The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has been the standout performer on the Australian share market on Tuesday.
At one stage the biopharmaceutical company's shares were up as much as 63%. And although they have given back the majority of these early gains, at the time of writing its shares are still 25% higher at $1.65.
Why did the Paradigm Biopharmaceuticals share price rocket higher today?
Investors have been fighting to get hold of shares after Paradigm Biopharmaceuticals announced that it has met the primary endpoint of its phase 2B randomised double-blind placebo-controlled clinical trial.
According to the release, the trial was designed to evaluate the effects of injectable pentosan polysulfate sodium (iPPS) on knee pain in subjects with knee osteoarthritis and subchondral bone marrow edema lesions (BMELs) as assessed by the Knee injury and Osteoarthritis Outcome Score (KOOS) Pain subscale.
The clinical trial met the primary endpoint with a change in the KOOS from baseline at Day 53. Management explained that this confirms the potential for iPPS to be a safe and effective treatment of knee osteoarthritis pain.
46.2% of subjects receiving iPPS showed a greater than 50% reduction in pain from baseline compared to 22.5% of subjects receiving a placebo. This is highly statistically significant and highly clinically meaningful.
The company's CEO, Paul Rennie, revealed that the company was incredibly happy with the trial results and optimistic on its future.
He said: "If you have clinical significance and statistical significance you have a high probability the drug will pass a Phase 3 clinical trial and once registered a drug that can penetrate the market. We are further impressed with the results given the widespread difficulty ASX Listed biotechnology companies have had in achieving positive phase 2b trial results over the last few years."
Should you invest?
While this is undoubtedly a big positive for the company, it is still a touch too soon for me to make an investment.
I would suggest investors keep a close eye on the company's progress over the next 12 months and its probable Phase 3 trial in particular.
In the meantime, I would prefer exposure to the biotech market through the likes of CSL Limited (ASX: CSL) and Mayne Pharma Group Ltd (ASX: MYX).
