Here is a analyst report on PXS. Higly regarded in the health...

Here is a analyst report on PXS. Higly regarded in the health sector. Matthijs SMITH from Canaccord Genuity.


Investment Perspective
On Wednesday 30th January 2013, PXS will go in front to the FDA’s 13-
member Pulmonary-Allergy Drugs Advisory Committee Meeting to discuss
the New Drug Application (NDA) for its’ cystic fibrosis (CF) drug, Bronchitol.
At the end of the meeting, the Committee will vote whether or not to
recommend the drug for approval by the FDA. While the FDA is not bound
to follow this recommendation, we would be very surprised if the decision
handed down by the agency on March 18 2012 differs from the Advisory
Committee’s recommendation. We believe the Committee is likely to come
down in favour of Bronchitol and recommend it for approval. As approval
would give PXS access to a potential $600m market opportunity, we would
expect PXS to be significantly re-rated on a positive recommendation.
Investment highlights
• Bronchitol already approved in Australia and Europe:- while each
regulator makes its own decision whether to approve a drug or not,
Bronchitol has already been successfully approved in two jurisdictions.
Furthermore, Bronchitol has also received a tick from public payers for
the drug, namely the PBS in Australia and NICE in the UK.
• Bronchitol data has been thoroughly examined:- while the approval
in Europe was particularly challenging, it does mean that any issues
which are likely to raise questions from the Advisory Committee are
likely to have been successfully addressed in the past. We fully
anticipate there will be discussion around:
- failure to achieve significance in the second Phase-3 trial
- the magnitude of the improvement in lung function
- the high withdrawal rate, particularly in the first Phase-3 trial
- haemoptysis (blood in sputum) occurring in some patients
• The drug works, is safe and provides extensive benefits: - in our
view, the data from the two Phase-3 trials of Bronchitol in over 600
cystic fibrosis patients shows that it is safe and provides a sustained
improvement in lung function. Furthermore, there was a significant
reduction in the number of pulmonary exacerbations in patients on the
drug which significantly improves both their prognosis and their
healthcare costs.
12-month target of $2.35; BUY recommendation
We have a Buy recommendation and a 12-month price target for PXS of
$2.35. The recommendation of the Pulmonary-Allergy Drugs Advisory
Committee at the end of this month is likely to have a considerable impact
on PXS’s price. In addition, the company will be updating the market on
sales of Bronchitol in Europe and is expected to report data from its