Repurposing PPS

Paradigm Biopharmaceuticals is raising a minimum $5 million and maximum $8 million at $0.35 per share to develop PPS (pentosan polysulphate sodium) as a superior treatment for BME (bone marrow oedema) and allergic rhinitis. PPS is an existing drug with non-steroidal anti-inflammatory properties that has potential to treat several conditions associated with inflammation. The fundraising is underwritten to the minimum $5 million by lead manager Lodge Corporate.

BME is characterised by constant bone pain, cartilage degeneration and blood clotting, and if left untreated often leads to long-term cartilage damage and in severe cases to joint replacement. Recent studies have also shown unresolved BME to progress to osteoarthritis.

While sportspeople are typically the most common sufferers of traumatic BME, other sufferers include people involved in car accidents and minor falls. The common bone marrow injury results in fluid build-up and micro-fractures inside the bone and can only be diagnosed by the increasingly used magnetic resonance imaging (MRI).

There are no existing therapies to treat this extremely painful condition and sufferers are advised to rest and immobilise injured areas. The only relief can come from non-steroidal anti-inflammatory drugs, which can have serious side effects.

Paradigm’s PPS is based on the much less intrusive administration by injection. PPS also has a well-established safety profile in both oral and intramuscular injections.

The US market for BME products (post traumatic osteoarthritis) is an estimated US$3 billion annually, making it a common medical problem worldwide. Paradigm’s intellectual property rights also encompass the use of PPS to treat respiratory conditions such as allergic rhinitis and allergic asthma.

Allergic rhinitis develops when the body becomes sensitised and overreacts to something you breathe in that you are allergic to. When an allergen is inhaled, mast cells secrete histamine, creating hay fever symptoms.

In most cases, treatment for allergic rhinitis is managed at the pharmacy level with oral and nasal spray medications (anti-histamines and corticosteroids) purchased over the counter.

Paradigm intends to use the proceeds of the Offer to conduct a Phase 2a study investigating the role of a nasal delivery of PPS to treat allergic rhinitis without the use of corticosteroids.

Corticosteroids are the current treatment for more severe and persistent symptoms. Long-term usage of nasal corticosteroids is a major concern for many patients as the side effects may include thinning of the nasal lining leading to nose-bleeding and potentially cataract formation. Long-term use of oral steroids also has some potential adverse effects (eg, growth retardation, diabetes mellitus, hypertension, adverse GI effects, cataracts, glaucoma, osteoporosis and necrosis of the femoral head).

Allergic rhinitis affects up to 30% of the world’s population with global spending on pharmaceuticals to treat allergic rhinitis estimated at US$13.5 billion per annum.

The IPO proceeds will be used to complete the open labelled Phase 2a clinical trial due to be completed in 2016 in up to 60 patients suffering BME. Capital raised will also enable Paradigm to proceed with its allergic rhinitis Phase 2a clinical trial also in 2016.

Paradigm Biopharmaceuticals Managing Director Paul Rennie said, “Repurposing an existing drug like PPS had several key advantages over new drug development including shorter drug development cycles, heavily reduced costs and greater success rates.

“There is strong evidence that PPS can be redeployed to benefit new classes of patients due to its anti-clotting, chondroprotective (cartilage protecting) and anti-inflammatory properties.”

Based on the full subscription amount, the post raising market valuation of Paradigm will be $30.6 million. The IPO closes on 30 June with Paradigm Biopharmaceuticals expected to list on the ASX on 10 July.