PARIS, France, 8:30 a.m. CET, June 21, 2021 – Pharnext SA (FR0011191287 - ALPHA), an advanced late-stage clinical biopharmaceutical company pioneering new approaches to developing innovative drug combinations based on big genomics data and artificial intelligence (‘Company’) using its PLEOTHERAPY™ platform, today published a Letter to Shareholders from its Chief Executive Officer, Dr. David Horn Solomon.
Dear Fellow Shareholders,
In recent days, since we announced our financing on 07 June 2021, our share price has dropped significantly, raising questions from you. I thought I should therefore write to explain more details of our financing and our progress on PXT3003 in Charcot-Marie-Tooth disease type 1A (‘CMT1A’). Financing this key asset and working towards an approval will benefit patients and shareholders and is why we work and invest in healthcare and why biotech companies exist.
2021 has already seen our Company accomplish a significant key milestone: enrolling the first patient in March in our pivotal Phase III study of PXT3003, the PREMIER trial. As you are familiar, PXT3003 is our lead asset for the treatment of CTM1A, a rare and highly debilitating disease. In April, we announced topline results of the interim analysis from the ongoing open-label Phase III extension study (PLEO-CMT-FU), which followed the first double-blind Phase III (PLEO-CMT), suggesting a good safety profile and sustained efficacy of PXT3003 as measured by the Overall Neuropathy Limitation Scale (‘ONLS’), after 4.5 years of total trial time. More recently, we secured a financing for a total amount of up to €81million over the next thirty-six months through a convertible bond program to extend the cash runway of the company and fund the PREMIER trial through to the data readout in Q3 2023.
This long-term financing, should the Company maintain the ability to draw down all the tranches over the next 36 months, will thus allow the funding and completion of our pivotal Phase III in CMT1A and more globally extend the cash runaway of Pharnext to support its growth and development. We understand the frustration around the dilution associated with the convertible bond financing, but given the timing, the current development stage of our company and non-optimal market conditions, we feel the financing in this way benefits the company for several reasons:
- Flexibility: The financing has been structured to ensure Pharnext is in control of the timing of drawing down the various tranches based on our cash needs (for more details, please refer to the press release issued on June 7, 2021) . In addition, depending on circumstances, and in particular if we can access other sources of financing, we may not need to draw down the full amount. Indeed, we do not exclude to pursue a capital increase, including on a U.S. stock market.
- Dilution: An equity raise would have created a significant one-time dilution for shareholders instead of spreading the dilution over several years with the current financing. Morevover, subcribers of such an equity raise also have the possibility to rapidly trade their shares in the stock market. Finally, part of the first tranche of the current financing has been used to redeem the outstanding convertible bonds issued by the Company on February 3, 2021 for €2.9 million, avoiding additional dilutive impact.
- Opportunity: This financing does not prevent us from pursuing deals and partnership discussions, or new opportunities that could come up from our PLEOTHERAPY platform which we are currently working on, to expand and diversify our pipeline and thus create value. We can, in these instances, withhold the drawing-down of convertible bonds which are under the Company’s call.
Our Focus on PXT3003 and our Pivotal Phase III Clinical Study in CMT1A, the PREMIER Trial
We continue to focus a substantial proportion of our resources on developing PXT3003 with the ultimate goal of obtaining marketing approval from the FDA and EMA to improve everyday life of patients with CMT1A. Currently, there are no approved therapies to treat CMT1A, and PXT3003, which has Orphan Drug Designation from both the FDA and EMA, is the most advanced pharmaceutical product candidate in development for this disease. Given there are over 100,000 CMT1A patients across the US and EU5 markets, there is little competition in the CMT1A therapeutic field and our current understanding of the market, we believe that the worldwide annual peak sales opportunity for PXT3003 could exceed $1 billion within 5 years post commercial launch.
We have high hopes of success in our PREMIER trial for several reasons:
. The Phase II and the first double-blind Phase III (PLEO-CMT) studies have shown encouraging and consistent safety and efficacy data.
. As recently announced in April 2021, the interim analysis topline data from the ongoing open-label Phase III Extension Study (PLEO-CMT-FU) suggests sustained benefits for CMT1A patients after 4.5 years of total trial time. Pharnext will continue reporting long-term data from the ongoing extension study on an annual basis.
. The design of the PREMIER trial has the same primary endpoint (ONLS measuring patients’ functional motor disability), same patient population (adult mild-to-moderate CMT1A patients) and same PXT3003 formulation (oral solution) as those used in the previous and ongoing Phase III program (PLEO-CMT and PLEO-CMT-FU trials).
The PREMIER trial is ongoing, as planned, following enrollment of the first patient in the US in March 2021 despite the COVID-19 pandemic. Ten sites so far have been activated in North America and are actively screening dozens of CMT1A patients. Additional sites are planned to be activated in the US and Canada during the summer 2021, and we are still on track to announce the activation of the first EU and Israeli sites in Q3 2021. We are confident that we will complete enrollment in the PREMIER trial in Q2 2022 as previously announced which will allow our company to disclose topline results of the pivotal Phase III study in Q3 2023.
The Future for Pharnext
We now have the financing in place to fund and complete our pivotal Phase III clinical study of PXT3003, the PREMIER trial, which, if successful, will ultimately form the basis of a marketing authorization dossier, together with the data from a pre-clinical factorial combination study in the CMT1A rat model, to be submitted to the FDA and the EMA. This submission could occur within H1 of 2024 according to the usual regulatory timelines. All this could potentially bring a new therapeutic option for CMT1A patients. Being granted marketing authorization in Europe and the US for PXT3003 in CMT1A would represent a tremendous value creation opportunity for both patients and our shareholders in the coming years, and this is what we are entirely committed to achieving.
In parallel, we will pursue the evaluation of growth opportunities for our company to potentially enrich our R&D pipeline, either internally by advancing drug candidates from our PLEOTHERAPY™ platform through clinical development; or through R&D partnership and/or deals with other biopharmaceutical companies or renowned academic research institutions.
I will keep you informed on the progress of our business plan on a regular basis, and I sincerely thank you again for your continued support of our Company.
With Best Regards,
David Horn Solomon
Chief Executive Officer
About Charcot-Marie-Tooth Disease Type 1A (‘CMT1A’)
Charcot-Marie-Tooth (‘CMT’) disease encompasses a heterogeneous group of inherited, severe, debilitating, progressive and chronic peripheral neuropathies. CMT1A, the most common type of CMT, is an orphan disease with a prevalence of 1/5000 people affecting about 150,000 people in Europe and the U.S. and about 1,500,000 people worldwide. The genetic mutation responsible for CMT1A is a duplication of the PMP22 gene coding for a peripheral myelin protein. The duplication of this gene results in overexpression of the PMP22 protein and failure of Schwann cells to produce normal myelin (neuronal sheath). The lack of a normal myelin structure and function leads to abnormal peripheral nerve conduction and axonal loss. As a result of peripheral nerve degradation, patients suffer from progressive muscle atrophy in both the legs and arms causing problems with walking, running and balance as well as abnormal hand functioning. They might also suffer from mild to moderate sensory disorders. First symptoms usually appear during adolescence and will progressively evolve throughout life. Patients with the most severe form of CMT1A end up in wheelchairs, representing at least 5% of cases. To date, no curative or symptomatic medications have been approved and treatment consists of supportive care such as orthotics, leg braces, physical and occupational therapy or surgery. More information can be found at https://pharnext.com/en/disease/charcot-marie-tooth.
PXT3003 is a novel fixed-dose synergistic combination of baclofen, naltrexone and sorbitol formulated as an oral solution given twice a day. The three individual components of PXT3003 were selected to downregulate the overexpression of PMP22 protein, leading to improvement of neuronal signaling in dysfunctional peripheral nerves that are an essential part of the pathophysiology of this disease. PXT3003 could also have a positive effect on other cellular types of the motor unit such as the axon (direct protection), neuromuscular junctions or muscle cells. PXT3003 has shown promising and consistent results across preclinical and clinical studies in Phase II and Phase III (PLEO-CMT and PLEO-CMT-FU). More information can be found at https://pharnext.com/en/pipeline/pxt3003.
About the PREMIER Trial
The PREMIER trial is an international, randomized, double-blind, two-arm placebo-controlled, pivotal Phase III study, evaluating the efficacy and safety of PXT3003 versus placebo in mild-to-moderate CMT1A patients, over a 15-month period. The dose of PXT3003 tested in the PREMIER trial corresponds to the high dose (‘HD’) tested in the prior Phase III trial (‘PLEO-CMT’). As agreed with regulatory agencies, the primary efficacy endpoint will be the Overall Neuropathy Limitations Scale (‘ONLS’) which measures functional motor disability. The secondary endpoints include the following outcome measures: 1) 10-Meter Walk Test (‘10mWT’), 2) Quantified Muscular Testing (bilateral foot dorsiflexion dynamometry), 3) Patient Global Impression of Severity (‘PGI-S’), 4) Patient Global Impression of Change (‘PGI-C’), 5) Charcot-Marie-Tooth Neuropathy Score, version 2 (‘CMTNS-v2’), and 6) Quantified Muscular Testing (hand grip). Safety and tolerability will be monitored throughout the study. Further information on the PREMIER trial can be found on the ClinicalTrials.gov website (study identification number: NCT04762758) here.
Pharnext is an advanced clinical-stage biopharmaceutical company developing novel therapeutics for orphan and common neurodegenerative diseases that currently lack curative and/or disease-modifying treatments. Pharnext has two lead products in clinical development. PXT3003 completed an international Phase III trial with positive topline results for the treatment of Charcot-Marie-Tooth disease type 1A (‘CMT1A’) and benefits from orphan drug status in Europe and the United States. An international pivotal Phase III study of PXT3003 in CMT1A, the PREMIER trial, is currently ongoing. PXT864 has generated encouraging Phase II results in Alzheimer’s disease and will be advanced through partnerships. Pharnext has developed a new drug discovery paradigm based on big genomics data and artificial intelligence: PLEOTHERAPY™. Pharnext identifies and develops synergic combinations of drugs called PLEODRUG™. More information can be found at www.pharnext.com.
Pharnext is listed on the Euronext Growth Stock Exchange in Paris (ISIN code: FR0011191287).
This press release contains certain forward-looking statements concerning Pharnext and its business, including in respect of timing of and prospects for clinical trials and regulatory submissions of the Company’s product candidates as well as a potential financing transaction, the use of proceeds therefrom and cash runway. Such forward-looking statements are based on assumptions that Pharnext considers to be reasonable. However, there can be no assurance that the estimates contained in such forward-looking statements will be verified, which estimates are subject to numerous risks including the risks set forth in Pharnext’s URD approved by the AMF on November 9, 2020 under number N° R. 20-029 as well as in its annual periodic management reports and press releases (copies of which are available on www.pharnext.com) and to the development of economic conditions, financial markets and the markets in which Pharnext operates. The forward-looking statements contained in this press release are also subject to risks not yet known to Pharnext or not currently considered material by Pharnext. The occurrence of all or part of such risks could cause actual results, financial conditions, performance or achievements of Pharnext to be materially different from such forward-looking statements. Pharnext disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
This press release and the information that it contains do not constitute an offer to sell or subscribe for, or a solicitation of an offer to purchase or subscribe for, Pharnext shares in any country, including the United States. The Company’s securities may not be offered or sold in the United States absent registration or an exemption from registration; any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer that will contain detailed information about the Company and management, as well as financial statements.