Pharmaxis Limited (ASX:PXS) has entered into a research collaboration with UK biotechnology company Synairgen plc (LSE:SNG) to develop a treatment for the fatal lung disease idiopathic pulmonary fibrosis (IPF).
Synairgen is a specialist respiratory development company with an extensive BioBank from volunteers with asthma or chronic obstructive pulmonary disease.
The lysyl oxidase type 2 enzyme (LOXL2) is being targeted as it is known to promote scar tissue which hardens and irreparably damages the lungs of IPF patients.
Adding interest, the LOXL2 inhibitor program comes from the same Pharmaxis chemistry platform as the SSAO inhibitor that was recently acquired by Boehringer Ingelheim, one of the world’s 20 leading pharmaceutical companies, in a deal that could be worth more than A$750 million in tiered and milestone payments.
Under the agreement, Synairgen will fund further activity of the program at Pharmaxis, use its BioBank and in vitro lung model platform, and collaborate with the IPF research team at the University of Southampton to complete pre-clinical and early clinical development.
The IPF program will be managed by a joint steering committee through to the end of phase 1 or phase 2a clinical trials, at which time the collaboration will seek a licence partner.
Pharmaxis and Synairgen will share any licensing revenues in accordance with the ratio of total investment by the two companies at that time.
This is expected to be approximately equal for a compound licensed for IPF after early clinical development.
Pharmaxis will continue to develop compounds outside the collaboration for other indications where LOXL2 inhibitors have shown potential such as liver and kidney fibrosis, and metastatic cancer.
The agreement does however allow for scenarios where the collaboration licenses its program for multiple indications.
Gary Phillips, Pharmaxis chief executive officer, commented:
“We have continued to make good progress in our preclinical LOX inhibitor program and in particular on LOXL2 small molecule inhibitors to treat various diseases where fibrosis is a major problem.
“The significant interest among leading clinicians and pharmaceutical companies in the role of LOXL2 in a number of different diseases has highlighted the need for us to collaborate for selected indications in order to fully exploit the potential value of our intellectual property.
“Synairgen has a demonstrated excellence in respiratory drug development, having successfully licensed its inhaled IFN‐beta Phase 2 program to AstraZeneca.
“We believe our collaboration with Synairgen will accelerate the development of a highly competitive once a day oral treatment for patients with IPF and enable Pharmaxis to develop LOXL2 inhibitors for other potential indications such as liver and kidney fibrosis, and cancer.”
Richard Marsden, Synairgen chief executive officer, added:
“We are delighted to be collaborating with Pharmaxis in idiopathic pulmonary fibrosis, a severe and fatal lung disease.
“Pharmaxis has a proven competence in the discovery and development of novel molecules, making it an ideal partner.
“LOXL2 is a target which is of interest not only to our IPF clinical experts in Southampton but also to large pharmaceutical companies; in 2011 Gilead Sciences acquired Arresto Biosciences for $225 million for its Phase I LOXL2 targeting antibody simtuzumab and is currently conducting a large efficacy trial in IPF.
“Using existing financial resources from our fundraising in 2014, we will apply our BioBank platform of advanced human tissue models and understanding of respiratory biology to develop the LOXL2 inhibitor.
“We look forward to working closely with Pharmaxis and the world class academics at the University of Southampton to progress this opportunity into the clinic in patients with IPF.”
Idiopathic Pulmonary Fibrosis
Idiopathic pulmonary fibrosis is a disease in which tissue deep in the lungs becomes scarred, over time.
There is currently no cure with most people living only 3 to 5 years after diagnosis.
IPF affects about 100,000 people in the U.S. with current products expected to produce global revenues in excess of $1.1 billion by 2017.
Analysis
Pharmaxis has executed three deals in six months and demonstrated its ability to add to shareholder value as evidenced by the sale of its SSAO inhibitor to Boehringer Ingelheim.
Its collaboration with Synairgen highlights its ability to identify a high quality collaborator to share risks and fast track the path to value points as they develop a treatment for IPF.
The company continues to tap into a rich seam of potential drugs from its chemistry platform.
Synairgen will accelerate work on the treatment and enhance Pharmaxis’ ability to focus on efforts to develop the valuable priority indications for LOXL2 such as liver and kidney fibrosis and cancer.
LOXL2 is an exciting target that has drawn keen interest from big industry players in a wide spectrum of diseases. Pharmaxis' unique approach would also be attracting interest.
The company had $54 million in cash as at 30th June 2015 versus a market cap of $69 million.
Pharmaxis has been a star market performer, the share price has gained 156%. Based on its approach and pipeline ahead, Proactive can see further gains ahead in 2015/16.
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