Pharmaxis portfolio fires on all pistons as U.S. relations warm up
Friday, February 05, 2016 by Proactive Investors
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Strengthening relationships, a multi-pronged research program and an agenda for milestone payments have Pharmaxis in good shape
Pharmaxis (ASXXS) is tracking strong progress in the current quarter with a sharpened focus engagement with potential future big pharma partners for the company's LOXL2 inhibitor program targeting both the fatal lung disease idiopathic pulmonary fibrosis (IPF) and non-alcoholic steatohepatitis (NASH).
Chief executive Gary Phillips met executives from several large pharmaceutical companies in San Francisco earlier this month confirming that the level of interest remained strong for Pharmaxis' research into LOXL2 and treatments for IPF and NASH.
"I also took the opportunity to meet with a number of US based investors who have expressed interest in our business model and potential for long term growth," Phillips said.
LOXL2 program for IPF and NASH
IPF affects about 100,000 people in the U.S. and whilst current products are expected to produce global revenues in excess of US$1.1 billion by 2017, there remains a clear need for new treatments.
Pharmaxis is developing its drug candidate for IPF via a research collaboration with U.K. biotech company Synairgen (LSE: SNG).
Pharmaxis’ work in this field is targeting the LOXL2 enzyme because it is known to promote scar tissue which hardens and irreparably damages the lungs of IPF patients.
IPF drug candidates under the program are expected to enter preclinical development this year.
The liver-related disease (NASH), commonly found in people who are overweight or obese, is also under the microscope at Pharmaxisas a good indication for a LOXL2 inhibitor.
It’s estimated that one in three people have fatty liver disease and that up to 10% of those will have NASH.
There are currently no approved NASH therapies available and Deutsche Bank estimates that the global market could be worth more than US$35 billion by 2025.
NASH is expected to increase in prevalence as obesity rates increase around the world.
Multi-front advance
Progress with Pharmaxis' LOXL2 program has coincided with more good news on the company’s work in cystic fibrosis.
Most recently, the company marked strong traction in furthering the commercial prospects of its cystic fibrosis treatment Bronchitol with positive results from a clinical trial in young patients.
The drug works by reducing the amount of mucus build-up in the lungs of patients suffering from chronic respiratory conditions.
The trial across 39 global centres reported in December and confirmed Bronchitol’s benefits in children and adolescents with cystic fibrosis (CF).
The company will now consider applying for an extension of its marketing authorisation to include children and adolescent patients with cystic fibrosis.
These results helped frame Phillips’ recent U.S. roadshow ahead of the first scientific presentation of the results to be made at the European Cystic Fibrosis Society meeting in Switzerland in June.
Meanwhile, the company has confirmed its expected timing to enter phase 2 clinical trials for a separate NASH program with its anti-inflammatory drug PXS-4728A sold last year in a landmark deal to Boehringer Ingelheim, one of the world's 20 leading pharmaceutical companies.
A phase 2 trial is expected to commence by the first quarter of 2017, at which time a milestone payment will be due to Pharmaxis.
Late last year a successful phase 1 clinical trial of PXS-4728A indicated that low doses of the drug are efficacious in long-lasting inhibition of an enzyme which reduces inflammation and oxidative stress.
It is rare to be able to demonstrate effective target engagement in a phase 1 study, so the fact that the long-lasting enzyme inhibition seen in the phase 1a study was reinforced when given once a day for 14 days adds to confidence in PXS-4728A.
Analysis
Pharmaxis’ push to engage U.S. investors and engage large pharm accompanies in its pipeline development is an encouraging confirmation of the expansionary ambition demonstrated in recent months by the company.
It also illustrates the advantages inherent in the company’s diverse portfolio, with strategies simultaneously targeting IPF, NASH and cystic fibrosis.
Besides these core areas of research, Pharmaxis’ focus on amine oxidase enzyme chemistry exposes the company’s innovations to potential applications in treatment sectors as diverse as Alzheimer’s, Parkinson’s, stroke, heart failure, cancer, type 2 diabetes, asthma and wound healing.
With a cash balance of A$46 million at the end of December and a net cash expenditure for the last quarter of $4 million, the company is well positioned financially.
The company’s more immediate price catalysts include the start of preclinical trials later this year for an IPF drug candidate and the commencement of a phase 2 trial by Boehringer by early 2017.
A growing institutional presence on the share register which now tallies higher than 45% is a testimony to the perceived future upside potential.
In the past 12 months, shares in the company have tripled to A$0.29.
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PXS Price at posting:
23.5¢ Sentiment: Buy Disclosure: Held
XS) is tracking strong progress in the current quarter with a sharpened focus engagement with potential future big pharma partners for the company's LOXL2 inhibitor program targeting both the fatal lung disease idiopathic pulmonary fibrosis (IPF) and non-alcoholic steatohepatitis (NASH).
