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FDA Bronchitol Approval to Generate Cash Flows for Pharmaxis

SYDNEY–()–It is the gold standard of success in biotech, but not many Australian companies can boast it – approval from the United States Food & Drug Administration (FDA) of a medicine you have researched and developed.

Sydney based Pharmaxis (ASX: PXS) has reached the top biotech echelon with the US agency’s approval of its cystic fibrosis treatment Bronchitol® (mannitol).

Bronchitol is now cleared for sale in the US as an add‐on maintenance therapy to improve pulmonary function in cystic fibrosis (CF) patients 18 years of age and older. The product – an inhaled dry powder – is already sold in Europe, Russia and Australia, and now will be available to patients in one of the world’s largest markets.

Pharmaxis will manufacture, package and export the product to the USA from its purpose‐built Sydney factory where high tech equipment transforms a powder into tiny particles that can be inhaled via a hand‐held device.

FDA approval is a “transformational step” for Pharmaxis, says Gary Phillips, chief executive officer of Pharmaxis. “We’re very pleased that Bronchitol, an Australian drug discovery, will now be available for patients in the USA. FDA approval is a testament to the capability of our team, who conducted the three large‐scale Phase 3 clinical trials that established Bronchitol’s safety and efficacy.”

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. Patients inhale increasing doses of Aridol through a simple hand‐held device: respiratory clinicians administering the test measure the patient’s lung function to identify airway inflammation, which can help doctors in providing appropriate asthma treatment.

What makes Bronchitol’s FDA approval so transformational for the company and its shareholders, says Phillips, is that it triggers cash flows that bankroll the company to take its PXS‐5505 drug candidate, aimed at myelofibrosis in adults, through its planned Phase 1c/2 trials. The ultimate aim of the transformation, he says, is to make Pharmaxis a global leader in myelofibrosis, and flowing from that, to develop PXS‐5505’s potential in several other cancers, including liver and pancreatic cancers.

“With the two mannitol products in the marketplace and generating revenue, we can shift the focus to our pipeline of small‐molecule drugs for big diseases. It’s already enabling us to put the most promising of those, PXS‐5505 into Phase 1c/2 trials,” he says.

PXS‐5505 inhibits all the lysyl oxidase (LOX) family of enzymes, which play a crucial role in the development of severe fibrosis, as well as cancers to which fibrosis contributes. The drug is being aimed in the first instance at myelofibrosis, a rare cancer in which normal bone marrow tissue is gradually replaced with a fibrous scar‐like material; over time, this leads to progressive bone marrow failure preventing the production of adequate numbers of red cells, white cells and platelets. Myelofibrosis has a poor prognosis and limited therapeutic options.

Because there is no effective treatment, earlier this year the FDA granted Pharmaxis “orphan drug” designation for PXS‐5505 for treatment of myelofibrosis. This is a special status granted to a drug to treat a rare disease or condition; the designation means that PXS‐5505 can potentially be fast‐ tracked, and receive tax and other concessions to help it get to market. The FDA has also given Pharmaxis Investigational New Drug (IND) approval to proceed to Phase 1c/2 trials with PXS‐5505.

“All the building blocks are in place now for the Phase 2 trial, and we expect to start recruiting for the study in the first quarter of 2021, and conclude it by the end of 2022,” says Phillips. “The aim is to show that our drug is disease‐modifying, and will make a real difference to patients with myelofibrosis. That is an attractive market, at more than US$1 billion ($1.4 billion) a year.

“While our primary focus is the development of PXS‐5505 for myelofibrosis, the drug also has potential in several other cancers including liver and pancreatic cancers, where it aims to breakdown the fibrotic tissue in the tumour and enhance the effect of existing chemotherapy,” adds Phillips. “We already have a lot of interest in the drug from other clinicians, and they’re proposing to do studies of the drug in other cancers. Naturally, we’re very keen to supply the drug to any such trials.”

Importantly, Bronchitol’s approval by the FDA gives Pharmaxis the financial runway to see PXS‐5505 fully through the clinical trial process, starting with milestone payments from development and commercialisation partner Chiesi USA, the American affiliate of Italian global pharmaceutical company Chiesi Farmaceutici S.p.A, which is responsible for the regulatory approval and commercialisation of Bronchitol. With FDA approval, Chiesi will now pay a US$7 million ($9.9 million) milestone to Pharmaxis, 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.

“With the milestone payments that we will get from Chiesi, plus the existing cash in the company, plus ongoing sales revenue from Bronchitol and Aridol, our funding situation for PXS‐5505 is assured,” says Phillips. “Our long term supply contracts with Bronchitol and Aridol distribution partners minimises our exposure to the commercial risks and secures a steady revenue stream. The focus for investors becomes PXS‐5505 and the rest of our anti‐fibrotic LOX program.

“PXS‐5505 has a unique mechanism of action that has the potential for disease modification, and we’re looking forward to seeing the effect of this drug in clinical trials,” adds Phillips.

For full ASX releases please see: https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02303355-2A1260700?access_token=83ff96335c2d45a094df02a206a39ff4 and https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02303358-2A1260702?access_token=83ff96335c2d45a094df02a206a39ff4

Forward‐Looking Statements

Forward‐looking statements in this media release include statements regarding our expectations, beliefs, hopes, goals, intentions, initiatives or strategies, including statements regarding the potential of products and drug candidates. All forward‐looking statements included in this media release are based upon information available to us as of the date hereof. Actual results, performance or achievements could be significantly different from those expressed in, or implied by, these forward‐looking statements. These forward‐looking statements are not guarantees or predictions of future results, levels of performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this document. For example, despite our efforts there is no certainty that we will be successful in partnering our LOXL2 program or any of the other products in our pipeline on commercially acceptable terms, in a timely fashion or at all. Except as required by law we undertake no obligation to update these forward‐looking statements as a result of new information, future events or otherwise.

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