MENLO PARK, Calif. - AN2 Therapeutics, Inc. (NASDAQ: ANTX) announced today the discontinuation of its EBO-301 study for treatment-refractory MAC lung disease following the evaluation of topline results from the Phase 2 trial. Despite meeting its primary objective with a higher patient-reported outcome-based clinical response rate, the study did not show significant improvement in sputum culture conversion, a key secondary endpoint.
The Phase 2 trial demonstrated a 39.5% clinical response rate in the epetraborole plus optimized background regimen (OBR) arm compared to 25.0% in the placebo plus OBR arm. However, the sputum culture conversion rates were comparable between the two arms, with 13.2% for epetraborole plus OBR and 10.0% for placebo plus OBR.
In light of these results and previously paused patient enrollment in February due to concerns over efficacy, the company has decided to terminate the Phase 2 and Phase 3 parts of the trial. The decision to halt the study was not based on safety issues, as epetraborole was generally well-tolerated by the participants.
Eric Easom, Co-founder, Chairman, President, and CEO of AN2, expressed disappointment in the outcome, acknowledging the high unmet need for new therapies in this patient population. He extended thanks to the patients, investigators, study site staff, and company employees involved in the study.
AN2 Therapeutics now plans to refocus on its internal boron chemistry platform and continue the development of its pipeline programs. The company's boron-based technology is noted for its ability to create reversible covalent bonds with biological targets, potentially addressing targets that have been challenging with traditional carbon-based molecules.
The strategic restructuring following the discontinuation of the EBO-301 study is expected to extend the company's cash runway through 2027. AN2 Therapeutics will continue to pursue its pipeline programs, including initiating Phase 1 clinical development for chronic Chagas disease and a Phase 2 study for melioidosis. The company also maintains early-stage research programs in infectious diseases and oncology, with plans to develop multiple compounds within its current financial resources.
In other recent news, AN2 Therapeutics has seen a change in its financial outlook by Evercore ISI, following the biopharmaceutical company's first-quarter earnings update. Evercore ISI has revised the stock price target for AN2 Therapeutics down to $2 from the previous $7, while maintaining an 'In Line' rating. This adjustment comes in the wake of a newly projected timeline for Phase 2 data, expected in August. The company ended the quarter with $118 million in cash reserves, deemed sufficient for reaching the crucial data readout phase.
In recent developments, AN2 Therapeutics voluntarily halted enrollment for the Phase 3 segment of its study in February due to potentially lower efficacy indicated by an analysis of ongoing Phase 2 trials. This pause was not safety-related but was based on comparisons with another study. AN2 Therapeutics is considering adjustments to the enrollment criteria to address this issue.
InvestingPro Insights
As AN2 Therapeutics, Inc. (NASDAQ: ANTX) confronts the challenges posed by the recent discontinuation of its EBO-301 study, the company's financial metrics and market sentiment provide additional context for investors. The market capitalization of AN2 Therapeutics currently stands at $73.68 million, reflecting investor valuation of the company post-announcement.
The company's valuation metrics indicate a negative P/E ratio of -0.81 and an adjusted P/E ratio for the last twelve months as of Q1 2024 of -1.17, suggesting that ANTX is not currently generating positive earnings. Moreover, the company's Price/Book ratio for the same period is 0.7, which might be seen as an indicator that the stock is potentially undervalued relative to its book value, assuming the company's assets are accurately valued on its balance sheet.
InvestingPro Tips highlight that AN2 Therapeutics has a PEG Ratio of 2.24 for the last twelve months as of Q1 2024, which could suggest that investors are expecting future growth despite the current earnings situation. Additionally, a tip worth noting is the company's significant Return on Assets of -62.19% for the same period, indicating challenges in generating profit from its assets.
Investors looking for more in-depth analysis can find additional InvestingPro Tips on the platform, which currently lists an array of insights that could assist in evaluating the company's prospects.
Despite recent setbacks, AN2 Therapeutics remains focused on advancing its pipeline programs and leveraging its boron chemistry platform. The commitment to research in infectious diseases and oncology, coupled with the extended cash runway through 2027, may provide a foundation for recovery and future growth.
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