Dr Boreham’s Crucible: Pharmaxis

Small Caps | Oct 05 2022

ASX code: ((PXS))

Share price: 8.4 cents

Shares on issue: 549,139,613

Market cap: $46.1m

Chief executive officer: Gary Phillips

Board: Malcolm McComas (chair), Mr Phillips, Dr Kathleen Metters, Dr Neil Graham

Financials (full year to June 30, 2022): revenue from sale of goods $7.42m (up 10%), milestones, sale of distribution rights $2.5m, loss of -$1.93m (previous -$3m deficit), cash of $8.9m*

* Excludes US$5m payment from Orbital device sale

Major shareholders: BVF Partners (Biotech Value Fund) 18.7%, Karst Peak Capital 12.4%, D & A Income 7.4%.

This column first appeared in Biotech Daily (biotechdaily.com.au)

By Tim Boreham

If there were a biotech award for making a silk purse out of a sow’s ear, the accolade would go to Pharmaxis after September’s funding deal to develop its anti-inflammatory compound for Parkinson’s disease.

In this case, the porcine auditory organ was long-time Germanic partner Boehringer Ingelheim, which in 2019 handed back the rights to the liver disease NASH (fatty liver disease).

The compound worked fine with NASH, by targeting the relevant enzyme called semi-carbazide-sensitive amine oxidase (SSAO).

But Boehringer walked because it also inhibited a brain enzyme called monoamine oxidase B (MAOB).

Pharmaxis has turned the setback to its advantage by targeting MAOB as a Parkinson’s treatment. This month the approach was vindicated when Parkinson’s UK extended a grant of up to $5m for a clinical trial (see below).

“We are taking advantage of what Boehringer saw as a problem,” says Pharmaxis chief Gary Phillips.

Last Monday, the company capped off an upbeat month by reporting encouraging results of a Perth-based trial to treat skins scarring for burns victims (also see below).

The company recently pocketed a handy $7m by selling a delivery device that everyone had forgotten about - except for Mr Phillips (yep, see below as well).

In a GoldiLOX position

A biotech sector veteran, Pharmaxis is immersed in amine oxidase chemistry which is the backbone of several enzymes involved in inflammation and fibrosis.

The company’s target is pan-lysyl oxidase (LOX), an enzyme closely implicated in inflammation and fibrosis.

The company’s lead program tackles the rare blood cancer myelofibrosis.

Pharmaxis has also commercialised Bronchitol, a powder to relieve the lung congestion of cystic fibrosis sufferers. It also sells a second-string product called Aridol, for asthma diagnosis (both are made from the sugar mannitol).

The company’s early impetus revolved around Bronchitol, but sales have been useful rather than company-making. Since then, the company has focused on its multi-pronged clinical efforts.

Pharmaxis listed on the ASX in 2006, raising $25m at 50 cents a share. A secondary listing on the Nasdaq was abandoned in 2009 for cost reasons.

The company’s compounds come in three iterations: PXS-4728 (for Parkinson’s disease), PXS-6302 (scarring) and PXS-5505 (myelofibrosis and hepatocellular carcinomas).

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