Biotech sensation Neuren rallies to record on clinical trial results
Key Points
- Neuren shares are up 17-fold in two years
- It has commercialised one drug in the US for Rett syndrome
- Its second drug may treat up to four more neurological disorders
Neuren Pharmaceuticals shares soared 29.5 per cent on Monday, giving the biotech group a record $2.8 billion valuation after it revealed positive phase-two clinical trial results for its drug to treat the cognitive disorder Phelan-McDermid syndrome in children.
Neuren CEO Jon Pilcher says he’s more excited about the company’s second drug. Eamon Gallagher
The Melbourne-headquartered company’s trial success for the NNZ-2591 drug backs up its launch of DAYBUE, an oral form of a drug to treat Rett syndrome, a rare developmental disorder also in children, in the United States.
Neuren shares closed at $22.20 after coming out of a trading halt in place since Thursday.
“We’re very happy,” said Neuren chief executive Jon Pilcher. “This phase-two trial was a really important hurdle for our second drug. We couldn’t have got a better result. The amount of improvement seen in patients in 13 weeks of treatment has exceeded the expectations of both physicians and caregivers. Important things changed in [patients’] behaviour and communication.”
Neuren is separately conducting phase-two trials for NNZ-2591 to treat other neurodevelopmental disorders such as Phelan-McDermid, for which there is no or little approved treatment: Angelman syndrome, Pitt Hopkins syndrome and Prader-Willi syndrome. The drug uses chemical compounds to improve connections between brain cells for tasks such as hand movements or visual communication.
The biotech’s clinical success has powered its shares 17-fold in two years as it earns royalty payments from US sales of DAYBUE, which partner Acadia expects to reach up to $US87.5 million ($130 million) in the December quarter alone. That would be worth $13.7 million to Neuren.
Mr Pilcher said he had no firm timeline on a phase-three trial for the Phelan-McDermid syndrome drug, with contingencies including a potential partnership to fund the trial with a deep-pocketed biotech partner. The phase-two trial was conducted with 18 participants.
“But we’ve got more than $200 million cash on our balance sheet, so we can fund it ourselves if we need to,” he added.
Investors including Andrew Mitchell of Ophir Asset Management are backing Neuren to succeed.
“Today’s results were very well received for good reason,” Mr Mitchell said. “We’re still excited about Neuren’s prospects.”
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