PaxMedica Inc has filed for an initial public offering (IPO). The company believes the IPO stock price will be between $4.50 and $6.50 per share of common stock. The company will list its common stock on the NASDAQ Capital Market under the symbol PXMD.
What Does PaxMedica Do?
PaxMedica is a clinical-stage biopharmaceutical company. It focuses on developing drug therapies to treat neurological development disorders such as autism spectrum disorder (ASD) and Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS). These are disorders that cause extreme disruption to the life of the patient and those around them and can be highly debilitating both physically and mentally.
ME/CFS is believed to be viral in origin and with rising incidence globally due to the long-term effects of SARS-CoV-2 (COVID-19).
PaxMedica is developing a range of anti-purinergic drug therapies (APTs), which have been shown to block the effects of too much adenosine triphosphate (ATP). It's thought an excess can trigger immune responses.
The company's lead program, PAX-101, is an intravenous formulation of suramin in the treatment of ASD and the advancement of the clinical understanding of using that agent against other disorders such as ME/CFS and Long COVID-19 Syndrome.
In February 2021, PaxMedica announced positive topline data from its Phase 2 dose-ranging clinical trial evaluating PAX-101 (commonly known as intravenous suramin) for treating the core symptoms of ASD.
Furthermore, the company intends to submit data to support a New Drug Application for PAX-101 under the US FDA's Tropical Disease Priority Voucher Program to treat Human African Trypanosomiasis. This is a fatal parasitic infection known as African sleeping sickness (HAT), leveraging suramin's historical use in treating HAT outside the United States.
The company believes its lead drug candidate (suramin), if approved by the FDA, may be a significant advancement in the treatment of ASD and potentially helpful treatment for ME/CFS and LCS.
PXMD Investment Risk Factors
PaxMedica stock is subject to numerous risks:
It is an early clinical-stage pharmaceutical company with a limited operating history.
The company has never generated revenue from operations and is unlikely to generate revenues for several years.
PaxMedica's recurring losses from operations have raised substantial doubt regarding its ability to continue as a going concern.
After IPO, the company will likely need to raise additional capital to support its development and commercialization efforts.
The company may never become profitable or be able to sustain profitability.
To date, PaxMedica has no supply source for suramin and cannot conduct clinical trials until it has sufficient supply.
The company cannot guarantee that PAX-101 or any other product candidates it develops or acquires will receive regulatory approval.
Who is Leading the PXMD IPO?
Underwriters and book runners on the PXMD stock IPO include Craft Capital Management LLC and R F Lafferty & Co Inc.
Use of PXMD IPO Proceeds
PaxMedica estimates it will receive net proceeds of around $6.6m from its IPO. It plans to use these net proceeds to increase its financial flexibility, create a public market for its common stock and to facilitate its access to the public equity markets.
The company will likely use the money raised for product development activities, including clinical and regulatory research and development for its product candidates, and the remainder for working capital and other general corporate purposes.
Based on current projections, PaxMedica believes the net proceeds from its IPO will fund its operations through 2023.