Pharmaxis gets EU boost for Bronchitol but further progress needed


European regulators’ change of heart gives Pharmaxis exactly the jump start it needs – a green light for cystic fibrosis therapy Bronchitol, reversing an earlier negative opinion, means the company should have the product on the market early next year.

Shares in the Australian company doubled in value today to A$1.41 on the news, a healthy recovery, although still somewhat below the A$3 the stock was trading at prior to the initial knock back (Pharmaxis' Bronchitol plans flounder in Europe, May 31, 2011). Growing caution around new drug launches, a label that excludes adolescents and children, and a looming fundraising are likely to combine to keep a lid on investor enthusiasm for now. With the company’s sights now trained on the US market, progress here is needed for another boost.


Approved for cystic fibrosis patients aged 18 and over, Bronchitol improves lung function by reducing the stickiness of the mucus that invades the airways of suffers, and aiding its clearance.

The Committee for Medicinal Products for Human Use (CHMP) has recommended it as an add-on treatment to standard of care, a broad label that Pharmaxis says does not exclude any patient subset and was exactly the wording it was hoping for.

Variability in response rates seen in clinical trials, particularly among different age groups, caused the regulator to hesitate on approval at first, and the label specifying patients aged 18 and over is a result of this. Another trial has been requested in 6 to 17 year olds to clarify safety and efficacy signals, which the company says will last only one or two months and cost A$1.5-2m ($1.6-$2.1m).

Those over 18 tend to be the heaviest users of medication and represent about two-thirds of the market, executives said on a conference call, so the label restrictions are not too onerous and will, hopefully, be broadened in the future.

Shareholder driven?

Pharmaxis ended September with A$34m in the bank, a sum that should last at least 12 months but that will need supplementing to support a European drug launch. Options are under consideration, executives said, stressing that funding does not have to be “shareholder driven”.

The company last raised cash in 2009, selling shares at A$2.35 and banking A$50m. With the stock still below that level, despite regulatory approvals in Australia and Europe near enough, issuing new shares would not be popular.

As well as financing the company will now start to work on a US application, which it hopes to file next year.

Snails pace

Evidence that progress is being made in the US will likely be needed to push Pharmaxis shares back towards the A$3 mark. The European approval was not won easily – even though the CHMP backed the product in the end its statement contained cautious notes: “Although the size of the effect is small with around 2-3% absolute change in FEV1 predicted and the clinical benefit is difficult to ascertain, it is acknowledged that even a small effect can be of relevance given the deterioration of FEV1 inherent to the disease progression,” they wrote.

This would certainly seem to pitch Bronchitol as a therapy for sick patients who are already on other medicines. The fact that few of these exist for cystic fibrosis, and that Bronchitol is a much more convenient dry powder inhaler, rather than administered through a nebulizer like other options, stands it in good stead.

But the product will not be cheap and despite its orphan status reimbursement negotiations will not be easily won in Europe. And should the FDA strike a similarly circumspect stance to Pharmaxis’ clinical package – one of the two pivotal trials did not hit its primary endpoint – Bronchitol's progress from here could still be painfully slow.

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