Pharmaxis Ltd (ASX:PXS) (OTCMKTS:PXSLY) (FRA:UUD) has reached the top biotech echelon with the US Food & Drug Administration (FDA) agency’s approval of its cystic fibrosis treatment Bronchitol® (mannitol) representing a transformational milestone.
Not many Australian companies can boast the gold standard of success in biotech – US FDA approval of a medicine it has researched and developed – with Pharmaxis chief executive officer Gary Phillips saying this was a “transformational step”.
Cleared for sale in the US
This approval clears Bronchitol for sale in the US as an add‐on maintenance therapy to improve pulmonary function in cystic fibrosis (CF) patients 18 years of age and older.
The product – an inhaled dry powder – is already sold in Europe, Russia and Australia, and now will be available to patients in one of the world’s largest markets.
Pharmaxis will manufacture, package and export the product to the USA from its purpose-built Sydney factory where high tech equipment transforms a powder into tiny particles that can be inhaled via a hand-held device.
The company’s chairman Malcom McComas said: “We are very pleased that Bronchitol, an Australian drug discovery, will now be available for cystic fibrosis patients in the USA.
"This is a very significant event for everyone who has worked hard to achieve this outcome.
"Approval in the world’s largest market is a testament to the capability of the Pharmaxis clinical team who designed and conducted the three large scale phase 3 clinical trials establishing Bronchitol’s safety and efficacy and our particular thanks goes to all the patients and healthcare professionals who made those trials possible.”
Shares up 94%
Investors responded positively with shares as much as 94% higher to A$0.17 in the first hour of ASX trading on volume of more than 80 million
Bronchitol joins Pharmaxis' first commercial product from its mannitol platform, Aridol®, as being FDA-approved.
Aridol is a lung function test designed to help doctors diagnose and manage asthma by detecting active airway inflammation through measuring airway hyper-responsiveness.
Patients inhale increasing doses of Aridol through a simple hand-held device: respiratory clinicians administering the test measure the patient's lung function to identify airway inflammation, which can help doctors in providing appropriate asthma treatment.
Triggers cash flows
What makes Bronchitol’s FDA approval so transformational for the company and its shareholders, said Phillips, was that it triggered cash flows that bankroll the company to take its PXS-5505 drug candidate, aimed at myelofibrosis in adults, through its planned Phase 1c/2 trials.
He said the ultimate aim of the transformation was to make Pharmaxis a global leader in myelofibrosis, and flowing from that, to develop PXS-5505’s potential in several other cancers, including liver and pancreatic cancers.
“With the two mannitol products in the marketplace and generating revenue, we can shift the focus to our pipeline of small-molecule drugs for big diseases.
"It’s already enabling us to put the most promising of those, PXS-5505 into Phase 1c/2 trials,” Phillips said.
PXS-5505 inhibits all the lysyl oxidase (LOX) family of enzymes, which play a crucial role in the development of severe fibrosis, as well as cancers to which fibrosis contributes.
Aimed at myelofibrosis
The drug is being aimed in the first instance at myelofibrosis, a rare cancer in which normal bone marrow tissue is gradually replaced with a fibrous scar-like material; over time, this leads to progressive bone marrow failure preventing the production of adequate numbers of red cells, white cells and platelets.
Myelofibrosis has a poor prognosis and limited therapeutic options.
Because there is no effective treatment, earlier this year the FDA granted Pharmaxis ‘orphan drug’ designation for PXS-5505 for treatment of myelofibrosis.
This is a special status granted to a drug to treat a rare disease or condition; the designation means that PXS-5505 can potentially be fast-tracked and receive tax and other concessions to help it get to market.
The FDA has also given Pharmaxis Investigational New Drug (IND) approval to proceed to Phase 1c/2 trials with PXS-5505.
Preparing for Phase 2 trial
Phillips said: “All the building blocks are in place now for the Phase 2 trial and we expect to start recruiting for the study in the first quarter of 2021 and conclude it by the end of 2022.
“The aim is to show that our drug is disease-modifying and will make a real difference to patients with myelofibrosis. That is an attractive market, at more than US$1 billion ($1.4 billion) a year.
“While our primary focus is the development of PXS-5505 for myelofibrosis, the drug also has potential in several other cancers including liver and pancreatic cancers, where it aims to breakdown the fibrotic tissue in the tumour and enhance the effect of existing chemotherapy.
“We already have a lot of interest in the drug from other clinicians, and they’re proposing to do studies of the drug in other cancers. Naturally, we’re very keen to supply the drug to any such trials.”
Importantly, Bronchitol’s approval by the FDA gives Pharmaxis the financial runway to see PXS-5505 fully through the clinical trial process, starting with milestone payments from development and commercialisation partner Chiesi USA, the American affiliate of Italian global pharmaceutical company Chiesi Farmaceutici S.p.A, which is responsible for the regulatory approval and commercialisation of Bronchitol.
With FDA approval, Chiesi will now pay a US$7 million (A$9.9 million) milestone to Pharmaxis, with a further US$3 million (A$4.2 million) payable on shipment by Pharmaxis of commercial launch stock, scheduled for the first quarter of 2021.
“With the milestone payments that we will get from Chiesi, plus the existing cash in the company, plus ongoing sales revenue from Bronchitol and Aridol, our funding situation for PXS‐5505 is assured,” says Phillips.
“Our long-term supply contracts with Bronchitol and Aridol distribution partners minimises our exposure to the commercial risks and secures a steady revenue stream. The focus for investors becomes PXS-5505 and the rest of our anti-fibrotic LOX program.
“PXS-5505 has a unique mechanism of action that has the potential for disease modification, and we’re looking forward to seeing the effect of this drug in clinical trials,” adds Phillips.