Health: Pharmaxis on verge of $14.3m payout after FDA close call on Bronchitol
Health & Biotech
Pharmaxis (ASX:PXS), one of the few ASX health and biotech small caps actively making money from the sale of its drugs, is on the verge of a $14.3 million milestone payment after a positive recommendation to the US Food and Drug Administration.
Pharmaxis sells two products, Bronchitol, an inhaled dry powder to treat cystic fibrosis, and Aridol, a lung function test for asthma. Bronchitol is sold in Australia, Europe and Russia and Aridol is sold in Australia, Europe, the US and Asia.
It is Bronchitol that is behind a 20 per cent rise in Pharmaxis’ shares this morning, to an intraday high of 30c. The company is attempting to get it approved for use in adult patients with cystic fibrosis, and it had good news to report to investors this morning.
The Pulmonary‐Allergy Drugs Advisory Committee (PADAC), which evaluates new products for use in the treatment of pulmonary disease and provides recommendations to the FDA, met for eight hours in the early hours of this morning and a yes vote was carried.
But it was a close call – nine of 16 committee members voted in favour of the question “is the benefit‐risk profile adequate to support approval of DPM (dry powder mannitol) for the proposed indication of the management of cystic fibrosis to improve pulmonary function in patients 18 years of age and older in conjunction with standard therapies?”
Pharmaxis CEO Gary Phillips said the result was “very encouraging” but wouldn’t count his chickens before they hatch.
“We are aware that these recommendations are not binding and Pharmaxis will continue to support Chiesi to work with the FDA to bring Bronchitol to patients in the US. We expect the FDA to make its final decision by mid‐year,” he said.
Chiesi is Pharmaxis’ licensing partner in the US. It is in charge of the regulatory approval and commercialisation of Bronchitol in the US, and, should it be approved, Pharmaxis will receive a US$10 million milestone payment on launch and “mid-to-high-teen” percentage royalties on sales. Pharmaxis will manufacture and be the exclusive supplier of Bronchitol for the US market.
Meanwhile, the company is also developing drugs to treat fatty liver disease and pancreatic cancer. Trials for the two are at the Phase II and Phase I stages respectively.
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