‘Tide is turning for the healthcare sector’ – ASX biotechs making strong gains in 2024 Part 2
The ASX health care sector is looking stronger in 2024, and these three biotechs are among the stocks powering the recovery’s momentum.
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This is Part 2 of Stockhead’s series on the ASX’s healthcare sector’s recovery, and the stocks that are helping to power it. You’ll find a link to Part 1 below.
After being out of favour for the past couple of years the ASX heath care sector is enjoying renewed investor interest.
Morgans’s health care analyst Iain Wilkie told Stockhead that with signs the higher interest rate cycle was coming to an end, there was optimism of more money flowing into health care.
The process may well have started, with a rally in the last months of 2023.
“On the macro-side, the potential end (or at least stabilisation) of the higher interest rate cycle could lead to more money flowing into healthcare,” he said.
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“This will be particularly beneficial for small to mid-end companies that have been largely overlooked in the past two years.
“The tide is turning for the healthcare sector.”
Here’s part two of our special on ASX health care stocks which have caught the eye of investors in the early months of 2024.
NYRADA (ASX:NYR)
NYR has jumped by an impressive 400 per cent year-to-date, with investors piling in following news its lead drug candidate, NYR-BI03, had demonstrated, in a preclinical animal study, strong efficacy in reducing secondary brain injury.
The study was conducted in collaboration with UNSW Sydney and involved 16 test animals, which were treated with either NYR-BI03 or vehicle, 30 minutes following induced brain injury, with treatment conducted for 72 hours via continuous intravenous infusion.
The MRI brain imaging results showed that a statistically significant neuroprotection was achieved when animals received NYR-BI03 treatment.
On average, NYR-BI03 therapy rescued 42 per cent of the brain injury in the penumbra region seen in animals receiving vehicle. NYR will now move on to Phase 1 clinical trial in humans, which is scheduled for the second half of CY24.
The results provided strong evidence that NYR-BI03 has the potential to protect the brain from secondary injury.
“I think where the market excitement comes from is not only the results we got, but also the potential for this drug, given its broad application in two particularly large indications – stroke and traumatic brain injury,” Nyrada’s CEO James Bonnar told Stockhead’s Eddy Sunarto recently.
Bonnar says there’s a very large unmet clinical need for the treatment, given that a stroke occurs every 20 minutes in Australia with about 13 million patients globally annually.
“And for traumatic brain injury, there are currently no FDA approved drugs to treat patients who sustained a traumatic brain injury, apart from supportive care and rehabilitation,” he says.
“So traumatic brain injury is an even larger market than stroke.
“That’s where the market excitement comes from, that our drug has first class potential in two very large indications.”
MORE FROM STOCKHEAD: Hot ASX biotechs – Part 1 | ImpediMed targets growth | Gold gap offers opportunities | AI to lead drugs discovery
DIMERIX (ASX:DXB)
DXB this week announced good news in its latest trial of a drug to battling a condition that can permanently damage kidneys and cause them to fail.
The ACTION3 Phase 3 trial was successful in the pre-specified interim analysis of proteinuria (efficacy) endpoint from the first 72 randomised patients.
Titled Angiotensin II Type 1 Receptor (AT1R) & Chemokine Receptor 2 (CCR2) targets for Inflammatory Nephrosis – or ACTION3 for short – the interim analysis showed DMX-200 was performing better than the placebo in reducing proteinuria (protein in the urine), using a statistical measure, in patients with focal segmental glomerulosclaerosis (FSGS).
The trial involved a significantly larger cohort than its prior Phase 2 trial of eight patients.
DXB said passing the early interim analysis suggested a statistically significant and clinically meaningful result in reducing proteinuria may be produced by the end of the study.
The trial’s Independent Data Monitoring Committee (IDMC) also says it has no safety concerns relating to DMX-200, adding to the drug’s growing safety profile – and formally recommended the trial continue as planned.
The ACTION3 Phase 3 clinical trial will now formally expand into Part 2, with new clinical sites to open in additional countries, including China, to further enhance recruitment.
FSGS is a rare condition that can occur in both adults and children affecting the kidney’s filtering units, where blood is purified, resulting in permanent kidney damage and eventual organ failure, necessitating either dialysis or a transplant.
For those who receive a transplant, around 60 per cent get reoccurring FSGS in the transplanted kidney … and no one knows why.
DXB has secured orphan drug designation (ODD) for DMX-200 in both the US and Europe for the treatment of FSGS due to the absence of an effective therapy for this condition.
In 2023, DXB finalised an exclusive licensing agreement worth up to $230 million for Europe, Canada and Australia/New Zealand with multinational pharmaceutical company Advanz Pharma that includes tiered, escalating, mid-teen to twenty percentage royalties on net sales of DMX-200, if it is successfully commercialised.
The company is now focusing on licensing deals in other jurisdictions, including in the US and China.
DXB also announced this week it had received binding commitments from new and existing institutional and sophisticated investors (and other exempt investors) to raise $20 million.
“This placement was highly strategic as it provides sufficient funds to take Dimerix through the second interim analysis and, including eligible R&D rebates, the completion of the ACTION3 Phase 3 clinical trial,” managing director and CEO Dr Nina Webster said in an ASX announcement.
The DXB share price has rallied 40 per cent YTD.
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NEUROTECH (ASX:NTI)
NTI this week announced it had expanded its Phase 1/2 clinical trial of its leading compound NTI164 to treat female pediatric patients with Rett syndrome.
NTI has obtained additional clearance from the Human Research Ethics Committee (HREC) allowing patients to continue receiving NTI164 beyond the initial 12 weeks, extending the trial to 52 weeks under the supervision of lead investigator Professor Carolyn Ellaway at The Children’s Hospital at Westmead.
NTI164, derived from a unique cannabis strain with low THC, comprises cannabinoids such as CBDA, CBC, CBDP, CBDB, and CBN.
Executive director Dr Thomas Duthy said the Rett syndrome trial was expected to report results in Q1 or early Q2 CY24.
“Investors have started to take significant interest in our Rett syndrome clinical trial, given the spectacular success of Neuren Pharmaceuticals (ASX:NEU), who with their billion dollar partner Acadia Pharmaceuticals received FDA approval for trofinetide in Rett in March 2023,” he said.
“We very recently announced all 14 girls on our trial have extended by a total of 52 weeks their treatment with NTI164 beyond the initial 12 weeks of the clinical trial.
“This has been a consistent theme for all our programs where patients on trial continue to receive treatment even through the trial has completed data collection for the primary analysis. Patients, parents and their treating doctors want to stay on this therapy.”
A rare genetic disorder Rett syndrome predominantly stems from mutations in the MECP2 gene on the X chromosome, crucial for brain development.
The condition mainly affects girls, occurring in approximately one in 10,000 female births, with around 15,000 cases in the US and 350,000 globally.
The market size for Rett syndrome treatments is estimated to be more than $US2 billion annually.
NTI164 has been exclusively licenced for neurological applications globally.
NTI also has been undertaking multiple clinical trials in children with autism spectrum disorder (ASD), spastic cerebral palsy, pediatric autoimmune neuropsychiatric disorders associated with streptococcal infections, and pediatric acute-onset neuropsychiatric syndrome (PANDAS/PANS).
“We reported clinically significant data in PANDAS/PANS in October 2023 once again highlighting the benefit of our proprietary broad spectrum cannabinoid therapy NTI164 in treating pediatric patients with neurological disorders associated with persistent or progressive neuroinflammation,” Duthy said.
“NTI164 has an excellent safety profile and our ASD kids have been on therapy for over 90 weeks now.”
NTI has also received HREC clearance for a Phase 1/2 clinical trial in spastic cerebral palsy.
Duthy said NTI’s Phase 2/3 ASD trial was also due to report clinical data in the next few weeks.
He said the trial was much larger but aimed to confirm initial Phase 1/2 trial results which showed a strong, durable benefit of NTI164 in Level 2 and Level 3 ASD patients.
“With the spiralling costs of the NDIS, driving by an explosion in ASD recipients, investors are eyeballing our intervention to see how beneficial it will be in reducing the clinical manifestations of ASD and improving adaptive behaviours, which allows children to return to school and parents to work,” he said.
The NTI share price is up 31 per cent YTD.
This content first appeared on stockhead.com.au
At Stockhead, we tell it like it is. While Dimerix and Neurotech are Stockhead advertisers, they did not sponsor this article.
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Originally published as ‘Tide is turning for the healthcare sector’ – ASX biotechs making strong gains in 2024 Part 2
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