Part 1: ASX biotechs with catalysts looking to pop in 2024
Health & Biotech
Health & Biotech
2023 has been significant for the ASX health and biotech sector with several companies achieving key catalysts but 2024 is shaping up to to be another big year.
Morgans healthcare and life sciences expert Scott Power says macroeconomic and geopolitical tensions continued to impact the sector in 2023.
The S&P ASX 200 healthcare index (ASX:XHJ) has recently just entered green territory YTD, up 0.56%, while the benchmark S&P ASX 200 (ASX:XJO) is up ~6.08%.
The sector is showing signs of rejuvenation leading into the new year as optimism grows that global inflation may be subsiding and central banks are closer to considering pausing or lowering rates.
Consequently, investors may rotate out of value and back into growth stocks like biotech. The XHJ is up ~9% in the past month.
“There are plenty of catalysts coming and I think that is what investors are starting to be interested in, particularly if the market is starting to move,” Power says.
“It’s the companies which have a spicy catalyst which investors are going to focus in on in 2024.”
In biotech there are the big catalysts such as regulatory approval for a drug or device, partnerships and positive trial results but Power says investors should think more broadly.
Market darling of 2023 Neuren Pharmaceuticals (ASX:NEU) was a good example of a biotech achieving big key catalysts.
The company announced US FDA approval for its drug trofinetide (now called DAYBUE) to treat Rett syndrome in March and earlier this month announcing a positive readout from its Phase 2 clinical trial of NNZ-2591 in Phelan-McDermid syndrome (PMS).
“What we are looking for are things that are going to move share prices,” Power says.
“Definitely approvals and positive clinical trial results will move prices but so can reports and/or outlook commentary showing strong growth.”
Here’s part 1 of our series on the ASX biotechs we’ve noticed with upcoming catalysts in 2024.
Petra Capital healthcare analyst Tanushree Jain told Stockhead while 2023 was a big year for NEU, the catalysts are due to keep on coming for the biotech in 2024.
“2023 was a transformational year for Neuren, with its first drug Daybue for Rett approved by the FDA and in its first two quarters of sales beating all expectations,” she says.
Jain says partner Acadia has provided sales guidance for Q4 CY23 which was also ahead of expectations.
“It was also a year where NEU strengthened its balance sheet through milestones and royalties from Acadia on Daybue’s US launch and a US$100 million upfront on expanding Acadia’s licence to Daybue globally,” she says.
“The company got into ASX-200 enhancing liquidity and investor base and ended the year with the proof of concept results for NNZ-2591 once again surpassing expectations and de-risking the asset, which could far surpass NEU’s Daybue in commercial opportunity.”
Jain says 2024 will be an even more important year for NEU with Daybue sales and milestones from US market continuing to strengthen NEU’s balance sheet, with the spotlight on NNZ-2591.
“We expect two more Phase 2 trials to read out for NNZ-2591 by mid-CY24 (Pitt Hopkins and Angelman) and NEU will progress NNZ-2591 into a Phase 3 registrational trial for Phelan-McDermid syndrome either by itself or through a partner.
“We also expect partnering and/or M&A interest to be high for NEU in 2024 with NNZ-2591 likely the driver of such interest following its Phase 2 success and progression to Phase 3.”
The countdown is on for DXB’s first analysis outcome for its Phase 3 trial of lead product DMX-200 for treatment of rare kidney disease focal segmental glomerulosclerosis (FSGS), forecast on or around March 15, 2024.
Titled Angiotensin II Type 1 Receptor (AT1R) & Chemokine Receptor 2 (CCR2) Targets for Inflammatory Nephrosis, or ACTION3 for short the Phase 3 trial is a multi-centre, randomised, double-blind, placebo-controlled study.
It is evaluating efficacy and safety of DMX-200 in patients with FSGS who are receiving a stable dose of an angiotensin II receptor blocker (ARB).
The Phase 3 trial has two interim analysis points built in that are designed to capture evidence of proteinuria and kidney function (eGFR slope) during the trial, aimed at generating sufficient evidence to support marketing approval.
DXB has inked an exclusive licence agreement with multinational pharmaceutical company Advanz Pharma covering the European Economic Area, UK, Switzerland, Canada, Australia, and New Zealand for commercialisation of DMX-200 for the treatment of FSGS following regulatory approval.
It has received an initial upfront payment of €6.5 million ($10.7m) from Advanz Pharma and remains eligible for potential development and sales milestones of up to €132m ($219m), plus tiered, escalating, mid-teen to 20 percentage royalties on net sales.
The brand name for DMX-200 of QYTOVRA has been approved for DMX-200 by the United States Food and Drug Administration (FDA), and may be used as the brand name in some regions.
The clinical-stage biopharmaceutical development company focused predominately on paediatric neurological disorders, where there is persistent neuroinflammation, has several catalysts coming up in 2024.
NTI recently announced it had completed recruitment in its Phase 2/3 NTIASD2 clinical trial for children with autism spectrum disorder (ASD) in Q1 CY24.
The trial covers treatment of NTI’s proprietary lead drug formulation NTI164, derived from a unique cannabis strain with low THC and a novel combination of cannabinoids, including CBDA, CBC, CBDP, CBDB and CBN.
The company expects results from the trial in Q1 CY24.
In addition NTI is also following in the footsteps of NEU and is anticipating to report clinical data in Q1 CY2024 of its Phase 1/2 Rett Syndrome trial in paediatric female patients.
NTI is also looking to launch a Phase 1/2 trial in paediatric patients with cerebral palsy in H1 CY24 with results expected in H2 CY24.
Executive director Dr Thomas Duthy says 2024 will be a significant year of trial delivery for the company, which also intends to map a pathway with the Therapeutic Goods Administration (TGA) regarding the potential registration of NTI164.
He says like NEU, NTI is focused on rare paediatric neurological disorders.
“There’s a dire market need and being a much smaller version of Neuren we’re seeking the same kind of strategic pathway which has been so successful for them, albeit with a different drug and certain diseases which differ.”
Power says focus will be on ANP in 2024 with the primary endpoint readout of its Phase 2b trial of its lead program ATL1102, an antisense oligonucleotide treatment for Duchenne muscular dystrophy (DMD), due mid year.
ANP is currently undertaking the international double-blind, placebo-controlled Phase 2b trial following positive clinical data from a prior single-arm Phase 2a study.
All four participating countries are open for recruitment, with 10 patients already receiving study medication and more patients in screening.
The Data Safety Monitoring Board (DSMB) hasn’t identified any safety concerns so far and will continue to monitor safety throughout the study. No patients have dropped out of the study, and feedback from investigators is positive.
The last patient in (LPI) guidance has been revised to the first quarter of 2024, with minimal impact on funding and reporting timelines.
“Looking ahead, ANP is heading into a big 12 months with plenty of catalysts to keep the market on edge,” Power says.
He says the market can expect newsflow around DMD recruitment milestones in Q1 CY24 along with topline readout expected mid-year.
At Stockhead we tell it like it is. While Dimerix and Neurotech International are Stockhead advertisers, they did not sponsor this article.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.