Melbourne based Dimerix Ltd perfectly fits our description of an Undiscovered Biotech. With its ~AUD$78M market cap and 3 x phase 3 clinical trials ongoing, there’s compelling reasons to take a look at this company.
Background
In 2004 Dimerix Bioscience was spun out of the University of Western Australia and the Western Australian Institute for Medical Research as a private company. Eventually the company made it’s way onto the ASX via Sun Biomedical Limited through a reverse takeover. The company then changed it’s name to Dimerix Ltd.
The early backbone of Dimerix Bioscience was is it’s propriety platform technology called Receptor-Heteromer Investigation Technology, or Receptor-HIT. Dimerix used the Receptor-HIT platform to identify it’s lead compound DMX-200.
DMX-200
Without getting too bogged down in technical aspects, DMX-200 combines two existing drugs, irbesartan and propagermanium. Irbesartan is an off-patent medication often used to treat Type-2 Diabetes patients suffering hypertension or nephropathy.
Propagermanium (PPG) is a chemokine receptor (CCR2) blocker, which
has been used for the treatment for Hepatitis B in Japan and is available in the USA for its anti-
inflammatory properties.
Phase 3 trials
Though Dimerix has other products/trials going on in the background, most investors will focus on the 3 phase 3 trials which provide near term potential upside.
ACTION3
The first of those trials, ACTION3, is for patients suffering a kidney disease called Focal Segmental Glomerulosclerosis, or FSGS. FSGS is an orphan indication, meaning it is a rare disease, that attacks the kidney’s filtering units. It causes irreversible scarring which leads to permanent kidney damage, and
eventually kidney failure, requiring dialysis or transplantation.
This study will be evaluating the safety and efficacy of propagermanium for the treatment of participants with FSGS who are already taking irbesartan. The company recently announced ethics and regulatory approvals for the trial and patient screening and recruitment is already underway.
It is expected that up to 167 sites across 18 counties will participate in the trial. The primary endpoint is the percent change in proteinuria (a surrogate marker if kidney function) from baseline to 35 weeks. This endpoint has the potential for accelerated marketing approval with the US FDA, while the endpoint of baseline to 104 weeks would see full approval.
REMAP-CAP
DMX-200 has been selected by and international panel of experts to participate in worldwide study into possible treatment for COVID-19 induced, Acute Respiratory Distress Syndrome (ARDS) and Community-Acquired Pneumonia (CAP).
This investigator led study is known as the Randomized, Embedded, Multifactorial Adaptive Platform trial for Community-Acquired Pneumonia (REMAP-CAP), will test the immunomodulatory and anti-inflammatory properties of DMX-200 in these COVID-19 patients.
The trial is funded by the European Union and has the primary endpoint of all-cause mortality at 21 days. Interim results likely in the first quarter of calendar 2022.
Clarity 2.0
The third phase 3 trial utilizing DMX-200 is investigating the safety and efficacy of the drug on patients with respiratory complications associated with COVID-19.
This 600 patient trial across Australia and India will have the primary endpoint of an 8-point clinical health score measured on day 14. . The clinical health score is adapted from the categorical scale recommended by the WHO for COVID -19 trials and ranks health states from being discharged with no limitations through to death. Participants will be treated for up to 28 days with long-term outcomes of treatment assessed at 26 weeks.
It is expected that DMX-200 will act to modulate the body’s immune response and it is hoped the drug will act regardless of vaccinations status or any anti-virals medications being prescribed. Interim data for this trial is also likely in the first quarter of calendar 2022.
Other opportunities
In addition to the trials detailed above, Dimerix has pre-clinical drug candidates as well as a successfully completed a phase 2 study utilizing DMX-200 in patients with Diabetic Kidney Disease.
Despite the successful trial, DKD is not an “orphan” indication which means there is a longer path to market for DMX-200 in this particular indication. For this reason, even though a phase 3 trial is likely for DKD, it appears Dimerix is channeling its limited resources into the 3 trials mentioned earlier
Conclusion
Let’s examine Dimerix value proposition a little more closely. At the time of publication, the company had a market capitalization of just $78M, staggeringly, that figure included a recently reported cash balance of $19M.
In calculating the value of an investment in Dimerix I’d argue that it would be fair to subtract the cash balance from the market cap. Looking at what’s left we find that for $51M we get exposure to 3 ongoing phase 3 trials.
Even if we ascribe zero value to the company’s future DKD trial and its pipeline of pre-clinical products, Dimerix warrants a place on any biotech investors watchlist.
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