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The biotech sector can be a minefield for investors, but the returns can be spectacular for the investor that accepts the fact that there is a long pathway between the laboratory and the market – and that pathway is fraught with potential mis-steps.
The sector grabs a lot of investor attention because in many cases the companies are trying to commercialise world-leading scientific advances – often made here in Australia.
Here are 6 fascinating examples of exciting potential biotech breakthroughs on the ASX.
Market capitalisation: $284 million
Three-year total return: +44.7% a year
Imugene works in immuno-oncology, the anti-cancer field in which the body’s immune system is artificially stimulated to boost its natural ability to fight the disease (sometimes called “cancer immuno-therapy.”) Imugene is developing four new treatments that activate the immune system of cancer patients to identify and eradicate tumours.
Earlier this month, Imugene received approval from the US Food and Drug Administration (FDA) to begin a clinical trial in the US for its PD1-Vaxx drug – IMU gained Investigational New Drug (IND) approval to begin enrolment in a Phase 1 trial in patients with non-small cell lung cancer, or NSCLC (the most common type of lung cancer, accounting for about 80% of cases.) PD1-Vaxx, one of Imugene’s portfolio of B-cell immunotherapy candidates, is already in clinical trials in Australia. B cells are one of the influences on whether patients respond to immunotherapy in a variety of cancers.
Imugene’s HER-Vaxx candidate, which is a B-cell peptide cancer immunotherapy designed to treat tumours in gastric, breast, ovarian, lung and pancreatic cancers, is also in Phase 2 trials in gastric cancer patients.
The company is also working in the highly promising area of oncolytic virotherapy, a form of cancer treatment that uses naturally occurring or genetically modified viruses to infect, replicate in, and kill cancer cells, while sparing healthy cells. Imugene’s two oncolytic virotherapies, VAXinia and CHECKvacc, are also planned to start Phase 1 trials in the near future. VAXinia will be tested in a patient population including those suffering from advanced or metastatic melanoma, non-small cell lung, gastric, colorectal, Triple Negative Breast Cancer (TNBC), bladder, head and neck and renal cell cancers. Pre-clinical studies of CHECKvacc have shown particularly encouraging results in triple negative breast cancer (TNBC).
Market capitalisation: $103 million
Three-year total return: +31.1% a year
Kazia’s investigational new drug paxalisib is being developed to treat glioblastoma (GBM), an aggressive type of brain cancer, and other cancers. In October, the company signed a deal to participate in the GBM AGILE pivotal study in glioblastoma, a Phase 3 trial regarded as pivotal – the GBM AGILE (Glioblastoma Adaptive Global Innovative Learning Environment) is an international platform study that has been established specifically to test and (hopefully) approve new medicines for glioblastoma, an aggressive type of cancer that can occur in the brain or spinal cord. Recruitment of patients for the testing of paxalisib is expected to begin in the first quarter of 2021.
Clinical data shows that paxalisib can achieve the crucial crossing of the blood-brain-barrier and penetrate the tissues of the brain and the spine. The drug has both “orphan drug” and “fast-track” status from the FDA: the first is given to drugs that may be able to treat medical conditions which, because they are so rare, would not be profitable to produce without government assistance, while the second is designed to speed-up the development of drugs with the potential to address unmet needs in serious or life-threatening conditions. Kazia licensed the drug from US cancer drug developer Genentech.
Paxalisib is the main story for Kazia, but the company has another iron in the fire: its Cantrixil molecule shows activity against cancer stem cells and is currently in Phase 1 trials in ovarian cancer.
Market capitalisation: $23 million
Three-year total return: –4.4% a year
Amplia is working on a pipeline of therapies that “switch off” the particular protein, known as focal adhesion kinase (FAK), that controls the formation of the protective fibrotic layer around cancer cells, and thus inhibits the penetration of chemotherapy drugs. Pancreatic cancer is well-known for having this fibrotic “shield,” but Amplia’s lead drug candidate, known as AMP945, targets the FAK protein, potentially enabling the drug to treat and prevent fibrotic diseases, as well as allow doctors to treat cancers that previously resisted chemotherapy. AMP945 is particularly focused on difficult-to-treat cancers, such as pancreatic and ovarian cancer, as well as chronic fibrotic diseases such as idiopathic pulmonary fibrosis (IPF).
The drug came out of a collaboration under the Cancer Therapeutics Co-operative Research Centre, involving scientists from the nation’s top universities, the Peter MacCallum Cancer Centre, the Walter & Eliza Hall Institute of Medical Research and Cancer Council Victoria.
The Phase 1 clinical trial of AMP945, which is designed to evaluate the safety and tolerability profile of the drug in healthy volunteers, got under way in October. Subject to the results of the Phase 1 trial, Amplia plans to progress AMP945 into Phase 2 clinical testing in patients toward the end of 2021.
Market capitalisation: $39 million
Three-year total return: –27.5% a year
Earlier this month, Australian pharmaceutical research company Pharmaxis achieved the rare distinction of FDA approval for one of its therapies – the FDA approved the sale in the US of its Bronchitol product, an inhaled dry powder, as an add‐on maintenance therapy to improve pulmonary function in cystic fibrosis (CF) patients 18 years of age and older. The product is already sold in Europe, Russia and Australia, but FDA approval is the global “gold standard” for a drug’s safety, quality, and effectiveness.
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.
Pharmaxis’ US commercial partner, Italian pharma company Chiesi, will now pay Pharmaxis a US$7 million ($9.9 million) milestone payment, with a further US$3 million ($4.2 million) payable on shipment by Pharmaxis of commercial launch stock, scheduled for the first quarter of 2021.
These payments, and its own cash reserves, will then help to fund Pharmaxis’ PXS-5505 drug candidate, aimed at myelofibrosis in adults, through its planned Phase 2 trials. Because there is no effective treatment, earlier this year the FDA granted Pharmaxis “orphan drug” designation for PXS‐5505 for treatment of myelofibrosis.
PXS-5505 could transform Pharmaxis’ business: the drug also has potential in several other cancers including liver and pancreatic cancers, where it can potentially break down the fibrotic tissue in the tumour and enhance the effect of existing chemotherapy.
Market capitalisation: $52 million
Three-year total return: +9% a year
Following success in Phase 2 trials this year, Australian drug developer Dimerix will submit an investigational new drug (IND) application to the FDA take its lead compound DMX-200 to a pivotal Phase 3 clinical trial in 2021, against the kidney disease focal segmental glomerulosclerosis (FSGS). FSGS is a particularly cruel disease, with half of all children who acquire it likely to endure kidney failure within five years. The disease, in which scar tissue develops in the glomeruli – the capillary networks that work as the microscopic filtration units in the kidney – and degrades their effectiveness, has no treatment approved anywhere in the world. For this reason, DMX-200 has been designated an “orphan drug” for FSGS by both the FDA and European Medicines Agency (EMA).
Dimerix also put DMX-200 into Phase 2 studies this year in patients with diabetic kidney disease (DKD), and the results showed that DMX‑200’s mechanism of action makes it effective against that disease as well. The company is waiting for full data from the Phase 2 trial in DKD to see whether it will also proceed to Phase 3 trials in that disease. There is no cure for DKD, and current treatment options are ineffective as the kidneys deteriorate towards failure.
Dimerix is also working on a study in patients with Acute Respiratory Distress Syndrome (ARDS), which is a major cause of death associated with COVID‑19. In June, DMX-200 was chosen to be used in a global trial to treat patients with ARDS. The trial, known as the Randomised, Embedded, Multifactorial Adaptive Platform trial for Community-Acquired Pneumonia (REMAP-CAP) program, is endorsed by the World Health Organisation (WHO). The REMAP-CAP trials have been established by a group of intensive care specialists from around the world, to enable researchers to rapidly analyse the effectiveness of multiple different treatment options for eligible COVID-19 patients admitted to ICU. The ultimate aim of the REMAP-CAP trials is to future-proof for pandemics like COVID-19.
Market capitalisation: $44 million
Three-year total return: n/a
Australian regenerative medicine company Exopharm works in the field of exosomes (also known as extra-cellular vesicles, or EVs), which all cells produce. Exosomes are an essential component of cell-to-cell signalling: they are small particles that deliver therapeutic ‘cargoes’ – such as protein and nucleic acids – to other cells to reduce inflammation and promote regeneration. Exosomes secreted by stem-cells is a major focus of regenerative medicine.
Exopharm’s difference is that accelerates the therapeutic effect by extracting the EVs from the stem cells and placing them in the patient’s body. The company has developed a proprietary method for a purification technique that can mass-produce exosomes/EVs: the process is called ligand-bases exosome affinity purification – or LEAP, for short – and Exopharm patented it in 2016.
Exopharm has developed an exosome product, Plexaris, derived from human platelets using LEAP, and that product is now in a Phase I study, called PLEXOVAL II. The first study (PLEXOVAL I) validated Exopharm’s process for manufacturing autologous (that is, sourced from an individual’s own blood platelets) Plexaris product. The PLEXOVAL II study is an advance on this because it uses a Plexaris product derived from allogeneic (unmatched) platelets.
The PLEXOVAL II study is on track for completion by the end of 2020: it is mainly investigating safety, but also the effect of Plexaris on wound healing activity (wound closure and scarring).
Disclaimer: the writer has in the past drafted ASX announcements and media releases for Dimerix, Exopharm and Pharmaxis through a third-party investor relations consultancy.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.