Why the Pharmaxis (ASX:PXS) share price jumped 6% today

The Pharmaxis Ltd (ASX: PXS) share price is up 6% during early afternoon trade. We look at the announcement driving the share price moves.

| More on:
medical asx share price represented by doctor giving thumbs up

Image source: Getty Images

The Pharmaxis Ltd (ASX: PXS) share price is up today on the news it has received a substantial payment from a strategic partner.

The Pharmaxis share price reached an intraday high of 9.9 cents in late morning trade, but has since pulled back. At the time of writing, the Pharmaxis shares are up 6.8% to 9.3 cents.

What does Pharmaxis do?

Pharmaxis is an Australian biotechnology company committed to research and drug development for diseases involving inflammation and fibrosis including cystic fibrosis, pulmonary fibrosis and liver disease.

The company currently has two respiratory products approved in international markets that are generating recurring revenue. In addition, Pharmaxis has a diversified range of products at various stages of development.

Milestone payment

Pharmaxis advised this morning that it’s received a milestone payment of US$7 million ($9.2 million) from its United States licensee, Chiesi.

According to the company, the credited funds follow the recent approval by the United States Food and Drug Administration (FDA) for Bronchitol.

Bronchitol is used for the treatment of cystic fibrosis in helping a patient clear mucus from their lungs. A spray-dried form of the active ingredient, mannitol, is delivered to the lungs by a specially designed, portable inhaler. Bronchitol works by rehydrating the airway/lung surface and promoting a productive cough.

The product is also sold and marketed across Europe, Russia, and Australia.

With the first payment received, Pharmaxis is anticipating a further US$3 million from Chiesi on the shipment of Bronchitol. The United States bound delivery is scheduled for the first quarter of 2021.

Reporting a cash holding of $10 million at the end of the last September period, the company has since bulked up its coffers. Pharmaxis recently added a $5 million R&D tax incentive in October, bringing its total cash balance to $24.2 million, including the $9.2 million payment.

How has the Pharmaxis share price performed in 2020?

The Pharmaxis share price is down almost 40% over the past 12 months. Its shares reached an all-time low of 5.3 cents in March and have failed to recover from its highs recorded at the start of the year.

The height of the Pharmaxis share price reached was 11 cents in April, straight after the pandemic took the world hostage. Since then, Pharmaxis shareholders have been going on a mini-rollercoaster ride.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Pharmaxis Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News