Actuate Therapeutics Seeks IPO For Promising Pancreatic Cancer Drugs (Pending:ACTU)

A Quick Take On Actuate Therapeutics, Inc.

Actuate Therapeutics, Inc. (ACTU) has filed to raise $50 million in an IPO of its common stock, according to SEC S-1 registration information.

The firm is a clinical-stage biopharma developing treatments for pancreatic cancers and other cancer conditions.

Actuate Therapeutics, Inc. has shown promising efficacy results in Phase 2 trials for its lead program.

I’ll provide a final opinion when we learn more about the IPO.

Actuate Overview

Fort Worth, Texas-based Actuate Therapeutics, Inc. was founded to license technologies called GSK-3 inhibitors that promise to block the function of the enzyme GSK-3B, “a master regulator of complex biological signaling cascades…that lead to tumor cell survival, growth migration and invasion.”

Management is led by president and CEO Daniel M. Schmitt, who has been with the firm since March 2015 and was previously Chief Operating Officer of Genus Oncology and has extensive experience in the pharmaceutical industry.

The firm’s lead drug candidate is elraglusib, which is being developed for numerous cancer conditions.

Its pancreatic cancer program is the most advanced, having completed Phase 1/2 trials, and management is pursuing testing of treatment for Ewing sarcoma as part of its “Actuate-1902 Phase 1/2 study in pediatric refractory malignancies.”

The current status of the firm’s development pipeline is shown here:

Actuate has booked fair market value investment of $99.8 million as of March 31, 2024, from investors, including Bios Equity Affiliated Funds and Kairos Venture Affiliated Funds.

Actuate’s Market & Competition

According to a 2019 market research report by Grand View Research, the global market for pancreatic cancer treatment was an estimated $560 million in 2015 and is forecasted to reach $4.2 billion by 2025.

This represents a forecast CAGR (Compound Annual Growth Rate) of CAGR of 23% from 2016 to 2025.

The primary factors driving this expected growth are an increasing elderly population worldwide, resulting in reduced immune system function and a higher incidence of cancer conditions, and a rising prevalence of alcohol consumption and obesity.

Also, the chart below shows the historical and projected future growth of the worldwide pancreatic cancer treatment market through 2025:

Major competitive vendors that have developed or are developing similar treatments include the following firms:

• Eli Lilly and Company

• Celgene

• F. Hoffmann-La Roche AG

• Amgen

• Novartis

• PharmaCyte Biotech

• Clovis Oncology

• Teva Pharmaceutical

• Merck & Co.

• Pfizer

• Others.

Actuate Therapeutics Financial Status

The company’s recent financial results are typical of clinical-stage biopharmaceutical companies in that they feature no revenue and substantial R&D and G&A expenses incurred by the various development programs.

Here are the firm’s current financial results for the past two calendar years, per its recent IPO filing documents:

As of March 31, 2024, the company had $2.1 million in cash and $16.3 million in total liabilities.

Actuate Therapeutics’ IPO Details

Actuate intends to raise $50 million in gross proceeds from an IPO of its common stock, although the final figure may be higher.

No existing or potentially new shareholders have shown an interest in acquiring shares at the IPO price.

The firm has elected to be an “emerging growth company” and a “smaller reporting company” according to the JOBS Act of 2012.

These classifications enable management to provide substantially less information to shareholders at their option.

Given the stage of development of the company’s pipeline, I estimate that Actuate would have a market capitalization at IPO of around $200 million.

Management said it plans to use the IPO net proceeds as detailed here:

the ongoing Elraglusib Injection Phase 2 mPDAC trial (Actuate-1801 Part 3B)

fund the existing pediatric refractory cancer Phase 1 dose escalation trial and continue exploring development opportunities and potentially initiate the Phase 2 portion of this study in patients with refractory Ewing sarcoma (Actuate-1902)

satisfy the company’s funding commitments for ongoing IIT studies for the use of Elraglusib Injection with other chemotherapy agents to treat mPDAC and a separate trial to treat recurrent salivary gland cancer

to the extent any proceeds remain available, fund initial planning steps for the studies described below and additional general and administrative operations.

(Source: SEC.)

Leadership’s online company roadshow presentation is not yet available.

Pertaining to legal proceedings, management said the company is not a party to any legal claims that would, if concluded against the firm in the aggregate, have a material adverse effect on its financial condition or operations.

Listed bookrunners of the IPO are Titan Partners Group and Newbridge Securities.

Commentary About Actuate’s IPO

ACTU is seeking US public capital market investment to advance its elraglusib drug treatment for various cancer conditions.

Its pancreatic cancer program is the most advanced, having completed Phase 1/2 trials, and management is pursuing testing of treatment for Ewing sarcoma as part of its Actuate-1902 Phase 1/2 study in pediatric refractory malignancies.

The market opportunity for pancreatic cancer treatments is moderately large, but effective treatments have proven difficult to develop for this condition, which is difficult to detect at an early enough stage to have successful outcomes.

Actuate is developing its lead candidate for other cancer conditions, which have reasonably large markets that are also growing due to population aging and reduced immune system response capabilities.

Management hasn’t disclosed any major pharma firm collaboration agreements or relationships.

The company’s investor syndicate includes biotech-focused venture capital firm investors.

Actuate has shown initial Phase 2 efficacy results in its lead program, as management states here:

Based on this interim data, the Kaplan-Meier preliminary analysis demonstrates a mOS [median overall survival] of 12.2 months in the elraglusib combination therapy arm versus 7.3 months in the GnP control group arm (HR=0.60; log-rank p=0.012).

So, ACTU appears to have Phase 2 trial activity that is quite promising for a cancer condition that has proven difficult to treat.

When we learn management’s assumptions about IPO pricing and valuation, I’ll provide an update.

Expected IPO Pricing Date: To be announced.