Fatty liver drug maker Pharmaxis says “several large pharma companies are interested” in the company’s “LOXL2” inhibitor compounds, following another round of clinical testing that showed the treatment was safe.

Pharmaxis (ASX:PXS) is developing two Lysyl Oxidase Like 2 (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).

In October Pharmaxis announced the first compound had passed early safety trials. Today it told investors a second compound had also passed with flying colours.

The shares bounced 8 per cent in early Thursday trade to 28c.

Pharmaxis chief Gary Phillips said some big names in pharmaceutical land were lining up to get a piece of the action.

“Several large pharma companies are interested in the Pharmaxis program where both of our LOXL2 inhibitors have now successfully completed phase 1 studies and demonstrated a best in class profile with 24‐hour inhibition of the target enzyme from a single daily dose,” he said.

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

“In a further significant scientific advancement we have also managed to underline the relevance of the program to potential partners by using our proprietary research tools to confirm that our compounds directly inhibit the activity of the raised levels of LOXL2 seen in diseased tissue from NASH and IPF animal models.

“The only remaining elements necessary to finalise the data package that companies are now conducting diligence on, are the 3‐month toxicity studies on both compounds which are due to report later this quarter.

“Following the completion of the data package, Pharmaxis intends to conduct a final series of scientific briefings to potential partners before moving to commercial partnering discussions to secure a comprehensive licensing agreement in 2019.”

Pharmaxis has already found a partner for another fatty liver drug.

German pharma giant Boehringer Ingelheim is testing Pharmaxis’s BI 1467335 diabetes eye drug and paid a $15m milestone fee in January for the pleasure.

That drug is also being tested on fatty liver disease via a Phase 2a clinical trial.

Boehringer Ingelheim bought that drug in 2015 — with an upfront payment of $41m — to study it for the liver condition.

Clinical trials are generally divided into three phases. phase one focuses on safety, phase two tests for effectiveness and phase three examines whether the new drug is an improvement on existing treatment.

LOXL2 is an enzyme that stiffens scar tissue. A build up of scar tissue or too much inflammation can lead to fibrosis, a nasty problem in a place like the lungs or liver because it makes it difficult for them to work properly.

The compound is being tested to inhibit, or prevent, excessive stiffening of scar tissue. In the lungs this is called Idiopathic Pulmonary Fibrosis (IPF), a disease with a two to three year survival rate.

In the liver Pharmaxis is testing the enzyme on ‘non-alcoholic steatohepatitis’, or fatty liver, a condition appears when the liver becomes inflamed and damaged due to a build-up of fat.