Paradigm Biopharmaceuticals Limited

PAR Details

Clearance of USFDA Norms: Paradigm Biopharmaceuticals Limited (ASX: PAR) is associated with researching and developing therapeutic products primarily used for humans. The company deals in drug repurposing, and it finds new uses for old drugs which helps in reducing the cost and time to bring therapeutics to market. On 24 September, the company issued 175,000 fully paid ordinary shares of its own by exercising 175,000 options. The price was fixed at $0.45 per option with an expiry date of 27 September 2020.

Recently, PAR informed that its first Investigational New Drug (IND) application, which was filed on 7 August 2019 has been cleared by the USFDA within the 30-day review period. Earlier, the company submitted an Expanded Access Investigational for its new drug application (IND) for pentosan polysulfate sodium (PPS) for the treatment of approximately 10 patients with pain associated with knee osteoarthritis (OA) with concurrent bone marrow lesions.

FY19 Financial Highlights for year ending 30 June 2019:  PAR declared its full-year results for FY19 wherein, the company posted a loss of $15.627 million as compared to the previous loss of $6.190 million in FY18. Other income for the period stood at $3.245 million as compared to $2.736 million. Research and development expenses for the period came in at $7.896 million as compared to $6.594 million in FY18. Other operating expenses during the period were reported at $4.047 million as compared to $2.332 million in FY18. The consolidated total expenses for the period were $18.873 million as compared to $8.926 million on FY18. The company reported $82.505 million of total current assets, including cash of $72.34 million, trade and other receivables at $0.35 million. Intangibles were valued at $2.98 million while total equity stood at $82.80 million as on 30 June 2019. Net cash outflow from operating activities came at $63.65 million while net cash outflow from investing activities was at $6.52 million.


FY19 Financial Highlights for the year ended 30 June 2019 (Source: Company Reports)

Clinical Development: During the year the company worked on the followings:

(a) Bone Marrow Edema Lesions – Osteoarthritis: It is the most prevalent form of joint disease, affecting as much as 13% of the world’s population. In the US alone, the financial burden of OA has been estimated to be $81 billion in medical costs and $128 billion in total cost, given approximately 21 million people with OA associated limitations, 36 million outpatient visits and 750,000 hospitalizations per year. The company is working on its product- iPPS, a non-opioid drug, which is safe and has the potential to disrupt the pharmaceutical market for the treatment for chronic pain arising from osteoarthritis.

(b) Alphavirus – Ross River virus (RRV) and Chikungunya virus (CHIKV): The company reported impressive results from the preclinical and human pilot study which provided the rationale for the Phase 2a randomized commenced during August 2017.
 

Outlook: As per the FY20 guidance, the Management expects to complete the Expanded Access Program and update on the same in the coming quarter.

Stock Recommendation: The stock of PAR is quoting at $2.520 with a market capitalization of ~$500.19 million. The 52-week trading range for the stock stands at $0.693 to $2.630 and currently, the stock is trading close to its 52-week high. The stock has given a stellar return of 94.76% and 75.73% in the last three-months and six-months, respectively. The stock price has moved 87.05% in the last one month. Considering the above clinical developments, price movement and the clearance of USFDA, we presume that all the positives have already factored in at the current price. Hence, we suggest investors to book profit and recommend a ‘Sell’ rating on the stock at the current market piece of $2.520, down 3.077% as on 24 September 2019.

 
PAR Daily Technical Chart (Source: Thomson Reuters)

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