Arguably the most significant event for the Australian biotech sector is approaching with a decision expected from the FDA on the approval of trofinetide, developed by Neuren Pharmaceuticals (NEU: $7.16), on 12 March.
Trofinetide was licensed by Neuren to Acadia Pharmaceuticals for the treatment of Rett syndrome in North America. So far Neuren has already received US$20 million from Acadia but stands to receive significantly more upon US approval. This includes US$40 million upon the first commercial sale of trofinetide, and an estimated US$33 million from the sale of a Rare Pediatric Disease Priority Review Voucher. (Acadia stands to receive this voucher from the FDA for reward for developing a drug to treat a rare pediatric disease. It can be sold on to others, historically for around US$100 million, allowing the buyer to use it to get a regulatory review six months earlier. Neuren will receive one third of the sale value.)
Neuren also stands to receive up to US$350 million in milestone payments plus a double-digit royalty from trofinetide sales.
There are some positive indicators that Acadia should receive a positive outcome from its new drug application. The first is that a specialist advisory panel has not been requested by the FDA to assess the submission. This could indicate that the regulator sees the application as relatively unambiguous. The second is the movement in Acadia's share price, which has increased by 19% this year.
Follow-on Programs
Neuren is also surging ahead with its follow-on compound, NNZ-2591 for four other genetic, neurological disorders.
In July and August last year, three trials commenced, in Angelman syndrome (in Australia), in Phelan-McDermid syndrome (in the US) and Pitt Hopkins syndrome (also in the US). In the first of those two studies, children from the first cohort (oldest children in the study) have completed treatment with no serious adverse events noted. Most adverse events were mild and considered not to be related to NNZ-2591.
Last month Neuren also received its IND from the FDA to start a fourth clinical study with NNZ-2591 in Prader-Willi syndrome. All of Neuren's indications are based on genetic disorders. It can replicate these disorders through preclinical studies with knock-out mice, where the gene of interest is removed. For Prader-Willi syndrome in preclinical studies with these mice, the fat mass, insulin levels and IGF-1 levels were all normalised as well as behavioural issues.
Neuren is capitalised at $902 million with $40 million in cash at the end of last year.
Bioshares recommendation: Speculative Hold Class A
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