ASX-listed PharmAust Limited has delivered the final report on its successful Phase II clinical trial, using the Monepantel drug to treat cancer in dogs, to the US$8.8B market capped pharmaceutical giant, NYSE-listed Elanco. Under an option agreement inked two years ago with PharmAust, the animal health-focused megapharma company now has six months to take up the option to licence, manufacture, and market Monepantel, or “MPL”, globally, as a canine cancer treatment.
The Perth-based, clinical-stage oncology company entered into the agreement with Elanco back in April 2018 to test the potential for Elanco’s Good Manufacturing Process, or “GMP”, grade MPL drug to treat dogs diagnosed with lymphoma-B cancer.
The delivery of the final report on the successful Phase II trials triggers the six-month option period for Elanco to agree to the terms of the license agreement.
PharmAust said its management had worked with Elanco in the design of the clinical trials to help ensure that these trials, if successful, would provide sufficient data for Elanco to make the decision to exercise its option.
Whilst Elanco is US-based and already marketing MPL as a sheep-drench formulation to treat parasitic infections, it was PharmAust’s oncologists who saw the drug’s potential to re-purpose it as a canine cancer treatment. PharmAust also had the drug modified into a tablet form to deliver the treatment effectively.
According to a recent research report on PharmAust, published by Perth-based research analyst, JP Equity Partners, the drug licensing deal covering the PharmAust-Elanco partnership typically involves up-front cash payments and reimbursement of development costs, potentially in the region of $15-20 million, plus a 10-12 per cent royalty on future sales.
Although management are currently having some “remarkable” laboratory success with Monepantel in the fight against COVID-19, PharmAust said the Elanco licensing deal would be a significant commercial outcome for the company and potentially see it fully funded to focus on the human cancer drug market.
In a recent interview Elanco’s Chief Executive Officer, Jeffrey Simmons, said that Elanco Animal Health Inc. recently gobbled up German megapharma Bayer AG’s animal health unit in a multibillion-dollar scrip and cash deal to become the world’s “Number 2” animal-health company.
No doubt Elanco’s global marketing reach would be a windfall for PharmAust if the option is taken up.
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By Matt Birney
