Pharmaxis has multiple potential value inflection points with two drugs advancing in clinical trials

Pharmaxis Ltd (ASX:PXS) (FRA:UUD) has multiple potential value inflection points over the next two years, with two drugs in clinical trials that are due to report meaningful efficacy and safety endpoints in patients by the end of 2022. 

The company has a platform technology that has delivered a pipeline of first in class or best in class clinical drugs for inflammatory and fibrotic diseases. The first of these drugs already has an IND approval from the FDA and is currently being trialled in myelofibrosis patients.

Its lead asset PXS-5505 – with disease-modifying potential in myelofibrosis – is in Phase 1c/2 trial, with further collaborations to extend the value of PXS-5505 in a variety of other oncology indications where there is strong unmet need.

Its anti-scarring drug PXS-6302 is also moving into Phase 1c trial in patients and Pharmaxis has identified commercially important dermatology indications that the drug could be developed in.

Myelofibrosis

Pharmaxis’ lead asset PXS-5505 Phase 1c/2a proof-of-concept myelofibrosis study commenced recruitment in the first quarter of 2021 and is targeted to complete in the second half of 2022.

The drug, with disease-modifying potential, was patented in 2018, with long-term tox and Phase 1 studies completed in the first half of 2020.

The US Food and Drug Administration (FDA) orphan status was granted in July 2020 and an IND-approved in August 2020.

Myelofibrosis is an orphan disease with high unmet need, with the market expected to exceed US$1 billion.

It affects 15 in 1 million people worldwide, with a five-years median survival and 11% transformation to leukemia.

Pharmaxis has research collaborations in other cancers:

• Myelodysplastic syndrome (Germany);
• Liver Cancer (Rochester, New York);
• Pancreatic Cancer (Sydney, Rochester);
• Melanoma and glioblastoma (Houston); and
• Head and Neck Cancer (Boston).

Anti-scarring drug PXS-6302

Pharmaxis’ anti-scarring drug is in a Phase 1 trial, with PXS-6302 entering patient studies in 2H 2021, to stop scars forming after trauma, including following burn injuries. 

The trial will investigate the potential of PXS‐6302 treatment to transform trauma recovery by blocking the underlying fibrosis causing scar tissue.

The world‐first human trial will determine the safety and tolerability of the product in healthy volunteers, and proceed to patients with established scars and those with scarring subsequent to burn injury. 

Distinguished surgeon and burns expert Professor Fiona Wood AM is leading a group of researchers from the University of Western Australia (UWA) and Fiona Stanley Hospital to progress the treatment through clinical trials. 

The Pharmaxis discovery has shown promising pre‐clinical results in inhibiting the enzymes that play a critical role in the development of scar tissue. 

PXS‐6302 was discovered by the Pharmaxis research team at its Frenchs Forest laboratories

The new compound may potentially avoid the need for invasive procedures such as further surgery or laser procedures according to UWA Senior Research Fellow at the School of Biomedical Sciences Dr Kylie Sandy‐Hodgetts.

Mannitol respiratory

Pharmaxis’ exclusive US distributor, Chiesi USA Inc, has launched Bronchitol® (mannitol), an add‐on maintenance therapy to improve pulmonary function in cystic fibrosis (CF) patients aged 18 years and older in the US.

Bronchitol, developed by Pharmaxis, is the first dry powder-inhaled mucoactive agent providing a compact, portable treatment option for CF patients.

Pharmaxis chief executive officer Gary Phillips said: “We expect Bronchitol sales in the US to contribute strongly to the product’s global sales and profit growth, making the Pharmaxis mannitol respiratory business cash flow positive from FY 2021.”

The company has so far received a total of US$10 million in Bronchitol milestone payments from Chiesi, triggered by the US Food and Drugs Administration (FDA) approval in October 2020 and the recent first shipment of stock to the US.

Mannitol respiratory sales are forecast to double by financial year 2022 with Bronchitol accounting for more than 75% of the sales.

The company sees strong longer term growth contribution from the US, and growth in ex-US markets, including Russia.

Bronchitol is manufactured and exported from the Pharmaxis manufacturing facility in Sydney. The product is marketed in Europe, Russia and several other countries and is PBS listed for the treatment of Australian adults and children.

CF is a debilitating genetic disease that causes progressive damage to the lungs and other organs.

Chiesi is responsible for the commercialisation of Bronchitol in the US.

Bronchitol joins Pharmaxis’ first commercial product, Aridol®, in being FDA‐approved.

Aridol is a lung function test designed to help doctors diagnose and manage asthma by detecting active airway inflammation.

Russian deal for Bronchitol

In April 2021, the company further strengthened its balance sheet, with the sale of the distribution rights in Russia for Bronchitol to regional pharma specialty company GEN İlaç ve Sağlık Ürünleri San. ve Tic. A.Ş. (GEN) for A$2 million – effective May 1, 2021.

Key functions will be handled by GEN, a trusted Pharmaxis business partner in other territories for more than seven years.  

Gary Phillips said: “We have had a long and productive collaboration with GEN who have been our distributors in the Turkish market for many years.  

“Extending this relationship to encompass Russia and other related territories at this time will ensure that Bronchitol will be well supported by an experienced partner with a leading position in cystic fibrosis care.”

The deal delivers ongoing annual savings of A$1m to Pharmaxis. The company will continue to manufacture and export Bronchitol to Russia from its factory in Sydney that also supplies the US, European and Australian markets

Promise in bone marrow cancer: study

Drugs from Pharmaxis’ lysyl oxidase inhibitor drug discovery program, have been found to be capable of slowing the progression of primary myelofibrosis (PMF), a relatively rare but painful type of bone marrow cancer, according to a new study by the Boston University School of Medicine (BUSM).

The study, led by corresponding author Professor Katya Ravid, DSc, and funded by the National Heart, Lung and Blood Institute, were published online in the journal Archives of Stem Cell and Therapy.

Based on its own extensive pre-clinical program and the results from this study, Pharmaxis initiated Phase 1c/2 clinical trials in humans with its lead drug from this program, PXS-5505.

According to Ravid, Professor of Medicine and Biochemistry at BUSM and Professor of Biology at Boston University, these drugs are unique because they are able to inhibit their target, a protein called lysyl oxidase (LOX), with a combination of specificity and potency not seen in previously tested drugs. 

These current findings build upon previous discoveries and publications by Prof Ravid and her group, showing what specific proteins in the bone marrow cause the scaring effect observed in PMF.

These findings are significant because they represent a possible novel avenue of treatment for PMF, since there are currently no available drugs that tackle the diseased bone marrow matrix proteins in the way that the Pharmaxis LOX inhibitors can.

PMF disrupts the body’s normal production of blood cells by causing extensive scarring in the bone marrow.

Currently, few treatment options are available, with most of them being palliative in nature. 

The only curative treatment is a stem cell transplant, for which few patients are eligible.

Non-core pipeline

Pharmaxis also has further non-core pipeline opportunities in fibrosis and inflammation that will leverage on its global leadership position in amine oxidase enzymes to deliver targeted drugs.

Strengthened cash position

Also in April 2020, the company received commitments from sophisticated and institutional investors to subscribe for 54.6 million fully paid ordinary shares at A$0.08 per share to raise around A$4.4 million.

New shareholder Karst Peak Capital Limited invested A$3.2 million for an 8.9% stake and existing shareholder BVF Partners LP invested A$800,000 to maintain its holding at 19.5%.

Funds raised will be used to strengthen the balance sheet as the company conducts a Phase 1/2 study in myelofibrosis with its lead drug PXS-5505 (which is already recruiting) and a Phase 1c study in patients with problematic skin scarring with its topical drug PXS-6302.

The company will have a A$20 million pro-forma cash balance (as of March 31, 2021) post raising.

There are further opportunities to extend its cash runway ahead with the mannitol business to go from cash burn in financial year 2020 to cash flow positive from financial year onwards.

Phillips added: “Further initiatives currently underway to generate non-dilutive cash and reduce operating expenses will be announced as they are completed.” 

Other opportunities include:

• Potential cost savings from rationalisation across business
• Distribution of licence fees from currently un-partnered Aridol and Bronchitol territories;
• Pipeline supported by grants and R&D tax credit (around A$5 million in 2020); and
• Partnering deals with pipeline assets.

Story by ProactiveInvestors