The next Neuren? These ASX biotech stocks have pending FDA catalysts in 2024
These ASX biotechs believe they can fly, with breakthrough tech and treatments. And in 2024, the US FDA may well clear them for takeoff.
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These ASX biotechs believe they can fly, with breakthrough tech and treatments. And in 2024, the US FDA may well will clear them for takeoff.
Potential investors will be watching as well, looking for opportunities.
Healthcare has long been considered as one of the most reliable defensive sectors when the market turns volatile.
The reason is simple: healthcare products and services can usually maintain steady consumer demand regardless of what the economy is doing.
Investing in established health stocks such as CSL (ASX:CSL), Cochlear (ASX:COH) or Sonic Healthcare (ASX:SHL) can therefore give investors a warm fuzzy feeling from knowing that their investments are relatively safe.
By contrast, investments in smaller biotech companies can be a binary proposition – you either get a huge return if the drug successfully makes it to the market, or the share price goes to zero (unless the company can find new sources of funding or new products).
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Atlas Funds Management says that when looking at a biotech company with plenty of promise, one of the signposts it looks for is how close the company’s drugs are to a US Food and Drug Administration (FDA) approval.
“Looking at where a company’s treatments are up to in the US’s FDA approval process will indicate the level of investment risk,” noted Atlas.
Companies with at least one product in end-stage trials are obviously safer investments than those just beginning the investigative phases of development.
“On average, it takes 12 years and over $US350 million to get a new drug from the laboratory onto the pharmacy shelf, with a 3 per cent success rate for drugs to move from pre-clinical trials to full approval.
“We have seen many companies issue exciting prospectuses and raise capital based on the results of their treatment on mice, with minimal further developments many years later.”
The FDA moves the needle
From that perspective, the ASX is no different than any other global exchange that hosts biotech companies.
A factor that moves the needles and gets Aussie biotech investors excited is the news of some sort of approval from the US FDA.
The FDA is the ultimate gatekeeper for the US pharmaceutical market, which is by far the world’s largest.
There are five applications and approvals that the FDA can provide a company with:
- Investigational New Drug (IND)
- New Drug Application (NDA)
- Abbreviated New Drug Application (ANDA)
- Over-the-Counter Drugs (OTC)
- Biologic License Application (BLA)
The FDA has also developed four designations to make some drugs available as rapidly as possible through:
- Priority Review,
- Breakthrough Therapy,
- Accelerated Approval,
- Fast Track Designation.
Receiving any one of these approvals or designations can have a significant impact on a biotech’s stock price for several reasons – the most important one being the potential and revenue generating opportunities it could bring.
An FDA approval also gives the biotech a competitive edge, because it grants the drug exclusivity for a certain period.
In the case of a new drug, this exclusivity period means that generic competitors cannot enter the market.
There’s also partnerships and licensing opportunities that an FDA approval can potentially attract.
And last but not least, an FDA approval badge boosts investor sentiment and confidence in the company’s prospects.
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ASX stocks with 2023 FDA approvals
In 2023, few ASX stocks received FDA approvals in various forms.
Cyclopharm (ASX:CYC) won an FDA approval for its radioactive technology, Technegas.
The approval has opened an anticipated addressable pulmonary embolism (PE) market of more than $US180 million, with strong demand expected for an immediate US-wide rollout.
Technegas is most commonly used in the diagnosis and management of PE. Over the past three decades, the product has been successfully used in 64 countries worldwide, amassing 4.7 million patient studies.
Neuren Pharma (ASX:NEU) received an FDA clearance for trofinetide (sold as DAYBUE) for the treatment of Rett syndrome in adult and pediatric patients two years of age and older.
Trofinetide’s approval has triggered game-changing milestone payments and royalties for NEU, and the company reported that DAYBUE net sales in Q3 2023 were $US66.9 million, up from $US23.2 million in Q2.
The FDA also issued an approval allowing Compumedics (ASX:CMP) to market its
wearable Somfit device in the US
Somfitcollects patients’ physiological data during sleep.
The approval achieved a strategic milestone for the Somfit technology platform in one of the world’s largest sleep markets.
Compumedics has now begun commercialisation work in the US, after starting sales activities for Somfit in the Australian market at the beginning of FY24.
ASX biotechs waiting for the nod
ASX biotechs expected to receive an announcement or an approval from the US FDA through 2024 include:
PHARMAUST (ASX:PAA)
The US FDA has granted PharmAust a Pre-Investigational New Drug (Pre-IND) meeting for monepantel, a treatment for motor neurone disease/amyotrophic lateral sclerosis (MND/ALS).
The request was submitted on December 15, 2023, and the FDA has committed to providing written responses by February 13, 2024.
PharmAust says the request for a pre-IND meeting formally initiates communications with the FDA regarding developing monepantel to treat MND/ALS.
The pre-IND meeting aims to confirm the details and acceptability of PharmAust’s proposed ongoing development program, including the requirements for non-clinical and clinical pharmacology, clinical chemistry, and manufacturing controls.
Importantly, given the stage of development of monepantel for the treatment of MND/ALS, it provides PharmAust with an opportunity to seek feedback from the FDA on the design of its planned Phase 2/3 adaptive clinical study and gain insights into the FDA’s requirements for monepantel to be potentially granted accelerated approval.
With these considerations in hand, PharmAust says it will be able to proceed confidently with its full IND application filing in Q2 2024.
BOTANIX PHARMA (ASX:BOT)
In December, Botanix completed resubmission of the New Drug Application (NDA) for Sofdra, a drug that treats primary axillary hyperhidrosis (excessive sweating).
The resubmission was originally planned for Q1 2024, but the Botanix team accelerated the process and filed earlier than expected.
As a result, the planned approval for Sofdra is now expected in late Q2 2024.
The resubmission of the Sofdra NDA is in response to an FDA complete response letter announced in September 2023.
The only deficiency identified in that letter was about the paper insert in the product carton instructing the patient how to use the product safely and effectively.
No efficacy, safety, pharmacology, non-clinical or chemistry, or other manufacturing and controls (CMC) issues were identified, and so no additional clinical studies are required to support the resubmission and approval of Sofdra.
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AVITA MEDICAL INC (ASX:AVH)
The regenerative medicine company says it expects to receive an FDA approval for RECELL GO on May 30, 2024, with the go-live for the device to happen the next day.
The RECELL System treats thermal burn wounds and full-thickness skin defects, and can re-pigment stable depigmented vitiligo lesions by harnessing the regenerative properties of a patient’s own skin to create spray-on skin cells.
Avita said that to prepare for the US market onslaught, it planned to expand its commercial sales team from 70 to 100.
As well as the US, the global commercialisation strategy for RECELL also focuses on the Australian, European Union, and Japanese markets.
Avita plans to actively identify new distribution partners in those focused markets over next six to 12 months.
ARTRYA (ASX:AYA)
The coronary heart disease-focused biotech says the final 510k pre-market FDA application for Salix Coronary Anatomy (SCA) will be submitted to the FDA in March 2024, with the final 510k clearance subject to FDA final review and approval.
A 510(k) is a premarket submission made to FDA to demonstrate that a medical device to be marketed is as safe and effective.
The submission follows the lodging a of Q-Submission (a device to allow companies to engage in discussions with FDA review teams during the product development process) in May last year.
The SCA is Artyra’s breakthrough technology to detect vulnerable plaque biomarkers from a CCTA (Coronary CT Angiography) within minutes.
The SCA platform is used in emergency situations, or where there is a CCTA machine like imaging centres.
In the UK, the company has a four-year contract in place to supply 1,250 National Health Service (NHS) Trust Hospitals with the product.
But for Artrya, it’s the huge US market that its eyes are firmly set on. The US is not only the biggest potential market, but at the moment, it only represents a third of the overall global market.
Read more: FDA submission looms as Artrya’s AI platform aims to capture the huge cardio diseases market
This content first appeared on stockhead.com.au
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Originally published as The next Neuren? These ASX biotech stocks have pending FDA catalysts in 2024
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