Leading fund manager Karst Peak Capital has secured a significant interest in a little-known Aussie pharmaceuticals research company, following the significant success they experienced with a large holding of Avita Medical.
Originally based in Hong Kong but now also with an office in Sydney, Karst’s investment focus includes the healthcare, biotech and pharmaceuticals industry which turned heads last week when the fund secured a 8.90% stake in Pharmaxis (ASX: PXS) for $3.21 million.
Raising eyebrows in the medical investor community was the fact the investment was made via private Placement at $0.08 per share which was higher than the last traded price at the time. Furthermore, it was noted that Pharmaxis was well capitalised and has approximately $20m cash in the bank after the placement with a revenue stream from their mannitol products, putting the Company in a healthy position.
Also as part of the Placement, BVF Partners LP invested a further $800k to maintain its shareholding in Pharmaxis at 19.5%.
Interestingly, Pharmaxis is indirectly networked to one of Karst’s very successful investments – Avita Medical, of which Karst Peak held a 14.9% stake in 2018 when AVH shares were trading around $0.07 each. Prior to the onset of COVID-19, AVH shares traded as high as $16.30 per share in February 2020 before Avita redomiciling to the United States in June 2020.
The flagship product at Avita Medical responsible for the commercial explosion was RECELL, the commercial product developed from ‘Spray-on-Skin’ which was invented by the Company’s founder, Professor Fiona Wood AM. As RECELL sales grew and Avita expanded internationally, building on Wood’s research, she took a step back from corporate operation to focus on medical research where her work is responsible for saving thousands of lives around the world.
Pharmaxis’ primary research focuses on the compound PXS-5505 which targets myelofibrosis, a rare form of cancer, however on 1 April 2021 the Company confirmed that Professor Wood is heading research into their other lead compound PXS-6302. This second discovery has shown promising pre‐clinical results in skin scarring models. Critically, the application of compound PXS-6302 has the potential to inhibit the enzymes responsible for scar tissue formation during the healing process.
While RECELL has the ability to regenerate skin after burns or trauma, the world-first trials of PXS-6302 have the potential to stop scars forming altogether. Professor Wood notes scar-less healing is the vision that has motivated our work in the field over many decades.
Although clinical trials of PXS-6302 are still in the early stages of recruitment, it is understandable why Karst believes Professor Wood has the midas touch given the success they have achieved by backing her in the past.
Pharmaxis welcomes investors to register for updates on their latest developments and industry research by joining their mailing list here.
*Owners of this website are PXS shareholders
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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4 Comments
[…] Last month, the Company confirmed the commencement of world-first trials led by Professor Fiona Wood AM into another of their enzyme inhibitors PXS-6302 to prevent scar formation. The Company’s ongoing cancer research is funded by sales of their cystic fibrosis treatment Bronchitol which secured FDA approval in 2020 with their recent successes noticed by a leading investment fund that secured 8.9% of the Company. […]
Reply[…] a career long goal of scarless healing, Professor Fiona Wood made her mark with the invention of ‘spray-on skin’, commercialised as the…. Now, Professor Wood continues to pioneer innovation in her field and was optimistic following the […]
Reply[…] bone marrow fibrosis, reduced spleen size and improved blood cell count – results that have secured major investment from a very successful pharmaceutical-focused hedge […]
Reply[…] US hospitals and health systems will soon have access to Avita Medical’s (ASX: AVH) proprietary RECELL System thanks to a purchasing agreement signed with Premier, a leading healthcare improvement company in […]
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