|Parnell CEO Robert Joseph|
When the Q&A session at Parnell Pharmaceuticals' ($PARN) inaugural Investor Day on June 18 stretched beyond its half-hour allotted time and continued for an hour and 15 minutes, CEO Robert Joseph wasn't worried. In fact, he was thrilled that just one year after the Kansas company went public, investors and analysts are showing that much interest in the products the company is developing for companion animals and livestock.
Joseph and his colleagues spent much of its inaugural investor day talking up Zydax, the drug it's developing to treat osteoarthritis in both dogs and horses. During the event, which was held in New York City, the company announced positive results from a pivotal study of the product.
Zydax inhibits aggrecanase-1, an enzyme that has been implicated in osteoarthritis. During the trial, 56% of dogs treated with the drug showed a statistically significant improvement in "activity impairment," of lameness, vs. 50% of dogs treated with a placebo, the company said. After a month of treatment, 81% of dogs showed an activity improvement of at least 11%.
In an interview with FierceAnimalHealth after the event, Joseph said veterinarians involved in the trial observed that after 70 days, the degree of lameness among the dogs continued to decline. "The improvement continued out, and that was gives us an extremely unique positioning as a disease-modifying osteoarthritis drug," Joseph said. "It doesn't just treat and control short-term symptoms but in fact modulates the progression of the disease."
Zydax is already on the market in Australia, New Zealand, Asia and the Middle East, and Parnell hopes to gain FDA approval in late 2016. It also plans to seek approval in Europe.
If the drug is approved, it could be entering an extremely crowded market that's currently dominated by nonsteroidal anti-inflammatory (NSAID) drugs. Rivals such as Nexvet Biopharma ($NVET) are also seeking to pioneer new approaches to treating pain in companion animals. So Parnell brought along a key opinion leader in the field to its investor event, Duncan Lascelles, a faculty member at North Carolina State University's College of Veterinary Medicine. Lascelles helped field questions about the quality of the data on Zydax, and Joseph says even he was surprised to hear a practicing veterinarian express such excitement about the importance of having a viable alternative to NSAIDs on the market to treat arthritis.
Duncan commented that he initially thought he was invited to Parnell's Investor Day to "put a Band-Aid on some [Zydax] data that might not have been that good," Joseph said. "But he said he was taken aback at how strong the data was."
During the event, Parnell's executives also touched on two products the company expects to launch this fall: Fetch (formerly iKam), an app that educates pet owners about osteoarthritis, and Glyde, a nutraceutical product to treat the disease.
Parnell was founded in Australia and has several products on the market overseas. Zydax brings in about $2 million a year in sales in Australia, but Joseph estimates the market in the U.S. and Europe could be as much as 80 times the size of that in Parnell's home country.
To prepare for possible FDA approval of Zydax, Parnell announced during its investor presentation that it has secured a loan for $11 million, which it plans to use to expand its U.S. sales team. "We are a cash-generating business, so we have significant tangible assets. Debt financing is a very effective way for us to augment our capital structure with non-dilutive capital," Joseph said.
Parnell is still struggling to generate enthusiasm on Wall Street--its stock is trading at half its IPO price of $10--but Joseph left the company's first Investor Day feeling optimistic. "People are starting to understand the value chain from discovery to commercial success," he said. "At Parnell we are very enthusiastic about the animal health sector. I think there's a great need for innovation and a lot of room for all the players in the market."