Dimerix (DXB: $0.16) has signed a licensing deal for its lead compound, DMX-200, with Advanz Pharma. The deal gives Advanz rights to the use of DMX-200 for the treatment of FSGS (Focal Segmental Glomerulosclerosis) in Europe, the UK, Canada, Australia and New Zealand.
Dimerix will receive an upfront payment of $10.8 million (€6.5 million) with milestone payments of up to $219 million (€132 million) and ‘mid teen to 20 percentage royalties’ from net product sales. The licensing deal extends at least out to the end of the Dimerix patents and potentially further according to Dimerix CEO Nina Webster.
It's a major validation of the Dimerix program, which is based on the combination use of angiotensin II receptor blockers such as irbesartan (a standard of care treatment) with DMX-200, which Dimerix found provides more than an additive benefit from a more extensive blockage of the disease pathway.
Webster said that Advanz had conducted an intense level of due diligence on the company’s trial data achieved to date in previous studies. Dimerix is currently conducting a Phase III study with DMX-200 at 70 sites across 11 countries. The first stage of that study had finished recruitment of 72 patients in July this year. Interim results are expected in mid-March next year, which will reveal whether or not the trial is on track to show a statistically significant and clinically meaningful drop in proteinuria levels.
Advanz Pharma: An Ideal Partner for Dimerix
Advanz Pharma is a family company formed in 1957 based in the UK. It's a very suitable partner for Dimerix as its approach is to develop improved therapies by 'revitalising and innovating niche, established medicines.' The company has a focus of operations in regions across Europe, Canada and Australia in the area of specialty medicines and rare diseases.
Under the partnering arrangement, Dimerix will be responsible for the clinical development of DMX-200 in FSGS and Advanz will be responsible for regulatory submissions, sales and marketing of the drug.
Advanz Pharma's largest acquisition to date has been that of Covis Pharma Sarl and Covis Injectables Sarl for US$1.2 billion in cash in 2015. The company delisted from the Toronto Stock Exchange in 2020.
Advanz has the first right of refusal to extend the license for DMX-200 in the same regions for other indications.
Aside from the funding, a significant benefit of the partnership will be the local regulatory expertise that Advanz has in the regions licensed, which has been an important feature of any licensing deal being considered by Dimerix. A regional partner is also likely to be more beneficial in marketing the drug for an orphan disease which may have greater regulatory challenges than more common, and well understood diseases.
Summary
Webster said that the deal signifies a new era for Dimerix and that this is the first of several likely deals for multiple territories with additional discussions progressing well. The company has no plans to raise additional funds at this point. Dimerix will receive both development and sales milestones from Advanz.
Dimerix finished June with $8 million in cash, and has received an $8.9 million tax rebate. Combined with the upfront funding, this should leave the company around $23 million in cash. This will be sufficient to fund the company past the interim results readout in March next year.
Webster said the deal puts the company in a far stronger position to bring DMX-200 to market for a disease for which there no available treatments and there is a high unmet need.
Bioshares recommendation: Speculative Buy Class A
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