Importance of Drug Development for Biotech Companies – NEU, TLX, PXS, RGS, BIT

Drug Development Process

The drug development process starts from drug discovery and ends at the launch of the new pharmaceutical product in the market. The process includes drug discovery and development, preclinical trials, clinical trials, regulatory approvals and market safety monitoring. Before starting preclinical trials, researchers conduct experiments to identify and collect information of new compounds such as absorption, distribution, metabolism, excretion (ADME), potential benefits and its mode of action (MOA), adverse or side effects of drug, dosage and route of administration.

Next step of drug development is preclinical trials, and these trials are conducted in animals and microorganisms. In preclinical trials, the toxicity of the compound is evaluated. Once the drug passes trials in animals, it is studied in humans in clinical trials. Drug developers or the sponsors submit an investigational new drug (IND) application to the regulatory agency, for instance the Food and Drug Administration, before beginning clinical research. After the successful completion of a clinical trial of the drug, the FDA reviews report of the problems or side effects with prescription or over the counter (OTC) drugs and determine the cautions to dosage information and for other serious issues.

The process from drug discovery to the marketing of a drug is lengthy and very expensive. The estimated range from leading health care companies is in between $1.2 billion and $1.8 billion for one new drug approval with the risk that many targets do not meet the requirements and fail somewhere along the extensive process. However, some small health care companies have been successful with smaller investment of approximately $500 million. The average time to launch a successful pharmaceutical drug in the market is around 12-15 years.

Let’s discuss five ASX listed health care stocks and their drug development-

Neuren Pharmaceuticals Limited (ASX: NEU)

Australian headquartered health care company, Neuren Pharmaceuticals Limited (ASX: NEU) is into the development of new treatment for neurodevelopmental disorders with high unmet need. The lead drug compound of NEU is trofinetide, which is in clinical trial phase III for Rett syndrome and has completed the Fragile X syndrome phase II clinical trial program. NEU has received Fast Track designation from the Food and Drug Administration (FDA) for the programs in these two syndromes. The company has given an exclusive license to ACADIA Pharmaceuticals for trofinetide development and commercialisation in North America.

Commencement of Phase III Trial of trofinetide in Rett Syndrome

In a recent ASX announcement, the company unveiled that its licensee ACADIA Pharmaceuticals has started the phase III clinical trial of trofinetide in Rett syndrome in the United States. The cost of phase III trial and other developmental is being funded by ACADIA Pharma, and Neuren has full access to all data for use to commercialise outside North America without any cost.

Key Highlights from Corporate Presentation

  • Neuren’s lead drug candidate trofinetide is in phase III clinical trial for Rett syndrome and in phase II for Fragile X syndrome.
  • Its North American licensee ACADIA funds the development and commercialises in the United States.
  • NNZ-2591, the second drug of NEU, is moving into clinical trials for three diseases in 2020.
  • NNZ-2591 received a grant of Orphan Drug Designation by FDA in Angelman, Pitt Hopkins and Phelan-McDermid syndromes.

Product Pipeline; Source: Company’s Report

Stock Performance

The company’s stock was trading at $2.640 on 06 November 2019 (AEST 01:42 PM) with a daily volume of nearly 40,523 and a market capitalisation of approximately $271.04 million. The stock has delivered a good return of 133.63% in the last six months.

Telix Pharmaceuticals Limited (ASX:TLX)

A clinical-stage biopharmaceutical company, Telix Pharmaceuticals Limited (ASX:TLX) is headquartered in Melbourne, Australia. It is engaged in developing drug molecules for unmet medical need in oncology particularly for kidney, prostate and brain cancer. TLX, which has operations in Japan, Belgium and the United States, is involved in diagnostic and therapeutic product development. The company uses the Molecularly Targeted Radiation (MTR) technology.

Collaboration between Telix Pharmaceuticals and AusHealth

As per an ASX update, the company and AusHealth have signed a technology licensing agreement and entered into a partnership for APOMAB®, a novel MTR platform for the treatment of lung and ovarian cancers. TLX and AusHealth will invest $30k (each) to fund the clinical proof of concept and on successful and commercial development of MTR technology, Telix will pay ~ $30 million in future milestone.

Upcoming Clinical Milestones of Telix
  • Submission of IND for phase III ZIRCON.
  • US Drug Master File submission for TLX101.
  • TLX591 Phase III clinical protocol submission to FDA
  • US new drug application for TLX591-CDx

Clinical program update; Source: Company’s Report

Stock Performance

The company’s stock was trading at $1.640, down 1.502% on 06 November 2019 (AEST 01:49 PM), with a daily volume of nearly 744,606 and a market capitalisation of approximately $421.71 million. The stock has delivered a good return of 156.15% on a YTD basis.

Pharmaxis Ltd (ASX: PXS)

Australian headquartered pharmaceutical research company, Pharmaxis Ltd (ASX: PXS) is into drug development for inflammation and fibrotic diseases. PXS has a favourably productive drug discovery engine and pharmaceutical compounds in clinical trials.

BI 1467335 – Phase 2a clinical trial in NASH

  • BI 1467335, which was formerly known as PXS-4728A, is an oral inhibitor of amine oxidase. Boehringer had acquired PXS-4728A from Pharmaxis in 2015, for two disease conditions – the liver disease Non?Alcoholic Steatohepatitis (NASH) and the eye disease diabetic retinopathy (DR).
  • The phase 2a NASH trial is a multi?centre, double?blind study and is being conducted in nine countries across Europe and North America.
  • Boehringer is expecting to provide the trial results to Pharmaxis in the fourth quarter this year.
  • The critical objectives of this trial are to demonstrate proof of clinical principle, evaluate the safety and investigate appropriate dosing of BI 1467335.

Stock Performance

The company’s stock was trading at $0.195, down 4.878%, on 06 November 2019 (AEST 01:53 PM) with a daily volume of nearly 4,000 and a market cap of approximately $80.91 million. The stock has delivered a negative return of 24.07% on a year to date basis.

Regeneus Ltd (ASX:RGS)

Sydney based health care company, Regeneus Ltd (ASX:RGS) is involved in developing a novel cell-based therapies portfolio for osteoarthritis and neuropathic pain using its platform technologies Progenza and Sygenus.

Key Highlights for quarter (ended on 30 September 2019)
  • Progenza showed positive preclinical data for the treatment of neuropathic pain.
  • R&D tax Incentives of $1.5 million received for FY19.
  • Cash balance of the company was $1 million on 30 September 2019.
  • Net operating cash outflow of $250k per month
  • Cash position of Regeneus strengthened with capital raising of $5.5 million.

Pipeline; Source: Company’s website


In the upcoming financial year, the company would focus on completion of phase II trial and commercialise Progenza for treating osteoarthritis. Regeneus aims to launch a product in Japan in 2023.

Stock Performance

The company’s stock last traded at $0.080 on 05 November 2019 with a market capitalisation of approximately $21.47 million. The stock has delivered a negative return of 55.76% on a YTD basis.

Biotron Limited (ASX: BIT)

Sydney-based health care sector player, Biotron Limited (ASX: BIT) is engaged in R&D and commercialisation of various antiviral drugs for diseases with an unmet medical need. The company is due to conduct an annual general meeting on 26 November 2019 in Sydney, Australia.

Clinical Stage Drug Development

Biotron’s lead compound BIT225 is in the mid-stage of its clinical trial for the treatment of HIV and hepatitis.

  • Biotron has a strong pipeline of drugs for serious virus infections.
  • Phase 2 clinical trial of BIT225 for HIV-1 has completed and BIT reported positive results.
  • The results from phase II clinical trial showed that BIT225 delivered key immune responses which were not even induced with the approved anti-HIV drugs.

Drug Pipeline; Source: Company’s Report

Stock Performance

The company’s stock was trading at $0.070 on 06 November 2019 (AEST 02:09 PM), with a daily volume of nearly 344,587 and a market capitalisation of approximately $41.81 million. The stock has a 52 weeks high price of $0.255 and a 52 weeks low price of $0.055. The stock has delivered a negative return of 39.13% on a YTD basis.


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