Paradigm Biopharmaceuticals Ltd (ASX:PAR) has major share price catalysts expected in CY23 as the company looks to initiate a Phase III trial and advance the ongoing Phase II trial for Zilosul or injectable pentosan polysulfate sodium (iPPS) as a treatment for knee osteoarthritis (kOA), according to Edison Investment Research.
Positive top-line data was announced for the Phase II trial in October 2022, and an update is expected in Q1 CY23 on the six-month follow-up results, involving biomarker data and MRI data, representing a significant near-term catalyst for the company’s share price, in Edison’s view.
The following is an extract from the research update:
Paradigm has presented its half yearly results and accounts, reflecting an active period. This included an encouraging safety review for injectable pentosan polysulfate sodium (iPPS, Zilosul) in the pivotal Phase III trial (PARA_OA_002) for patients with knee osteoarthritis (kOA) pain. The Phase II (PARA_OA_008) biomarker trial reached its primary endpoint, positioning iPPS as a potentially disease-modifying drug. In our opinion, the initiation of the confirmatory Phase III trial (PARA_OA_003) and sixmonth follow-up results from the PARA_OA_008 trial represent major catalysts expected in CY23. At end-December 2022, the company had A$83.9m cash, supported by an August 2022 capital raise of A$66.0m.
Active clinical pipeline backed by encouraging data
Paradigm’s development pipeline for iPPS as a treatment for kOA is supported by several Phase II studies. The company is now assessing the long-term efficacy and safety of iPPS in Phase III. The most advanced programme (PARA_OA_002) is a two-stage, pivotal Phase III trial to assess the effect of iPPS in patients with kOA pain. Patient enrolment began in H222 and the first formal safety data review (December 2022) reported an encouraging tolerability profile with no adverse events; we believe this is supportive of all ongoing clinical activity involving iPPS. Management expects recruitment for stage 1 to be completed in H1 CY23.
Potential for disease modification to maximise impact
In our view, maximum impact for iPPS may be achieved by demonstrating a disease-modifying profile in kOA. The Phase II trial (PARA_OA_008) is an ongoing biomarker study to investigate iPPS as a potential disease-modifying osteoarthritis drug (DMOAD). Positive top-line data was announced for this study in October 2022, and an update is expected in Q1 CY23 on the six-month follow-up results, involving biomarker data and MRI data, representing a significant near-term catalyst for the company’s share price, in our view.
A$66m funding to support clinical development
During H123, R&D expenses accounted for over 80% of the company’s operating expenses, indicating continued focus on preclinical and clinical activities. We believe Paradigm's net cash position of A$83.9m, supported by the A$66m raised in August 2022, provides an adequate cash runway in the near term, but the company is actively pursuing an out-licensing partnership, which could extend this runway