Opioid Manufacturer Avenue Therapeutics to kick off IPO with $50 million Offer
The US is developing slowly because of setbacks like the opioid epidemic. Opiate abuse costs the US government millions through loss of labor and in direct treatment cost. The financial impact of the epidemic has made it more crucial than ever to find ways of dealing with the widespread abuse. That’s what companies like Avenue Therapeutics are doing.
Avenue Therapeutics (Pending: ATXI) is one of many biopharmaceutical companies to list on NASDAQ since the beginning of April. Other firms include Verona Pharma and Catasys. Verona Pharma deals with respiratory diseases while Catasys tackles outpatient treatment programs. Avenue Therapeutics is a New York-based company founded to help fight opioid addiction by producing the opioid Tramadol. Sounds ironic. Fighting opioids with opioids. But that’s how Avenue Therapeutics works. The company produces Tramadol to help relieve pain in post-surgery patients like other opiates but it isn’t addictive.
In March Avenue Therapeutics filed confidentially with the SEC. The company said on Friday that it would put up its shares for trade on NASDAQ soon. Avenue Therapeutics hopes to raise $50 million in its first public offering. The company didn’t offer any details about the pricing and the shares. However, but the $50 million target seems like a placeholder amount for now. Raymond James LLC will guide Avenue Therapeutics through the deal.
The fate of Avenue Therapeutics pre-IPO was always uncertain. It’s even more so now because analysts have the leeway to speculate how the IPO will turn out because no terms have been declared. To make matters worse investors have no idea what they’re getting into with the company because Avenue Therapeutics hasn’t bothered to release its financial position. If studies, on the other hand, are anything to go by, then Avenue Therapeutic managers may just have a home run with the upcoming initial issuance.
Usually when a product moves from phase of testing to the next it’s a sign that the scientific community has accepted the product. Avenue Therapeutics is holding its IPO to fund additional trials for the company’s Tramadol IV formulations. The two trials have shown successes in previous research and will be going into the Phase III trial programs. According to Avenue Therapeutics, it will release the results of the two tests, which are going to take place in the 3Q17, in the second quarter of 2018 and mid-2019 respectively.
Also, should the IPO offering go through, Avenue Therapeutics will conduct an open-label safety study along with the trial programs. This move will enable the company to release its products into the market sooner if the product trials are successful.
Avenue Pharmaceuticals is the only licensed and contracted firm that can produce IV Tramadol. It started working on the formulations in 2015. That was when one of its subsidiaries struck up a licensing deal with an Ireland-based pharmaceutical company. The deal stated that Avenue Therapeutics could create and provide IV Tramadol but only for use in hospitals. Today the company continues to advance its study into the product with the hopes of some near-future production.