Pharmaxis recently announced some initial data from the open label myelofibrosis study as well as an institutional capital raise for $10 million at $0.06 per share. Two new institutional investors participated (Platinum Asset Management and Regal Funds Management), with funds now owning around 50% of the company. Existing shareholder Karst Peak is also participating in the raise.
Myelofibrosis Data Released
So far 15 of the target 24 patients have been enrolled into the study with the balance expected to be recruited by year's end. Patients in the study are treated with PXS-5505 twice daily for 24 weeks. Six patients have completed the treatment and four patients stopped therapy due to a lack of clinical effect detected.
Myelofibrosis is a cancer of the bone marrow. The outcome is a reduction in red and white blood vessel production, and reduction of platelets that can promote bleeding and bruising. To try and counter these effects, the spleen becomes enlarged to increase blood cell production.
There are three JAK inhibitor drugs on the market that generate sales in excess of US$1 billion a year. However, according to Pharmaxis CEO Gary Phillips, these drugs only treat the symptoms and not the underlying fibrosis. All but one patient in the Pharmaxis study had failed JAK inhibitor therapy. The life expectancy on these patients is on average between 11-14 months.
Pharmaxis has taken the highest dose explored in the Phase I studies into this Phase II study. It has been difficult to recruit the target patients with 18 sites across the US, Australia, South Korea and Taiwan.
Initial results show that PXS-5505 is very well tolerated by patients. With the patients being recruited having a life expectancy on just 12 months, Phillips said the expectation is that deterioration would continue in the first six months. However, in five of the first six patients, their bone marrow fibrosis, assessed from a biopsy of the bone marrow, was either stable or had improved and two of those patients had clinically improved symptoms. Five of the six patients had stable or improved platelet or haemoglobin levels.
The only measure that did not see a change was spleen volume, which Phillips says may occur if patients are treated for longer and possibly in combination with a JAK inhibitor. According to a clinician who reviewed the individual data, an important aspect was a correlation between improved clinical outcomes and the blood scores. Phillips said there has been a dramatic increase in platelet levels in some patients as well as improvements in symptom scores in the same patients.
One patient went from transfusion dependent to transfusion independent following treatment which Phillips said does not happen by accident. This development was highlighted by the investigator involved in the study.
It's likely that more interim data will be released from the myelofibrosis study. Pharmaxis will require one month safety data from at least 21 patients, with data already available from the first 15 patients who all passed the one-month treatment period.
Once final data is released (mid 2023) the company will seek to progress the program to a registration study, pending positive results. That study would require additional funding, most likely from a partner. A registration study would require at least 300 treatment naïve patients or 100 - 200 patients who are progressing on JAK inhibition therapy.
Competition in Myelofibrosis Treatment
Galecto Inc is also developing a LOX inhibitor for the treatment of myelofibrosis. In a Phase IIa study in a similar patient population, Galecto reported in September that four out of five patients experienced an improvement (reduction) in collagen fibrosis of the bone marrow at six months. Of the 16 patients treated, eight discontinued treatment due to adverse events or disease progression. The company stated that the trial was the first clinical validation of LOXL2 as a target for myelofibrosis.
Phillips said that PXS-5505 is a pan lox inhibitor (inhibiting LOX1, LOX2, LOX3 and LOX4) and has substantially better inhibition of LOXL2 than the Galecto compound (90% inhibition of the enzyme at its lowest point compared to 25%), with the Galecto compound achieving no improvements in symptom scores or blood counts.
Another more advanced competitor in the myelofibrosis field is Constellation Pharmaceuticals, which was acquired last year by MorphoSys for US$1.7 billion. At the time of acquisition, Constellation had Phase II data with its drug compound pelabresib with a JAK inhibitor and had started a 400-patient combination study with a JAK inhibitor (ruxolitinib) in JAK treatment naïve patients.
Of the 84 patients enrolled in the Phase II study, 68% achieved more than a 35% reduction in spleen volume.
Funding
With the capital raise underway and the expected R&D tax rebate, Pharmaxis has just over $26 million in funds. This is enough to get the company to the start of 2024. By then the company should have final data from its myelofibrosis study (mid 2023) and data from the current scarring study (1H 2023). In the first half of 2024 the company also expects data from the liver cancer study and the second scarring study.
Pharmaxis is capitalised at $42 million.
Bioshares recommendation: Speculative Buy Class A
Disclaimer:
Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressed represent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may have interests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s or company’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe the information herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Details contained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. The Directors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: Analyst MP: 1AD, ACR, AVR, CGS, CUV, CYC, DXB, IMM, LBT, MX1, OPT, NEU, PAB, PXS,RNO,SOM. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.
