Paradigm Biopharmaceuticals Ltd (ASX: PAR) is an Australian biopharmaceutical company, which focuses on repurposing pentosan polysulfate sodium (PPS) for the treatment of medical conditions and diseases.
Paradigm's share price has tripled in value over the last 12 months and currently trades at $3.33 a share with a market cap of $658.72 million.
Paradigm explores new usages for existing drug
PPS is an FDA-approved medication used to treat a variety of inflammatory conditions most notably, interstitial cystitis (inflammation of the bladder). Secondary uses include the treatment of osteoarthritis in horses and dogs. PPS contains fibrinolytic (which prevents blood clots), lipolytic (which improves metabolism), and anticoagulant properties, making it an incredibly unique medication in its applications.
Paradigm has patented the exploration and usage of PPS in new applications with a minimum life on patents ending 2030–2040. The company's main focus is on repurposing PPS to treat knee osteoarthritis in humans under the brand name Zilosul.
Osteoarthritis occurs when the protective cartilage that cushions the ends of bones wears down over time. Currently, there is no cure for osteoarthritis – however, symptoms can be relieved through medical and non-medical treatments depending on the stage of condition.
Zilosul has so far proven effective in treating osteoarthritis due to the potential biological characteristics of PPS. These characteristics include:
- anti-inflammation
- antihistamine
- anti-clotting
- prevention of cartilage degeneration
- prevention of necrosis (premature cell death)
Paradigm is also exploring PPS in treating other diseases such as mucopolysaccharidosis (the body being unable to break down sugar molecules). Usage for both osteoarthritis and mucopolysaccharidosis has already passed phase 2 clinical FDA trials with undeniable results.
Current competing treatments have not demonstrated the same level of safety, efficacy, and indicative regression of disease that Paradigm has achieved. With a sample size of over 600 patients, clinical trials showed a >50% reduction in pain at day 53 with statistically significant results. Tests have also confirmed a substantial reduction in two key biomarkers (COMP and ADAMTS-5), which reduce the progression of osteoarthritis and protect bone cartilage from breakdown.
Overall, this has resulted in a reduction in pain and cartilage loss, and the reduced risk of joint destruction and total knee replacement.
Paradigm making moves in 2020
The next step for Paradigm is obtaining an IND filing with the FDA for marketing approval of Zilosul. The company expects this to be completed in Q4 CY2020 and is currently on-track after an announced successful pre-IND meeting with the FDA on 20 February 2020.
Paradigm is fully funded with $70 million cash in bank for all clinical trials and regulatory submissions, in addition to long term manufacturing and supply agreements with PPS's only manufacturer. This provides a secured scalable operation with global potential.
Currently, Paradigm reports that there are 31 million sufferers of osteoarthritis in the US and 3 million sufferers in Australia. The company has announced that a 10% market share of the US market alone results in US$9 billion in revenue annually. Paradigm is also taking steps to ensure its phase 3 trial will also meet European regulatory requirements for further expansion.
Foolish takeaway
Paradigm Biopharmaceuticals has incredible potential in the application of its Zilosul treatments. However, the company is still dependent on an approved IND filing and its phase 3 FDA trial results. Phase 2 clinical trials provided statistically significant results for patients aiding the confidence of investors for 2020.
For these reasons, I think Paradigm Biopharmaceuticals is a buy. Otherwise, for the more risk-averse, it is definitely one to add to your watchlist for 2020.
