London-listed Arix Bioscience’s (LON:ARIX ) portfolio firm, Atox Bio, said the U.S. Food and Drug Administration (“FDA”) has now accepted its New Drug Application (“NDA”) for reltecimod.

Reltecimod is designed to enhance resolution of organ failure in conditions associated with severe, acute inflammation such as Necrotizing Soft Tissue Infection (NSTI) and sepsis.

Arix unveiled back in July 2020 that its portfolio company, Atox Bio, was planning to submit a New Drug Application to the US FDA for its Reltecimod drug in the third quarter of 2020.

The global venture capital firm said Atox would submit the application under ‘Accelerated Approval Pathway’ which allows for earlier approval of drugs that treat serious conditions.

The decision followed phase 3 clinical trial results of Reltecimod which showed positive effects on resolution of organ dysfunction in patients with necrotizing soft tissue infection.

The Phase 3 results showed that Reltecimod, in conjunction with the currently available standard of care, demonstrated a “significant difference” in the percentage of patients who achieved resolution of organ dysfunction/failure by day 14 versus standard of care alone.

The group added that Reltecimod was ‘well tolerated’ in patients who also demonstrated an improvement in their hospital discharge status versus those taking a placebo.

“This is a potentially life-threatening condition with significant morbidity and long-term mortality that has no FDA-approved treatment.” said Dan Teleman, CEO of Atox Bio.

The Company told investors this morning that the Prescription Drug User Fee Act (PDUFA) date set by the FDA, which is the goal date for a decision on the NDA, is 30 September 2021.

"The NDA acceptance marks an important step forward in Atox Bio's development of reltecimod for patients with NSTI, a devastating and potentially fatal disease for which there is no approved treatment,” said Jonathan Tobin, MD at Arix and Board Director at Atox Bio.

Shares in Arix Bioscience have increased by almost 20% since the beginning of December 2020 to open 3.35% higher this morning at 185p following the announcement.

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Arix Bioscience plc is a global venture capital company focused on investing in and building breakthrough biotech companies around cutting-edge advances in life sciences. 
 
Research by Hardman and Co. said that “strong interim results, which saw the NAV rise 24% to £251.0m, highlighted the enormous disconnect between this and its share price. ARIX has prioritised 11 companies in the portfolio on which to focus its resources and expertise.” 
 
The investment research firm highlighted that these portfolio companies have “a number of important value inflection points - mostly clinical events - over the next 12-18 months.” 
 
Not only did results for 1H20 exceed market expectations, but as at 30 June 2020, ARIX had £44m of cash to support existing portfolio companies, early-stage companies, and operations. 
 
Arix refocused and streamlined the business by significantly reducing net operating costs by over 35% to an annual run rate of around £5m by the end of 2021 down from £8m in 2019. Pre-tax profit therefore turned positive to £48.96m compared to a loss in 1H19 of £44.81m. 
 
During the 1H20 period, Arix’s portfolio companies raised $392m of working capital, while since its inception, ARIX has deployed £149m into its portfolio, realised £13m through opportunistic divestments, and generated an IRR of 20% (realised and unrealised).  
 
Arix’s portfolio continues to make ‘strong progress’, with a number of companies reaching important clinical milestones and completing further financing rounds at higher valuations. 
 
‘With a number of upcoming clinical events, ARIX has set an aspirational target to make an annual IRR of 15%-25%, and produce an NAV of £500m by the end of 2023,’ said Hardman. 
 
Looking ahead, Arix cited potential for M&A, strategic partnerships and other financing events which could significantly increase the value of its companies, and in turn its NAV. 
 
‘Whilst the development of important new medicines always carries risk, over the next three years we expect to see at least two additional IPOs across the portfolio and at least two exits.’ 
 
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