Several ASX companies have upcoming catalysts. Pic: Getty Images
Health & Biotech
In equity markets a catalyst refers to a predefined event with an uncertain outcome that can significantly influence a company’s stock price, either positively or negatively. It is often referred to as a known unknown.
In mining it can be the result of a drilling program and for biotech companies, the primary catalysts are the outcomes of clinical trials, which are costly and can extend over several years.
The results of a clinical trial can have substantial consequences for a company’s ability to obtain regulatory approval for its drug or technology.
READ Clinical Trials 101: How to know your placebos from blinded studies
Morgans healthcare analyst Iain Wilkie says it has been a tough year for the ASX biotech sector.
“It’s like the haves and have nots, so companies with good news flow and cash with no curve balls in the next six to 12 months are doing a lot better,” he says.
“Some of the rats and mice are on their knees at the moment so I think it’s two speed.
“The focus is on companies with real upside potential with clear catalysts and good management.”
Here are some of the ASX biotech companies with upcoming catalysts worth a mention.
NEU has become the market darling of the biotech sector for 2023 after large pharma partner Acadia (NASDAQ:ACAD) announced in March that the US Food and Drug Administration (FDA) had approved trofinetide, for the treatment of Rett syndrome.
Now dubbed DAYBUE, trofinetide is the first approved treatment for Rett syndrome with its official launch in the US by Acadia in April with its share price sending the stock soaring.
NEU’s was elevated to the S&P ASX 200 in the recent September re-balancing after rising more than 37% YTD.
However, the catalysts for the drug developer are not over yet. NEU is forecast to release topline results of its Phase 2 clinical trial of NNZ-2591 in Phelan-McDermid syndrome (PMS) in December.
Apart from PMS, NEU ’s Phase-2 trials on NNZ-2591 are focusing on three other serious neurological disorders that emerge in early childhood, including Angelman, Prader-Willi Syndrome (PWS) and Pitt Hopkins syndromes.
All four programs have been granted Orphan Drug designation by the FDA, which grants tax credits for qualified clinical trials, exemptions from user fees and a potential seven years of market exclusivity after approval.
“I’ve been saying for a long time it’s worth a lot more to us than trofinetide,” CEO Jon Pilcher told Stockhead when tronfinetide was approved.
“They are both involved in the biology of IGF-1 in the brain, which is growth factor critical for normal brain development and maintenance.
“The number of patients we are looking to target with NNZ-2591 is five times the patients of Retts syndrome.”
NTI is expecting results of its Phase I/II PANDAS/PANS clinical trial later this month.
“This is a world-first clinical trial examining the safety and therapeutic potential of NTI164, a broad spectrum cannabinoid drug treatment for children with PANDAS/PANS, a sudden onset neurological disorder with excessive neuroinflammation with catastrophic impacts for patients and their families where there are no approved treatments available,” executive director Dr Thomas Duthy told Stockhead.
In addition NTI is also following in the footsteps of NEU and is anticipating to report clinical data in Q1 CY2024 of its Phase I/II Rett Syndrome trial in paediatric female patients.
“There is a need for safer and more effective therapies that target the persistent neuroinflammation associated with this rare neurological disorder,” Duthy says.
“Recent corporate activity in the Rett Syndrome therapeutic space highlights to us the significant opportunity ahead for the company in developing NTI164 for this patient population, with a safe and efficacious intervention that improves clinical outcomes.”
On top of that, NTI have the Phase II/III randomised, double-blind, placebo-controlled clinical trial in 54 autism spectrum disorder patients with NTI164, which it also expects to report data within the next six months.
“We have previously demonstrated over 52 weeks of daily oral treatment in 11 autism patients, that NTI164 significantly improves their function across a range of gold-standard clinical measurements, with no serious adverse events recorded over that same time,” he says.
“We remain excited by the potential of NTI164 to confirm these earlier findings in a larger (and blinded) Phase II/III clinical trial.
“With the significant costs autism is having on the NDIS, coupled with the lack of approved therapies that better enable patients to integrate into society, it stands to reason NTI164 holds great promise as a front line therapy for these patients, if approved.”
Wilkie says all eyes will be on ANP in 2024 with the primary endpoint readout of its Phase2b trial of its lead program ATL1102, an antisense oligonucleotide treatment for Duchenne muscular dystrophy (DMD), due mid year.
ANP is currently undertaking the international double-blind, placebo-controlled Phase 2b trial following positive clinical data from a prior single-arm Phase 2a study.
“Up until then we will have milestones like full recruitment and so on but that will be the hero or zero type result,” Wilkie says.
He says ATL1102 is a late-stage asset with substantial commercial opportunity with ~300,000 DMD patients worldwide.
Existing therapies are priced up to US$300k per treatment year with a total market estimated at ~US$4 billion per annum forecast to rise to ~US$10 billion by 2030.
ANP says ATL1102 is potentially applicable to almost all DMD patients, not just those with specific genetic mutations (mutation agnostic), with the drug showing potential applications for treatment in other disease areas.
Last patient data collection for DXB’s Phase 3 into a rare kidney disease is scheduled for February 2024 with first interim data outcome expected to be reported around a month later in March.
DXB’s Phase 3 trial is titled Angiotensin II Type 1 Receptor (AT1R) & Chemokine Receptor 2 (CCR2) Targets for Inflammatory Nephrosis – or ACTION3 for short.
ACTION3 is a pivotal multi-centre, randomised, double-blind, placebo-controlled trial of the efficacy and safety of DMX-200 in patients with Focal Segmental Glomerulosclerosis (FSGS) who are receiving a stable dose of an angiotensin II receptor blocker (ARB).
Once the ARB dose is stable, patients aged 18 to 80 years are randomised to receive either DMX-200 (120mg capsule twice daily) or placebo.
The global trial is broadening to 12 to 80 years following the first successful interim analysis, after the US confirmed inclusion of paediatric adolescent patients aged 12 to 17 was appropriate and recognised its appropriate safety profile.
A successful outcome in the first interim analysis outcome would see DXB announce a clinically significant and statistically meaningful improvement in proteinuria in patients on DMX-200 versus placebo and that the trial is continuing to Part 2.
The predictive diagnostics and bio-analytical services company remains in halt for an update on the Australian regulatory pathway and reimbursement payment rate in the US for its Promarker D predictive test for diabetic kidney disease.
Wilkie says the payment rate is set by the American Medical Association (AMA) pricing review and is what labs can charge patients.
“PIQ have their Promarker D test and the AMA essentially look at prices of comparable on-market tests to peg against (crosswalk) or chose a different price (gapfill),” Wilkie says.
“They can go to insurers then and say here’s the AMA price for which they can base their price.”
PIQ has previously set expectations at US$150 per test.
Earlier this year PIQ inked an exclusive licence agreement with Sonic Healthcare USA, a division of Sonic Healthcare (ASX:SHL).
The agreement is for the use and commercialisation of PIQ’s PromarkerD predictive test for diabetic kidney disease in the US.
“It’s a big catalyst and investors now have a much better read through on what PIQ, or in this case Sonic Healthcare because they’re the partner, will be able to charge,” he says.
An estimated 32 million adults or 11% of the American population live with diabetes. PIQ said testing these patients with PromarkerD could help identify their risk of developing diabetic kidney disease.
Wilkie says another company with a key catalyst is Brisbane-based medical software technology company IPD, which is targeting to give 50% of the insured population in the US access to reimbursement coverage for its bioimpedance spectroscopy (BIS) SOZO testing for lymphoedema by December 2023 and 100% by June 2024.
The goal comes after the US National Comprehensive Cancer Network (NCCN) included BIS as part of its new guidelines announced in March this year.
“They’ve got some very good momentum going on at the moment,” Wilkie says.
“Most private payors are expected to have updated their medical policy by June 2024.
“This is a key revenue driver and we forecast a break-even position in FY25.”
IPD has a bit of a board stoush going on at the moment over the recent capital raising and perceived risk to shareholder wealth, which it is hoped will be resolved at a general meeting on September 28.
In August IPD announced in accordance with ASX listing rules it had received notice from shareholders holding at least 5% of the votes that directors hold a general meeting of the company to remove four of the existing directors and replace them.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
At Stockhead, we tell it like it is. While Dimerix and Neurotech International are Stockhead advertisers they did not sponsor this article.
Disclosure: The author held shares in Sonic Healthcare at the time of writing this article.
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