Pharmaxis (ASX:PXS) has made a solid start to 2017 with the company’s shares trading up 17% over the past three months to $0.305 and a cash balance of A$29 million.
The company continues to build into a biotech powerhouse focused on fibrosis and inflammation with a number of opportunities and milestones expected in the current calendar year.
It has a proven method of progressing from drug discovery to commercialisation supported by its first deal done with Boehringer Ingelheim in 2015 with the acquisition of the Pharmaxis phase 1 investigational drug PXS-4728A.
This involved an upfront payment of €27.5 million and a total potential deal value of over A$750 million.
PXS-4728A is being developed for the treatment of the cardiometabolic liver-related condition NASH.
Upcoming payment from Boehringer
Pharmaxis’s partner Boehringer Ingelheim is on track to commence a phase 2 clinical trial of the drug PXS‐4728A for the liver disease NASH in the second quarter of 2017.
The commencement of the trial will trigger a milestone payment to Pharmaxis of €18 million (~A$25 million).
Other deal opportunities
Pharmaxis is becoming a more enticing target for drug acquisition and partnerships as it continues to develop its fibrosis and inflammation drugs.
The company is working to build on the previous commercialisation successes of its in-house Drug Discovery Team.
Pharmaxis is targeting LOXL2 to reduce liver fibrosis and the liver disease NASH and has received strong interest from large pharmaceutical companies.
Mergers and acquisitions are increasing in the fibrosis and NASH space and there is evidence of structural pressure on big pharma to drive this M&A trend further.
Pharmaxis intends to partner after phase 1 trials and progress to date has been met with great interest by representatives of the large pharmaceutical companies scouting for opportunities.
Background
Pharmaxis is a pharmaceutical research company with a portfolio including two respiratory products approved in various world markets and a research pipeline focused on areas of high unmet clinical need in inflammatory and fibrotic diseases.
The company’s product pipeline is founded on its expertise in the chemistry of amine oxidase inhibitors.
A LOXL2 deal the next catalyst?
Despite a large number of drugs under development to treat the metabolic and inflammatory drivers of fibrosis, Pharmaxis is one of only a few companies developing drugs that directly target fibrosis itself.
Its program should therefore attract significant interest from big pharmaceutical companies who are looking for assets to help build and differentiate their franchises in this large, competitive and valuable market where there is still a high level of unmet need.
Deal values for phase 1 assets in fibrosis remain high with Gilead Sciences, Inc. (NASDAQ:GILD), Allergan and Bristol-Myers Squibb Co (NYSE:BMY) all acquiring anti fibrotic drug programs in the last 6 months with upfront payments for these deals all over US$100 million and total deal values often in excess of US$1 billion.
Mergers and acquisitions are increasing in the fibrosis and NASH space and there is evidence of structural pressure on big pharma to drive this M&A trend further with the number of increasing over the last five years.
With an undiluted market cap of $97.3 million backed by a healthy cash balance and plenty of growth opportunities in 2017, Pharmaxis offers a compelling investment.