Clinical stage pharmaceutical company Pharmaxis (ASX: PXS) is in a transformation phase as their clinical pipeline progresses towards multiple value inflection points.
With two products already on market, the Company has a great base from which to fund their ongoing clinical product development. Adding to that, the company has just completed a capital raise via (oversubscribed) placement which saw $7.2 million flow in from some experienced institutional biotech backers including BVF Partners LP, Karst Peak Capital and D&A Income Ltd.
CEO of Pharmaxis, Gary Phillips is notably excited about the financial health of the Company heading into their transformational Phase 2 cancer treatment trials.
“We have products which are approved in the US and Europe and other parts of the world for cystic fibrosis and for asthma diagnosis. That division is now cash flow positive. We generated $3.2 million in sales in the September quarter,” he said.
“Together with the cash raise that we’ve just completed, that really puts us in a very strong position to complete those trials and deliver transformational results for the Company before the end of next year.”
Those trials he’s talking about are Phase 2 trials for their revolutionary cancer drug, PXS-5505. The drug is designed to inhibit lysyl oxidase enzymes which play a role in fibrosis and scar formation within the body. Having just cleared Phase 1c trials in myelofibrosis, a rare blood cancer, PXS-5505 received approval to progress to Phase 2 trials, which have begun recruitment. To better understand the drug’s mechanism of action and how it differs from the current standard of care treatment for myelofibrosis, Gary stepped me through some of the technicalities.
Myelofibrosis is a cancer of the bone marrow, affecting 15 per 1 million people worldwide. “These patients have fibrosis or scarring of their bone marrow. That’s the body’s engine for producing red blood cells, white cells and platelets. And, if that gets scarred and can’t do that, then the spleen tries to take over and it gets bigger which causes a host of other problems as well.”
JAK inhibitors are the current class of drug used to treat myelofibrosis; however, these drugs act by reducing the size of the patient’s spleen and afford some symptom relief. “They have very little impact on the life expectancy for these patients, which currently is around about five years from diagnosis”, explains Gary.
PXS-5505 has been clinically validated to be disease modifying, meaning that it alters the course of the disease and can potentially increase life expectancy and reduce symptoms.
“We’ve done some earlier preclinical work with a group in Boston, and they showed that in a model of myelofibrosis, we can reduce the scarring in the bone marrow. When that happens, you see an increase in the red cells, white cells and platelets because the bone marrow is now functioning again. You also see a reduction in the spleen volume.
“These are all really positive things and we think are real evidence of a disease modifying effect of our drugs. We expect [PXS-5505] to be an improvement on the existing standard of care.”
Given the positive results flowing from clinical trials it’s not surprising that key opinion leaders want in. The recent injection of money will allow Pharmaxis to initiate an additional Phase 2 trial for PXS-5505, this time in liver cancer, following on from promising preclinical work in liver cancer models by researchers at the University of Rochester in New York.
Humble as ever, but proud of the accomplishments of the little breakthrough compound, Gary explains how this arrangement came to be, saying: “Once it was known in the scientific world that we had a drug which inhibited this family of enzymes called lysyl oxidases a lot of researchers beat a path to our door because it has been a target that they’ve been interested in looking at for for many years in certain types of cancer.
“There are some cancers which are very fibrotic in nature, so they have a lot of scar tissue both around the tumour and running through the tumour. The theory goes that this fibrosis stops the access of existing drugs. So we’ve got some great new cancer drugs, which seem to produce miraculous effects in some cancers, but in other cancers like pancreatic cancer and liver cancer, this scar tissue prevents these drugs working and prevents them from getting into the tumour. [Scientists] have been looking for a way around that. Now our drug, in inhibiting these lysyl oxidase enzymes, breaks down that fibrous scar tissue, and that allows these drugs to get access.”
Preclinical work carried out by the University of Rochester showed that PXS-5505 broke down fibrotic tissue in the tumour and allowed for an increased amount of drug penetration. Researchers now believe that PXS-5505 could be a viable adjunct therapy to chemo in liver cancer patients.
The new indication opens up a totally new addressable market for Pharmaxis, Gary explains: “The liver cancer market is worth around $2 billion per annum, and it’s forecast to reach $7 billion by 2027. So this is a huge addressable market, with very high unmet needs. Our drug looks like it could be the key to unlocking efficacy of some of the new cancer therapies in this area.”
The FDA has already cleared PXS-5505 for Phase 2 trials in liver cancer and have granted the drug IND status for this new indication.
Yes, Pharmaxis’ share price is still trading around $0.11 however, zoom out and you’ll see the interesting uptrend over the past few months. Their recent performance, combined with a recent MST Access report valuing them at 0.53c per share and a totally new addressable market means that in 12 months time, investors may regret not jumping on board sooner.
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