Sign up Australia
Proactive Investors - Run By Investors For Investors
Why invest in PAR?
Paradigm Biopharmaceuticals Ltd: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Paradigm Biopharmaceuticals banking on near-term revenues from repurposing FDA approved drugs

Paradigm’s share price has increased more than 60% in the last month and it was up more than 12% on Friday.
Graphic of person pointing to different parts of the body
INVESTMENT OVERVIEW: PAR The Big Picture
The company was granted a European patent for the treatment of bone marrow edema lesions with PPS

Paradigm Biopharmaceuticals Ltd (ASX:PAR) is a biotechnology company focused on repurposing Pentosan Polysulfate Sodium (PPS), an FDA-approved drug with a long track record of safely treating inflammation.

However, Paradigm is repurposing it for a number of applications with a focus on the treatment of orthopaedic and viral arthritic indications.

While the company’s market capitalisation of about $60 million could suggest it is a small player in a big pond, it has a blue-chip management team at the helm.

Heading the team is non-executive chairman Graham Kaufman, whose CV includes chief financial officer at CSL Limited (ASX:CSL) and executive vice-president of the $700 million Mesoblast Limited (ASX:MSB).

Strategy beginning to resonate with investors

The company’s strategy appears to be gaining traction with investors.

Of course, one of the advantages of drug repurposing is that it lowers costs and minimises risks, resulting in accelerated development times.

Paradigm’s share price has increased more than 60% in the last month and was up more than 12% on Friday when it hit a high of 52 cents, a level it hasn’t traded at since June 2017.

Establishment of commercial partnerships

Paradigm’s upfront costs aren’t as substantial as those encountered by companies developing and launching new drugs.

Such companies need to finance research and development, as well as conducting studies and trials, in most cases necessitating financing or royalty arrangements with larger players.

While Paradigm’s needs are different, it would be beneficial to establish commercial partnerships with pharmaceutical companies.

Success in achieving this goal may be a share price catalyst.

Multiple applications translate into large end market

PPS is a multi-acting treatment for osteoarthritis, viral arthritis, heart failure and respiratory conditions.

From an osteoarthritis perspective, it is useful in treating bone lesions and bruising.

Consequently, the treatment has broad applications across the ageing demographic, an increasingly emerging challenge for most first world countries.

As medical progress continues to enhance longevity, demand for treatments such as PPS should increase.

Paradigm’s management recently indicated that the combined addressable market was more than US$37 billion.

Vast difference in time to market

The following standard clinical development pipeline, as outlined by industry bodies, demonstrates significant difference between drug development and drug repurposing.

Research by Khanaoure A, Chuki P & De Sousa A in 2014 also demonstrated that the drug repurposing route had a 25% chance of successful commercialisation compared with 10% in ‘de-novo’ (starting from the beginning) drugs.

On the score of speed to market, Paradigm has demonstrated its efficiencies in this area, a factor that has no doubt resonated with investors.

In relation to its phase IIb osteoarthritis/bone marrow lesions development progress, the trial remains ahead of schedule with important results expected in the fourth quarter of 2018.

Management recently referred to this as one of the ‘value inflection points’ for the company, and it would appear logical that this will be reflected in its share price performance.

Success in Europe

Paradigm is also having success outside Australia.

In January, the company was granted a European patent for the treatment of bone marrow edema lesions with PPS.

Paradigm has initiated the process of validating the patent in most European countries, as well as the UK.

The company anticipates that the patent will be validated in these individual countries over the coming six months, providing an effective patent life of 20 years.

Management said that the patent would expire on February 2, 2032.

The European registration enhances Paradigm’s strong patent position, adding to previously granted registrations in the US, Japan, China, Canada, Taiwan, Singapore and Australia.

Additional layer of exclusivity

Paradigm has an additional level of market exclusivity via its supply agreement with bene pharmaChem GmbH.

Bene pharmaChem is the original manufacturer of PPS and its manufacturing process is protected via trade secrets.

The supply agreement with the group provides Paradigm with exclusive rights to the injectable PPS for use in humans for all its orthopaedic indications for a term of 20 years.

Paradigm also has the right to extend the term if it so chooses.

View full PAR profile View Profile

Paradigm Biopharmaceuticals Ltd Timeline

Related Articles

surgeons working
September 03 2018
Chief executive Steve Couldwell also told investors the regenerative medicines specialist had identified a number of potential new commercial opportunities it was “actively pursuing”
mountains
August 22 2018
So far, the hit rate is a five out of 12 success rate for its investments
3d rendering of an antibody
July 24 2018
It is teaming up with Bach BioSciences, a company commercialising the research of William Bachovchin, a professor at Tufts University School of Medicine, Boston

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use