Pharmaxis Ltd (ASX:PXS) has boosted its cash balance after receiving a US$7 million (~A$9.2 million) milestone payment from US licensee Chiesi Farmaceutici S.p.A. and is well-funded to progress the development of innovative medicines with high patient need.
This payment follows the recent approval by the US Food Drug Administration of Bronchitol® (mannitol) for the treatment of adult cystic fibrosis patients in the US.
Shares have been as much as 14% higher to an intra-day high of 9.9 cents
Further US$3 million in Q1
A further US$3 million is payable by Chiesi on shipment by Pharmaxis of commercial launch stock, and this is scheduled for the first quarter of 2021.
The milestone payment from Chiesi follows an R&D tax incentive of A$5 million in October and with cash funds of $A10 million as of September 30, 2020, the company has a strong balance sheet to support its clinical work as it heads into the New Year.
“Transformational” approval
US FDA approval for Bronchitol® cystic fibrosis treatment has been labelled by chief executive officer Gary Phillips as being “transformational” for Pharmaxis.
He said: “The FDA still remains the gold standard by which all biotechs judge their success and the eventual quality of their programs and I’m pleased to say that Bronchitol is our second approval with the FDA.
“The approval brings US$10 million of cash milestones into the company.
“We have a long-term agreement with an international partner Chiesi in the US who expect sales to commence in the first half of next year.
New cancer drug with unique mechanism
The company is quickly moving to clinical development of its drug candidate PXS-5505 which has demonstrated a unique mechanism of action that has the potential for disease modification of the rare bone marrow cancer myelofibrosis.
It is a pan-LOX inhibitor that seeks to reverse the bone marrow fibrosis that drives morbidity and mortality in the disease.
PXS-5505 was patented in 2018, and the company has moved swiftly through the early development stages due to its potential.
Phase 2 study
Phillips said: “We’ve completed the long-term safety and toxicity studies, we’ve already completed a phase one study in healthy volunteers, we’ve demonstrated the product is safe, and importantly, we’ve already been to the FDA.
“The FDA granted the drug orphan status in July and after submitting all our data to date to secure IND approval – the FDA gave us permission to go out and start a phase two study in patients.
“We aim to start in quarter one of 2021, progressing an open label study recruiting up to 42 patients with myelofibrosis in Australia and international sites.”