Pharmaxis Ltd (ASX:PXS) has made strong progress in drug development with value inflection points in a number of programs expected in 2018.
The research‐based biotech company has identified novel ways to cure diseases that are poorly treated and has generated new drugs which are then rigorously tested.
After receiving $42 million in milestone payments from Boehringer Ingelheim, the company expects more results later in 2018 which will impact the risk-adjusted valuation of this deal.
READ: Pharmaxis strengthens balance sheet with $15 million milestone payment
Gary Phillips, chief executive officer, said: “The NASH study is due to read out in the September quarter and the diabetic retinopathy study in the December quarter this year.
“Both studies will provide the first clinical proof of concept in humans and, if positive, would represent a huge step forward in their progress towards the clinic and the delivery of more financial rewards for Pharmaxis.
“The second key event will be the mid‐year read out from the phase 1 studies that are underway on the two lead candidates from our anti fibrotic LOXL2 program.”
Company takes control of collaboration
Late last year Pharmaxis decided to take full scientific and commercial control of its collaboration with UK biotech Synairgen.
Phillips said: “This was driven by our increasing confidence in this program and the very high level of interest we are receiving from large pharmaceutical companies that are active in the liver and lung fibrosis markets.
“We have used some of the cash that the BI deal has provided to substantially increase our interest in the commercial returns from the program in exchange for a one‐off payment to Synairgen.
“The end of phase I is not a classic major value inflection point for a new drug given that you have shown safety in healthy volunteers but not yet any efficacy in patients with the disease being targeted.
LOXL2 program a significant valuation catalyst
“Despite this I believe that this point in our LOXL2 program is significant from a valuation perspective.
“There are very few anti fibrotic drugs under development and the number of companies chasing a good asset is high.
“This means that companies are looking earlier and earlier in the development pipeline of biotechs to identify promising drugs to add to their development portfolio.
“I met with many of these companies at the JP Morgan conference in San Francisco earlier this month and several are already investing considerable resources in doing due diligence on our science whilst the phase I studies are ongoing.
“I anticipate that a major deal in the second half of this year will be our reward if the phase I studies are successful.”
Pharmaxis has a portfolio of products at various stages of development and approval.
READ: Pharmaxis secures further Australian government reimbursement for Bronchitol
Its product Bronchitol for cystic fibrosis is marketed in Europe, Russia and Australia.
Another product, Aridol, for the assessment of asthma, is sold in Europe, Australia and Asia.