Pharmaxis Ltd PXS Thursday, 30 August 2007 Positive Phase III data takes PXS to a $763m Fully Diluted Market Cap Recommendation Short Term Investor -Take Profits, Long Term Investor - Hold Pharmaxis reported positive Phase III data on Bronchitol Pharmaxis reported positive Phase III data on Bronchitol for the management of mucus deposition in the lungs of bronchiectasis patients. The value of the company predominantly resides in it lead compound Bronchitol. The company has Bronchitol in clinical development for the management of mucus clearance of bronchiectasis patents, as well as cystic fibrosis and chronic bronchitis. The company also development and markets a asthma quantification diagnostic. Aridol for the quantification of asthma has entered the market in Australia and Europe, as well as completing Phase III trials for US registration. Positive Bronchiectasis Phase III Clinical Trial • Data from the 362 subject study demonstrated a highly significant improvement in quality of life after 12 weeks of treatment with Bronchitol. The primary endpoint were; o Positive reports from the St George Respiratory Questionnaire where patients reported a better health and a higher quality of life. o Significant difference in mucus clearance at 12 weeks for patients receiving Bronchitol versus those patients receiving placebo. • The trial was conducted at 22 hospitals across Australia, New Zealand and the United Kingdom. • Secondary endpoint have not yet been assessed, include Bronchiectasis symptoms (questionnaire), Cough severity (questionnaire), Exercise capacity (shuttle), Lung function, including gas transfer, changes in Antibiotic use, Bronchial wall thickening and inflammation and Peripheral airway function. These data points will be assessed and released later, and will provide the medical community greater information on the clinical utility of Bronchitol and assist with the adoption rate of the drug, if the current Phase III data is accepted by the regulatory authorities. Recommendation We previously reported that PXS is trading above the high range of our valuation by a confidence interval of 75%, assessing the mean valuation of $2.95 per share as the fair value and recommended Hold for the Long Term investor. The completion of the Phase III data and a small amount of new equity issued takes our valuation to $3.79 per share. However, with a 75% level of confidence the valuation range is high, calculated at high of $4.48 and a low of $2.93 per share respectively. At a share price of $4.03 cent per share, we recommend; • For the Long Term Investor – Hold • For the Short Term Investor – Take Profits. Snapshot Last Price $4.03 Market Cap (A$m) $763m 52 Week High $4.05 52 Week Low $1.84
PXS Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
