The ASX pharmas playing the long game, with commercialisation the prize

ASX pharmaceutical companies are retaining their assets longer and advancing them to commercialisation in a bid to maximise value.

ASX pharma firms believe commercialising their assets is the right move. Pic via Getty Images

• ASX pharmaceutical companies are retaining their assets longer and advancing them to commercialisation

• LTR Pharma has established several commercialisation pathways for its novel nasal spray to treat erectile dysfunction 

• Botanix is independently commercialising its product in the US to treat excessive underarm sweating following regulatory approval

ASX pharmaceutical companies are adopting a new approach to drug development, retaining their assets longer and advancing them to commercialisation in a bid to maximise value for both their businesses and shareholders.

LTR Pharma (ASX:LTP) chairman Lee Rodne told Stockhead traditionally early-stage pharmaceutical companies followed a well-established path in drug development involving discovery and preclinical studies to identify promising compounds.

"They'd then go through phase I, phase II and phase III clinical trials but the business model typically is to try and get acquired or a licensing agreement at some stage through that process," Rodne said.

"Typically larger pharma will come in and do those type of deals on phase II and phase III clinical trials but not before."

The approach enabled smaller pharmaceutical companies to focus on innovation while leaving the expensive and complex late-stage trials, regulatory approvals and market distribution to larger, well-funded pharmaceutical firms.

However, recently there has been a shift toward early-stage pharmaceutical companies instead looking to build their own commercialisation capabilities to create long-term value and retain ownership, in turn leading to higher potential returns.

Some are looking to build in-house sales and distribution teams, instead of out-licensing, while others are developing their own sales platform technologies or enhancing telehealth capabilities to expand their reach.

LTR looks to telehealth to build Spontan market

LTR Pharma has established several commercialisation pathways for its novel nasal spray to treat erectile dysfunction (ED), while also building real-world data supporting its use case.

Spontan is set apart from existing ED therapies by its mechanism of action – intranasal delivery technology of a PDE5 inhibitor.

"Since it belongs to the same drug class as Viagra and is already approved in oral tablet form, we can establish commercial channels earlier than traditional pharma companies and prescribe it in Australia before larger clinical trials are completed," Rodne said.

Results of a pivotal trial showed Spontan reached a mean Tmax (time to peak drug concentration) of 12 minutes, compared to 56 minutes for the oral tablet, showing a 470% faster absorption.

Spontan is being considered a disruptor in the global ED market with early access established in Australia through the Therapeutic Goods Administration (TGA) Authorised Prescriber Scheme for unmet needs.

"The doctors and specialists in men's health all know what our drug does when it gets into the blood stream so they're comfortable with the safety and efficacy,"Rodne said.

"Why it's an unmet need in the Australian and global market is because 50% of men stop taking viagra and viagra-like tablets in the first year because they don't always work and have highly variable results, are not as effective with food in the stomach and can cause adverse reactions.

"We don't have those same adverse reactions and don't have a food effect so men can enjoy lunch or dinner and still take our product and have it be effective."

In November, LTR announced it had entered a strategic joint venture with the privately-owned Restorative Sexual Health Clinic (RSHC) to establish a men’s health platform, which will see it capitalise on the rapidly growing telehealth market.

"They're now prescribing our product online now," Rodne said.

LTR Pharma has also inked an access agreement with Mens Health Downunder (MHDU), which specialises in comprehensive men’s urological healthcare solutions and currently services more than 1000 patients annually.

"They can also prescribe online," Rodne said.

He said it was estimated that 70% of ED scripts were now prescribed through telehealth.

"We expect additional telehealth platforms to come on board with our product and see them as a sales channel," he said.

No sweat for Botanix selling Sofdra

Botanix Pharmaceuticals (ASX:BOT) gained approval from the US Food and Drug Administration (FDA) for its Sofdra gel in June 2024 to treat primary axillary hyperhidrosis (PAH), more commonly known as excessive underarm sweating.

Sofdra is the first and only chemical entity approved to treat PAH by the FDA and addresses a significant medical need, with ~10 million people in the US suffering the condition, which currently has limited effective treatment options.

“Our choice coming into FDA approval was to partner Sofdra out to someone else for upfront payments, milestones or royalties or to launch the product and commercialise it ourselves,” founder and executive director Matt Callahan told Stockhead.

“Generally, if you’re an Australian pharmaceutical company – making the decision to commercialise yourself in the US is a pretty bad idea – because it’s a completely different market.

“But our entire US-based team has launched more than 30 dermatology drugs into the US market and internationally, so for us the risk was low.”

The company believed it could keep more of the value for its first commercial product by launching Sofdra itself.

Callahan said this had enabled the company to preserve its profit margins by avoiding payments to pharmaceutical distributors and multiple pharmacy networks.

“We go direct to a limited pharmacy network which means off the bat we save about 20-25% and that goes straight to our bottom line,” he said.

“We also have a way of working with insurers so we can ship product directly to the patient every month and cover their gap payment, so they’re not out of pocket.”

Callahan said in the US the average repeat rate on a dermatology prescription was about two.

“You do all the work to get a product approved, a first prescription and they only ever take one of their repeats, so it is bad for the patient and pretty inefficient,” he said.

“It’s largely because they forget to go to the pharmacy or drop-off because they have a gap payment, so we have a way of refilling every month without the patient doing anything at all.”

Callahan said it is more valuable for Botanix to pay that gap payment of ~US$50 per month.

“We are selling a product where we net somewhere between US$400 to $US500 per month per patient even accounting for that gap payment we pay for the patient,” he said.

Botanix has both a fulfilment and telemedicine platform. In-person consultations by dermatologists can use the fulfilment platform to get Sofdra shipped to their patients.

Alternatively, patients can see a doctor through the Botanix telemedicine platform and use the fulfilment platform to have Sofdra delivered to their door.

“There’s the fulfilment platform which is how we get the product to patients,” Callahan said.

“On top of that there’s the telemedicine platform for people who aren’t in a dermatologist’s office or have seen an ad online to be prescribed Sofdra and have it shipped directly to their door.”

Cannabis play Vitura building strong sales channel

Vitura Health (ASX:VIT) (formerly Cronos Australia) owns Burleigh Heads Cannabis (BHC), which in turn owns the Canview marketplace, which prescribes and supplies medicinal cannabis products.

In FY24, the company sold almost 1 million medicinal cannabis units on Canview, which now has more than 60 brands covering 400+ products listed.

Vitura said the number of pharmacies on Canview was now 4,658, representing nearly all pharmacies in Australia actively dispensing medicinal cannabis. There are also 2,500 doctor accounts registered on Canview nationally.

The company is also ensuring customer retention and growth through acquisitions in telehealth platforms and clinics, prescribing medicinal cannabis and other emerging therapies including:

•  75.5% of Cannadoc, which undertakes nationwide telehealth consultations with patients seeking access to medicinal cannabis.
• 100% of CDA Clinics, which undertakes nationwide telehealth consultations with patients seeking access to medicinal cannabis.
• 50% of Cortexa through a joint venture with PharmAla Biotech, a supplier of psychedelics, GMP MDMA and GMP psilocybin, for R&D use in Australia.
• 100% of Doctors on Demand,  a nationwide telehealth platform providing general medical consults, urgent care, medical certificates, pathology referrals, specialist referrals, men’s health, women’s health, medicated weight loss and smoking cessation.
• 50% joint venture of Releaf, a fully integrated healthcare service that includes integrative medicine clinics, pharmacies and retail dispensaries.
• 100% Candor Medical, Vitura's most recent purchase provides prescription to medicinal cannabis through telehealth consultations.

Vitura said it was worth noting that telehealth made up 20% of company revenue  – $12.7million in H1 FY25.  Emerging health treatments, mainly medicinal cannabis and a growing number of smoking cessation products, made up 80% of revenue or $50 million in H1 FY25.

The company said its telehealth investments tended to be in areas where consultations were with patients seeking access to medicinal cannabis and other emerging health therapies.

Professor Charlie Shahin of Adelaide’s billionaire Shahin family, has thrown his support behind Vitura's growth strategy. Shahin recently made a $5.2m investment for a 11.4% stake in Vitura through his company AFO Investments with the funds used for its $4m purchase of Candor Medical.

At Stockhead we tell it like it is. While LTR Pharma is a Stockhead advertiser, the company did not sponsor this article.