DXB announces approval for Phase III COVID-19 trials in India
6 minute read
Our new business model is to research, analyse, and invest in up and coming small cap ASX-listed biotech stocks that we believe have a high chance of success. We then share our research and commentary along our investment journey with our readers.
Last month, we announced our very first investment in our small cap biotech portfolio, Dimerix Ltd (ASX:DXB).
DXB has developed a treatment for inflammatory diseases such as kidney and respiratory diseases and is busy advancing multiple near term Phase 3 clinical studies.
We are closely following DXB's progress in its application for treating COVID-19. This is what we call our "DXB side bet #1" to our main reason for investing — the Phase 3 trials of its kidney disease treatment that are happening over the next 12 months.
Today, DXB announced that the main drug regulator in India has recommended approval for its Phase 3 clinical trials on COVID-19 treatment, specifically for patients with respiratory complications.
This was the final regulatory approval required to commence recruitment for the study and the first patient is expected to be dosed in the next few weeks.
A total of 600 patients will be recruited into the trial, starting with an initial group of 80. Now that the trial is approved we are watching for the first of the 80 to be recruited, which we expect to happen in the very near term.
Obviously, the market for for treatments of COVID-19 complications is pretty big.
Just a short note from us today (its a public holiday here in Melbourne), but we will follow up with a deeper analysis of today's DXB news on Monday at our sister portfolio nextinvestors.com, that has called DXB as its 2021 Biotech Pick of The Year.
Also, DXB is hosting its annual shareholder meeting this Monday 27th September at 2pm AEST. Managing Director Nina Webster will be running through a presentation and answering shareholder questions. If you want to attend (virtually) you can do so via this meeting link.
Todays news: What is the CLARITY 2.0 Study?
The Controlled evaLuation of Angiotensin Receptor Blockers for COVID-19 respIraTorY disease or CLARITY will evaluate whether DXB’s drug DMX-200 will be able to treat patients diagnosed with COVID-19 who are intended for hospital admission.
(They really tried to jump through some hoops with that acronym...)
In late 2020, DXB entered into an agreement with the NHMRC Clinical Trials Centre to undertake the study. Ethics approval was then received in March. And after delays to the approval process — primarily due to the pressure from the COVID outbreak in India — the study is now back on track with the first patient expected to be dosed in the next few weeks.
Professor Meg Jardine of the Clinical Trials Centre will undertake a study to evaluate whether the DXB’s anti-inflammatory drug DMX-200 will be better at treating COVID-19 (with a level of statistical significance) than a placebo.
To evaluate the success, DXB’s drug will be measured on a 7 point scale (which is set out by the World Health Organisation, updated to 8 points in today's announcement), and benchmarked against the effects of the placebo in 600 COVID-19 patients in India.
What we are looking out for is whether there is statistical significance between DMX-200 and the placebo.
Why do we think that DMX-200 will work?
According to Professor Jardine, the SARS COVID-19 virus downregulates and suppresses certain anti-inflammatory and that may tip the local lung environment towards inflammation and fibrosis, and might be why the virus has such a devastating effect on lung tissue.
The DMX-200 therapy is aimed at reducing damage from inflammation by reducing damage from inflammatory immune cells by blocking their signalling. DXB expects that by limiting the virus’ movement into the lung, the damage to the tissue can be reduced.
Our investment in DXB
Building on our own research, we are leveraging the knowledge of one of Australia’s most successful small cap biotech fund managers, the Merchant Group. We will be following the lead of the group’s early stage biotech fund, investing in high potential, early stage ASX listed biotech companies.
This includes our first Finfeed portfolio investment, DXB, which we think has upside from its current share price over the coming 12-18 months.
DXB recently raised $20M and is now fully funded to deliver its Phase 3 trials.
Here are the project milestones we expect to see for our DXB Side Bet
Covid-19 Treatment (Side Bet 1)
CLARITY 2.0: Respiratory Complications
🔄 Regulatory approval by DCGI
🔲 Patient Recruitment Update 1
🔲 Safety Threshold Met (80 Patients)
🔲 Patient Recruitment Update 2
🔲 Patient Recruitment Update 3
🔲 CLARITY Phase III Study Complete
🔲 Primary Endpoint Reporting
🔲 Emergency use granted
🔲 Drug Commercialised
🔲 New Milestones Added
REMINDER: About Dimerix (ASX:DXB)
For this investment in DXB we are taking our lead from early stage biotech experts and one of the most successful small cap biotech fund managers in Australia, Merchant Group.
The Group’s new Merchant Biotech Fund has now made its first investment: in DXB... so we did too.
We have been investing in ASX small caps for many years, and we get shown a LOT of investment opportunities from a LOT of different people - we say no to most of them.
Over the last 12 months, biotech expert and fund manager at Merchant Group, Andrew Chapman, told us a bunch of times that we should invest in another company called BARD1 Life Sciences (we said no each time).
It then went from 60¢ to almost $4 in a few weeks.
Before that Merchant also told us to look at Race Oncology (we didn’t invest in that one either) and that has been one of the ASX’s most successful biotechs in the last few years.
We get shown over 400 potential investments per year and we say no to the majority of them ... However, we have observed that the companies that Merchant recommends have gone on to perform extremely well.
...so when Merchant approached us a few months ago to join in the due diligence process looking at DXB with them, this time we decided to get involved.
Merchant tells us that DXB has one of the cheapest market caps they have seen for a biotech company that’s entering Phase 3 trials. They decided to invest $6M cold hard cash into the recent DXB placement as the FIRST investment in their NEW early stage Merchant Biotech Fund.
SUMMARY: 9 Reasons we have invested in DXB
- We are following the lead of experts at the Merchant Group, DXB is the first investment in their new early stage biotech fund and they have an excellent track record.
- We have spent some time with DXB CEO Nina Webster and are very impressed with her industry experience in commercialising biotechs
- DXB MAIN BET: Addresses an inflammatory kidney disease to address a $1 billion market if successful. Phase 3 trial results due in 12 months with investor speculation building in the lead up to the result.
- DXB SIDE BET #1: Phase 3 trials of lung inflammation treatment for patients in hospital from COVID — results due in a few months.
- DXB SIDE BET #2: Phase 3 trials treatment for patients with pneumonia associated with COVID — results due in a few months.
- Share price consolidated during 2021 and $20M in the bank — ready for next leg up with funding.
- We think life science and biotech will be a big theme over the next few years.
- Our new biotech expert advisor tells us the DXB science is very good.
- We think that if it proved the treatment, DXB could be acquired by big pharma for hundreds of millions.
You can read our deep dive into each of the above nine reasons in our original launch article for DXB here