After making a $5.9 million profit for the 2018 financial half-year, drug developer Pharmaxis’ bottom line has fallen by 312 per cent.

For the 2019 half-year, Pharmaxis (ASX:PXS) posted a $12.6 million loss.

That seems extreme, and extremely bad — but it’s not quite so dire.

The reason for the gap is that Pharmaxis received a significant payment from German pharmaceutical giant Boehringer Ingelheim during the 2018 financial year.

In 2015, BI bought the rights to develop Pharmaxis’ fatty liver drug PXS-4728A and renamed it BI 1467335. When certain trial conditions were fulfilled, Pharmaxis received $42 million in milestone payments.

So Pharmaxis made $31.3 million in total revenue for the 2018 half-year, but with no milestone payments trickling in for the current half-year, that dropped to just $3 million in revenue and was the reason for the hefty overall half-year loss.

Shareholders were aware, and the company’s shares fell just 2 per cent on the news, to 26c.

Pharmaxis (ASX:PXS) shares over the past year.

Pharmaxis told investors back in November that “several large pharma companies” were interested in the company’s Lysyl Oxidase Like 2 (LOXL2) inhibitor compounds.

It is developing two LOXL2 inhibitor compounds to treat conditions such as non-alcoholic steatohepatitis (NASH, or fatty liver) and idiopathic pulmonary fibrosis (IPF, or a type chronic lung disease).

It also has two drugs currently on the market; Bronchitol, an inhaled dry powder for the treatment of cystic fibrosis, and Aridol, a lung function test for asthma.

Stockhead has contacted Pharmaxis for comment.