Dimerix (DXB: $0.22) has secured another licensing deal for its lead drug candidate DMX-200 for the treatment of FSGS. This is for the regions of Greater China, South Korea and Southeast Asia. The deal is with Everest Medicines for the treatment of FSGS.
The deal comes with an upfront payment of $14 million and up to $467 million in potential milestone payments. This brings the total value of its five licensing deals to $80 million in upfront fees and up to $1.8 billion in development milestones, plus royalties. In the Everest deal, Dimerix will be eligible to receive 10%-15% of net sales.
The risk for this stock continues to fall with now its fifth licensing deal (which includes due diligence from its five partners) and most recently a blinded independent analysis that indicates the pivotal study under way (in 333 patients) has at least a 90% chance of delivering statistical significance in a drop in proteinuria levels over placebo.
The marker of proteinuria has recently been validated as an acceptable endpoint by the FDA from Travere Therapeutics' approval of its Filspari, the first drug approved for the treatment of FSGS. This also reduces risk for Dimerix as it's the preferred and arguably more accurate marker for disease improvement. Filspari can be used in combination with DMX-200 so is not a competing drug.
The one obstacle remaining is funding (see below) to get the company to the Phase III trial readout, which should occur in Q2 2028.
Everest Medicines
Everest appears to be an appropriate partner. Its product NEFECON was approved in China in November 2023 for the treatment of another rare kidney disease, IgA nephropathy. The product was launched in May 2024 and this year is expected to generate sales of US$330 million. Everest has secured Chiense reimbursement for the therapy. Its overall sales have increased by 140% over the previous year.
Open Label Extension
Of the 333 patients in Dimerix’s Phase III study, 81 have completed the two year treatment and 75 of these patients have elected to continue in the open label extension phase.
Global Regional Recruitment
Of the 333 patients enrolled, 38 are from China and Hong Kong, and 44 are from Latin America, a region that has not been licensed. The trial involves 21 countries, with 58 from the US, 122 from Europe and the UK, and the balance from other areas in the Asia Pacific, including Australia (12).
Financing
At the end of March Dimerix had $26.6 million in cash. With the upfront from Everest, it gives the company a pro forma cash balance at the end of March of $40.6 million.
In calendar years 2022 and 2023, Dimerix's spend (excluding grants and licensing income) was around $20 million a year. This increased to $27 million in 2024 when recruitment picked up in its Phase III study, and will likely have peaked last year at $43 million.
CEO Nina Webster said that its spend is not linear, indicating that clinical trial costs should start to decrease with the last patient having been recruited and treated in March this year.
Going forward, Bioshares estimates that spending should drop to around $30 million a year, excluding costs for product manufacturing, for additional product to be used in the current study, in the open label extension study, and to prepare for commercialization. Its partners will be making their receptive regulatory submissions, pending positive Phase III results.
Over the next two years the company should receive around $30 million in R&D tax rebates in total. For the 2025 year the company was not eligible for the R&D tax rebate because of the revenue received from its licensing deal with Amicus ($48 million). This gives the company access to around $70 million in total.
Dimerix will likely need to increase its funding available. A potential licensing deal for Latin America is one option to increase its funds. Another option in progress is non-dilutive funding for up to $70 million, which would be paid back from future milestones and royalties. Given the company has now secured five licensing deals, the potential to secure such non-dilutive funding would be high.
Dimerix is also likely to receive regulatory-based milestone payments, which may be received before approval in certain regions. In the deal with Everest, $41 million will come from the achievement of development and regulatory milestones, with the balance based on commercial/sales milestones ($424 million).
Dimerix is capitalized at $132 million.
Bioshares recommendation: Speculative Buy Class A
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