Alzamend Neuro, a Tampa company working to find treatments for Alzheimer’s disease and other disorders, made a splashy debut on the Nasdaq Capital Market.
On Monday, the company priced 2.5 million shares of stock at $5 a share for an initial public offering. The stock began trading Tuesday morning with the ticker symbol ALZN and opened at $29 a share. It climbed as high as $33.55 in the first hour after the market opened. By mid-day, it was trading around $13 a share. It closed Tuesday at $13.50 a share.
The hot market could be attributed to Food and Drug Administration approval last week of an Alzheimer’s treatment from Biogen, the first new treatment in 18 years, according to the New York Times. Approval of the Biogen drug came over the opposition of an independent advisory committee for the FDA and some Alzheimer’s experts who said there was not enough evidence that the drug can help patients.
Alzamend Neuro is a pre-clinical stage biopharmaceutical company focused on developing novel products for the treatment of neurodegenerative diseases and psychiatric disorders. The primary target is Alzheimer’s disease, which currently affects about 6.2 million Americans and is the sixth leading cause of death in the United States, according to the Alzheimer’s Association. Existing treatments only temporarily relieve symptoms but don’t slow or halt the worsening of the disease, Alzamend said in a public filing.
The cost of treating Alzheimer’s this year is estimated at $355 billion, including $239 billion in Medicare and Medicaid payments. That could rise as high as $1.1 trillion by 2050 if no permanent treatment or cure is found, the Alzheimer’s Association said.
Alzamend has two product candidates in its pipeline. The lead candidate is a patented ionic cocrystal technology delivering a therapeutic combination of lithium, proline and salicylate, through two licenses from University of South Florida Research Foundation. Alzamend hopes to begin Phase 1 clinical trials in humans after the U.S. Food and Drug Administration approves an investigational new drug application.
In addition to Alzheimer’s, the product potentially could be used to treat bipolar disorder, depression and post-traumatic stress disorder, the filing said.
The second product candidate is a cell-based therapeutic vaccine designed to restore the ability of a patient’s immunological system to combat Alzheimer’s. It also has a license from USF Research Foundation.
Alzamend was formed in February 2016 and is headquartered at University of South Florida’s Research and Innovation Park on the Tampa campus.
The company was founded by Milton “Todd” Ault III, an entrepreneur focused on identifying value in financial markets and executive chairman of Ault Global, a diversified holding company.
Ault was board chair until Alzamend went public, when William Horne, the CEO of Ault Global, took over the board chair role at Alzamend.
Alzamend’s CEO is Stephan Jackman. Jackman has played a key role in the development of therapeutic treatments, products and programs from the research stage to market and commercialization and has worked at companies such as Novartis Pharmaceuticals and L’Oréal.
USF Research Foundation controls about 5 percent of the shares of Alzamend Neuro, the filing said. A spokeswoman for the foundation said the company operates completely independently of the university, and especially so in company stock matters.
Ault Life Sciences and Ault Life Sciences Fund, both associated with Todd Ault, control nearly 35 percent of the stock. Congregation Chazon Avrohom in Brooklyn, New York, controls 7 percent and Spartan Capital Securities, the underwriter, controls 6.3 percent.
Like most biopharma startups, Alzamend has generated no revenue and incurred losses. It has an accumulated deficit of $15.5 million.
The company estimated the net proceeds from its offering would be about $11.3 million, or $13.1 million if underwriters exercise their option to buy shares. It intends to use a significant portion of the proceeds to continue to fund research and development of the two drug candidates, for preclinical testing and for clinical trials.
Alzamend Neuro is the third company in the Tampa-St. Petersburg area to go public so far this year. KnowBe4 (Nasdaq: KNBE), a Clearwater cybersecurity training company, went public in April. Tampa-based SCP & CO Healthcare Acquisition Company (Nasdaq: SHACU), a “blank check” company formed to buy or merge with another business, had an initial public offering in January.