Australian company Pharmaxis has sold Russian distribution rights to cystic fibrosis therapy BRONCHITOL (mannitol) and completed a $4.4 million placement to institutional investors.
BRONCHITOL was discovered and developed in Australia. Pharmaxis manufactures the medicine at its facility in Sydney.
The company has announced the sale of BRONCHITOL distribution rights in Russia to Turkish company GEN İlaç ve Sağlık Ürünleri San. ve Tic. A.Ş. (GEN) for A$2 million. Pharmaxis said 70 per cent of the A$2 million fee is now payable with the remaining 30 per cent due in 12 months.
The company said the sale will also deliver an ongoing reduction in annual marketing and regulatory expenses of A$1 million. Pharmaxis said it will continue to manufacture and export BRONCHITOL to Russia from its factory in Sydney that also supplies the US, European and Australian markets.
“Pharmaxis steered BRONCHITOL to approval as the first orphan drug approved in Russia following a change in legislation, listing on the Essential Drugs List and subsequently established a fast-growing business that brought a new drug to cystic fibrosis patients in Russia," said CEO Gary Phillips.
"We have had a long and productive collaboration with GEN who have been our distributors in the Turkish market for many years. Extending this relationship to encompass Russia and other related territories at this time will ensure that Bronchitol will be well supported by an experienced partner with a leading position in cystic fibrosis care.
“The upfront payments and the annual cost savings realised by the Company along with the placement announced earlier today strengthen our balance sheet as we commence clinical proof of concept studies in myelofibrosis and skin scarring. Further initiatives currently underway to generate non-dilutive cash and reduce operating expenses will be announced as they are completed,” said Mr Phillips.
Pharmaxis also announced a placement of 54.6 million fully paid ordinary shares at A$0.08 per share to raise approximately A$4.4 million.
The company said the funds will be used to strengthen its balance sheet as it progresses a phase 1/2 study in myelofibrosis with its lead drug PXS-5505, which is currently recruiting, as well as a phase 1c study in patients with problematic skin scarring with its topical drug PXS-6302. It said it will have a $A20 million cash balance (31 March 2021) post the raise.
Pharmaxis said the placement received strong support from Hong Kong and Sydney-based Karst Peak Capital that committed to investing A$3.2 million and will emerge owning 8.9 per cent of the company. Existing shareholder BVF Partners LP also committed to investing a further A$0.8 million to maintain its shareholding at 19.5 per cent.
“We are delighted to welcome Karst Peak as a major shareholder as we commence clinical studies that will deliver results that will have significant value to both patients and shareholders. This recognition of the potential in our pipeline from an institutional fund that is renowned for its extensive due diligence prior to investing is very encouraging at a time when we are focusing our resources on clinical trials and looking to deliver non-dilutive cash and cost savings from other parts of our business,” added Mr Phillips.