Health Check: And the EOFY biotech winner is … gasp … a pot stock
Paradigm shares soar 34% after $41 million convertible note deal
Biotechs turn to debt funding
The ASX biotech sector's best EOFY performer has come from left field: the local and European focused medicinal cannabis supplier Bioxyne (ASX:BXN).
According to the Health Check Biotech Pulse – trademark pending – Bioxyne shares soared 720% in 2024-25, leaving its largely poorly performing pot peers in the dust.
Bioxyne's fortunes have been driven by its Breathe Life Sciences arm, which purveys cannabis products including not just flowers and oils but pastilles, vapes, pessaries and suppositories (we kid you not).
The company recently upgraded full-year revenue guidance from $25 to $28 million and promised positive cash flow and – gasp! – profitability.
Amplia (ASX:ATX) took second place, with a 233% gain (300% over the last month).
The stock soared after Amplia unveiled clinical trial results showing two 'complete responses' among a cohort of advanced pancreatic cancer patients.
Orthocell (ASX:OCC) shares vaulted 220% on the back of US Food & Drug (FDA) approval of its novel nerve repair tool Remplir.
Imricor Medical Systems (ASX:IMR) shares ended the year 189% to the good, as the company eyes FDA approval of its world's first MRI-guided ablation catheter.
Other triple digit dazzlers were myelofibrosis drug developer Syntara (ASX:SNT) (up 130%), autism testing device play Blinklab (ASX:BB1) (up 116%) and the beloved radiology imaging tearaway ProMedicus (ASX:PME) (up 110%).
Sorry – there's no prize for trying
Sadly, there's still too much red ink in the rankings.
In your columnist's opinion, investors have marked down many worthy stocks unfairly.
But we're not in primary school and everyone doesn't get a ribbon for trying, so the record books will show that medication compliance group MedAdvisor (ASX:MDR) led the falls with an 82% decline.
Other laggards are the multi-pronged Universal Biosensors (ASX:UBI) (down 76%), Proteomics International Laboratories (ASX:PIQ) (down 62%, see below), lung imager 4D Medical (ASX:4DX) (down 56%) and Clarity Pharmaceuticals (ASX:CU6) (down 51%).
Shares in the busy Clarity shares peaked at $8.74 last October – a 70% gain for the year – but even after the subsequent sell off the company still bears an $800 million market cap.
Strictly speaking, Opthea shares fared the worst after the company's infamous eye disease trail failure in March.
Opthea shares never resumed trading, so the official records show a 73% gain when in fact the stock is worth next to nothing.
Genetic Technologies and Nuheara are also missing from the laggards list, only because they went into administration and subsequently de-listed.
Paradigm shifts to convertible notes
With the equity capital raising outlook still looking shaky, Paradigm Biopharmaceuticals (ASX:PAR) has become the latest in a string of biotechs to tap alternative funding sources.
The developer of a knee osteoarthritis (OA) drug candidate has tapped US$27 million ($41.2 million), by way of convertible notes.
These have been issued to New York based alternative funder Obsidian Global Partners.
Under the terms, Paradigm will draw an initial US$7 million to fund patient recruitment, trial operations and regulatory milestones.
The balance of the facility is available at Paradigm's discretion, 'offering operational flexibility and strategic control over future funding needs'.
Barring default, the notes are interest free.
The cash will help to fund Paradigm's pivotal phase III trial of its repurposed drug candidate pentosan polysulphate sodium (PPS, or Zilosul).
Investors have keenly awaited this trial initiation – and confirmation of how it will be funded. Reflecting this, Paradigm shares this morning surged 34%.
The 466-patient study in underway across up to 15 Australian and 50 US sites.
The company says it is now fully funded up to the interim analysis of the first 50% of patients, due in mid 2026.
Last week Paradigm hedged its bets by paying as much as $16.5 million for Proteobioactives Pty Ltd ($500,000 upfront)
This company owns an early-stage oral candidate for minor to mild OA, which combines PPS with a COX-2 inhibitor (Coxib).
When debt is not a dirty word
The term 'debt' can have unfortunate connotations – especially in the context of your columnist's household budget.
But it can be cheaper than equity and has the benefit of being non-dilutive and more flexible with the timing of drawdowns.
Often, it's simply more accessible than equity.
The developer of better working anti-infectives, Recce Pharmaceuticals (ASX:RCE) last month availed of a US$20 million ($30 million) draw-down facility from the New York based Avenue Capital Group.
Recce pockets an initial US$7.5 million and a further US$5 million between April and September this year.
The remainder is available in calendar 2027, with all the amounts subject to 12.75% interest.
The funds will support Recce's two phase III registrational studies on diabetic foot infections and acute bacterial skin and skin structure infections.
Recce also recently raised $15.8 million of equity.
Last month, dermatology group Botanix Pharmaceuticals (ASX:BOT) unveiled a circa US$30 million ($48 million) debt facility with Kreos Capital.
Kreos is an arm of the world's biggest investment manager Blackrock.
The facility provides for circa $US20 million to be drawn now, with the remainder to be tapped by October 2026 at the company's option.
Under certain conditions, Kreos Capital can convert 20 percent of the loan into Botanix shares, at 33 cents apiece.
Botanix developed Sofdra, a treatment for excessive underarm sweating and has started selling the product in the US.
In mid-April Botanix also raised $40 million of equity, via an institutional placement.
Proteomics secures non-dilutive $6 million
Then there's non-dilutive grant funding.
The Perth-based Proteomics today said it had secured a $6 million investment from the federally funded Bioplatforms Australia and the WA government.
The funding will support developing an accredited protein biomarker analysis platform, in partnership with the University of Western Australia.
Proteomics chips in $1 million over the three-year funding period.
Proteomics has commercialised a predictive test for diabetic kidney disease and is developing assays for endometriosis, esophageal cancer and oxidative stress.
Meso-blast off for FDA application?
Stem-cell drug developer Mesoblast (ASX:MSB) says the company and the FDA are 'aligned' on what the company needs to do before it lodges a US marketing application for its heart disease candidate, Revascor.
In late December Mesoblast won FDA approval for its childhood graft-versus-host disease (GvHD) candidate.
This followed years of the company and the agency being decidedly 'unaligned'.
Given the heart disease heart indication is much bigger than GvHD, today's news is more significant than it may appear at first blush.
Mesoblast intends to file for accelerated approval by the end of the year. This is to treat ischemic heart failure patients with reduced ejection fraction and inflammation.
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