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If the 13% rise last week in Nymox Pharmaceuticals' (NASDAQ:NYMX) shares is anything to go by, investors are slowly noticing that the New Jersey-based company is heading into the final furlong of required Phase III tests for its lead product, NX-1207. The treatment for benign prostatic hyperplasia (BPH) or enlarged prostate could be filed in the U.S. by the end of this year.

Nymox is embarking on a final small open-label, three month safety study of the drug that will assess the impact of repeat injections in 100-200 previously treated patients. The study will run alongside its larger final Phase III trials, which are due to complete this year. This inching towards the finishing line is likely to be why the shares have more than doubled in value over the last six months, to $8.

Given the size of the BPH market, there could be plenty more upside if the drug gets approval. According to the American Urological Association 30% of men over 50 suffer from enlarged prostate, with the figure rising to 50% of men over 60 and as many as 90% of men in their 70s and 80s. With so many sufferers it is not surprising that the market opportunity for the disorder is high, with branded drugs generating $4.7bn last year, according to EvaluatePharma.

New player in the game

At present the most common medications for the disorder are hormone treatments that reduce testosterone levels. However, many patients eventually require surgery as their prostates become larger due to lack of efficacy of drug regimens, or non-compliance due to side effects.

But, excitable investors might want to remember that if it does get U.S. approval NX-1207 will be up against well entrenched blockbusters including Flomax and Avodart, blockbuster drugs that are approaching the end of their patented lives.

With such stiff competition what minnow Nymox will be counting on is the low side effect profile of NX-1207, which has so far avoided some of the common disadvantages of treatments for BPH. These include loss of libido and breast enlargement sometimes seen with Avodart and the fainting, dizziness and erectile dysfunction connected with Flomax.

NX-1207 can also boast impressive long-term data. In March, a study evaluating the progress of patients seven and a half years since first taking the drug showing sustained improvement in symptoms without the need to use other treatments and no side effects.

Alongside seeming long-term efficacy, the dosing of the drug may also play a part in any future success, as it only needs to be administered once every 12-18 months in physicians' offices by injection directly into the prostate, a process the company claims only causes patients minor discomfort.

Partnering

Approval, which so far looks likely given the drug's efficacy and safety record, will certainly put Nymox on investors' radars and also that of potential US partners, giving it a cash boost that will assure its future. A deal, however, is not expected until later in the current Phase III trials or an NDA filing.

There is some short-term wriggle room for any negotiations as the company waits for the Phase III results thanks to $13m from a deal over European rights with Italian company Recordati, signed last December. This has left it with $15m on the balance sheet.

While the fee looks rather small, Nymox has negotiated royalty revenues of 26% rising to 40%, making it a low risk investment for Recordati, but a potentially high reward deal for Nymox if the drug becomes a commercial success.

Sales estimates

As for the market opportunity for NX-1207, analysts at Singular Research estimate that NX-1207 will be priced at $1,500 per treatment, roughly equal to current therapies. This has led the investment advisors to forecast income of $167.6m by 2013 on the assumption of 740,000 patients treated and royalty rates of 15%, assuming a 2012 approval.

While these figures look rather optimistic, if NX-1207 is as effective as Flomax and Avodart, without the side effects and a 12-18 months dosing schedule it could see rapid take up if it was marketed by a larger player.

Longer term, Nymox has its eyes on a much bigger prize of prostate cancer and liver cancer for NX-1207, which has shown interesting results in animal studies.

But for now, the focus is on the outcome of the group's three Phase III studies, which if successful could thrust Nymox, which has kept a relatively low profile, firmly into the limelight.

Source: Investors Waking Up to Nymox Pharmaceuticals