Company Overview

Azitra, Inc. is a clinical-stage biopharmaceutical company at the forefront of developing innovative therapies for precision dermatology. Founded in 2014, the company has built a proprietary platform that leverages its extensive library of approximately 1,500 unique bacterial strains to identify and engineer therapeutic candidates for a variety of skin diseases. The company's initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis for treating skin diseases.

Company History

The company's journey began in January 2014 when it was established with the goal of discovering and developing novel therapeutics to create a new paradigm for treating skin disease using engineered proteins and live biotherapeutic products. Azitra's initial focus was on the development of genetically engineered strains of Staphylococcus epidermidis, a bacterial species that demonstrates several well-described therapeutic properties in the skin. Over the years, the company has expanded its platform to include the screening and engineering of other microbial species, and has established valuable partnerships with academic institutions to further bolster its research and development capabilities.

Financial Journey

Azitra's financial journey has been marked by significant milestones. The company initially capitalized its operations through a series of private placements of convertible preferred stock and convertible promissory notes. In June 2023, Azitra reached a crucial milestone by completing its initial public offering (IPO), issuing and selling 50,000 shares of common stock at $150 per share. Concurrent with the IPO, all of Azitra's outstanding shares of convertible preferred stock and convertible promissory notes were converted into a total of 298,380 shares of common stock. The company continued to strengthen its financial position with follow-on public offerings. In February 2024, Azitra issued and sold 555,570 shares of common stock at $9 per share. Subsequently, on July 25, 2024, the company completed another follow-on offering, issuing 6.67 million shares of common stock and Class A warrants to purchase up to 13.33 million shares of common stock, at a combined public offering price of $1.50 per share and accompanying warrants.

Financials

For the nine months ended September 30, 2024, the company reported total revenue of $596,000, with a net loss of $6.57 million. As of September 30, 2024, Azitra had $7.26 million in cash and cash equivalents, providing a solid foundation for its ongoing clinical and preclinical activities.

For the most recent fiscal year (2023), Azitra reported revenue of $686,000, with a net loss of $11,283,781. The company's operating cash flow (OCF) was -$7,362,375, and its free cash flow (FCF) was -$7,680,634.

In the most recent quarter (Q3 2024), Azitra reported no revenue, compared to $310,700 in the prior year period. This decrease was primarily due to a reduction in reimbursable development costs under the Bayer collaboration. The net loss for Q3 2024 was $1,009,491, with an operating cash flow of -$2,458,034 and a free cash flow of -$2,310,777.

The company's research and development expenses increased by 85% year-over-year in the third quarter, reflecting its efforts to advance its lead product candidates into clinical trials.

Liquidity

Azitra's liquidity position is supported by its cash and cash equivalents of $7.26 million as of September 30, 2024. This financial cushion enables the company to continue its ongoing clinical and preclinical activities while pursuing its research and development objectives.

The company's debt-to-equity ratio stood at 0.07983715577061182 as of September 30, 2024. Additionally, both the current ratio and quick ratio were 5.581150714892976 as of the same date, indicating a strong short-term liquidity position.

However, Azitra has expressed substantial doubt about its ability to continue as a going concern without raising additional capital in the next 12 months. The company does not appear to have any available credit lines or facilities disclosed in the financial statements.

Product Pipeline

One of Azitra's key strengths is its robust pipeline of product candidates, which includes both live biotherapeutic products and engineered protein or peptide therapeutics. The company's lead candidate, ATR-12, is a genetically modified strain of S. epidermidis being developed for the treatment of the rare skin disease Netherton syndrome. In August 2024, Azitra announced that it had dosed the first patient in a Phase 1b clinical trial evaluating ATR-12, and the company expects to report interim safety data from this trial in early 2025. Azitra received Pediatric Rare Disease Designation for ATR-12 from the FDA in 2019.

Another notable pipeline candidate is ATR-04, a genetically modified strain of S. epidermidis engineered to treat the papulopustular rash experienced by cancer patients undergoing epidermal growth factor receptor (EGFR) inhibitor therapy. In September 2024, Azitra announced that the U.S. Food and Drug Administration (FDA) had granted Fast Track Designation for ATR-04, a recognition of the significant unmet need in this patient population. The company obtained IND clearance from the FDA in August 2024 and plans to commence a Phase 1b clinical trial for ATR-04 in the fourth quarter of 2024.

ATR-1, another key product candidate, is a genetically modified strain of S. epidermidis that expresses an engineered recombinant human filaggrin protein for treating ichthyosis vulgaris. The company is planning to perform lead optimization and IND-enabling studies for ATR-1 in 2024 to support an IND filing targeted for early 2026.

Strategic Partnerships

Azitra's strategic partnerships have also been a key driver of its progress. In December 2019, the company entered into a joint development agreement with Bayer Consumer Care AG, the consumer products division of Bayer AG. Under this agreement, Azitra is responsible for testing its library of bacterial strains and their natural products for key preclinical properties, and Bayer holds an exclusive option to license the patent rights to the selected strains. The two companies are collaborating on the development of two separate strains of bacterial microbes.

Additionally, Azitra has established collaborations with leading academic institutions, such as Carnegie Mellon University and the Fred Hutchinson Cancer Center. These partnerships have enabled the company to leverage cutting-edge technologies, including artificial intelligence and machine learning, to enhance its strain screening and genetic engineering capabilities.

Conclusion

Azitra's focus on precision dermatology therapeutics has positioned it as a pioneer in the field. The company's Precision Dermatology Platform, which includes a microbial library of approximately 1,500 unique bacterial strains, uses artificial intelligence and machine learning technology to analyze, predict, and screen these bacterial strains for potential therapeutic properties. This innovative approach allows Azitra to create new therapeutics, either engineered living organisms or engineered proteins/peptides, to treat various skin diseases.

By harnessing the power of its proprietary microbial library and genetic engineering expertise, Azitra is poised to address a wide range of skin diseases with its innovative approach. As the company continues to advance its pipeline and forge strategic collaborations, it remains well-positioned to drive progress in the rapidly evolving landscape of precision dermatology. However, the company's financial position and its expressed concern about its ability to continue as a going concern without additional capital highlight the challenges it faces as it moves forward with its ambitious research and development programs.