The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has returned from its trading halt and is charging higher on Wednesday.
At the time of writing, the biopharmaceutical company's shares are up 30% to $2.69.
Why is the Paradigm share price charging higher?
The catalyst for the rise in the Paradigm share price today is the release of a positive update relating to its investigational new drug (IND) application to proceed with a phase 3 trial in the US.
This trial aims to evaluate injectable pentosan polysulfate sodium (PPS/Zilosul) for the treatment of pain associated with knee osteoarthritis.
According to the release, the US Food and Drug Administration (FDA) has cleared Paradigm's IND application, allowing the company to commence with the trial.
This will no doubt come as a big relief to shareholders. In June and September, Paradigm received feedback from the FDA requesting further information relating to the trial. This cast a few doubts on whether it would ultimately be approved.
However, today's release notes that FDA advised that the company's responses sufficiently addressed its questions. In light of this, it is no surprise to see the Paradigm share price respond so positively to the news.
What's next?
Central ethics committee approval has also been received and the company is now focused on site initiation in the US. Patients are expected to begin screening in both the US and Australia during the current quarter.
In addition to commencing in the US and Australia, Paradigm is also entitled to commence clinical trials in EU member countries. As a result, the company now has a clear harmonised path to global approval of Zilosul.
Ten sites in Europe and the United Kingdom have been identified and are expected to be initiated during the first half of 2022.
This is a big positive given its huge market opportunity. Paradigm highlights that osteoarthritis affects more than 72 million people in the US, EU, Canada and Australia. This number is expected to increase meaningfully in the future due to ageing populations.
Paradigm's CEO and Interim Chair, Paul Rennie, said: "The opening of the Trial in the USA – the largest global pharmaceutical market, is a major milestone for the Company. This milestone represents a substantial de-risking of the Company's lead clinical program and is a testament to the Company's expertise, commitment and determination. As the Company progresses with the Trial, we expect there will be increasing interest from the pharmaceutical industry in the commercial value of this potential blockbuster therapeutic."
