Israeli biopharma company Alcobra hopes to raise money from American investors to finance further clinical trials of its flagship drug, after a proposed acquisition by Israeli behemoth Teva Pharmaceutical Industries fell through.
Alcobra hopes to raise up to $20 million in a Nasdaq initial public offering at a company value of about $90 million, going by its draft prospectus filed on Monday.
If all pans out, Alcobra would become the first Israeli firm floating on Nasdaq this year stealing the thunder of fellow Israeli biopharma Kamada, which is listed in Tel Aviv and is also gearing up for a Wall Street offering.
Aegis Capital Corp. is the lead bookmaker for Alcobra's IPO.
Alcobra's flagship drug under development is MG01CI, to treat attention-deficit hyperactivity disorder, one of the most common behavioral disorders around the globe.
According to Alcobra, MG01CI presents a safer alternative than stimulant-based medications and is more effective than other non-stimulant drugs.
Alcobra completed Phase II clinical trials for MG01CI with 120 participants in Israel in November 2011. It intends to start talks American and European regulators within six months of its prospectus filing date, to determine if it will proceed with Phase III clinical trials that will pave the way for the drug's regulatory approval.
All this activity said - Alcobra has just one employee at the moment. The company reported a $1.6 million loss for 2012 and a $4 million loss for 2011. Altogether, the company has chalked up $8 million in losses until now.
In November 2010, Teva Pharmaceutical Industries lent money to Alcobra, which was later converted into shares. Altogether, Teva eventually invested $2.2 million in Alcobra and converted its loans into equity as part of an acquisition deal it signed with the company in March 2011. Teva received options to purchase full ownership of Alcobra, but in January 2012, following then Teva CEO Shlomo Yanai's resignation, it did not exercise the options and the acquisition deal was cancelled. Teva subsequently returned its Alcobra shares to the company without payment.
Alcobra intends to use $6 million to conduct Phase II clinical trials in accordance with FDA guidelines. An estimated $3 million will be used for the decisive Phase III clinical trials. The rest of the proceeds will be used to finance current operations.