Avenue Therapeutics, Inc. (NASDAQ:ATXI): A Promising Neurological Pipeline with Significant Upside Potential

Published on September 24, 2024 | Ticker: ATXI

Avenue Therapeutics, Inc. (NASDAQ:ATXI) is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases. The company's current product candidates include AJ201 for the treatment of spinal and bulbar muscular atrophy (SBMA, also known as Kennedy's Disease), intravenous tramadol (IV tramadol) for the treatment of post-operative acute pain, and BAER-101 for the treatment of epilepsy and panic disorders.

Financials

For the fiscal year ended December 31, 2023, Avenue Therapeutics reported an annual net loss of $10,377,000, with no revenue generated. The company's annual operating cash flow was -$9,451,000, and its annual free cash flow was -$12,451,000.

In the first quarter of 2024, the company reported a net loss of $4,349,000. The company's cash and cash equivalents stood at $3,194,000 as of March 31, 2024, compared to $1,783,000 as of December 31, 2023. The increase in cash was primarily due to $4,531,000 in net cash provided by financing activities, partially offset by $3,120,000 in net cash used in operating activities.

AJ201 for the Treatment of SBMA

AJ201, Avenue's lead product candidate, is being developed for the treatment of spinal and bulbar muscular atrophy (SBMA), also known as Kennedy's Disease. In February 2023, the company announced that it had entered into a license agreement with AnnJi Pharmaceutical Co., Ltd. to obtain an exclusive license to intellectual property rights pertaining to AJ201.

The company is currently conducting a 12-week, multicenter, randomized, double-blind Phase 1b/2a clinical trial of AJ201 in 25 patients with clinically and genetically defined SBMA. The primary endpoint of the study is to assess the safety and tolerability of AJ201, while secondary endpoints include pharmacodynamic data and changes in fat and muscle composition. The company expects to report topline data from this trial in mid-2024.

IV Tramadol for the Treatment of Post-Operative Acute Pain

Avenue's second product candidate, IV tramadol, is being developed for the treatment of post-operative acute pain. In March 2023, the company participated in a Type C meeting with the FDA to discuss a proposed study protocol to assess the risk of respiratory depression related to opioid stacking on IV tramadol relative to an approved opioid analgesic.

In April 2023, the company announced that it had received official meeting minutes from the Type C meeting, indicating that it is in agreement with the FDA on a majority of the proposed protocol items and is in active discussion about remaining open items. The company plans to initiate the Phase 3 safety study as soon as possible, subject to having the necessary financing.

BAER-101 for the Treatment of Epilepsy and Panic Disorders

Avenue's third product candidate, BAER-101, is a novel α2/3–subtype-selective GABA A positive allosteric modulator being developed for the treatment of epilepsy and panic disorders. BAER-101 was originally developed by AstraZeneca and has an established safety profile in early clinical trials.

In August 2023, the company reported preclinical data for BAER-101 from an in vivo evaluation in the Genetic Absence Epilepsy Rate from the Strasbourg (GAERS) model of absence epilepsy. The data showed that BAER-101 demonstrated full suppression of seizure activity with a minimal effective dose of 0.3 mg/kg administered orally.

Liquidity

As of March 31, 2024, Avenue Therapeutics had $3,194,000 in cash and cash equivalents, compared to $1,783,000 as of December 31, 2023. The company expects that its expenses will increase substantially for the foreseeable future as it continues to execute on its product development plan and seek opportunities to license or acquire additional products.

The company will require additional financing to carry out its business plan and implement its strategy, and it continues to analyze various alternatives, including potentially obtaining lines of credit, debt or equity financings, including through at-the-market program ("ATM") offerings, or other arrangements. Without additional capital, the company does not expect its cash will be sufficient to fund its projected operating requirements or allow it to fund its operating plan past the third quarter of 2024.

Risks and Challenges

Avenue Therapeutics faces several risks and challenges, including the fact that it currently has no drug products for sale and its success is dependent on its product candidates receiving regulatory approval and being successfully commercialized. The company also faces the risk of serious adverse or unacceptable side effects being identified during the development of its product candidates, which could lead to the abandonment or limitation of development of some of its product candidates.

Additionally, the company faces substantial doubt about its ability to continue as a going concern, which may hinder its ability to obtain future financing. The company has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future, and it may not receive regulatory approval for any or all of its product candidates, or such approval may be significantly delayed due to scientific or regulatory reasons.

Conclusion

Avenue Therapeutics is a promising specialty pharmaceutical company with a diverse pipeline of neurological product candidates. The company's lead candidate, AJ201, is currently in a Phase 1b/2a clinical trial for the treatment of SBMA, and the company expects to report topline data from this trial in mid-2024. Additionally, the company is advancing its IV tramadol candidate for the treatment of post-operative acute pain and its BAER-101 candidate for the treatment of epilepsy and panic disorders.

While the company faces significant risks and challenges, including the need for additional financing to fund its operations, the potential of its product candidates and the company's strategic focus on the development and commercialization of therapies for the treatment of neurologic diseases make it a compelling investment opportunity for investors with a higher risk tolerance and a long-term investment horizon.

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Avenue Therapeutics (ATXI): A Promising Biopharmaceutical Player in the Neurologic Diseases Space

Avenue Therapeutics, Inc. (ATXI) is a specialty pharmaceutical company focused on the development and commercialization of therapies for the treatment of neurologic diseases. The company’s pipeline includes several promising product candidates, including AJ201 for the treatment of spinal and bulbar muscular atrophy (SBMA), also known as Kennedy’s Disease, intravenous tramadol (IV tramadol) for the treatment of post-operative acute pain, and BAER-101 for the treatment of epilepsy and panic disorders.