Is biotech Dimerix the next billion-dollar Opthea?
Health & Biotech
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Special Report: Investors are comparing Dimerix to other highly successful biotechs in the expectation its two phase 2 trials results provide the same surge.
Biotech Dimerix (ASX:DXB) could be following the same trajectory as success stories Opthea, Paradigm Biopharmaceutics, and Antisense which saw their shares surge following positive phase two clinical trial results.
Dimerix shareholders are on tenterhooks waiting for the outcome of two phase 2 trials testing DMX-200, a drug given in addition to the standard of care for two hard-to-treat conditions, by the middle of the year.
Anticipation for those results supported the share price through the March market rout, CEO Nina Webster says.
The release of the third quarter report spurred the Dimerix share price even higher as investors drew parallels with other successful biotechs for a hint as to what could happen to their stake after the results are released.
Both of Dimerix’s studies are ‘unicorns’ in the clinical trial world: they’re on budget and on time.
The two trials are a phase 2 study testing a drug for diabetic kidney disease and a phase 2a study looking at the rare kidney disease focal segmental glomerulosclerosis (FSGS) for which it has been awarded Orphan Drug Status in the US and Europe.
Dimerix’s drug development platform can identify protein receptor combinations which can be used to treat diseases.
Webster says the next cab off the rank from a pipeline of candidates-in-waiting is Chronic Obstructive Pulmonary Disease, or COPD, a progressive and life-threatening lung disease which they’re looking at a treatment dubbed DMX-700.
FSGS and diabetic kidney disease are just the first two and investors are aware the company is not a one-trick pony — it has other drugs to keep the share price ball rolling once its first two studies report.
With results of two phase two studies on the way and other treatments to call on, Dimerix investors are hopeful the stock will mimic those of other biotechs which have released positive data over the last 18 months.
Opthea (ASX:OPT) suddenly became a billion-dollar company in August last year after it reported a successful phase 2 study into wet age-related macular degeneration (AMD), a condition for which there are few good treatments.
It had been working for years to deliver that result, but investors only took notice a couple of days before the results were due.
The stock surged 377 per cent in August to a high of $4.15.
The other possibility is the slow burn at Paradigm (ASX:PAR), which announced several good trial outcomes before the stock moved sharply.
Paradigm said in late 2018 that its phase 2b trial on osteoarthritis of the knee met key primary endpoints, hit its secondary endpoints in April 2019, and it had a successful phase 2 study into a treatment for Ross River Virus in June that year.
Investors finally took notice in August when it launched an initial new drug application in the US for early-onset Osteoarthritis — featuring ex-NFL players.
The stock finally took off by 223 per cent to peak at $4.50, but it had started its slow-burn climb in mid-2018 before the first results were released.
Quiet achiever Antisense (ASX:ANP), a biotech trying to treat the rare condition Duchenne Muscular Dystrophy (DMD) which affects little boys, saw its shares bumped up 180 per cent in September last year following good results.
The company said preliminary data, from the six patients who completed 24 weeks of dosing in a phase two clinical trial, showed the drug worked.
The risk of clinical trials failing is always high, but unlike Opthea, Paradigm and Antisense, Dimerix’s share price isn’t popping just in anticipation of good results.
Investors are buoyed by one last detail: doctors in Australia who participated in both trials are asking if their patients can stay on the drug after the study finishes because they are seeing a benefit for their patients.
Dimerix said in March that the doctors had approval from the health regulator for patients in both the FSGS and diabetic kidney disease trials to remain on DMX-200 if they choose.
The TGA approved the Special Access Scheme Category B applications based on the safety profile of DMX-200, as well as clinical evidence that DMX-200 may benefit patients.