Pharmaxis (ASX:PXS) shares are up eight per cent to a one-month high after the Sydney biotech company received a US$7 million ($9.2 million) milestone payment from its Italian partner and US licensee.

The company has been owed the money by Chiesi Farmaceutici S.p.A. since November 2, when the US Food and Drug Administration approved Pharmaxis’ cystic fibrosis treatment, Bronchitol.

The dried powder inhaler been available in Australia since 2011, and is sold in 17 other international markets, but US approval took years, with the company first submitting a New Drug Application in 2012.

Pharmaxis chief executive Gary Phillips has called the approval “transformational” for the company as the milestone payments will fund its development of its Pan-LOX inhibitor drug candidate PXS-5505 for the treatment of a rare type of bone cancer called myelofibrosis.

Recruitment for the company’s phase 1c/2 clinical trial is expected to begin in the first quarter of 2021.

As of September 30, Pharmaxis had $10 million in the bank, and it received another $5 million in October as part of a research and development tax incentive credit, so the additional $9 million is a sizeable sum for the company.

Pharmaxis will be owed another $US3 million ($4 million) by Chiesi when Pharmaxis ships its commercial launch stock, which is scheduled for early next year.

At 11.53am, Pharmaxis shares were up 6.9 per cent to 9.3c, their highest level since late November.