Good timing, and flexible funding: Why Dimerix’s $20m share placement is ‘transformational’ for the business, with CEO Nina Webster
Health & Biotech
Health & Biotech
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The placement gives Dimerix a flexible, long-term funding solution as the Phase 3 clinical trial kicks off with first ethics submission.
For biopharmaceutical companies, securing new funding pathways for the development of complex clinical trial processes is often a crucial (and sometimes challenging) step.
Clinical-stage biotech Dimerix (ASX:DXB) achieved just that in August with a marquee $20m share placement backed by key cornerstone investors.
And Stockhead caught up recently with CEO Dr Nina Webster, to discuss the mechanics of the raise and the importance of bringing in extra funding at the current stage of DXB’s development.
The bulk of DXB’s funding round will be allocated towards the Phase 3 FSGS study for its lead drug candidate DMX-200, for patients with the rare kidney disease Focal Segmental Glomerulosclerosis (FSGS).
Webster said the execution of the raise was largely a question of timing, after an extensive development period where it discussed the trial parameters within a global regulatory framework.
The company achieved a key breakthrough in July, when the FDA provided feedback on those trial parameters including study endpoints and statistical analysis to support the potential for accelerated approval in the US market.
That followed equivalent feedback by the European Medicines Agency (EMA) in June, giving Dimerix a strong platform to commence cross-jurisdictional trials with the requisite levels of regulatory consistency.
“I think the expectation in the market was that we’d need to address the funding because of the size of this Phase 3 trial, ” Webster said.
“So it was really a timing question. We wanted to finalise that protocol and make sure we had the right endpoints and patient numbers.”
“In that context, the feedback from regulators were critical. And for us, having aligned advice from the two major regulators is really pleasing.”
With its framework in place, Dimerix was then in position to go to market, and it landed a major $20m funding round, led by a $6m investment from Merchant Funds Management.
Major shareholder Peter Meurs contributed an additional $3.5m. And Webster said the market response confirmed a central focus on the Phase 3 trials as DXB built out its development pathway.
“I had heard that one component was that our share price was possibly being held back because of that funding need. It’s a well-understood risk for biotechnology companies,” she said.
“Once we announced the funding, our share price bumped up a bit and to me that validates the general consensus that we were being held back because of the pathway to funding for Phase 3.”
The study has now commenced with the first ethics submission, and following appropriate approvals, will initiate recruitment for the trial which will be a Phase 3, multi-centre, randomised, double-blinded, placebo-controlled study to test the efficacy and safety of Dimerix’s DMX-200 drug as a proprietary CCR2-inhibitor treatment for FSGS.
As a CCR2-inhibitor, DMX-200 works to inhibit receptors that foster inflammation and fibrosis in the kidney.
The study will centre around the capacity of DMX-200 to further enhance the receptor blocker function when used as a combined therapy with other treatments.
And when considered in relation to the mechanics and structure of the Phase 3 trial, Webster explained why DXB’s funding round is a “transformational” deal for the company.
“The key thing to highlight is that this capital raise funds us to the first interim analysis point (of the trial),” Webster said.
Investors in the placement and subsequent Share Purchase Plan have also been offered options, which they can convert anytime until the announcement of a data result from the interim analysis.
“If converted, those options could fund us to the next data point, which could be the accelerated marketing approval,” Webster said.
“So if you look at it that way, we’ve effectively done a much bigger raise but in two parts, because that structure de-risks it around the interim results.”
As the trial proceeds, Webster said Dimerix is expecting its first interim analysis results towards the end of next year based on the expected rate of recruitment and COVID conditions.
The base expiry date for those options is 2024, but the funding deal was structured with an “accelerated trigger point”, Webster explained.
“If and when we announce a data result, then those options will expire four weeks after that announcement,” she said.
“So from my perspective, this is a really smart way to do the raise because it’s effectively provided approximately $40m of funding, and the company gets $20m now and the rest later once the data is announced,” she said.
With its medium-term funding plans locked in, Dimerix can now focus on its commencement of the Phase 3 trial.
The study will start at five sites across Australia and New Zealand before expanding globally.
Ultimately, that will expand to up to 167 sites in 18 countries across North America, South America, Europe, United Kingdom, and the Asia-Pacific.
Along with its government-funded research in the use of DMX-200 as part of combination therapies in the treatment of COVID-19, DXB investors have plenty to look forward to in the years ahead as the company executes on its comprehensive clinical development strategy.
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.