Dimerix has passed a key milestone in its phase three clinical trial.
Dimerix will rapidly expand the phase three clinical trial of its flagship kidney drug after the treatment for a rare disorder was shown to work better than placebo in the first cohort of patients.
In an announcement which managing director Nina Webster has called “the biggest news we’ve had since we incorporated’’, the company told the ASX on Monday that its molecule DMX-200 was working better than placebo in reducing proteinuria for patients with focal segmental glomerulosclerosis.
The company’s shares were placed in a trading halt on Monday morning while Dimerix raised new capital, but were already up 50 per cent in recent days, with the March release of the results well-flagged.
The stock last traded on Friday at its 12-month high of 30c, compared with its year low of 5.2c.
Pitt Street Research has a valuation range of 58c-77c per share for Dimerix, saying “we still think Dimerix isn’t priced like the phase three company that it is’’.
Dr Webster said the results were “super exciting’’ for the company.
“The importance of this study is that it is demonstrating that the drug is performing better than placebo,’’ Dr Webster said.
The company’s phase two trial was in just eight patients – with FSGS a rare disease.
The first stage of the phase three trial was in 72 patients, with that already expanded to 94 of the 144 which will be treated as part of the second interim analysis, which will be complete in about mid-2025, subject to recruitment.
“If we see compelling data at that next analysis point at 144 patients, that means we could potentially submit for early marketing approval, what’s called conditional marketing approval because there’s such high unmet need,’’ Dr Webster said.
Dr Webster said the aim was to report final results for the full phase three trial about 12 months after the second interim analysis was announced.
“This is the last study before we go to market,’’ Dr Webster said.
“Because we have orphan drug designation a single study is appropriate for a number of different territories, we’ve got alignment with US, Europe, and potentially in China as well, which means that this really is a single study that’s globally recognised.
“The other piece there is us going out now and negotiating the larger piece of the globe (for licensing), which is the US.
“We’ve already licensed Europe, which is fantastic. That was $230m, but we think the US is the bigger piece and now we’re in a much stronger negotiating position with strong data going into that as well.”
The European payments are subject to development and sales milestones, after an initial lump sum of $10.8m on signing, as well as royalties of mid-teens to 20 per cent.
The milestone payment triggers have not been made public because the company is still negotiating deals for various territories.
“FSGS is a rare disease that attacks the kidney’s filtering units, where blood is cleaned (called the glomeruli), causing irreversible scarring,’’ Dimerix said.
“This leads to permanent kidney damage and eventual end-stage failure of the organ, requiring dialysis or transplantation.’’
The company said FSGS is a potential billion dollar-plus market, with the number of potential patients in the US alone more than 80,000.
Dimerix said the interim analysis results released on Monday showed the molecule worked “better than placebo in terms of reducing proteinuria (a surrogate marker of kidney disease
progression) in patients with FSGS’’.
“Passing this first interim analysis (a futility assessment) is important as it suggests that it is possible DMX-200 may achieve a statistically significant and clinically meaningful result at the end of the study.’’
Pitt Street Partners said recently that Dimerix shares could be rerated on successful phase three results, with DMX-200 the only drug globally at such an advanced stage of testing for FSGS.
“Drug development is no easy feat, but it is fair to say Dimerix has made significant progress,’’ the broker’s analysts said in a note to clients.
“Subject to (regulatory) approval, it is plausible that DMX-200 could be commercialised for FSGS in two to three years.
“The company has laid the foundations, signing a partnership with Advanz Pharma for commercialisation in certain territories.
“Advanz has an exclusive licence to commercialise DMX-200 in the European Economic Area, Switzerland, the UK, Australia, New Zealand and Canada.’’
Pitt Street Partners said despite posting substantial gains from its $17m market capitalisation in 2019 – to $136m now – “we still think it is undervalued considering it is now a phase three stock’’.
“Our valuation of Dimerix implies that there is upside that can be realised if the company successfully executes on its planned pathway to market.
“The first key to unlocking this value will be the successful passage of the current clinical stage.’’
Dimerix has patent protection over DMX-200 until 2032 which could be extended out to 2042.
The company’s shares will remain in a trading halt until its capital raise is finalised.
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