Health Check: Paradigm makes scenic acquisitive detour, but it’s no strategic shift

• Paradigm Biopharmaceuticals will spend up to $16.5 million on an oral drug asset, but stays focused on its phase III knee trial
• Percheron enters headline $450 million cancer drug acquisition
• Neurizon goes from solid to liquid with its motor neurone disease drug candidate

Paradigm Biopharmaceuticals (ASX:PAR) is taking the acquisitive scenic route in its quest to develop an effective knee osteoarthritis treatment, but says it remains focused on its phase III knee trial.

In a heavily back-ended deal, Paradigm will pay as much as $16.5 million to purchase Proteobioactives Pty Ltd.

This company owns an early-stage oral candidate for minor to mild osteoarthritis (OA), called Pentacoxib.

The proposed drug combines pentosan polysulfate sodium (PPS) – Paradigm’s core asset – with a COX-2 inhibitor (Coxib).

The idea is to improve drug ‘bioavailability’: a shortcoming of many oral drugs.

The deal expands Paradigm’s remit into the OA-related pain market, such as hand OA, mild knee OA and the veterinary market (dogs and horses).

Proof of concept data shows meaningful pain reduction in patients with hand and knee OA.

‘Strategic alignment’

Paradigm touts Pentacoxib as an alternative to existing nonsteroidal  anti-inflammatory  drugs  (NSAIDs), which are “not known to improve structures of the arthritic joint”.

Paradigm dubs the purchase as a “strategic alignment” with its core program, which is about developing its repurposed PPS (Zilosul) for moderate to severe knee OA.

The acquired asset moves the company down the OA “severity spectrum” and maintains Paradigm’s focus on a non-opioid alternative.

Proteobioactives was founded by Professor Peter Ghosh, who pioneered PPS research.

The deal gives Paradigm exclusive global rights to develop and commercialise the PPS-Coxib combo for pain and inflammation.

The  acquisition enables “potential expansion into earlier-stage disease segments where large unmet needs remain.”

Now to the financial nitty gritty:

The deal involves an upfront $500,000 in cash and a $1 million milestone payment on completion of a phase II trial.

Paradigm pays a further $5 million on “successful completion” of a phase III trial.

A further $5 million is paid on US Food & Drug Administration approval.

There’s more!

Another $5 million is due on the sale of an FDA registered product, “as evidenced by the submission of a sales invoice, proof of delivery, or other  relevant documentation”.

Keep your receipts guys!

The deal is modest bet for Paradigm relative to its long-awaited phase III knee OA. The study in underway across up to 15 Australian and 50 US sites.

Percheron finds a new purpose

Having scoured for a new asset following the failure of its flagship clinical program, Percheron Therapeutics (ASX:PER) has settled on a Singapore-based cancer drug candidate.

This is by way of an exclusive license agreement with Hummingbird Bioscience, for a monoclonal antibody therapy with potential applications in several cancers.

Percheron hopes to start a clinical trial of the candidate, dubbed HMBD-002, next year.

Percheron will pay Hummingbird an upfront US$ 3 million ($4.6 million), with contingent milestone payments of up to US$287 million ($443 million), plus royalties to boot.

Naturally, the big bucks are later in the piece.

Taking in the VISTA

HMBD-002 targets a bodily agent called VISTA, as in “v-domain immunoglobulin suppressor of T-cell activation”.

But we knew that already.

A novel target, “VISTA potentially represents a new mechanism to treat a diverse range of tumours.”

HMBD-002 has passed a phase I trial in the US, which showed the agent to be  “pharmacologically active” and generally safe and well-tolerated.

“After the challenges of recent months, we are once again a mid-clinical stage drug development business,” says Percheron CEO Dr James Garner.

The “challenges” refer to two board spills – both unsuccessful – after the company’s Duchenne muscular dystrophy trial proved an unmitigated flop.

Percheron shares this morning rebounded as much as 30%, or one-third of a cent.

Neurizon eyes easier drug delivery

While Paradigm goes from liquid to solid, Neurizon Therapeutics (ASX:NUZ) is moving the other way with its drug candidate to treat amyotrophic lateral sclerosis  (ALS, a form of motor neurone disease).

The liquid formulation of Neurizon’s candidate NUZ-001 is designed to support patients with all stages of ALS, “particularly those with swallowing difficulties such as bulbar onset”.

The first manifestation of ALS, bulbar onset can lead to difficulties with speech (dysarthria), swallowing (dysphagia), and sometimes breathing.

Neurizon will integrate the liquid form into its ongoing NUZ-001 program, starting with a human bioequivalence study in the first half of 2026.

The company says the formulation resulted from direct feedback from patients and carers.

“As ALS progresses, patients face increasing challenges with day-to-day activities, including something as fundamental as swallowing,” Neurizon chief Dr Michael Thurn says.

Rainforest foraging leads to cancer drug hope 

The private, eternal IPO candidate Qbiotics has reported “highly encouraging” results from a phase II study of its cancer therapy sourced from the Daintree rainforest.

The trial targets soft tissue sarcoma, a rare cancer that generally forms as a painless lump (tumour) in any one of the soft tissues in the body.

Qbiotics’ candidate, tigilanol tiglate activates a certain protein to stimulate the immune system and destroy tumours.

In stage one of the trial,  ten evaluable patients achieved an objective response rate of 80%, “based on the best observed response”.

In other words, eight out of ten evaluable patients saw either complete ablation or partial ablation (more than 30% reduction in volume) of treated tumours.

Also, 22 of the 27 injected tumours across all patients showed complete or partial ablation (14 showing complete ablation).

None of the 14 completely ablated tumours recurred at 6 months, “indicating tigilanol tiglate may provide durable responses”.

“Given soft tissue sarcoma is a challenging cancer to treat, achieving this level of clinical activity is highly encouraging,” Qbiotics chief Stephen Doyle says.

Now moving to expanded stage two, the trial is being carried out at New York’s Memorial Sloan Kettering Cancer Center.

Eureka! moment

Qbiotics founder Dr Gordon and her forest ecologist husband Dr Paul Reddell stumbled on the therapeutic benefits of tigilanol tiglate while fossicking in rainforest in the Atherton Tablelands of Far North Queensland.

They observed that animals spat out the seed of the blushwood tree, pointing to a nontoxic deterrent preventing the critters from eating and thus destroying the seed.

The moral of the tale: don’t chop down rainforests as they make for a great drug store.