

Key elements of this expected growth are the aging population, which is more susceptible to disease, and the arrival of the COVID-19 pandemic, which is raising awareness of the importance of infection control.

Also, the Americas region is expected to continue to account for the largest market demand by region, followed by Europe. The Asia-Pacific region is projected to grow at the highest growth rate through 2030.

Key competing vendors offering or developing related treatments include:

  • Pfizer

  • note

  • GlaxoSmithKline

  • Sanofi

  • SK chemicals

  • Affinivax

  • Astellas

  • A few others

Alopexx IPO date and details

The initial public offering (IPO) of Alopexx will take place on September 21, 2022 and will be available for retail investors to trade on the open market from September 22, 2022.

(Warning: Compared to stocks with more history, IPOs typically have less information for investors to review and analyze. For this reason, investors should exercise caution when considering investing in an IPO or immediately after an IPO. Also Investors should stick with it, however, remember that many IPOs are heavily marketed, past company performance is no guarantee of future results, and potential risks may be underestimated.)

ALPX intends to sell 3.0 million common shares at a proposed mid-point price of $5.00 per share for gross proceeds of approximately $15.0 million, excluding the sale of customary underwriter options.

No existing or potential new shareholders have expressed an interest in purchasing shares at the IPO price.

Assuming a successful IPO in the middle of the proposed price range, the Company’s enterprise value at IPO (excluding underwriter options) would be approximately $27 million.

The free float to outstanding share ratio (excluding underwriter options) will be approximately 38.23%. A number below 10% is generally considered a “low float” stock, which can experience significant price volatility.

According to the Company’s most recent regulatory filing, it plans to use the net proceeds as follows:

approximately $5.5 million to begin a proof-of-concept study of AV0328 vaccine, including manufacturing and correlating laboratory studies;

approximately $4.5 million to begin a proof-of-concept study of our monoclonal antibody in ICU patients; and

the remainder for general corporate purposes, including working capital, operating expenses and capital expenditures, and potential expansion of our research pipeline.

(Source – SEC)

Management’s presentation of the company’s roadshow is available here until the IPO is completed.

Regarding pending litigation, management announced that “on June 8, 2022, the Company was sued by Xenothera in the Commercial Court of Nantes, France. The litigation aims, among other things, to force the company to conclude a license agreement with Xenothera, or pay 120,000,000 euros in damages. No liability has been recorded in this matter.”

How to invest in Alopexx stocks: 7 steps

Investors can buy ALPX shares the same way they buy shares of other publicly traded companies.

Note: This report is not a recommendation to buy ALPX stock or any other security. For investors interested in making a potential investment after the ALPX IPO closes, the following steps for buying shares will be helpful.

Step 1: Understand Alopexx’s financial history

Although not much public information is available about Alopexx, investors can view the company’s financial history on its S-1 or F-1 form with the SEC (source).

Step 2: Evaluate Alopexx’s financial reports

The primary financial statements available for publicly traded companies include the income statement, balance sheet, and cash flow statement. These financial statements can help investors understand a company’s cash capitalization structure, cash flow trends, and financial condition.

The company’s recent financial results are typical of a development-stage biopharmaceutical company in that they show no revenue and material R&D and G&A expenses related to its drug development efforts.

Below are the Company’s financial results for the last two calendar years:

Operating Invoice

Operating Account (SEC EDGAR)

As of June 30, 2022, the Company had $421,842 in cash and $2.5 million in total debt.

Step 3: Evaluate the potential of Alopexx compared to your investment horizon

When investors evaluate potential stocks to buy, it’s important to consider their time horizon and risk tolerance before buying stocks. For example, a swing trader might be interested in short-term growth potential, while a long-term investor might prioritize strong financials over short-term price movements.

Step 4: Choose a brokerage

Investors who do not already have a trading account start by choosing a brokerage firm. Account types commonly used for trading stocks include a standard brokerage account or a retirement account like an IRA.

Investors who prefer fee-based advice can open a trading account with a full-service broker or independent investment advisor, and those looking to manage their portfolio at a reduced cost can opt for a discount brokerage firm.

Step 5: Choose an investment size and strategy

Investors who have decided to buy ALPX stock should consider how many shares to buy and what investment strategy to adopt for their new position. The investment strategy determines an investor’s holding period and exit strategy.

Many investors choose to buy stocks and hold them for an extended period of time. Examples of basic investment strategies are swing trading, short-term trading, or investing over a long-term holding period.

Investors wishing to receive an allotment of shares at the IPO price would “express interest” to their broker prior to the IPO. A statement of interest is not a guarantee that the investor will receive an allotment of Shares.

Step 6: Choose an order type

Investors have many ways of placing orders to buy stocks, including market orders, limit orders, and stop orders.

  • Market Order: This is the most common type of order filled by retail traders. A market order executes a trade immediately at the best available transaction price.

  • Limit Order: When an investor places a buy limit order, they set a maximum price to be paid for the shares.

  • Stop Order: A buy stop order is an order to buy at a specific price, known as the stop price, which will be higher than the current market price. In the case of buy stop, the stop price is lower than the current market price.

Step 7: Submit the trade

After investors fund their account with cash, they can set an investment size and order type, and then submit the trade to place an order. If the trade is a market order, it will be executed immediately at the best available market price.

However, when investors place a limit order or stop order, the investor may have to wait for the stock to reach its target price or stop-loss price for the trade to complete.

Comment on Alopexx

ALPX is seeking funding from the US public capital market to advance its pipeline of vaccine and antibody drug candidates.

The company’s lead candidates are vaccine AV0328, to treat pneumonia and meningococcal infections, and monoclonal antibody F598, to treat ICU-acquired infections and prevent postoperative abdominal infections.

Both candidates have been shown to be well tolerated in phase 1 safety studies. The Company recently submitted a Free Writing Prospectus as a source of additional information about its operations, which can be viewed here. Source – SEC.

The market opportunity for the treatment of hospital-acquired infections is large but is expected to grow only slowly in the coming years.

Management has not disclosed any collaborative relationships with major pharmaceutical companies.

The Company’s investor syndicate does not include any well-known life science-focused institutional venture capital firms or strategic investors.

ThinkEquity is the lead underwriter and IPOs led by the firm over the past 12 months have generated an average negative return (58.9%) since its listing. This is a lowest performance for any major underwriter over the period.

In terms of valuation, the stock is valued well below the typical range for a clinical-stage biopharma at the IPO.

Though the company has completed Phase 1 and Phase 2 proof-of-concept studies that suggest the drugs are well tolerated, it’s still a thinly-capitalized company with extensive more studies ahead, without big ones Pharma or life science venture capital firm validation while defending against a potentially significant company lawsuit in France.

So I’m waiting for the IPO of Alopexx.

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