Global biotech funds commit $7.2m to breakthrough liver and bone cancer trials

Breakthrough clinical trials into new treatments for bone marrow and liver cancer will soon commence after experienced institutional biotech investors with positive track records in companies such as Viralytics, Ophthea and Avita committed $7.2 million towards funding the trials for Pharmaxis (ASX: PXS) and their hero drug PXS-5505.

Unlike other cancer treatment drugs on the market, PXS-5505 has the potential for disease-modifying efficacy which offers new hope for many cancer patients where existing treatments deal mainly with the symptoms of the disease. In many of these cases, the current standard of care does not significantly extend life expectancy and are often so poorly tolerated that patients discontinue treatment.

Offering new hope for cancer patients and attracting global interest from investors and academic researchers, PXS-5505 has already passed Phase 1c trials in myelofibrosis patients where it has proven to be safe across increasing dose levels with the highest dose giving >90% enzyme inhibition and no side effects.

With these results, Pharmaxis has recently commenced a Phase 2a study in myelofibrosis and is set to commence a Phase 1c/2a investigator led study in liver cancer with the backing of new investors keen to increase their stake in Pharmaxis. From the institutional Placement that was heavily oversubscribed, Pharmaxis raised $7.2 million which included strong participation from their existing experienced biotech funds.

“Pharmaxis is entering a transformational 12 months with two clinical studies expected to deliver safety and efficacy data in diseases with high unmet need and addressable markets of over $1b by the end of 2022,” said Pharmaxis CEO, Gary Phillips.

“The opportunity to add a third study in liver cancer triggered the capital raise and we are delighted by the response both from our major shareholders and other knowledgeable investors.”

Amongst those knowledgeable investors were BVF Partners LP, Karst Peak Capital and D&A Income Ltd.

BVF Partners is a San Francisco-based fund (BVF stands for Biotechnology Value Fund) which was founded in 1993 and has been hugely successful in identifying early stage companies to now hold large positions in over 60 biotech and biopharma companies around the world with a portfolio valued at more than USD $2.3 billion.

Karst Peak is a Hong Kong-based specialist biotech fund that identified an opportunity in 2018 to invest $19m in Avita Medical’s ‘spray on skin’ which delivered the fund a $100m profit within just two years. Karst Peak are renowned for their extensive due diligence prior to investing and in the case of their Pharmaxis investment in April 2021, that included speaking to numerous global experts in myelofibrosis before committing $3.3m.

Of the three large investments from this current round of $7.2m raise, London-based D&A Income Ltd is the most diversified of the three with some of their most successful investments having come from the mining industry. One of the major beneficiaries behind D&A Income is businessman Graham Edwards who is the Executive Chairman of Telereal Trillium – one of the UK’s largest property companies, owning and managing a £8 billion portfolio. Before his appointment as Chairman of Telereal Trillium, Edwards was the Company’s CEO since its creation in 2001 following successful stints at Merrill Lynch (now Blackrock) and BT Group.

Given the strength of hitters that have come in to bat for Pharmaxis, the biopharmaceutical company appears well positioned as the discoverers of PXS-5505 which has displayed the breakthrough properties to successfully inhibit cancer-inducing enzymes.

Should Pharmaxis continue to deliver on its already impressive clinical results, the Phase 2a myelofibrosis clinical trials and Phase 1c/2a study in liver cancer have the potential to unlock a commercial opportunity for a drug like PXS-5505 valued around USD $2 billion per annum. With liver disease forecast to increase in the coming years however, demand for such drugs are expected to drive the market to reach $7 billion by 2027 and just one of the reasons these hugely successful funds are increasing their stake in Pharmaxis.

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