Funding Secured but Risks Remain: Can Paradigm’s Phase 3 Trial Deliver?

Phase 3 Trial Progress

Paradigm Biopharmaceuticals has marked a significant milestone in its development journey with the active recruitment of patients for its global Phase 3 clinical trial targeting knee osteoarthritis pain. The trial, known as PARA_OA_012, is now underway at 27 sites across Australia and the United States, with the first patients screened and dosing imminent. This transition from regulatory approvals to active trial execution signals a critical phase for the company as it seeks to validate injectable pentosan polysulfate sodium (iPPS) as a novel treatment option.

In Australia, 15 sites have been selected and three are actively screening patients, led by Principal Investigator Dr Phillip Bloom at Sportsmed Biologic in Melbourne. Meanwhile, in the US, 24 sites have been initiated following centralized ethics approval, with the first participant consenting to the trial by the end of June. Paradigm aims to reach 50% patient enrollment by the end of 2025, setting the stage for an interim analysis in mid-2026.

Strategic Funding and Financial Position

To support this operational ramp-up, Paradigm secured a US$27 million (A$41.2 million) convertible note facility with Obsidian Global Partners, drawing an initial US$7 million tranche shortly after the quarter ended. This funding provides a robust financial runway through key clinical milestones, including full patient recruitment and the pivotal interim analysis. At quarter-end, Paradigm held A$16.82 million in cash, reflecting prudent capital management amid increased investment in clinical trial activities.

The convertible note structure offers Paradigm flexibility to draw down the remaining US$20 million at its discretion, minimizing immediate shareholder dilution while preserving optionality for future strategic funding or partnerships. The company forecasts cash outflows of A$10–12 million in the coming quarter, driven by the expansion of recruitment and monitoring activities across multiple clinical sites.

Pipeline Expansion with Proteobioactives Acquisition

In a strategic move to broaden its osteoarthritis franchise, Paradigm completed the acquisition of Proteobioactives Pty Ltd, securing global intellectual property rights for Pentacoxib™, an oral combination of PPS and a COX-2 inhibitor. This addition targets earlier-stage osteoarthritis in humans and veterinary markets, addressing large, underserved segments.

Pentacoxib™ offers a compelling advantage by enabling lower doses of COX-2 inhibitors, potentially improving safety and tolerability. Initial development will focus on veterinary applications, leveraging established safety profiles, with human trials planned to target hand and mild knee osteoarthritis. Pilot clinical data included in the patent demonstrate meaningful improvements in pain, grip strength, and joint function compared to COX-2 inhibitors alone, underscoring the potential of this combination therapy.

Regulatory Alignment and Future Outlook

Paradigm remains closely aligned with the US Food and Drug Administration (FDA), incorporating agency feedback into the final trial protocol. The study includes imaging and biomarker assessments to explore potential disease-modifying effects of iPPS beyond pain relief, which could enhance the product’s regulatory and commercial profile.

The upcoming interim analysis, expected by mid-2026 once half of the participants reach Day 112, will be overseen by an independent Data Safety Monitoring Board. Positive results at this juncture could accelerate regulatory approvals and partnering discussions, serving as a transformative catalyst for the company.

To support patient recruitment and education, Paradigm has launched dedicated trial websites in Australia and the US, providing resources on osteoarthritis and the therapeutic potential of iPPS as a non-opioid treatment option.

Community Engagement and Market Presence

Paradigm has actively engaged with investors and the broader community through webinars and media features. Notably, a recent 7NEWS segment highlighted the potential of PPS in managing osteoarthritis, featuring testimonials from former AFL star Marc Murphy and insights from healthcare leaders. These efforts help raise awareness and build momentum ahead of key clinical milestones.