Pllanned ProceedsThe net proceeds to the Company from the Offering will be approximately $23,050,000 after deducting the Underwriters' Fee of $1,750,000 and estimated expenses of the Offering of $200,000. The foregoing amounts are prior to any exercise of the Over-Allotment Option.
The Company intends to use the net proceeds of the Offering to fund certain activities required to support large market partnering and begin the Phase 3 program for ATB-346. These activities include: (i) completion of reproductive and long-range animal toxicology studies for ATB-346; (ii) U.S. regulatory consulting fees to support a successful Investigational New Drug (“IND”) application and end-of-Phase-2 meeting with FDA; (iii) European regulatory consulting fees to support EMA requirements; (iv) market opportunity assessment and partnering studies; (v) IND-opening absorption, metabolism and excretion (“AME”) study for ATB-346; (vi) drug supply of ATB-346 for the Phase 3 program; (vii) initiation of the pivotal Phase 2/3 adaptive trial; (viii) completion of IND-enabling studies for ATB-352; and (ix) recruitment of senior business development executive. The remainder of the net proceeds will be used for working capital and general corporate purposes. These activities are expected to benefit future partnering discussions as they aim to materially de-risk ATB-346 from a regulatory and commercialization perspective.
Phase 3-enabling animal toxicity and reproductive toxicity studies have commenced in rats, mini pigs and rabbits. They are being conducted in tranches to enable a timely start of Phase 3 clinical trials. Short range studies are expected to conclude in Q1 2021, enabling the commencement of the 12-week phase 3 efficacy trials. Long range studies are expected to conclude in Q3 2021, enabling the commencement of 24-week Phase 3 GI safety trials. The regulatory consulting fees are to fund the balance of its regulatory consulting effort (initiated in calendar Q1 2019) which include preparation for the Company’s IND filing with the FDA and end-of-Phase 2 meetings with the FDA. Both the IND filing and end-of-Phase 2 meeting are expected to occur in the next six months. Upon successful opening of the IND, the Company plans to commence an absorption, metabolism and excretion (“AME”) study in calendar Q4 2020 to satisfy its regulatory requirement for such a study. The Company’s primary regulatory focus is to obtain FDA approval for ATB-346 given the United States is the largest pharmaceutical market worldwide. The Company has also engaged a European regulatory consulting agency to develop a strategy for EMA approval. Upon the conclusion of this mandate, the Company plans on identifying the optimal path forward for achieving regulatory approval for ATB-346 in Europe.
The Company recently completed a comprehensive market opportunity assessment and payor study for the United State and Europe, and plans to proceed with a partnership study to identify and stratify potential target partners in these markets. The Company will also be conducting similar market opportunity assessment and partnership studies in Japan, the third largest pharmaceutical market worldwide. These studies have already commenced or are commencing shortly, and are expected to conclude in calendar Q3 2020. The Company believes that the findings of these studies should be valuable in future partnering discussions. The Company expects business development activity to increase materially given the recent positive Phase 2B efficacy data for ATB-346. In anticipation of this
increased activity, the Company plans to hire a senior business development executive to lead the negotiation and execution of future licensing deals. The Company also plans to engage an advisory group to support partnering activity in China, the second largest pharmaceutical market worldwide.
In addition, the Company plans on funding all required IND-enabling pre-clinical studies for its second pipeline drug, ATB-352, and anticipates these studies will conclude in calendar Q3 2021. ATB-352 is a hydrogen sulfidereleasing derivative of ketoprofen, one of the more potent NSAIDs commonly prescribed for severe pain. However, ketoprofen is also one of the most damaging NSAIDs to the GI tract. ATB-352 is being developed as a GI-safe and non-addictive alternative to opioids for the treatment of post-surgical pain.
The recent successful outcome of the Phase 2B dose-ranging, efficacy study for ATB-346 represented a major development milestone for the Company and concluded Phase 2 human proof-of-concept development of ATB-346. The Company’s overall strategy is to monetize ATB-346 at the optimal time through partnering or M&A activity. In parallel, the Company will continue to advance ATB-346 to maximize both value and negotiating leverage. In the next 12 months, the Company would either complete M&A activity, partner with one or more pharmaceutical companies who would complete Phase 3 development, or raise additional capital and/or secure regional partnerships to further or fully fund Phase 3 development. In any event, the Company estimates that the Phase 3 program for ATB-346 will commence in calendar Q1 2021 and will take approximately 2 years to complete. Although the Phase 3 design is not finalized, it is expected to replicate the Phase 2B GI safety and Phase 2B dose-ranging, efficacy studies in a larger sample size with a longer treatment duration. The Company is planning for the first registration trial of the Phase 3 program to have an adaptive design which will also establish the lowest effective dose of ATB346. The Company anticipates that this efficacy trial will compare multiple doses of ATB-346 to placebo in OA patients over a 12-week period. Successful completion of Phase 3 development would allow the Company to file an application with the FDA for regulatory approval.
The