Biotech faces big drug test windfall

Listed biotech Neuren is on track for a $152m windfall from US pharmaceutical giant Acadia.

Neuren Pharma CEO Richard Treagus. Picture: Stuart McEvoy.

Listed biotech Neuren is on track for a $US105m ($152m) windfall from US pharmaceutical giant Acadia as it starts phase three trials in a treatment for Rett syndrome, a rare neurological disorder affecting only girls.

Neuren, of which billionaire Lang Walker owns 20 per cent, has signed a deal with Acadia, which will run the trial, expected to cost about $US60m.

The deal includes Acadia paying Neuren $US465m in milestone payments, $US105m of which will be paid to Neuren as the drug development progresses.

Neuren CEO Richard Treagus said Acadia was recruiting 180 girls with Rett syndrome from across the US for the phase three trial, the last step before commercialisation.

Rett syndrome is a genetic defect on the X chromosome which affects about one in 10,000 girls. Those affected by the condition are wheelchair-bound, have intellectual disabilities and often have seizures.

The drug, Trofinetide, is also being developed to treat another rare neurological condition, Fragile X syndrome.

Dr Treagus said Trofinetide worked by crossing the blood/brain barrier to improve neural cell connections. He said neurologists had been pushing for a treatment for younger patients to take advantage of brain plasticity but research had found Neuren’s drug could treat much older patients.

“The oldest patient we have treated was 45 years old,” he said. “The experts really believe it is making a fundamental change in the brains of these girls.”

$2.85 Neuren fell 8¢ q

Neuren signed the deal with Acadia in 2018, flying low under the radar of investors. However, since May its shares have soared almost 175 per cent to $2.79.

Under the agreement with Acadia, the US company will progress the drug development, including trials, and have exclusive rights to market and sell the drug in North America and Neuren will receive a double-digit royalty on all sales.

Acadia will also apply to the US Food and Drug Administration for a priority review voucher that is given to fast-track drugs that treat conditions such as rare paediatric diseases.

Dr Treagus said the agreement included Neuren having access to all the data that Acardia collected so it wouldn’t have to replicate from scratch in other jurisdictions including its home market in Australia and in Europe.