Health: Botanix shares fall 50% after failed clinical trial

Botanix Pharmaceuticals’ (ASX:BOT) shares have halved after its anti-acne drug failed its clinical trial.

If you read most of the company’s announcement and you’d would have thought the 368 patient trial was a success. Its drug, BTX 1503, was safe and it met its secondary end points.

But…it did not meet its primary end point, an absolute change. The drug achieved 40 per cent efficacy, but this is no better than the existing treatments. One leading treatment, Allergan’s Epiduo has a reduction of 42 per cent.

To be commercialised, drugs have to be better, not just the same and while other biotechs such as Opthea (ASX:OPT) and Orthocell (ASX:OCC) have surged as a consequence of success, Botanix went the other way.

It fell by over 50 per cent this morning.

But Botanix is remaining positive in the face of adversity. It noted the US sites in the trial were affected by supply chain restrictions and inexperience. It noted the Australian results were overall positive.

Botanix president Vince Ippolito said they were “pleased with the overall efficacy outcomes, clean safety profile and highly significant Australian data”.

The company wants to go ahead with a Phase 3 trial and is well-capitalised to do so. It has $40 million in the bank and anticipates receiving $7 million in research and development incentives.

But first it has to meet with the US Food and Drug Administration and is currently planning a meeting.

The company is also developing a skin cream that attacks bacteria but human clinical trials are only in the planning phase.

In other ASX small cap health news today:

Medical Developments International (ASX:MVP) has launched its anti-trauma drug Penthrox in Italy. This follows a local 272 patient study which showed Penthrox’s superiority and will trigger a $US2 million milestone payment from its local partner Mundipharma.

Elixinol (ASX:EXL) found that its Japanese subsidiary had not been meeting local cannabis requirements. In Japan CBD can only be sourced from hemp stalk and seed but this was not the case with products recently sold. The company told shareholders it is assessing this business’ viability, although it has other markets should it wish to pull out.

Imugene (ASX:IMU) has received a US Department of Defence grant to test its drug against gastric (Stomach) cancer. US military members and veterans are disproportionately affected by this disease. Pre-clinical data has shown it works in mice but humans are a different kettle of fish. Shares have risen 10 per cent this morning.