Pharmaxis signs first Aridol distributor

Sydney-based drug developer Pharmaxis (ASX:PXS, Nasdaq:PXSL) has signed a European distribution agreement for its first product, Aridol.

The agreement, with Nigaard Pharma AS, covers the distribution and marketing of the asthma management tool throughout Scandinavian countries. Nigaard Pharma is a specialist respiratory pharmaceutical company based in Oslo, Norway with offices in Sweden, Denmark and Finland.

"Nigaard is a Pharmaxis away from home and that is what we were after," said Pharmaxis CEO Alan Robertson. "They are small and nimble but with an extensive network. It i much more than a distribution agreement -- it is a marketing agreement also. We didn't want a company that had a number of products -- the deal is significant to them and significant to us. We also expect Sweden to be the first European country to approve Aridol.

"This is a five-year, close-ended agreement -- we are not licensing the product to them and they have to follow reporting requirements and target milestones. It is a good, strong deal which is the first of many in Europe and covers 20 million people in Scandinavia.

"Deals like this take the best part of nine months, but there is no hurry to sign if the marketing approval is not yet in place."

Robertson said an agreement in central Europe would follow in the next few weeks. Pharmaxis lodged its application for regulatory and marketing approval of Aridol for Australia in January 2005 and in Europe with the Swedish Medical Products Agency (MPA) in May 2005, and anticipates registration for Aridol in the first half of 2006.

"We expect it to be approved in Australia first. Pharmaxis will market and distribute Aridol in Australia -- our national sales and marketing manager is in place and we are ready," said Robertson.

Pharmaxis enrolled the first patients in a US-based phase III trial of Aridol in late 2005 and intends to file for authorisation to market Aridol with the FDA later this year.

Aridol is designed to identify patients with active airway inflammation such as occurs in asthma, provide information on the severity of their disease and help monitor the effectiveness of their current treatment.

The Aridol challenge test is said to be a simple, 15-minute procedure, which uses a patented formulation of mannitol processed into a respirable powder. The test requires the patient to inhale increasing doses of Aridol, which causes the airways to narrow and contract that is detected by measuring the amount of air a person can exhale in one second. The smaller dose required to cause contraction, the more severe the patient's asthma diagnosis. People without airway inflammation do not respond to an Aridol challenge test.

In November, Pharmaxis completed its capital raising of AUD$87 million on the ASX and Nasdaq stock exchange at an issue price in the US of US$24.16 per ADS (AUD$33, and in Australia at AUD$2.20.

Yesterday Pharmaxis closed on the Nasdaq at US$21 and the ASX at AUD$1.86.

"It is never a good idea to be a slave to share price," Robertson said. "The volumes are still low in the US and we must create more volumes and interest. We set our goals and deliver and this should reward shareholders

"We set the price at $2.20 and I would prefer it was north of $2.20, but it reflects that the placement sucked up lots of the demand. As Aridol is approved, we are expecting the share price will go north.

"This company is going to change dramatically as we put our global distribution in place and it will change the landscape of biotechnology in Australia."

The market responded favourably to today's announcement. In morning trade shares gained 7.5 per cent, hitting a high of $2.00. At time of writing shares were trading at $1.975, up $0.115.