PharmAust is set to benefit from Epichem’s debt repayment with an expected improvement to the bottom line, as it begins to leverage the state-of-the-art laboratories in Technology Park, WA.

Clinical stage biotech company, PharmAust (ASX:PAA), announced that its wholly-owned subsidiary Epichem is ready to accelerate growth after fully paying off its debt liability.

Perth-based Epichem today paid the debt on time, after using the funds for a major laboratory expansion in Technology Park, WA.

The company had initially sought an export loan from Export Finance Australia (EFA) in 2015, with assistance from parent company, PharmAust.

The $750k loan was used to build a state-of-the-art laboratory on new premises, and was paid back to the EFA in 2019 when the first stage of the lab was completed.

Epichem subsequently built a second laboratory at the Technology Park site to keep up with customer demand, and had borrowed another $460k from the EFA, again with assistance from PharmAust.

The labs have world class equipment and expertise in synthetic and medicinal chemistry to support Epichem’s drug discovery projects, and for the cost-effective synthesis of its drug analogue libraries and intermediates.

These new labs have also provided jobs for an additional 20 employees, making Epichem one of Australia’s top employers of PhD educated individuals in the medical science and technology SME sector.

The loan repayment also means that Epichem will save on interest and principal, and this will be reflected in an improvement to its bottom line margins going forward.

“It is a major accomplishment for the company,” says PharmAust chairman, Dr Roger Aston.

“Epichem’s global competitiveness has been boosted with the investment in cutting-edge laboratories, growth in workforce and the recently acquired OHD technology.”

“With the EFA loan repaid and positive revenue trajectory, we look forward to further growth at Epichem,” Aston added.

Chemists at Epichem’s state-of-the-art laboratory in Technology Park, WA

Epichem’s capabilities

Epichem has been delivering products in synthetic and medicinal chemistry to the global drug discovery and pharmaceutical industries in over 40 countries worldwide for 17 years.

The company has expanded its chemistry expertise to now include material science applications to the Energy, Resources, Waste, Recycling and AgTech sectors.

Earlier this month, the company announced a critical milestone in its efforts to develop and promote a disruptive waste-to-fuels technology.

Epichem said it has completed building the flow reactor using the  benchtop Oxidative Hydrothermal Dissolution (OHD) technology.

The flow reactor is a world-first, with the potential to turn a wide range of waste and biomass feedstock into valuable energy products, and is located at the state of the art laboratory at Technology Park.

PharmAust says that potential revenue streams from this technology could come from the removal of organic waste, its conversion to valuable end user products, as well as reduction of landfill.

Data shows that bioplastics will grow into a $28 billion market in five years time, while the bio-ethanol market is expected to double to $65 billion in five years time.

PharmAust’s clinical trials

Apart from Epichem, PharmAust itself has had a productive quarter in its efforts to commercialise lead drug, monepantel (MPL).

In June, the company had successfully treated 15 pet dogs in its Phase IIb studies of MPL to treat canines with B-cell lymphoma. MPL has demonstrated sufficient anti-cancer activity to continue the development into Phase III.

PharmAust is now contacting leading global animal healthcare companies to seek partners to co-develop and commercialise MPL for treatment of veterinary cancers.

The company is currently preparing for several other clinical trials, which include a Phase II Human Cancer Trial to study MPL in diseases such as pancreatic cancer or oesophageal cancer.

PharmAust has also been engaging with clinicians in the US, as well as Eastern and Caucasus countries and The Balkans about a Phase I trial in human patients to treat COVID-19.

In another trial, a Phase I/II clinical trial on MPL for human patients with motor neurone diseases (MND) is set to commence in Q1 2022, following $900k in funding from AFL-linked charity, FightMND (yet to be received).

This article was developed in collaboration with PharmAust, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.