AN2 Therapeutics Plunges 66% in a Month: Here's Why

AN2 Therapeutics ANTX, a clinical-stage company, leverages its boron chemistry platform to develop novel small molecule therapeutics to potentially treat various infectious diseases and cancer indications.

The company is currently evaluating its lead clinical-stage candidate, epetraborole, a bacterial leucyl-tRNA synthetase inhibitor, for nontuberculous mycobacteria (NTM) lung disease and acute melioidosis in separate early-stage studies.

In the past month, shares of AN2 Therapeutics plunged 66.3% after the company announced that it has discontinued its mid to late-stage study on epetraborole for patients with treatment-refractory mycobacterium avium complex lung disease due to unsatisfactory efficacy results.

Year to date, shares of ANTX have plummeted 95.2% compared with the industry's 1.7% decline.

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On Aug 8, AN2 Therapeutics announced top-line results from the phase II portion of the phase II/III EBO-301 study evaluating epetraborole in combination with an optimized background regimen (OBR) in treatment-refractory MAC lung disease. 

Per ANTX, the EBO-301 study met its primary endpoint, potentially validating a novel patient-reported outcome tool and a higher PRO-based clinical response rate of 39.5% in the epetraborole arm compared with the 25% observed in the placebo arm, when combined with OBR.

However, the MAC lung disease study failed to demonstrate a statistically significant, superior sputum culture conversion at month six, a key secondary endpoint, in the epetraborole + OBR arm compared with the placebo + OBR arm. On the contrary, the sputum culture conversion at month six was similar between the treatment arms.

We remind the investors that in February 2024, AN2 Therapeutics had voluntarily suspended new patient enrollment in the phase III portion of the EBO-301 study due to potentially lower-than-expected efficacy observed in blinded aggregate data.

Following the latest data from the phase II/III study announced in August, the company terminated the phase II as well as the phase III portion of the EBO-301 study.

AN2 Therapeutics clarified that the candidate was generally well-tolerated, and the study was not terminated due to safety concerns.

Following the massive setback, the company will further evaluate the EBO-301 study results to determine the next steps for the potential future development of epetraborole to treat NTM lung disease in other patient populations.

The company also plans to invest heavily in research and developmental activities to accelerate the development of several pre-clinical candidates for infectious diseases and oncology. Simultaneously, AN2 Therapeutics plans to undergo strategic restructuring with the intent of extending its cash runway through 2027.

In an SEC filing, the company stated that it will slash its workforce by approximately 50% by the end of 2024, as part of its strategic restructuring efforts. ANTX anticipates the charges for such a reduction in workforce in the range of $2-$3 million, including severance and other employee-termination related expenses.

Currently, AN2 Therapeutics is gearing up to initiate a phase I clinical study of its second product candidate, AN2-502998, to cure chronic Chagas disease. The company is also planning to initiate a mid-stage study of epetraborole for the melioidosis indication.

Zacks Rank & Other Stocks to Consider

AN2 Therapeutics currently carries a Zacks Rank #2 (Buy). 

Some other top-ranked stocks in the overall healthcare sector include Illumina, Inc. ILMN, Fulcrum Therapeutics FULC and Arcturus Therapeutics ARCT, each sporting a Zacks Rank #1 (Strong Buy) at present.

In the past 60 days, estimates for Illumina's 2024 earnings per share have moved up from $1.07 to $3.16. Earnings per share estimates for 2025 have improved from $2.93 to $4.49. Year to date, shares of ILMN have lost 6.4%.

Illumina's earnings beat estimates in each of the trailing four quarters, the average surprise being 463.46%.

In the past 60 days, the consensus estimate for Fulcrum Therapeutics' 2024 loss per share has narrowed from $1.24 to 48 cents. The consensus estimate for 2025 loss per share has narrowed from $1.71 to $1.51 during the same period. Year to date, shares of FULC have jumped 36.9%.

Fulcrum Therapeutics beat earnings estimates in each of the last four quarters, delivering an average earnings surprise of 393.18%.

In the past 60 days, estimates for Arcturus Therapeutics' 2024 loss per share have improved from $4.39 to $2.60. The estimate for 2025 is currently pegged at earnings of 21 cents per share. Year to date, shares of Arcturus Therapeutics have lost 35.9%.

Earnings of Arcturus Therapeutics beat estimates in each of the last four quarters, delivering a four-quarter average earnings surprise of 56.73%.

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