Paradigm Biopharmaceuticals (ASX: PAR) shares are up 10% on the back of their Phase II results. This is one stage of the lengthy process that any new drug or treatment needs to go through. This isn’t definitive, by no means, but it is indicative that they might have something really useful and worthwhile here. Some years of further testing to go but then each stage along this testing process will be - assuming the test is passed - value additive.
The announcement itself: “The above results support that iPPS both treats the symptoms of OA and preserves and/or regenerates joint tissues. This is significant from a commercial perspective because the disease modifying effects of iPPS observed in the PARA_OA_008 phase 2 clinical trial are expected to support a greater reimbursement compared to that which would be expected for a therapeutic that only treat the symptoms of OA. In the phase 2 clinical trial, subjects treated with iPPS (2 mg/kg twice weekly) had an average increase of 60 µm of cartilage thickness (0.06 mm) in the central medial femur whereas the placebo group lost an average 20 µm of cartilage (-0.02mm) in the same Region.”
Old knees, when they lose cartilage, need to be replaced. If a way of reversing the damage through drugs were found then the number of major surgeries would fall. This would be good. The initial claim here is that the Paradigm treatment does this, not just stops but reverses the cartilage loss. Excellent.
Paradigm Biopharmaceuticals share price from Google Finance
It’s also true that assuming final approval there will be a big market for this drug. Excellent.
However, this is only Phase II. Phase I testing is simply to make sure it doesn’t poison healthy volunteers. Phase II is as here - does it actually work? Phase III is to make sure, on a wider testing population, that there are no debilitating side effects. Approximately, and roughly, Phase III here would be to show that it’s less dangerous than knee replacement surgery.
Given this testing structure and timescale these results do not mean anything imminent. But evidence that the drug works means that what has been spent so far is not in vain. It’s also a valuation point. The company is worth more having shown that the drug works. Still those Phase III trials to pass or fail, but things are on the right path.