Actuate Cuts IPO to $22M, Reduces Cancer Drug Plans

Actuate Therapeutics, a cancer-focused biotech company with bases in Texas and Ireland, has adjusted its initial public offering (IPO) expectations downward. Originally, the company announced its IPO plans in late May and set out to offer 5.5 million shares of common stock priced between $8 and $10 each. However, Actuate has now revised its plans, opting to offer only 2.7 million shares within the same price range. 

According to a recent filing with the Securities and Exchange Commission, if the shares are sold at the assumed price of $9 each, Actuate expects to generate approximately $21.8 million from this reduced offering. This amount could rise to $25.3 million if underwriters fully exercise their 30-day option to purchase an additional 416,666 shares at the same price. This revised figure is considerably lower than the initial projection of $45.1 million and could have reached $52 million with the previous underwriters' option for 83,333 additional shares.

The proceeds from this IPO are aimed at advancing the development of Actuate’s drug, elraglusib, which is in a Phase 2 trial for pancreatic cancer, a particularly challenging area in oncology. Despite the reduced funds, the company believes it can still complete this midstage study by allocating $16 million instead of the initially planned $21 million for this program and its related expenses.

Actuate also planned to advance a Phase 1 dose-escalation trial for refractory Ewing sarcoma, a rare bone cancer affecting children and young adults, into a Phase 2 trial. However, this Phase 2 trial will now depend on future funding, though the completion of the Phase 1 trial remains in the company’s plans.

Other planned clinical trials that are now postponed due to funding constraints include a Phase 1 dose-escalation study for an oral version of elraglusib in patients with advanced, refractory solid cancers, and a Phase 2 study in refractory metastatic melanoma. These delayed programs were expected to cost around $9.3 million based on the SEC filing.

Elraglusib is designed to bind to GSK-3β, a protein implicated in cancer cell invasion and resistance to treatments like chemotherapy and radiation. Preclinical studies indicated that this intravenous small molecule could impact diseases such as urothelial cancer and renal cell carcinoma, which led Actuate to initiate human trials in 2018.

It's not unusual for companies to reassess their IPO offerings shortly before hitting the market. For instance, on the same day Actuate announced its revised plans, Artiva Biotherapeutics entered the public market with an upsized $167 million IPO. Artiva reduced its share price from approximately $15 to $12 while increasing the total number of shares from 10 million to 16 million.

In summary, while Actuate Therapeutics has scaled back its IPO expectations, the company remains committed to progressing its clinical programs for pancreatic cancer and refractory Ewing sarcoma, albeit with adjustments to their timelines and funding strategies. The success of these endeavors now hinges on securing additional funding to support future clinical trials and research activities.

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