Shares of Neuren Pharmaceuticals Ltd (ASX:NEU) leaped by 29.5% on Monday, propelling the Melbourne-based biotechnology company’s valuation to an unprecedented $2.8 billion.
This surge followed the announcement of encouraging results from a Phase 2 clinical trial, involving 18 participants, of a drug intended to treat Phelan-McDermid syndrome in children.
Share price surges
Alongside this achievement, the company has had success with another of its assets. The biotech’s successful trial of the drug NNZ-2591 has coincided with its launch of DAYBUE in the United States. DAYBUE is an oral medication for Rett syndrome, another rare developmental disorder affecting children.
The company's shares closed at A$22.20 post the lift of a trading halt in place since Thursday.
"We're very happy," said CEO Jon Pilcher. "This phase-two trial was a really important hurdle for our second drug. We couldn’t have got a better result. The amount of improvement seen in patients in 13 weeks of treatment has exceeded the expectations of both physicians and caregivers."
Neuren is also involved in Phase 2 trials for NNZ-2591 targeting other neurodevelopmental disorders such as Angelman syndrome, Pitt Hopkins syndrome and Prader-Willi syndrome.
The drug functions by enhancing connections between brain cells, aiding in various tasks such as hand movements and visual communication.
Clinical success
The biotech's clinical achievements have dramatically boosted its shares, increasing them 17-fold in two years.
This growth is partly attributed to royalty payments from US sales of DAYBUE, with partner Acadia projecting up to US$S87.5 million (A$130 million) in sales for the December quarter alone, potentially earning Neuren A$13.7 million.
Although there is no confirmed timeline for a Phase 3 trial for the Phelan-McDermid syndrome drug, Neuren is considering various options, including a partnership with a well-financed biotech partner.
Pilcher highlighted the company's strong financial position, with more than A$200 million in cash reserves, ensuring the capability to self-fund the trial if necessary.