Dimerix Limited

DXB Details

Positive Results from Clinical Trials: Dimerix Limited (ASX: DXB) is a clinical-stage biotechnology company focused on the commercialisation of new therapies for underserved and unmet medical needs globally. The market capitalisation of the company stood at ~$146.33 million as on 14^th September 2020.

Favourable Results from Clinical Study: Recently, the company recently notified the market with positive results from Phase 2 clinical trial in individuals with diabetic kidney disease in order to support further development of its DMX-200 drug candidate. Under the study, a total of 45 patients were enrolled, with 40 patients meeting all pre-defined criteria required for inclusion in the final analysis in accordance with the protocol. The company added that the phase 2 study was a double-blind, randomised, placebo-controlled, crossover study, which has been designed to assess the safety and efficacy of DMX-200 in patients with diabetic kidney disease. Previously, the company has been presented with a funding of A$1 million from the Australian Government’s Medical Research Future Fund (MRFF) via a Biomedical Translation Bridge (BTB) program to support the development and clinical evaluation of DMX-200.

Decline in Bottom-line: During FY20, the company added two additional candidates to the development pipeline, DMX-200 for Acute Respiratory Distress Syndrome (ARDS) associated with COVID-19, and the second one is DMX-700 in Chronic Obstructive Pulmonary Disease. For FY20, the company reported net loss amounting to $4,494,153, reflecting a fall of 55.7% on YoY basis. This was primarily attributed to research and development costs of $5,537,528 and corporate and administration expenses of $1,251,581.

Key Financials (Source: Company Reports)

Strategic Priorities: The near-term strategic priorities of the company revolve around the additional analysis of Focal Segmental Glomerulosclerosis (FSGS) data, which is underway. In addition, the company continues to undertake planning for its proposed global Phase 3 pivotal program in FSGS. The company is scheduled to conduct its 2020 Annual General Meeting on 30^th September 2020.

Stock Recommendation: For FY20, the company reported net operating cash expenditure of $4.7 million. At the end of June 2020, the cash reserves of the company stood at $7.8 million. DXB has an EV/Sales multiple of 60.2x as compared to the industry median (Biotechnology & Medical Research) of 37.8x on TTM basis. The stock is trading at a price to book value multiple of 18.9x against the industry average (Biotechnology & Medical Research) of 5.8x on TTM basis. On the technical analysis front, the stock of the company has a support level of ~A$0.173 and a resistance level of ~A$0.355. Thus, considering the rise in expenses, higher valuation and more leveraged balance sheet, we suggest investors to avoid the stock at the current market price of $0.275 per share, down by 62.838% on 14^th September 2020 owing to the release of clinical results of Phase 2 study of DMX-200.

DXB Technical Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.