When it comes to biotech investing, the value opportunities in Australia attract many of the world’s smartest investors. Amongst them, Platinum Asset Management (ASX: PTM) has joined a growing list of institutions taking a substantial stake in a little-known Aussie biotech set to announce hugely-anticipated clinical trial results within the next few months.
With more than $17 billion in funds under management and their success available to all to see, Platinum Asset Management was founded in 1994 by investment guru Kerr Neilson. Since then, the firm has been one of the most well known firms in Australia, delivering returns of 11.2% per annum since 1995.
According to their website, a $20,000 investment in the Platinum International Fund in 1995 would now be worth more than $373,000.
Among the many regulatory filings lodged by Platinum for their large investment portfolio, was a notice in October 2022 confirming they had acquired a 5.06% stake in biotech company Pharmaxis (ASX: PXS) for $1.9 million.
This was the first time Platinum entered the Pharmaxis register, joining some well known investment funds based in Hong Kong, the United States and the United Kingdom as substantial shareholders of Pharmaxis.
Platinum’s investment in Pharmaxis took place after the biotech company announced interim clinical data from their Phase 2 trials of PXS-5505 which seeks to treat bone marrow cancer, myelofibrosis.
While myelofibrosis is somewhat of a niche disease, its treatment market is conservatively estimated at USD $1 billion per annum with no current product on the market that can modify the disease like Pharmaxis’ drug has the potential to.
Myelofibrosis is a rare cancer of the bone marrow affecting 15 per 1 million people worldwide. It is driven by fibrosis, or scar tissue build up within the bone marrow, which in turn disrupts production of normal blood cells. This results in reduced immunity, bleeding issues, anaemia and ultimately, poor patient outcomes.
“The positive preliminary data from Pharmaxis phase 2 clinical study in myelofibrosis has impressed global clinical experts and has driven interest from the specialist healthcare investors,” said Pharmaxis CEO, Gary Phillips.
“I am delighted by the strong support seen from existing substantial shareholders and would also like to welcome our new institutional investors.
“The company is now well positioned to build on the positive preliminary data from both the ongoing clinical studies in myelofibrosis and skin scarring to deliver full results during 2023.”
The bigger picture for PXS-5505 may be the valuation barrier Pharmaxis breaks upon reporting their Phase 2 trials results with US-based Constellation Pharma having been acquired for USD $1.7 billion after they had completed Phase 2 trials of their myelofibrosis treatment.
At present, Pharmaxis trades on the ASX with a market capitalisation around $45 million as what could become Platinum’s next success story in the small cap space.
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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