As the gravity of the coronavirus outbreak continues to intensify, the healthcare sector has been surrounded by the news about the race amongst countries and pharma companies to develop a vaccine for the infectious disease. Several established companies, as well as emerging companies, have made claims suggesting positive results from the trials and tests conducted by them.
Moreover, several companies have transformed from million-dollar companies to billion-dollar companies in the recent past. One Company that the investors are talking about is the clinical-stage biopharmaceutical Company, Dimerix Limited (ASX:DXB). They expect the Victoria-headquartered Company to be the next billion-dollar biotech player like some of the other highly successful biotech companies, anticipating that its phase 2 trials results will show similar promise.
There is a reason why Dimerix has become the talk of the town for investors and why there is a comparison with some of the other biotech companies. Several biotech companies had witnessed a sharp surge in their shares after favourable results from phase two clinical trials, and Dimerix looks to be on track to mimic these players.
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Investors are anticipating the results from two phase 2 trials testing DMX-200 somewhere in the middle of 2020. Moreover, Dimerix believes that the optimism among the investors about these results has helped the stock price of DXB navigate smoothly through the highly volatile market with an impressive return of 54.55% to its shareholders during the last one month till 22 May 2020.
Moreover, during the last six months till 22 May 2020, the DXB stock has gone up by a staggering 131.82%. One of the reasons for the surge in the price of DXB stock was the quarterly results reported by the Company for the period ended 31 March 2020 highlighting that the two Phase 2 clinical studies; DMX-200 for FSGS; and DMX-200 for Diabetic Kidney Disease, were on track and under budget with results expected in mid-2020.
The independent Safety Review Committee overseeing the Company’s ongoing studies has affirmed a positive recommendation that both trials continue without modification. Since both the clinical trials represent a significant clinical milestone for Dimerix, major pharmaceutical companies across the globe have shown significant interest in the biotech player.
Along with these two Phase 2 trials, the Company has an asset in pre-clinical development: DMX-700 for COPD, which is a progressive and life-threatening lung disease caused due to exposure to tobacco smoke, indoor and outdoor air pollution, occupational dust and fumes and long-term asthma. The condition is also the fourth-leading cause of death across the globe. Dimerix has completed initial studies and lodged a provisional patent application for DMX-700 to secure an important new drug discovery.
Investors are optimistic that the results related to these ongoing studies shall soon be out and the stock shall depict a movement similar to the other biotech stocks that witnessed a surge in their stock price as an effect of the announcing favourable data over the last one and half years.
With a clear corporate strategy and a detailed business plan, including a considered risk management plan, Dimerix is progressively engaged in executing these plans suitably.
Several vital activities currently remain underway, and the exciting part of all this is yet to be delivered in the form of results through the two phase 2 trials. Besides, the recent addition of DMX-700 to the pipeline has increased the inherent value of DXB’s platform technology to an unmatched level.
DXB expects the value of its assets to accelerate with the execution of commercialisation of DMX-200. At the same time, the Company is set to enter a critical phase for all shareholders as it begins to understand the complete commercial potential of its technology platform and reach an exciting value-adding milestone in its history.
On 22 May 2020, the DXB stock settled at $0.255, up by 2% compared to the previous close. The Company has a market capitalisation of $45.38 million with ~181.53 million outstanding shares. During the last one month, the stock has gone up by 54.55%.
Let us throw light on some of the other biotech players that witnessed a significant rise in share price post the release of their respective phase 2 study results:
Opthea Limited (ASX:OPT)
One of these stocks is Opthea Limited which is a biologics drug developer focusing on ophthalmic disease therapies that turned out to be a billion-dollar Company after getting investor’s attentions after reporting of successful phase 2 study into wet age-related macular degeneration (AMD), a condition for which there are few suitable treatments.
Although it took several years for Opthea’s to be active engagement in obtaining such significant result, yet investors were vigilant enough to keep an eye on the significant day of results that were long due for OPT.
In March 2020, the OPT reached a significant clinical milestone through concluding patient dosing and all follow-up week 12 patient visits in the Company’s Phase 2a trial evaluating the safety and efficacy of OPT-302.
The OPT stock witnessed an unmatched growth in August 2019 to a level of $4.15. On 22 May 2020, the OPT stock settled at $2.790, down by 2.105% compared to the previous close. The Company has a market capitalisation of $767.1 million with ~767.1 million outstanding shares. During the last one year, the stock has gone up by an astounding 322.73%.
Paradigm Biopharmaceuticals Limited (ASX:PAR)
DXB could very well follow the path of Paradigm Biopharmaceuticals Limited, a biopharmaceutical company focused on repurposing the drug pentosan polysulphate sodium (PPS) for the treatment of inflammation revealed multiple positive trial outcomes before the stock showed dramatic movement.
In December 2018, Paradigm had notified that its phase 2b trial on osteoarthritis of the knee had met the target of between 175-200 TGA SAS patients reported on before the read-out of its 110 patient Phase 2b osteoarthritis randomised double-blind, placebo-controlled, clinical trial.
Further in April 2019, PAR met its secondary endpoints of Activities of Daily Living (ADL) that showed better physical function to Day 165 in subjects treated with injectable pentosan polysulfate sodium (iPPS) compared to placebo.
Moreover, the PAR further reported successful Ross River Phase 2a clinical trial, which showed RRV disease symptoms were reduced by injecting pentosan polysulfate sodium compared to placebo.
However, investors took notice of the significant developments at the Company only after filing of PAR’s first IND submission to the US FDA for an Expanded Access Program where ten Americans were expected to include some retired NFL players who had early-onset osteoarthritis and had also failed standard of care.
The stock showed slower growth in 2018 as an effect of the positive effect of less intensive triggering before the first results were released and finally skyrocketed by 223% to peak at $4.50.
On 22 May 2020, the PAR stock settled at $2.480, down by 2.362% compared to the previous close. The Company has a market capitalisation of $570.83 million and ~224.74 million outstanding shares. During the last one month, the share price has increased by an impressive 72.22%.
Antisense Therapeutics Limited (ASX:ANP)
A biopharmaceutical company engaged in development and commercialisation of antisense pharmaceuticals for large unmet markets, Antisense Therapeutics Limited, witnessed a surge in its stock price after receiving positive preliminary results from six patients who completed 24 weeks of dosing in Phase II clinical trial of ANP’s immunomodulatory therapy, ATL1102 for Duchenne Muscular Dystrophy (DMD) therapy.
The positive results from the phase two clinical trial indicated that the drug was effective on the patients and was likely to demonstrate a meaningful deceleration of disease progression compared to what might otherwise have been expected.
The ANP stock surged by as much as 180% during September 2019 after these results were out. On 22 May 2020, the ANP stock settled at $0.067, up by 39.583% compared to the previous close, primarily due to the announcement regarding final Phase 2 DMD results surpassing expectations on secondary endpoints. The Company has a market capitalisation of $23.46 million and ~488.79 million outstanding shares. During the last one month, the share price has increased by 42.55%.
Bottomline
Investors should be aware that merely entering a clinical trial does not guarantee the successful completion of the trial, and there remains a substantial risk of failure during the trial. However, we can assume that it is not only the optimism among the investors that is pushing the price of DXB’s stock. What is more important is the far more reaching application of the drug and the effectiveness of the same after consumption in patients.
NOTE: $ denotes Australian Dollar, unless stated otherwise.
Disclaimer
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
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