Neuren Pharmaceuticals [ASX:NEU] has expanded its licensing deal with its US distributor Acadia Pharmaceuticals to a worldwide licence for its drug trofinetide, which it brands as Daybue.
The deal is worth $100 million, plus potential milestone payments of up to US$427 million. Acadia shares surged 20% in after-hours trading in the US on the news. While on the ASX, Neuren shares are up by 16.24%, trading at $13.53 per share.
Neuren has become the hottest junior biotech on the ASX, with shares up by 238.25% in the past 12 months. The company saw shares spike in early March after the FDA approved Daybue for treatment for Rett syndrome, the market’s first and only approved treatment so far.
Source: TradingView
Neuren’s gains worldwide licence for breakthrough drug
Acadia has expanded its licencing deal with Melbourne-based biotech company Neuren to acquire ex-US rights to Daybue.
Under the new agreement, Acadia will gain exclusive rights to market and sell Daybue globally, allowing the treatment to reach more patients with Rett syndrome and other neurological disorders.
Acadia also acquired global rights to Neuren’s new drug candidate for Rett syndrome and Fragile X syndrome, which are undergoing Phase 2 trials.
Arcadia’s president and chief executive officer, Steve Davis commented:
‘This expanded worldwide agreement solidifies Acadia’s position as the global leader in addressing the unmet needs of people with Rett syndrome,
‘We have successfully delivered DAYBUE, the first FDA-approved therapy that treats the core symptoms of Rett syndrome and are deeply committed to broadening access to this important therapy for patients worldwide.’
Rett syndrome is a rare neurological disorder that affects mostly girls. It occurs in one in 10,000 women and is characterised by developmental delays, intellectual disability, and movement disorders. Trofinetide is the first and only drug approved to treat the core symptoms of Rett syndrome.
Treatments for rare diseases are on the rise globally as new medical techniques and technology have boosted smaller biotech players’ ability to create life-changing drugs and disrupt larger biomedical companies’ grip on the market.
Source: Global Market Insights
Neuren began out of Auckland University two decades ago when a molecule discovered by distinguished Professor Dame Margaret Brimble became the basis for the drug’s development.
Neuren shares are up by 394% in five years, with a market cap of $1.71 billion. The company is also developing other drugs for neurological disorders including NNZ-2591, which is in Phase 2 clinical trials.
Previous trials have indicated strong results for NNZ-2591, and principal investors Milford Asset Management are hopeful about its success.
‘We put the likelihood of FDA approval at 90%–95%,’ remarked portfolio manager Will Curtayne.
Neuren’s Outlook
The expanded licensing deal with Acadia is a major win for Neuren. It gives the company a partner with a strong track record in commercialising neurological drugs. This will help Neuren to bring its other medicines to the market and generate global revenue.
The deal is also a positive sign for patients with Rett syndrome and other neurological disorders. It means that they will have access to more treatment options in the future as it now has the working capital to continue its trials.
The global market for neurological disorder drugs surpassed US$78.73 billion in 2021 and, with a CAGR of approximately 5.3%, is slated to reach US$125.3 billion by 2030.
Source: Biospace
Neuren’s earnings are forecast to grow by 42.2% per year, but this could be understated if further trials see FDA approval for other disorders the company is targeting.
With the clear success of Daybue under its belt, investors can look ahead to further breakthroughs by the young company as it continues to grow in the biotechnology sector.
The future looks brighter for the company and global Rett syndrome patients.
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