Paradigm Raises $57M, Activates 27 Sites for Pivotal Osteoarthritis Phase 3 Trial

Clinical Progress and Trial Execution

Paradigm Biopharmaceuticals Ltd (ASX – PAR) has transitioned from regulatory groundwork to active clinical execution in FY25, initiating its pivotal global Phase 3 trial (PARA_OA_012) for Zilosul® (injectable pentosan polysulfate sodium, iPPS) targeting moderate-to-severe knee osteoarthritis. The U.S. Food and Drug Administration (FDA) accepted the final trial protocol in October 2024 without further comment, a significant regulatory milestone that underscores the robustness of Paradigm’s clinical design.

By the end of the financial year, Paradigm had activated 27 clinical sites across Australia and the United States, with patient screening underway. The trial aims to enrol 466 participants and is powered to detect meaningful treatment effects, building on encouraging Phase 2 data. The company is targeting 50% patient recruitment by the end of calendar year 2025 to enable an interim analysis in mid-2026, a key inflection point for validating efficacy and safety outcomes.

Strengthened Financial Position to Support Milestones

To underpin its clinical ambitions, Paradigm completed a A$16 million equity raise in December 2024, which funded initial trial activities including CRO engagement and manufacturing readiness. Subsequently, in July 2025, the company secured a US$27 million (A$41.2 million) convertible note facility with Obsidian Global Partners, providing a strong financial runway through to the interim analysis milestone. This layered capital strategy balances funding certainty with minimal dilution, reflecting shareholder feedback and a disciplined approach to capital management.

Pipeline Expansion with Pentacoxib™ Acquisition

Paradigm expanded its osteoarthritis portfolio by acquiring Proteobioactives Pty Ltd and its oral PPS + COX-2 inhibitor combination, Pentacoxib™, which targets earlier-stage OA patients. This strategic asset complements the injectable iPPS program by addressing the mild-to-moderate OA segment, estimated to represent up to 60% of knee OA diagnoses. Initial development efforts for Pentacoxib™ will focus on veterinary applications, providing a de-risked pathway to generate translational data and support future human clinical development.

Operational and Governance Enhancements

FY25 also saw Paradigm strengthen its governance and operational capabilities. The Board welcomed Matthew Fry as a Non-Executive Director, bringing extensive regulatory and commercial experience. Meanwhile, Chief Medical Officer Dr. Donna Skerrett stepped down from the Board to focus exclusively on clinical execution, ensuring continuity in medical leadership. The company also added key operational roles to support the scaling of its global trial infrastructure.

Financial Performance and Outlook

Paradigm reported a net loss of $18.8 million for FY25, a significant reduction from the prior year’s $58.7 million loss, reflecting cost containment and the shift from preparatory activities to clinical execution. Revenue remained modest, primarily from a limited Special Access Scheme for iPPS. The company impaired its respiratory program intangible asset to focus resources on osteoarthritis development, though the respiratory asset remains a strategic part of the pipeline for future consideration.

Looking ahead, Paradigm is focused on accelerating patient enrolment, achieving the 50% recruitment target by end-2025, and delivering the interim analysis in mid-2026. These milestones are critical for unlocking further clinical and commercial value. The company’s dual-pathway approach, spanning early-stage oral therapy and injectable treatment for advanced OA, positions it to address the full disease spectrum and meet significant unmet medical needs.