Special Report: FSGS is a multi-billion-dollar market in the US alone, and Dimerix could be the first to capitalise on it.

Half of all children who acquire the heartbreaking disease focal segmental glomerulosclerosis (FSGS) will endure kidney failure within five years, studies show.

And unfortunately for children, there are even fewer symptomatic treatments than for adults for a disease in which scar tissue develops on the parts of the kidneys that filter waste from the blood.

Nina Webster, the CEO of a company that is pioneering a potential treatment, says in addition to adults, children as young as two can contract the condition.

“For approximately 40 per cent of sufferers who are lucky enough to get a kidney transplant, FSGS can transfer to the new organ, and no one knows why. But it means ultimately, they will end on dialysis for life,” she told Stockhead.

“Currently, there is no treatment for FSGS approved anywhere in the world.”

Webster leads Dimerix (ASX:DXB), an Australian biotech which is developing treatments for FSGS, as well as for diabetic kidney disease, chronic obstructive pulmonary disease and acute respiratory distress syndrome associate with COVID-19.

FSGS could be a multi-billion dollar market in the US alone, while diabetic kidney disease is already a $US5.8bn market.

The biotech has developed DMX-200 which has the potential to be the first ever treatment for FSGS, and is a single drug that is given alongside the current standard of care, and thus is known as an adjunct therapy.

The FSGS treatment, the first of the two kidney drugs to come through late stage drug trials, has orphan drug status in both the US and Europe, a detail that hints at how few options sufferers have and the market opportunity for Dimerix.


A premium price

The number of people with FSGS in the US is just over 80,000 and worldwide about 210,000, and the illness has a global compound annual growth rate of 8 per cent, with over 5,400 new cases diagnosed in the US alone each year.

These numbers are not large, which is where the orphan drug status comes in.

Orphan drug status is given for indications which are rare and have no other effective treatments available — too rare for a company to spend the billions of dollars it takes to take a drug from lab to market and still make a profit to continue as a business.

The status provides incentives such as accelerated regulatory approvals, tax breaks and, importantly, premium pricing: the average price of an orphan drug for any condition in the US is $US7,000/month.

At that price, the FSGS market in the US alone could ultimately be worth in the region of $US6.7bn a year.

Dimerix’s nearest competitor is touted to price its proposed FSGS drug, if it gets to market, at around $US150,000 per patient per year if approved ($US12,500 a month).

Webster is often asked what share of that market Dimerix will be able to access, or in other words how many people will be able to afford that price.

“One way to look at it is that in FSGS, diagnosis is by biopsy. If we look at the US, in order to get a biopsy a person is likely to have health insurance to pay for it, which suggests they are also likely to have the type of cover that will pay for treatment as well when it becomes available,” she said.

Dimerix has just finished a positive phase 2a study that even before it finished, the Australian Therapeutic Goods Administration allowed some patients to continue receiving the treatment. A pivotal or phase 3 study, the final step towards marketing approval, is in the works.


Market exclusivity 

Webster says the market may have missed a key feature of DMX-200 which is likely to be more important than anyone appreciates.

The drug is a new chemical entity, or NCE. This factor combined with its orphan drug status would grant it seven years marketing exclusivity for FSGS in the US and 10 years in Europe.

For non-orphan NCEs the exclusivity period is five years in the US and seven years in Europe.

While the drug has granted patent protection until at least 2032, this exclusivity period is a huge advantage.

“This is important because regardless of your patent position you a have guaranteed period where the drug product can’t be challenged. This is often underestimated by the market because many do not fully appreciate yet how critical an exclusivity period is within the current pharma environment,” Webster said.

Patent challenges, or so-called Paragraph IV applications from generics manufacturers, are a flourishing industry in the US.

However, NCE status means patents can’t be challenged for that exclusivity period. The owner of the drug has seven (or 10) years to make their money back before any potential generic challenges begin.


This article was developed in collaboration with Dimerix, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.