Dimerix (ASX:DXB) is poised to benefit from the US Food and Drug Administration's recent approval of Travere Therapeutics' sparsentan drug to treat focal segmental glomerulosclerosis, a rare kidney disorder Dimerix is also working on, Euroz Hartleys said in a Tuesday note.
"This outcome has positive implications for [Dimerix] and its lead asset, DMX-200, across both the regulatory pathway and potential future commercialization," the equity research firm said.
It noted that sparsentan marks the first full FDA approval for the kidney disease based on a reduction in proteinuria, or the levels of protein in urine, creating a clear precedent for its use as a surrogate endpoint. The development meaningfully de-risks the FDA's acceptance of proteinuria for traditional and accelerated approvals for DMX-200 and highlights the US regulator's flexibility in focal segmental glomerulosclerosis, Euroz Hartleys said.
"Commercially, Travere is likely to help establish the [focal segmental glomerulosclerosis] market, driving awareness, diagnosis, and reimbursement, which should support a faster uptake of DMX-200," the equity research firm said.
It added that sparsentan and DMX-200 are complementary, not competitive, and are expected to be used simultaneously in clinical practice based on the progressive nature of the disease and feedback from clinicians.
Euroz Hartleys maintained its speculative buy recommendation and AU$1.65 price target on Dimerix.
The company's shares advanced 11% in recent Tuesday trading.