- Drug developer Dimerix (DXB) has entered into a funding agreement with Radium Capital
- The move grants Dimerix early access to government tax incentives around research and development
- This agreement means Dimerix can now advance R&D on on its DMX-200 drug, without the share dilution that would come from equity raising
- With the cash from Radium, Dimerix can advance the Phase 2 clinical study, and begin development and partnering discussions to get the drug to market
- Dimerix is up 7.1 per cent, with shares trading for 15 cents each
Dimerix (DXB) has entered into a funding agreement with Radium Capital to provide early access to a part of the Research and Development (R&D) tax incentive.
Buy Now, Pay Later
Put simply, Radium provides upfront cash to companies so they can advance R&D, with repayments deferred until tax rebates are received. This agreement means Dimerix can now advance R&D on on its DMX-200 drug, without the share dilution that would otherwise come from equity raising.
Given the uncertain market conditions around the COVID-19 pandemic, the initial advance of $1,024,128 will see Dimerix through the Phase 2 clinical trials of DMX-200 and beyond, regardless of capital market sentiment.
CEO and Managing Director of Dimerix Dr Nina Webster says the agreement puts the company in a strong cash position despite the uncertain times.
“Our two Phase 2 clinical studies continue on track to complete mid-2020, and this cash advance provides a solid base for the company to those pursue activities beyond the current clinical trials as we continue to plan for the success of DMX-200.”
The advance will be received in the next week, accruing interest at the compounded rate of 1.25 per cent per month, and repayment will coincide with receipt of the company’s 2020 R&D refund, expected by September 30.
The company reported a cash position of $3.85 million as at December 31, 2019.
What is DMX-200?
DMX-200 is a chemokine receptor (CCR2) blocker, which has shown early signs of helping to treat kidney disease.
It’s planned to be administered to patients taking Irbesartan, an angiotensin II type I (AT1) receptor blocker and the standard of care treatment for kidney disease.
According to Dimerix, the common clinical marker for progression of kidney disease is an increase in protein in the urine (known as proteinuria), and a significant reduction in proteinuria demonstrates the slowing progression of kidney failure.
Irbesartan used alone has been shown to reduce proteinuria in type 2 diabetics by 24 per cent. Early clinical trials have shown DMX-200, in conjunction with Irbesartan, reduces proteinuria by a further 36 per cent. This reduction may result in delaying kidney failure and the need for dialysis, which can potentially extend the lives of – and delay the symptoms of – type 2 diabetics with the onset of kidney disease.
Similarly, sufferers of another kidney disease – Focal Segmental Glomerulosclerosis (FSGS) – have shown similar outcomes. FSGS is a serious and rare disease that attacks the kidney’s filtering units, the glomeruli.
DMX-200 for FSGS is currently in a Phase 2 clinical trial and has been granted Orphan Drug Designation by the Federal Drug Administration (FDA) and European Medicines Agency (EMA).
Orphan Drug Designation is granted by the FDA and EMA to support the development of products for rare diseases.
Given that there are 23 million diagnosed diabetics in the U.S. alone, and the costs associated with kidney disease are prohibitive, there is great potential for a drug like DMX-200 in the treatment of type 2 diabetes and other kidney conditions.
With the cash from Radium, Dimerix can advance the Phase 2 clinical study, and begin development and partnering discussions to deliver the drug to market.
Dimerix is up 7.1 per cent, with shares trading for 15 cents each as at 2:35pm AEDT.