DXB kicks off Phase 3 clinical trials - Ethics approval lodged

Our new business model is to research, analyse, and invest in up and coming small cap ASX-listed biotech stocks that we believe have a high chance of success. We then share our research and commentary along our investment journey with our readers.

Last Monday, we announced our very first investment in our small cap biotech portfolio, Dimerix (ASX:DXB).

DXB has developed a treatment for inflammatory diseases such as kidney and respiratory diseases and is busy advancing multiple near term Phase 3 clinical studies.

Yesterday DXB announced its first “ethics submission” in Australia. Once approved, the patient recruitment process can begin for the Phase 3 trials. We will provide our commentary at every step in the process.

Building on our own research, we are leveraging the knowledge of one of Australia’s most successful small cap biotech fund managers, the Merchant Group. We will be following the lead of the group’s early stage biotech fund, investing in high potential, early stage ASX listed biotech companies.

This includes our first Finfeed portfolio investment, DXB, which we think has upside from its current share price over the coming 12-18 months.

DXB raised $20M last week and is now fully funded to deliver its Phase 3 trials over - most of the 20¢ placement stock came onto the market on Tuesday this week and the share price seems to be holding up well above 30c, which tells us that most incoming investors at 20¢ are keen to see the DXB the story play out, like we are.

DXB is wasting no time in getting to work. Now fully funded for its Phase 3 trials on Focal Segmental Glomerulosclerosis (FSGS), the company this week confirmed that the trials are now commencing with DXB having filed an ethics submission before commencing Australian patient recruitment upon its approval.

FSGS (Focal Segmental Glomerulosclerosis) is a rare kidney disease characterised by inflammation and scarring of the kidney’s filtration unit.

There are currently no FDA approved therapies for this disease, and the only treatment for people with this debilitating kidney disease is a kidney transplant (which is very expensive and has a long waiting list).

Receiving ethics approval is an important part of the clinical research process. All research on humans involves some degree of risk, so it is important that patients have enough information about these risks to make an informed decision before undergoing a clinical trial.

An ethics approval board will evaluate the submission and (hopefully) grant DXB permission to go ahead with the trial. Once granted, DXB will commence patient recruitment.

The Phase 3 trial, “ACTION3”, is a pivotal (final), multi-centre, randomised, double-blind, placebo-controlled study of the efficacy and safety of DMX-200 in patients with FSGS who are receiving a stable dose of an angiotensin II receptor blocker (ARB). We'll explain what this all means in a future note.

According to DXB CEO Nina Webster, assuming ethics approval is received, DXB expects first patient screening to begin next quarter.

DXB expects up to 167 clinical sites across 18 different countries to participate in the clinical study. Patient recruitment will begin across five sites in Australia and New Zealand, with recruitment from countries throughout North America, South America, Europe, the United Kingdom, and Asia Pacific regions to follow shortly after.

Here are the project milestones we expect to see for DXB’s FSGS testing and commercialisation

✅ Phase III Study Design Complete
✅ Study design approval from FDA
➡️🔄 Ethics submission and site initiation for first sites
🔲 Phase III Trials Commenced: Study Period 1
🔲 First patient Recruited/Dosed
🔲 Patient Recruitment Update 1
🔲 Patient Recruitment Update 2
🔲 Patient Recruitment Update 3
🔲 Recruitment Complete
🔲 Interim Results
🔲 Phase III Trials Continue: Study Period 2
🔲 Patient Recruitment Update 1
🔲 Patient Recruitment Update 2
🔲 Patient Recruitment Update 3
🔲 Phase III Data collected for accelerate approvals
🔲 Accelerate Approvals Submitted
🔲 Accelerated Approvals Granted (H2 2024)
🔲 Drug Commercialised
🔲 Final Results eGFR (how well is the patient’s kidney functioning)
🔲 New Milestones Added

Investment Milestones for DXB

✅ Initial Investment: @20c
🔲 Increase Investment
🔲 Increase Investment
🔲 Price increases 500% from initial entry
🔲 Price increases 1000% from initial entry
🔲 Price increases 2000% from initial entry
🔲 12 Month Capital Gain Discount
🔲 Free Carry
🔲 Take Profit
🔲 Hold remaining Position for next 2+ years

REMINDER: About Dimerix (ASX:DXB)

For this investment in DXB we are taking our lead from early stage biotech experts and one of the most successful small cap biotech fund managers in Australia, Merchant Group.

The Group’s new Merchant Biotech Fund has now made its first investment: in DXB... so we did too.

We have been investing in ASX small caps for many years, and we get shown a LOT of investment opportunities from a LOT of different people - we say no to most of them.

Over the last 12 months, biotech expert and fund manager at Merchant Group, Andrew Chapman, told us a bunch of times that we should invest in another company called BARD1 LIfe Sciences (we said no each time).

It then went from 60¢ to almost $4 in a few weeks.

Before that Merchant also told us to look at Race Oncology (we didn’t invest in that one either) and that has been one of the ASX’s most successful biotechs in the last few years.

We get shown over 400 potential investments per year and we say no to the majority of them ... However, we have observed that the companies that Merchant recommends have gone on to perform extremely well.

...so when Merchant approached us a few months ago to join in the due diligence process looking at DXB with them, this time we decided to get involved.

Merchant tells us that DXB has one of the cheapest market caps they have seen for a biotech company that’s entering Phase 3 trials. They decided to invest $6M cold hard cash into last week's DXB placement as the FIRST investment in their NEW early stage Merchant Biotech Fund.

SUMMARY: 9 Reasons we have invested in DXB

1. We are following the lead of experts at the Merchant Group, DXB is the first investment in their new early stage biotech fund and they have an excellent track record.
2. We have spent some time with DXB CEO Nina Webster and are very impressed with her industry experience in commercialising biotechs
3. DXB MAIN BET: Addresses an inflammatory kidney disease to address a $1 billion market if successful. Phase 3 trial results due in 12 months with investor speculation building in the lead up to the result.
4. DXB SIDE BET #1: Phase 3 trials of lung inflammation treatment for patients in hospital from COVID — results due in a few months.
5. DXB SIDE BET #2: Phase 3 trials treatment for patients with pneumonia associated with COVID — results due in a few months.
6. Share price consolidated during 2021 and $20M in the bank — ready for next leg up with funding.
7. We think life science and biotech will be a big theme over the next few years.
8. Our new biotech expert advisor tells us the DXB science is very good.
9. We think that if it proved the treatment, DXB could be acquired by big pharma for hundreds of millions.

You can read our deep dive into each of the above nine reasons in our original launch article for DXB here.