Bio Curious: How Dimerix negotiates the 'valleys of death' on the winding road to drug approval

Dimerix chief Dr Nina Webster describes the three stages of drug development and the hurdles involved
Dimerix is in phase III trials to treat a rare kidney condition
Following promising interim analysis, further results are expected in mid-2025

Introducing Bio Curious – renowned healthcare and biotech journalist Tim Boreham’s weekly deep dive into the frequently complex, terrific scientific world of medtech innovation on the ASX.

The CEO of kidney drug play Dimerix (ASX:DXB) describes three “valleys of death” that drug developers need to traverse to get an approved product to market.

The first, says Dr Nina Webster, is proving that the underlying science actually works, with this stage typically funded by government bodies or seed capital.

The next crevasse – and the steepest one – is scaling up from an idea to a commercial proposition supported by late-stage human trials.

Few biotechs reach the rickety bridge over the third valley, which is all about validating the results to gain regulatory approval to sell the drug – and getting adequate funding to do so.

Webster says a common problem with early biotech plays is that management teams tend to be scientifically oriented and not well versed in the commercial nuances of drug manufacturing and approval processes.

“Each stage needs a different team, so the one at the beginning won’t be the one at the end,” she says.

While 90% of developers fall away at the third valley, Dimerix is navigating this chasm with a phase III trial to treat the rare kidney ailment focal segmental glomerular sclerosis (FSGS).

Dimerix hopes – and expects – the 286-patient trial will support regulatory approval of its compound, dubbed DMX-200, in the key geographies of US, Europe and perhaps China.

Management’s optimism appears justified, given that in March this year the company reported an interim analysis of 74 patients showing DMX-200 worked better than placebo.

Results of a second interim analysis are expected in mid-2025.

Affecting about 200,000 people globally but fast growing as the population ages, FSGS causes scarring to some sections of the kidney filtering units, resulting in the spuds ultimately failing.

Trial success will be measured partly by the level of proteinuria (excessive protein) which seeps into urine from blood, something that does not occur with healthy organs.

Solid funding never hurts

So far DMX-200 has been 12 years in development, with tens and millions of dollars expended.

But many millions more will be required at the pointy end – and that’s where a decent partnership with a deep-pocketed party comes into the equation.

In early October last year Dimerix shares soared after the company struck a deal with Advanz Pharma, covering Europe, Canada, the UK, Switzerland, Australia and New Zealand.

In late May this year Dimerix signed up Taiba for the Middle Eastern distribution.

Collectively the agreements offer up to $340 million of potential milestone payments – $11.5 million up front – plus tiered royalties.

Of course, there are two humungous gaps in this partner coverage: the US and China, which account for 70% of the potential global value of the drug.

Partner talks are progressing.

Webster says recent deals struck tend to be for larger amounts and at a later stage.

“Very few ASX life science companies have done a ‘true’ licensing deal, as opposed to giving their program way for next to nothing,” she says.

“There needs to be something meaningful upfront for them to get drug marketing study exclusivity. Generally speaking, the milestone payments should cover the costs of the study.”

Webster says partnering deals can take two years to come to fruition, with the Advanz deal taking 16 months.

Given the Taiba compact only took seven months to sign, investors might not have to wait too long for the company to fill the remaining distribution gaps.

In good company

Dimerix is among an elite cohort of ASX-listed drug developers in phase III trials aimed at marketing approval.

Others include Opthea (ASX:OPT) (for the eye disease wet AMD), Paradigm Biopharmaceuticals (ASX:PAR) (knee osteoarthritis) and Immutep (ASX:IMM) (immune-oncology).

These companies hope to emulate the success of Neuren Pharmaceuticals (ASX:NEU), which partnered to get its drug for a rare childhood neurological disorder to market in the US. Once a minnow, Neuren is now worth close to $2 billion.

Given an advanced clinical trial can take years and requires more equity along the way, developers need to work hard to maintain investor interest to support their share price.

Given Dimerix shares have risen more than five-fold since the Advanz deal, that’s one ‘valley of death’ the company need not fret about.

At Stockhead, we tell it like it is. While Dimerix is a Stockhead advertiser, it did not sponsor this article.