Cash flow from US sales of Bronchitol will help fund Pharmaxis' planned trials for its PXS-5505 drug candidate, which is a therapy for bone marrow cancer myelofibrosis in adults.In what has been described as a “transformational step” Pharmaxis (ASX: PXS) has collared United States Food and Drug Administration approval for its Bronchitol drug (mannitol) to be used in the country as an adjunct therapy for cystic fibrosis patients.
The green light from the FDA means Pharmaxis can sell Bronchitol, which is an inhalable dry powder, as an add-on maintenance therapy to cystic fibrosis sufferers over the age of 18 throughout the US.
Bronchitol is already available in Australia, Russia and Europe.
Pharmaxis chief executive officer Gary Phillips said securing FDA approval to sell Bronchitol in the US was a “transformational step” for the company.
US launch
Pharmaxis’ US licensee Chiesi Farmaceutici SpA steered the drug through its final stages of securing the FDA approval.
As part of the US distribution arrangement, Chiesi will pay US$7 million to Pharmaxis. Once Pharmaxis has shipped Bronchitol to Chiesi, it will receive a further US$3 million.
The commercial launch in the country is scheduled for the first quarter of next year. Pharmaxis expects to receive revenue in the form of royalties – equivalent to about 20% of Chiesi’s US Bronchitol net sales. Additionally, Pharmaxis will receive a total of US$15 million in the form of three sales milestones upon Chiesi hitting annual sales thresholds.
Approval for Bronchitol follows Pharmaxis’ FDA approval for its Aridol lung function test, which is already commercially available in the US.
It is expected Bronchitol sales in the US will contribute to existing cash flow from other regions and Aridol sales.
As a result, Pharmaxis anticipates it will become cash flow positive from FY 2021.
“The US market makes up more than 60% of the global cystic fibrosis market by value so today’s announcement of FDA approval has important and positive ramifications for Pharmaxis,” Mr Phillips said.
“The additional volume of Bronchitol that Pharmaxis will produce at our Sydney facility to supply the US on top of Australia and 17 other international markets, greatly increases capacity utilisation and, consequently, radically improves the cost of goods.”
Bankrolling development of PXS-5505
Mr Phillips said the payments from Chiesi, combined with cash flow from the company’s mannitol segment, will enable Pharmaxis to advance its lead drug candidate PXS-5505, which is designed to treat bone marrow cancer myelofibrosis.
The revenue from mannitol segment sales is expected to cover development of PXS-5505 to the conclusion of a phase 2 trial.
Pharmaxis has already secured investigational new drug approval and orphan drug designation from the FDA for PXS-5505.
The company will now proceed to an open label study recruiting up to 42 myelofibrosis patients across Australia and internationally.
Pharmaxis describes PXS-5505 as an inhibiting agent that seeks to reverse the bone marrow fibrosis that drives the disease’s morbidity.
Mr Phillips said the company hopes to sell it as a monotherapy or adjunct to approved therapies in treating myelofibrosis.
