article

Not sure if this article was posted before as it is a couple of months old but is still a good read.


PHARMAXIS
Australian Ethical Trusts took the decision to increase its exposure to Pharmaxis as
it plunged from $2.93 to 76 cents on the negative European trend vote on Bronchitol
for cystic fibrosis.
Australian Ethical Smaller Companies Trust?s portfolio manager Andy Gracey
explains why.
We were disappointed to hear European authorities are now set to vote down the new
drug application for Bronchitol in its existing form, but Pharmaxis does have the right of
appeal and in all likelihood will modify its application and appeal this decision.
While Pharmaxis is now a riskier investment proposition, Australian Ethical Investment
added to its positions on the day of the negative trend vote announcement, primarily
because we think Bronchitol will eventually win approval and we thought the market had
oversold the stock.
The Committee for Medicinal Products for Human Use concerns with Bronchitol revolve
around the drug?s efficacy, as well as the variability of results seen in adolescents.
We take a small positive in that no safety issues were highlighted.
The Pharmaxis combined phase III clinical studies of 643 patients demonstrated a 7.3
percent improvement in forced expiratory volume in one second (FEV1) as a measure of
lung function, from baseline over 26 weeks.
The more relevant statistic however in any phase III pharmaceutical study is performance
against placebo or control, where FEV1 was a less impressive 3.8 percent improvement.
This divergence between FEV1 improvement versus baseline and against control is
explained by a strong placebo response, particularly present in adolescent patients, which
dragged down the overall clinical efficacy of Bronchitol to 3.8 percent.
The Committee for Medicinal Products for Human Use is quite rightly questioning whether
this 3.8 percent improvement is enough and why adolescent patients had such variability
in their response to Bronchitol.
We believe Pharmaxis will appeal any negative final decision, with the most conservative
Pharmaxis strategy being to modify their new drug application and ask for drug approval in
adult cystic fibrosis populations only.
We understand that Bronchitol?s clinical data in 341 adult patients or 53 percent of the
combined study patients is stronger, with FEV1 improvement above placebo of about
seven percent, with statistical significance.
The strategy of focusing on adult cystic fibrosis patients allows Pharmaxis to present
stronger clinical efficacy data and removes criticism about variability seen in the
adolescent data.
This still leaves the issue of what is enough lung function improvement or efficacy to
warrant drug approval in Europe.
Bronchitol rehydrates mucous on the lungs and facilitates a productive cough.
The two therapies used in cystic fibrosis treatment that are most similar to Bronchitol are
saline and the Roche-owned Pulmozyme.
Pulmozyne thins the mucous allowing a more productive cough and was approved in 1994
having demonstrated a 5.8 percent improvement in FEV1 over 26 weeks.
But Pulmozyme gained marketing approval on the back of demonstrating a 27 percent
reduction in infections requiring antibiotic use and not the FEV1 improvement.
Bronchitol is often also linked to nebulised hypertonic saline, which has a similar method
of action.
In 2006, researchers published a report which demonstrated an average 3.2 percent
improvement in FEV1 against placebo when saline was taken twice daily over 48 weeks.
This result was considered credible, while falling marginally short of Bronchitol?s overall
3.8 percent result.
The 3.2 percent result is a useful data point in an efficacy discussion although saline is not
an approved therapy.
It remains difficult to gauge what is a clinically meaningful improvement in lung function,
but when put into the context of a nearly two percent annual FEV1 decline seen in cystic
fibrosis adults, a seven percent improvement feels enough to get Bronchitol approved for
adults in European on appeal in late 2011.