Kiwi ingenuity behind ground-breaking Rett syndrome treatment
- Wed 08 November 2023
Following success with Daybue, Neuren Pharmaceuticals is securing approval for another important drug.
“In our clinical trials and now in ongoing treatment, caregivers have reported some very meaningful improvements in walking, talking and hand use.”
In March this year, the US Food and Drug Administration (FDA) approved Neuren Pharmaceuticals’ Daybue (trofinetide) as the first treatment for Rett syndrome, which is a rare, genetic neurological disorder that almost exclusively affects girls. In April, the drug was launched in the US by Neuren’s partner, Acadia Pharmaceuticals.
“This was an enormous moment,” says Jon Pilcher, Neuren’s CEO/MD. “In our clinical trials and now in ongoing treatment, caregivers have reported some very meaningful improvements in walking, talking and hand use.”
It was also the culmination of work that began more than 20 years ago, when Distinguished Professor Dame Margaret Brimble and her team at the University of Auckland created a new molecule with therapeutic potential.
“Initially, the team thought it could work for traumatic brain injury, then they realised Rett syndrome would be a better application,” says Pilcher.
Clinical trials began in 2012. The following year, Neuren moved the entire operation from Auckland to Melbourne.
New cash flow
Acadia is predicting sales of between US$45 million and US$55 million for the current quarter. “Neuren is paid royalties and also milestone payments from Acadia, so we’re finally seeing significant cash flows,” Pilcher says. Since the launch, Acadia has paid Neuren US$100 million to expand the partnership from North America to the whole world.
“That was a massive deal for us,” says Pilcher. “We’ll get royalties and milestone payments on future sales.”
Even more impressive cash flow could be on the way. A second neurological drug from Dame Margaret and her team, still known as NNZ-2591, has FDA approval for phase 2 clinical trials for the treatment of four neurodevelopmental disorders similar to Rett. These include Phelan-McDermid syndrome, Angelman syndrome, Pitt-Hopkins syndrome and Prader-Willi syndrome. All four trials are in progress.
“When we get the first results in December this year it could be the first time we see an impact on patients, so we’re really looking forward to that,” says Pilcher. “From a financial point of view, the markets for NNZ-2591 are five times that for Rett syndrome, so there’s also potentially massive growth.”
“Neuren is paid royalties and also milestone payments from Acadia, so we’re finally seeing significant cash flows.”
Engaging investors
Winning over new investors can be particularly challenging when your product is a complex treatment for a rare disease.
“We’ve learned to explain the science in a way most people can understand,” says Pilcher. “It also helps that NNZ-2591 is similar to Daybue and will treat similar disorders, so there’s basically one story to tell. From there, we’re happy to provide more technical data to anyone who is interested.”
He estimates about 40 per cent of the current investor base is institutional.
“Our other shareholders include a number of high-net-worth individuals, with quite big holdings, who have been through much of the journey with us,” he says.
“They're still an important part of the register but there’s also a big opportunity to build the institutional side. Most funds like cash flows, so they’re starting to take notice now. Hitting the ASX 300 index also brought more investors in, and I think we're getting pretty close to being included in the ASX 200 index, which will bring in more investors again. We’re also starting to attract attention overseas but, as we’re not trying to raise capital, we’ll have to wait and see how that plays out.”
Retaining capital
Neuren can look forward to increasing revenue as Daybue is sold around the world. In the meantime, they’re holding on to $200 million in cash until the readout of the first NNZ-2591 phase 2 trial in December.
“If this is positive, we’ll have to decide what we’re going to do with our second drug,” says Pilcher.
Whether the business will work with a partner, establish a hybrid partnership or move forward alone is yet to be determined.
“This time, we’re in a position to contemplate these options. We’ve put in a huge amount of work and thinking into Daybue, and it has taken a lot of determination, motivation and flexibility to get through that journey.”
It will be fascinating to see how the company’s future evolves.
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