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Pharmaxis to get $14m payday after its cystic fibrosis treatment Bronchitol approved by FDA
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- Pharmaxis due $14.3m from US licensee Chiesi after US FDA approves inhaler drug to treat cystic fibrosis
- The Sydney biotech will use funds to develop possible treatment for a rare bone cancer
- Pharmaxis shares trading up as much 79 per cent higher on news, their highest level since January.
Pharmaxis (ASX:PXS) shares have soared after the United States Food and Drug Administration approved its inhaled dry powder formulation to treat cystic fibrosis, meaning the Sydney biotech company will be owed $US10 million ($14.3 million) from its launch partner.
Pharmaxis chief executive Gary Phillips called the approval “transformational” for the company as the milestone payments would fund its development of its Pan-LOX inhibitor drug candidate PXS-5505 for the treatment of a rare type of bone cancer called myelofibrosis.
The company’s Bronchitol treatment approved by the FDA is a precision spray-dried powder delivered to the lungs via a portable inhaler that works to help CF patients clear mucus from their lungs.
It’s been available in Australia since 2011, and is sold in 17 other international markets, but US approval has been slow. The FDA last year asked for another study to ensure that healthcare professionals could safely gauge whether patients could tolerate the medication.
Pharmaxis’ US licensee Chiesi Farmaceutici SpA steered the medicine through the final stages of FDA approval and now owes Pharmaxis $US7 million, with another $US3 million due when Bronchitol launches for sale early next year.
The company will also earn high teens royalties and is eligible for up to $US15 million in three milestone payments based on achieving annual sales thresholds.
“We are very pleased that Bronchitol, an Australian drug discovery, will now be available for cystic fibrosis patients in the USA,” said Pharmaxis chairman Malcolm McComas.
“This is a very significant event for everyone who has worked hard to achieve this outcome.”
The US market makes up more than 60 per cent of the global cystic fibrosis market by value, and the approval will greatly increase capacity utilisation at Pharmaxis’ Sydney production facility, Phillips said.
PXS-5505 development plan
Pharmaxis said it expects to recruit its first patients early next year into a Phase 2 clinical trial in Australia and other countries testing PXS-5505 to treat myelofibrosis in up to 42 patients.
Phase 1 studies have already shown the drug has a good safety profile, Phillips said.
The drug is thought to work by reversing the bone marrow fibrosis, or scarring, that drives morbidity and mortality in the disease.
PXS-5505 also has potential in the treatment of other cancers including liver and pancreatic cancers, where it could work to break down the fibrotic tissue in the tumour and enhance the effect of chemotherapy.
Phillips told analysts on a conference call this morning that 5505 has a unique mechanism of action and could be used to modify the course of the disease, rather than just treat symptoms.
Approval of other drugs to treat myelofibrosis have driven company valuations to half a billion to a billion dollars – and those drugs are poorly tolerated in patients, Phillips said.
A little before 11am, Pharmaxis shares were up 53 per cent to 14c, and had traded as high as 16c, giving the company a valuation of about $50 million.
Other biotech news
Elsewhere in the ASX biotech space,
– Imugene (ASX:IMU) announced that the FDA had approved the Sydney biotech starting a Phase 1 clinical trial of its checkpoint immunotherapy candidate PD1-Vaxx in non-small cell lung cancer patients. The trial will begin at the Hackensack University Medical Center in New Jersey, with the Mayo Clinic in Phoenix and Ohio State University Center joining later.
– Sydney biotech Regeneus (ASX:RGS) announced that its chief executive officer, Leo Lee, had resigned to pursue a new role with a Japanese pharmaceutical company. He’ll remain on the board as a non-executive director. Karolis Rosickas, the founder of stem cell manufacturing company SingCell, will replace him as CEO.
