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Botanix shares crash on acne study results

Shares in ASX-listed marijuana pharmaceutical company Botanix Pharmaceuticals have lost nearly half their value after a clinical trial of its acne drug candidate showed mixed results.

Investors fled after the phase 2 clinical trial involving 276 patients taking the company’s BTX 1503 antimicrobial skin gel didn’t do much better after 12 weeks than 92 patients using a skin gel without the cannabis-derived active ingredient.

They experienced a statically significant reduction in their non-inflammatory acne lesions, but not in their inflammatory lesions, which researchers deemed more important.

Botanix said the results were skewed by the patients in the United States experiencing an odd “vehicle response” in which those using the skin gel without the active ingredient also experienced a reduction in their acne.

There was no such effect in Australia, where patients using BTX 1503 had about a 40 per cent reduction in their acne, compared to a 26 per cent reduction from those using the placebo skin gel.

The trial overall involved 250 mostly teenage acne patients in the US and 118 in Australia.

Botanix president and executive chairman Vince Ippolito said the effect in the United States was “somewhat perplexing to us”.

Botanix said that, because of licensing requirements from the US Drug Enforcement Agency around cannabidiol as a controlled substance, the supply chains for Australia and the US were different.

Botanix has since announced a new supply agreement with the world’s largest synethic cannabidiol manufacturer, Purisys.

At 1451 AEDT, Botanix shares had shed 48.9 per cent of their value and were at a four-month low 12.5 cents.

But Ippolito insisted the results were positive overall and that investors may have misunderstood the company’s results presentation.

“These are sometimes very technical in nature and hard to understand,” he said.

“We look at the result as good strong efficacy results.”

Ippolito said Botanix still intends move forward with a larger phase 3 drug trial of BTX 1503, which uses a synthetic version of cannabidiol (CBD), a substance derived from marijuana.

The company is also completing patient enrolment this quarter of a study using BTX 1503 to treat atopic dermatitis, with results expected early next year.

Ippolito said his company had $37 million in cash and was spending about $3 million to $4 million a month.

“The fundamentals are really good right now,” Ippolito said.

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