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Kalkine IPO Report

Should You Subscribe to the IPO of Azitra Inc.?

May 31, 2023

The Offer

Company Overview

Azitra Inc (NYSE America: AZTR) is a clinical biopharmaceutical company in the early stages, dedicated to advancing precision dermatology therapies using engineered proteins and topical live biotherapeutic products. Their proprietary platform comprises a diverse microbial library of around 1,500 bacterial strains, carefully screened to identify unique therapeutic properties. By integrating artificial intelligence and machine learning, the platform analyzes and predicts drug-like molecules within the strain library. AZTR's platform also incorporates licensed genetic engineering technology, enabling the transformation of previously challenging strains. Their primary focus is developing genetically engineered strains of Staphylococcus epidermidis for dermatologic therapies, capitalizing on the species' favorable characteristics for skin applications. Thus far, AZTR has identified over 60 bacterial species in their library with the potential to engineer living organisms or produce engineered proteins of significant therapeutic efficacy.

Key Highlights

Primary Offering and overview of net proceeds: The company has offered 2,400,000 shares in the IPO. The number of common stock shares to be outstanding after this offering is expected to be 12,957,134 shares. If the underwriters exercise their option to purchase additional shares in full, the total number of outstanding shares will be 13,317,134. An over-allotment option has been granted to the underwriters, allowing them to purchase up to an additional 360,000 shares of common stock at the initial public offering price, minus the underwriting discount. This option can be exercised within 45 days of the date of this prospectus to cover any over-allotments, if necessary. From the sale of common stock in this offering, the company estimates net proceeds of approximately USD 9.9 million. If the underwriters fully exercise their over-allotment option, the net proceeds will amount to approximately USD 11.6 million. These figures are based on an initial public offering price of USD 5.00 per share, which is the midpoint of the price range specified in the prospectus. The company plans to utilize the net proceeds, in addition to its existing cash and cash equivalents, for various purposes such as funding clinical trials, product development, research and development activities, clinical manufacturing, working capital, and general corporate purposes.      

Use of proceeds:

The net proceeds from this offering, in addition to AZTR's existing cash and cash equivalents, will be allocated as follows:

  • The budget for clinical studies and product development activities will be around USD 5 million. This includes USD 1.5 million for the ATR-04 EGFR inhibitor associated rash program, covering costs up to the initial enrollment for the proposed Phase 1b clinical trial, and USD 2.5 million specifically for the ATR-12 Netherton syndrome program, providing funding for dosing in the proposed Phase 1b clinical trial.
  • A total of USD 3 million will be spent on research and development efforts, of which USD 1.5 million will go towards developing ATR-12 biomarkers, USD 0.5 million towards developing ATR-04 biomarkers, and USD 1 million towards creating new products.
  • The budget for clinical production will be around USD 1 million.
  • The remaining funds will be used for basic business needs, such as working capital, in-licensing and partnership activities, lab facility upgrades, general and administrative costs, and general expenses.

Dividend policy: No cash dividends have been announced or paid out on common stock by AZTR, and no cash dividends on common stock are expected soon. The Board of AZTR will decide whether to pay dividends on the common stock in the future, if any, based on a number of variables, including profits, capital requirements, financial condition, and other relevant considerations. Currently, AZTR plans to keep all potential earnings to promote the growth and development of its company.

Financial Highlights (Expressed in USD):


  • Service revenue under the Bayer JDA increased from USD 110,000 in fiscal 2021 to USD 284,000 in fiscal 2022. This USD 174,000 increase was due to higher reimbursable development costs in 2022.
  • Research and development expenses in fiscal 2022 rose by USD 717,836 (13%) to USD 6,097,938 compared to the previous year. The increase was mainly attributed to USD 808,000 in research and development costs related to advancing the Netherton program, partially offset by a decrease in payroll and related costs of USD 85,738 due to staff reduction. Government and nonprofit grant revenue received in fiscal 2022 and 2021 offset a portion of research and development expenses, amounting to USD 4,426 and USD 202,509, respectively.
  • As of December 31, 2022, total assets amounted to USD 7.2 million, with working capital of USD 1.9 million. Liquidity included USD 3.5 million in cash and cash equivalents, considering the USD 4.35 million proceeds from the placement of unsecured convertible promissory notes in September 2022. Projected working capital needs include funds for clinical trials, product development, research, clinical manufacturing, and general corporate purposes.
  • Operating activities used USD 8.3 million in cash in the year ended December 31, 2022, primarily due to a net loss of USD 10.7 million, partially offset by USD 2.4 million in non-cash items. Similarly, operating activities used USD 8.1 million in cash in the year ended December 31, 2021, driven by a net loss of USD 8.9 million, partially offset by USD 0.8 million in non-cash items.

Key Management Highlights

Risk Associated (High)

Investment in the IPO of “AZTR” is exposed to a variety of risks such as:

  • Limited Operational History: AZTR, an early-stage clinical biopharmaceutical company established on January 2, 2014, has limited operating history, and hasn't generated significant revenue. Their focus has been on developing a proprietary microbial library, genetic engineering, and testing of bacteria for therapeutics. Potential investors should carefully assess the risks and uncertainties inherent in a company with a limited operating history.
  • Uncertainty of microbial library and genetic engineering platform: AZTR has developed a proprietary platform with a microbial library of 1,500 bacterial strains screened for unique therapeutic properties. The platform combines artificial intelligence, machine learning, and genetic engineering. AZTR's focus is on genetically engineered S. epidermidis for dermatologic therapies, but its efficacy is unproven. Pre-clinical studies have been conducted, but no clinical trials for safety, tolerability, or efficacy have taken place. Phase 1b trials for ATR-12 and ATR-04 are planned for the first halves of 2023 and 2024, respectively. Positive early trial results do not guarantee success in larger trials, and the limited patient sample introduces uncertainty. AZTR must provide substantial clinical evidence to the FDA for its microbial library and genetic engineering platform to be validated.
  • Failure in pre-clinical studies and trials: Due to the early stages of development of AZTR's product candidates, extensive preclinical and clinical testing is required. ATR-12 and ATR-04 are the only candidates with significant preclinical studies. AZTR plans to initiate a Phase 1b clinical trial for ATR-12 in the first half of 2023 and file an IND for a Phase 1b trial of ATR-04 by the end of 2023. However, success in preclinical and early-stage clinical trials does not guarantee efficacy and safety in later trials. The design of a trial can impact approval, and AZTR's limited experience in trial design poses a risk. Setbacks and failures are common in the industry, and data interpretation and regulatory approval are subject to uncertainties. It is uncertain if or when AZTR will submit a BLA or if it will be approved. Results from later trials may differ from prior results, and failure in demonstrating safety and efficacy could lead to delays and the abandonment of candidates. Any trial delays or terminations will impact AZTR's commercialization and revenue generation efforts.


Azitra Inc. is a company that provides AI-powered solutions for the healthcare industry, dedicated to developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. Its lead candidate, ATR-12, is a genetically modified strain of Staphylococcus epidermidis aimed at treating Netherton syndrome, a rare and severe skin disease affecting approximately one in every 100,000 individuals. Phase 1a safety trial for ATR-12 has been completed, and a Phase 1b trial to assess safety and efficacy is currently underway.

The company is also working on two other product candidates, ATR-13 and ATR-14, targeting papulopustular rash and ichthyosis vulgaris, respectively.

Azitra Inc. has the potential to make a significant impact on the healthcare industry. The company's AI-powered solutions have the potential to improve patient care, reduce costs, and make healthcare more accessible. Further, the company has developed proprietary AI technology that is used to power its solutions and partnered with leading healthcare organizations to test and deploy its solutions.

However, there are also some risks associated with investing in Azitra Inc. First, the company is still in the early stages of development, and there is no guarantee that AZD-100 will be successful in clinical trials. Second, the company is facing competition from other companies that are developing similar drugs. Third, the market for cancer drugs is volatile.

Hence, given the financial performance of the company, increased revenue and net losses, use of proceeds, and associated risks “Azitra Inc (AZTR)” IPO seems “Attractive" at the IPO price.


Kalkine Equities LLC provides general information about companies and their securities. The information contained in the reports, including any recommendations regarding the value of or transactions in any securities, does not take into account any of your investment objectives, financial situation or needs. Kalkine Equities LLC is not registered as an investment adviser in the U.S. with either the federal or state government. Before you make a decision about whether to invest in any securities, you should take into account your own objectives, financial situation and needs and seek independent financial advice. All information in our reports represents our views as at the date of publication and may change without notice.

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