Perhaps China decided to make its own version of the drug or perhaps it proved that it could do so and fast. Whatever it may be, something told the specialised healthcare company Medical Developments International Limited (ASX: MVP) that it wasn’t a good idea to continue pursuing the country. And so, it stopped.
Medical Developments International (MDI) has discontinued the preparation of clinical trials for Penthrox, its trademark pain relief drug, in China. After extended delays to the anticipated timeline for clinical trial outcomes—and consequently the commercial launch of Penthrox in the market, primarily due to the challenging regulatory environment and COVID restrictions—it has decided to call it quits.
Commenting on the discontinuation, CEO Brent MacGregor said, “A commercial launch in China is not a strategic priority at this time. We are directing our resources into those projects that have [a] greater capacity to generate shareholder value in the nearer term.”
These projects include boosting the penetration of Penthrox in select European markets, like Germany, Italy and Spain, and Australia. In the longer term, the Company has its sights set on growth as a result of Penthrox entering the US. Following the FDA’s green light to conduct phase III clinical trials of Penthrox in the country, MDI is all but ready to launch its marketing efforts in the region.
MDI develops and distributes emergency pain relief and respiratory products. A trademark product the Company manufactures in Melbourne is Penthrox—a.k.a. the green whistle—a trauma and emergency pain relief product. It’s called the green whistle because it is shaped like one, and in the opening you’d typically blow into, you inhale the non-opioid analgesic.
Say someone gets into an accident and has to undergo surgery. They are rushed into the emergency room and poked with a cocktail of drugs, each with a different objective. The quicker the pain goes, the sooner the patient can get back home. However, injections can be invasive and might even cause bruising. Methoxyflurane, i.e. a pain relief medication to be inhaled, stored safely in a hand-held whistle-shaped device on the other hand? Now we’re talking.
Currently, Penthrox is being used in Australian Hospitals, including their emergency departments, ambulances, defence forces, sports departments and dental and cosmetic surgeries, among others.
In 2019, MDI got approval to test its new investigative drug, Penthrox, in China. It wanted to test for two things: trauma pain and procedural pain. However, odds are that Chinese healthcare businesses caught wind of it and decided to create their own. If that’s the case, then fighting a locally-made drug would be an uphill battle for MDI, one not likely worth fighting.
Thankfully, MDI has been tapping into the global market, so the discontinuation wouldn’t put a major damper on its efforts. In 2022, the global overall analgesics market reached $44.26 billion. This includes opioid-based analgesics, too. However, with the global death toll of opioid usage (be it for personal use or prescription-based) amounting to about 70,000 people per year, there is a desperate need to depart from opioid-based analgesics for pain relief and shift to safer alternatives.
Following the discontinuation in China, the Company will recognize net non-cash income of approximately $11 million (before tax). This includes contract termination income of $18 million, relating to the write-off of a deferred, non-refundable, upfront payment for distribution in China and the reduction of capitalized registration costs of approximately $7 million.
The total financial impact of this deal will be reflected in the Company’s FY23 half-year results report.
Alinda is a Business Reporter for The Sentiment
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