The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has zoomed over 610% higher in the last 12 months. After jumping 10% higher on Monday, the Paradigm share price is currently trading near its all-time high at $2.07.
Paradigm is an Australian based company that focuses on the repurposing of pentosan polysulphate sodium (PPS). PPS shows anti-inflammatory and tissue regenerative properties which Paradigm is currently utilising to treat inflammation-based conditions.
Bone marrow edema is responsible for the pain in Osteoarthritis and acute joint injury, which Paradigm is treating using PPS. Other indications for PPS include alphavirus induced arthralgia, mucopolysaccharidoses (MPS) and allergic respiratory conditions.
Multiple share price catalysts around the corner
Many users of PPS have already reported a life-changing improvement in their quality of life post-treatment. In December 2018, Paradigm successfully completed its phase 2b randomised, double-blind, placebo-controlled trial. The primary results showed great potential with PPS being a viable option to treat Osteoarthritis.
Despite the success of Paradigm’s phase 2b clinical trial, the share price lost momentum possibly due to portfolio rebalances at the time. After all, Paradigm was one of the few stocks to show strong gains in its share price throughout late 2018 while the overall ASX showed weakness. The secondary results for its phase 2b trial are bound to be released in Q1/Q2 CY2019 which should reiterate the potential of PPS.
Furthermore, Paradigm will treat up to 50 ex-NFL players experiencing pain from Osteoarthritis in the United States. Results for this should also be expected in Q1/Q2 CY2019. A successful result could drive strong media attention which can greatly benefit Paradigm’s share price. Based on Paradigm’s phase 2b trial, the risk of poor results has already been significantly reduced.
The equivalent analogy of Paradigm’s current situation would be to get a glimpse of the exam answers before sitting the exam itself.
Other catalysts include the phase 2/3 clinical trials for MPS and will have results due in Q1/Q2 CY2019. The approval sent to TGA for the sale of iPPS in Australia will have results due in Q2 CY2019. The Ross River Virus focusing on the treatment of alphavirus-induced arthralgia will show results in Q2/Q3 CY2019.
Finally, the talk for partnerships has already begun with more news potentially released any time soon.
Paradigm has a huge addressable market
To give investors some perspective, in just the United States alone, Osteoarthritis costs the economy over $128 billion USD per annum. Paradigm, a sub $300 million AUD company has managed to develop a viable treatment for this condition.
In addition to the Osteoarthritis market, MPS and allergic respiratory conditions are also billion-dollar markets. In these markets, PPS also shows potential to be a superior treatment compared to current options available.
To boost investors’ confidence, the management team leading Paradigm consists of individuals from world-class companies such as CSL Limited (ASX: CSL) and Mesoblast Limited (ASX: MSB). Clinical trials, resource allocation and partnership discussions are events that this management team would be well equipped to handle.
With Paradigm having found an answer to multiple billion-dollar markets, it may only be a matter of time until Paradigm becomes a leader in Australia’s biotechnology industry. Although Paradigm’s recent share price has showed impressive gains, current facts available indicate that the best could be yet to come.
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Motley Fool contributor Elton Wang owns shares of PARA BIO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.