Pharmaxis joins elite Australian club with US approval

Latest News

A stunning outcome for Pharmaxis with the Australian company ending a long journey by securing FDA approval of cystic fibrosis therapy BRONCHITOL (mannitol).

The FDA approved BRONCHITOL as add‐on maintenance therapy to improve pulmonary function in cystic fibrosis (CF) patients 18 years of age and older.

The Australian discovered and developed product is manufactured for the global market at the company's facility in the Sydney suburb of Frenchs Forrest.

Pharmaxis has now become one of the small number of local life science companies to secure FDA approval of an Australian developed, discovered and manufactured product.

The US approval triggers a US$7 million milestone payment from partner Chiesi with a further US$3 million payable on shipment by Pharmaxis of commercial launch stock scheduled for the first quarter of 2021.

In a statement, Pharmaxis said it expects US sales to commence in the first half of 2021. 

"Pharmaxis will then earn high teens royalties which, allied to a long term supply contract, is forecast to deliver approximately 20% of Chiesi US Bronchitol net sales directly to the Pharmaxis mannitol business segment EBITDA [earnings before interest, taxes, depreciation, and amortization]. Three sales milestones totalling US$15m are also payable on achieving annual sales thresholds."

Investors cheered the news with a significant spike in the company's share price.

The approval is the culmination of a long journey for Pharmaxis. In 2013, the FDA required the company to conduct additional clinical trials to secure the approval of BRONCHITOL.

BRONCHITOL is listed on the PBS and now approved in the US, European Union and Russia.

“The US market makes up more than 60% of the global CF market by value so today’s announcement of FDA approval has important and positive ramifications for Pharmaxis," said Pharmaxis CEO Gary Phillips.

"It justifies the vision we shared with our partner Chiesi to commit to the final phase 3 study requested by the FDA. The additional volume of Bronchitol that Pharmaxis will produce at our Sydney production facility to supply the US, on top of Australia and 17 other international markets, greatly increases capacity utilisation and consequently radically improves the cost of goods.”

He added, “The FDA approval of Bronchitol is transformational for Pharmaxis because the milestone payments from Chiesi together with positive cash flows from the mannitol business segment allow us to move confidently ahead with the development of our lead clinical development asset PXS‐5505 for the treatment of myelofibrosis.

“Clearing this last significant regulatory hurdle for the mannitol business also enables us to progress a number of restructuring initiatives to further extend the company’s cash runway. These will continue to be pursued over the coming months.”