The Neuren Pharmaceuticals Ltd (ASX: NEU) share price bounced this morning following the announcement that the FDA had granted Rare Pediatric Disease (RPD) designation to its drug trofinetide.
The designation was granted by the United States Federal Drug Administration to a program to develop trofinetide for Rett syndrome in the United States.
After jumping nearly 2% to $1.96 before midday today, Neuren shares have pulled back since to now be trading 3.38% lower for the day at $1.86.
Neuren's business
Neuren is a biopharmaceutical company developing new therapies for brain injury, neurodevelopmental, and neurodegenerative disorders. Trofinetide is Neuren's lead drug candidate. The company is also developing a second drug candidate for the treatment of Phelan-McDermid syndrome, Angelman syndrome, and Pitt Hopkins syndrome.
License agreement
The program is run by Neuren's associate ACADIA Pharmaceuticals (NASDAQ: ACAD) which is developing and commercialising trofinetide in North America under a license agreement with Neuren. Neuren retains all rights in relation to trofinetide outside of North America.
Upon marketing approval of a product with RPD designation, the sponsor may be eligible to receive a Priority Review Voucher. The voucher can be used to obtain FDA review of a new drug application for another product in an expedited period of six months.
Priority Review Vouchers can be sold and have a rough market value of US$95 million – US$105 million. Under the license agreement with ACADIA, Neuren is entitled to one third of the market value of the voucher.
The RPD Priority Review Voucher program is designed to incentivise companies to develop treatment for diseases or conditions that are serious or life-threatening in children under the age of 18 and affect less than 200,000 people in the US.
Trofinetide trials
Neuren's drug trofinetide is currently in a Phase 3 clinical trial for Rett syndrome and has completed a Phase 2 clinical trial in Fragile X syndrome. Programs for each of Rett syndrome and Fragile X syndrome have received Fast Track designation by the FDA and Orphan Drug designation in both the US and European Union.
The Rett syndrome Phase 3 program commenced in the US in October. Results are expected in 2021 with potential for marketing approval in 2022.
Rett syndrome
Rett syndrome is a debilitating neurological disorder that occurs primarily in females. It occurs in approximately 1 in every 10,000 to 15,000 births and impacts 6,000 to 9,000 patients in the US.
Rett syndrome causes problems in brain function with symptoms presenting between 6 and 18 months of age. Patients experience a period of rapid decline with loss of purposeful hand use and spoken communication and inability to independently conduct the activities of daily living. There are currently no FDA approved medicines to treat the syndrome.
