Why Paradigm Biopharmaceuticals is one to watch in 2020

Paradigm Biopharmaceuticals Ltd (ASX: PAR) shares have tripled in value over the last 12 months. Here's a closer look at the company and why its one to watch this year.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Paradigm Biopharmaceuticals Ltd (ASX: PAR) is an Australian biopharmaceutical company, which focuses on repurposing pentosan polysulfate sodium (PPS) for the treatment of medical conditions and diseases.

Paradigm's share price has tripled in value over the last 12 months and currently trades at $3.33 a share with a market cap of $658.72 million.

Paradigm explores new usages for existing drug

PPS is an FDA-approved medication used to treat a variety of inflammatory conditions most notably, interstitial cystitis (inflammation of the bladder). Secondary uses include the treatment of osteoarthritis in horses and dogs. PPS contains fibrinolytic (which prevents blood clots), lipolytic (which improves metabolism), and anticoagulant properties, making it an incredibly unique medication in its applications.

Paradigm has patented the exploration and usage of PPS in new applications with a minimum life on patents ending 2030–2040. The company's main focus is on repurposing PPS to treat knee osteoarthritis in humans under the brand name Zilosul.

Osteoarthritis occurs when the protective cartilage that cushions the ends of bones wears down over time. Currently, there is no cure for osteoarthritis – however, symptoms can be relieved through medical and non-medical treatments depending on the stage of condition.

Zilosul has so far proven effective in treating osteoarthritis due to the potential biological characteristics of PPS. These characteristics include:

  • anti-inflammation
  • antihistamine
  • anti-clotting
  • prevention of cartilage degeneration
  • prevention of necrosis (premature cell death)

Paradigm is also exploring PPS in treating other diseases such as mucopolysaccharidosis (the body being unable to break down sugar molecules). Usage for both osteoarthritis and mucopolysaccharidosis has already passed phase 2 clinical FDA trials with undeniable results.

Current competing treatments have not demonstrated the same level of safety, efficacy, and indicative regression of disease that Paradigm has achieved. With a sample size of over 600 patients, clinical trials showed a >50% reduction in pain at day 53 with statistically significant results. Tests have also confirmed a substantial reduction in two key biomarkers (COMP and ADAMTS-5), which reduce the progression of osteoarthritis and protect bone cartilage from breakdown.

Overall, this has resulted in a reduction in pain and cartilage loss, and the reduced risk of joint destruction and total knee replacement.

Paradigm making moves in 2020

The next step for Paradigm is obtaining an IND filing with the FDA for marketing approval of Zilosul. The company expects this to be completed in Q4 CY2020 and is currently on-track after an announced successful pre-IND meeting with the FDA on 20 February 2020.

Paradigm is fully funded with $70 million cash in bank for all clinical trials and regulatory submissions, in addition to long term manufacturing and supply agreements with PPS's only manufacturer. This provides a secured scalable operation with global potential.

Currently, Paradigm reports that there are 31 million sufferers of osteoarthritis in the US and 3 million sufferers in Australia. The company has announced that a 10% market share of the US market alone results in US$9 billion in revenue annually. Paradigm is also taking steps to ensure its phase 3 trial will also meet European regulatory requirements for further expansion.

Foolish takeaway

Paradigm Biopharmaceuticals has incredible potential in the application of its Zilosul treatments. However, the company is still dependent on an approved IND filing and its phase 3 FDA trial results. Phase 2 clinical trials provided statistically significant results for patients aiding the confidence of investors for 2020.

For these reasons, I think Paradigm Biopharmaceuticals is a buy. Otherwise, for the more risk-averse, it is definitely one to add to your watchlist for 2020.

Motley Fool contributor Jordan Liu has no position in any of the stocks mentioned. 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.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

CSL share price leaping higher amid $1.9 billion funding news

ASX 200 investors are bidding up the CSL share price on Wednesday.

Read more »

Two happy scientists analysing test results.
Healthcare Shares

Mesoblast share price rockets 36% on breaking FDA news

ASX investors are sending the Mesoblast share price soaring following promising FDA news.

Read more »

a doctor in white coat and stethoscope stands in front of a building holding an electronic device in his hands.
Healthcare Shares

Guess which ASX 200 healthcare share is jumping 7% on a guidance update

This healthcare share is performing better than expected in FY 2024.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Earnings Results

Chemist Warehouse merger target Sigma reports 149% FY24 profit jump

This could be the last set of results from Sigma as we know it if its merger is approved.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

1 ASX healthcare stock that looks severely undervalued

I think this stock looks too cheap to miss.

Read more »

Stethoscope with a piggy bank and hundred dollar notes.
Healthcare Shares

Own Medibank shares? Here's why it's a rewarding day for you

Shareholders are getting a healthy boost today.

Read more »

Health professional looking at a laptop.
Healthcare Shares

Are CSL shares a must-buy in March?

Let's see what analysts are saying about this high-quality company.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

This ASX healthcare stock is up 72% on FDA news and 'historic moment'

Huge gains are been recorded by this stock on Tuesday. But why?

Read more »