With a burgeoning pipeline of drugs deeply advanced, clinical stage biopharmaceuticals company Pharmaxis (ASX: PXS) has streamlined its business with the sale of its mannitol respiratory business (MBU) and will now will focus their resources towards a much larger commercial opportunity in blood cancers haematological malignancies, aka blood cancers.
The definitive sale agreement of its MBU will transfer production of Aridol and Bronchitol to Arna Pharma, an Australian company with healthcare and pharmaceutical operations globally. Pharmaxis MBU be progressively moved into Arna Pharma’s multi-product Sydney facility with all operations expected to be transferred by May 2024.
As part of the sale agreement, Pharmaxis will be reimbursed by Arna Pharma for a significant portion of expenses incurred until May 2024. Pharmaxis will also receive ongoing royalties for eight years from Arna Pharma’s Sydney-based business, which includes Bronchitol and Aridol – cystic fibrosis and asthma treatments respectively.
This strategic sale is expected to result in an annual cost reduction of over 60% for Pharmaxis, equivalent to savings of more than $14 million per year. The savings primarily stem from the elimination of expenses associated with operating a global pharmaceutical manufacturing and distribution business. The reduced cash expenses will allow Pharmaxis to focus on its lead drug PXS-5505 which focuses on blood-related cancers and has reported final interim data for its Phase 2 clinical trial as a treatment for myelofibrosis (bone marrow cancer).
Pharmaxis will also receive ongoing royalties for eight years from Arna Pharma’s Sydney based business including Bronchitol and Aridol.
As part of this restructure, Pharmaxis will also change its name to Syntara, subject to shareholder approval at the Company’s upcoming AGM.
The next phase of clinical development for PXS-5505 will involve an FDA-agreed study design, wherein PXS-5505 will be used in combination with a JAK inhibitor, the current standard of care. This program is expected to recruit its first patient in Q2 FY24, with interim data anticipated by the end of CY24, a time that CEO Gary Phillips considers the most exciting in the Company’s history.
“Pharmaxis has built a commanding position in lysyl oxidase biology and chemistry research over the last few years. The restructure announced today and the creation of Syntara enables us to focus and accelerate our clinical development programs,” said Phillips.
“In PXS-5505, we have a best-in-class drug with an excellent safety profile that has the potential to offer disease-modifying effects to patients with haematological malignancies.”
Syntara also plans to explore the use of PXS-5505 in myelodysplastic syndrome, based on promising preclinical data published earlier this year in Nature Communications, and received substantial interest from researchers around the world.
While the majority of resources will be directed towards advancing PXS-5505 towards FDA approval, Syntara is also committed to progressing both oral and topical pan-LOX inhibitors in Phase 2 scar prevention and scar modification programs with its drug PXS-6302. These initiatives are part of an ongoing collaboration with Professor Fiona Wood and the University of Western Australia, which reported positive results in May 2023, highlighted by the drug’s ability to reduce collagen by 30%, an unprecedented clinical trial result.
Syntara will also continue trials with PXS-4728, a novel anti-inflammatory drug candidate for early-stage neurodegenerative diseases, substantially funded by Parkinson’s UK.
As part of the restructuring process, the Pharmaxis Board will be downsized. Malcolm McComas, who has served as Chair for 11 years, is retiring, as is non-executive director Dr. Neil Graham, who served for 3 years. Dr. Kathleen Metters, a current Pharmaxis director, has been appointed as the new Chair, effective immediately.
With this strategic shift and the creation of Syntara, Pharmaxis is positioning itself to capitalise on significant market opportunities in clinical drug development where current myelofibrosis treatments generate more than $1 billion per annum, but don’t offer the disease modifying potential shown by PXS-5505.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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