We are following the lead of biotech experts at the Merchant Group, DXB is the first investment in their new early stage biotech fund and they have an excellent track record in the sector.
Opened: 01-Feb-2022
Shares Held at Open: 2,825,000
What does DXB do?
DXB is an early stage biotech research company that is developing an anti-inflammatory drug to treat respiratory and kidney diseases, with potential applications to treat COVID.
What is the macro theme?
Due to the pandemic, biotech and life sciences have been at the forefront of global decision making for investors, governments and ordinary consumers.
What was once an industry that was considered slow and niche is now rapidly evolving with innovation and technology.
Why did we invest in DXB?
Merchant Group Cornerstone Investment
We are following the lead of biotech experts at the Merchant Group, DXB is the first investment in their new early stage biotech fund and they have an excellent track record in the sector.
Phase III Clinical Trials on Rare Kidney Disease
DXB has commenced Phase III clinical trials on patients with a rare kidney disease called FSGS. This disease has 'orphan drug status', which means that DXB is eligible for accelerated approvals by drug regulators.
Clinical trials are a long process, so being eligible for accelerated approvals will save DXB time and money if the drug is proven to be successful at an interim stage.
The prize for a successful FSGS treatment is large, with DXB estimating the market to be more than $1B.
Covid-19 Side Bets
DXB has 2 near-term Covid-19 Phase III studies. If either of these studies are successful then we expect DXB’s share price to significantly re-rate.
Fully Funded
DXB has recently raised $24M at 20c, fully funding its clinical trials for FSGS through to interim results.
Read: Full Breakdown
What do we expect DXB to deliver?
Objective #1: Progress the Phase III Clinical Trial for Rare Kidney Disease (FSGS)
Over the next 12 months we want to see DXB get ethics approval in new jurisdictions and undertake recruitment for Part 1 of its Phase III clinical trial, which will include around 70 patients.
Milestones
Phase III Study Design Complete
Study Design approved by the FDA
Ethics approvals complete 12/12 countries
Site Setup
First Patient Recruited
Patient Recruitment Updates
72 Patients Recruited
Patient Recruitment Updates
72nd Patient Trial Complete
Interim Results Announced - [March 2024]
[New] Commercialisation Deal (Europe, Australia, UK, Canada, NZ)
Commercialisation Deal (US)
Commercialisation Deal (China)
Objective #2: Complete Phase III Clinical Trial to treat COVID-19 hospitalisations (CLARITY 2.0)
We want DXB to provide initial data on whether its treatment can improve respiratory function in hospitalised patients with COVID-19 in a clinical setting. With ethics approval granted in India and Australia, DXB will need to recruit patients and undertake analysis to evaluate the efficacy of its drug.
We want to first see an interim safety analysis of the first 80 patients before DXB continues recruitment for the full 600.
Milestones
Results Published
Objective #3: Complete Phase III Clinical Trial to treat pneumonia in patients with COVID-19 (REMAP CAP)
We want DXB to complete its Phase III clinical trial on ICU patients with pneumonia. It is well underway with recruitment and we will be expecting initial results in the first half of 2022. If DXB’s treatment is proven to be effective then we expect the technology to be transferable to other patients with pneumonia not just those caused by COVID-19.
Milestones
Results Publsihed
What could go wrong?
Early Stage Biotech Risk
There are some standard risks that are associated with early stage biotechs that are undertaking clinical research:
Rare Disease Specific Risk
FSGS is a rare disease, this means it could take a long time to find and recruit patients into the clinical trial. To increase the pool of applicants for the clinical trial, DXB will need to recruit from around the globe. Therefore, DXB will need to to secure ethics approval in each new jurisdiction - this takes time and may cause delays.
Commercialisation Risk
Even if DXB’s treatment is successful it will still need to commercialise the drug, which can be difficult if a competitor drug is superior or the landscape of the disease changes (ie. a new strain of COVID-19 emerges that renders the drug ineffective).
What is our investment plan?
In early stage biotech investing, the lead up to initial phase III trial results is where investors can expect to see positive share price action as speculators enter the stock on expectation of a positive result, similar to what we usually see in our exploration stocks prior to long awaited drill results.
Like with all our early stage investments, we invest early and wait patiently for the share price catalyst event, at which point we will look to free carry prior to the result being announced, expecting to sell about 25% of our position on a share price re-rate, holding 75% into the release of results.
Prior to the phase 3 trial results for FSGS we will look to free carry our position if the share price re-rates off the back of either of the COVID treatment results.
Disclosure: The authors of this article and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 2,825,000 DXB shares at the time of writing this memo. S3 Consortium Pty Ltd has been engaged by DXB to share our commentary on the progress of our investment in DXB over time.
DXB signs $230M Commercialisation Deal for ~20% of the global market
Oct 5, 2023
Oct 5, 2023 |
10 min
Our 2021 Biotech Pick of the Year, Dimerix (ASX:DXB) has secured a $230M commercialisation deal with Advanz Pharmaceuticals for its Phase 3 drug targeting FSGS, a deal made before key trial results and a major ~$10.8M upfront payment in cash.
US$3.5BN kidney deal puts DXB’s current valuation in perspective
Jul 4, 2023
Jul 4, 2023 |
13 min
Last month, a big pharma company swooped on two treatments for a rare kidney disease in a US$3.5BN deal. This $3.5BN deal sets a benchmark price by big pharma on later stage assets treating rare kidney diseases. It also highlights the M&A appetite for kidney drug development.
What could commercialisation actually look like for DXB?
Mar 6, 2023
Mar 6, 2023 |
12 min
The sparsentan drug, which recently received accelerated FDA approval, and priced at US$120,000 per year, per patient, could act as a benchmark for Dimerix (ASX:DXB) pricing and potential deal value in negotiations with major pharmaceutical companies.
DXB completes Phase III patient recruitment for crucial interim analysis
Dec 15, 2022
Dec 15, 2022 |
8 min
Our Biotech Pick of the Year, Dimerix Limited (ASX: DXB), has just announced the completion of patient recruitment for the Phase 3 Interim Analysis data. This is a crucial stage in DXB's FSGS clinical trials, helping inch closer to hopefully produce their drug which helps Renal Kidney disease patients.
Pre-result build up? The “big catalyst” in 2023
Sep 2, 2022
Sep 2, 2022 |
10 min
Our biotech Investment and 2021 Biotech Pick of the Year, Dimerix (ASX:DXB), has been busy this year working towards its all important Phase 3 trial and first interim results. After our initial entry at 20c in August 2021, our Investment in DXB is currently sitting below that price at 14.5 cents.
DXB passes second safety hurdle in Phase 3 trial
Aug 8, 2023
Aug 8, 2023 |
1 min
Date set for DXB clinical trial result
Jul 24, 2023
Jul 24, 2023 |
2 min
Today our 2021 Biotech Pick of the Year Dimerix (ASX:DXB) announced that the 72nd patient has now been randomised for the Phase III clinical study.
DXB to expand patient base in Europe?
Jul 6, 2023
Jul 6, 2023 |
2 min
Today, our Phase 3 biotech Investment, Dimerix (ASX: DXB) announced that the European Medicines Agency had accepted DXB’s Paediatric Investigation Plan (PIP).
DXB raises $8.7M to progress Phase 3 clinical trial
Jun 5, 2023
Jun 5, 2023 |
3 min
Our Phase 3 biotech Investment, Dimerix (ASX:DXB) has completed a capital raise that will see it sufficiently funded through to important Phase 3 interim analysis results and beyond.
DXB Announce Rights issue to raise $12M for FSGS
May 5, 2023
May 5, 2023 |
2 min
Our 2021 Biotech Pick of the Year, Dimerix (ASX:DXB), announced a non-renounceable entitlement offer to raise up to $12M to progress its Phase 3 clinical trial for FSGS, a rare kidney disease.
How share prices can still go up in a bear market
Oct 7, 2023
Oct 7, 2023 |
14 min
In this feature, we look at why some small cap share prices surge upwards despite bear market conditions. We also saw our 2021 Biotech Pick of the Year surge 200% in two days this week.
Market Cycles and how we invest
Jul 9, 2023
Jul 9, 2023 |
11 min
In this edition of the Weekender, we discuss the various seasonal stock market cycles we see year around. From selling in May, and tax loss selling in June recently, we look at how the cyclical nature of markets may present new investment opportunities to investors.
The stocks hit hardest by tax loss selling
Jun 17, 2023
Jun 17, 2023 |
12 min
Here we are, the final two weeks of June tax-loss selling. Those wanting to exit a stock and holding out for newsflow or a liquidity event are probably getting to the point where time is running out.
What we are looking for before Christmas...
Dec 3, 2022
Dec 3, 2022 |
10 min
The markets often go quiet before Christmas and during the summer break, with volumes drying up. Assay labs, brokers and other businesses will soon close their doors before opening again for the new year. In this Weekender, we cover all our portfolio companies that COULD put out material announcements before the market enters hibernation.
Meeting management matters: In person catch ups with GAL, DXB and LRS
Sep 17, 2022
Sep 17, 2022 |
12 min
This week we took the chance to attend in-person presentations from a few of our portfolio company CEOs that were in town, in particular DXB, GAL and LRS.
