Neuren Pharmaceuticals Limited (ASX:NEU) Executive Chairman, Dr Richard Treagus provides an update on the company's strategy, outlook and partnership with ACADIA Pharmaceuticals (NASDAQ:ACAD), and the upcoming Phase 3 trial of its lead drug candidate Trofinetide for the treatment of Rett Syndrome and Fragile X Syndrome.
Jessica Amir: Hello. I'm Jessica Amir for the Finance News Network. Joining me today from Neuren Pharmaceuticals Limited (ASX:NEU) is Executive Chairman Dr Richard Treagus. Dr Treagus, welcome to the network.
Dr Richard Treagus: Thanks very much. Thanks for having me.
Jessica Amir: Thanks for coming. So, first and foremost, just tell us about the company.
Dr Richard Treagus: So, Neuren is a pharmaceutical company. We're developing some novel pharmaceutical drugs for the treatment of rare neurological conditions in children. And we have two drugs under development at the moment. Our first drug is Trofinetide, and we're moving that forwards for the development and the treatment of Rett Syndrome and Fragile X Syndrome. And we have a second drug, NNZ-2591, and that's at an earlier stage of development, but likewise we will be developing that for rare neurological conditions in children. Both of these drugs qualify for what we call Orphan Drug Designation. And that gives us a number of regulatory and commercial advantages as we progress through the development pathway and ultimately take these products to market.
Jessica Amir: So, before we talk about the business and your products in more detail, what's the incidence for neurodevelopmental disorders?
Dr Richard Treagus: So, the Orphan Drug Designation, by definition these are rare conditions. But our estimates are that, for Rett Syndrome, approximately 10,000 patients within the United States. And then for Fragile X Syndrome, about four times that. 40,000 patients in the US alone. Now, all of these neurological conditions, they have their basis in genetic mutations. The mutations themselves are different, but they manifest in severe mental and physical disabilities that are not too dissimilar from each other.
Jessica Amir: Let's move into your agreement with ACADIA Pharmaceuticals Inc (NASDAQ:ACAD). Maybe, before we go into the details, just tell us about ACADIA.
Dr Richard Treagus: So, ACADIA is a US-based pharmaceutical company. They are listed on the Nasdaq. They have a market capitalisation of about US$3.8 billion. And they specialise in the development and the commercialisation of rare neurology drugs. And we entered into a partnership with ACADIA in August of last year.
It's a fundamentally very important partnership that we've entered into. We've licensed our lead drug Trofinetide to ACADIA for the US, Canada and Mexico. Now, they bring a tremendous funding capability. They also bring the expertise in order to take our drug through the development process.
So the drug is moving into Phase 3 in the latter part of 2019, and ACADIA is funding those development costs, which are estimated at US$55 million. And if the Phase 3 trial in itself is successful, then we anticipate ACADIA will file a new drug application with the Food and Drug Administration (FDA) in 2021. And the drug ultimately then becomes available in the US about six months thereafter.
Jessica Amir: And what is the size of the market?
Dr Richard Treagus: So, ACADIA have stated that, for Rett Syndrome alone, we estimate the drug has a sales potential of about US$500 million per annum. Now, that's for Rett Syndrome. Our estimates have it that there's approximately four times as many Fragile X Syndrome patients. And so this is a very significant opportunity for both ACADIA and ourselves. And through the partnering arrangements, the one thing that we managed to do was to hold on to the rights to our drug outside the United States. So, we still have an opportunity to license that to third parties in Europe, Japan and elsewhere in the world.
Jessica Amir: And, before we go on, if you wouldn't mind just telling us about Rett Syndrome and Fragile X?
Dr Richard Treagus: So, Rett Syndrome manifests really only in girls, and it's usually diagnosed at an early age of two to three years. And the underlying problem is a genetic mutation on the X chromosome. And what that leads to is improper connections between brain cells and the signalling between brain cells.
Our drug is actually getting into the brain and restoring those connections, both the physical and the biochemical pathways necessary for those brain cells to communicate effectively.
So, these girls without treatment, they suffer from a number of physical and mental disabilities. They struggle to walk, they struggle to communicate effectively. Rett Syndrome in itself is a very disabling condition, and our drug is going right to the core of correcting these abnormalities between brain cells.
Jessica Amir: Now, let's change pace to your share price and your recent results, your first half 2019 results. What are the highlights?
Dr Richard Treagus: Well, the highlight certainly is the partnering deal that we struck with ACADIA in August of last year. And that's put us in a strong position. So, from a financial point of view, we finished December 31, 2017 being our financial year, with a cash position of $24 million. And that's given us the funding envelope to now accelerate the development of our second drug, NNZ-2591. And so we'll be moving forward with that in coming months. We're doing a fair bit of work there, taking that drug forwards.
Certainly, in terms of our share price, we're disappointed in the current share price. We don't feel the market has fully appreciated or understood the inherent value in our drug pipeline, and, for that matter, the partnership deal. But as we move forward in coming weeks and months, and as we're in a position to update the market on our progress, I believe that the market will better understand and appreciate the true value within Neuren.
Jessica Amir: And just lastly, Richard, before we let you go, is there anything else you wanted to add today?
Dr Richard Treagus: We certainly look forward to updating our investors in the coming months in terms of our progress with our partnering discussions around the world with Japanese and European partners. I think that's important. As well as our progress with our second drug compound. And as we move forward, closer to the commencement of Phase 3 in the second half of this year, I think there will certainly be a better understanding and appreciation of the value within Neuren.
Jessica Amir: Wonderful. Dr Richard Treagus, thank you so much.
Dr Richard Treagus: Thank you.