Reata Pharmaceuticals (RETA) won Food and Drug Administration approval for its neurological disease treatment and RETA stock almost tripled Wednesday.
At least one analyst saw the approval as a coin flip, assigning a 50% chance the drug now called Skyclarys would pass muster with the FDA.
Skyclarys treats Friedreich’s ataxia. Patients with this neurological disorder experience progressive difficulty walking.
The approval is based on one Phase 3 study called Moxie. Patients treated with Skyclarys showed statistically significant improvements in symptoms after 48 weeks. Usually, the FDA requires two final-phase placebo-controlled studies for drug approvals, however.
RETA stock soared 172.9% near 85.10 in morning trading on today’s stock market, RETA stock ended the regular trading Tuesday session up 1% at 31.17.
RETA Stock: Reverberations In Neuroscience
Reata shares hit the skids Monday on news Billy Dunn retired. Dunn headed up the FDA’s Office of Neuroscience.
Dunn was known for helping push along the accelerated approval of Biogen‘s (BIIB) controversial Alzheimer’s treatment Aduhelm. Aduhelm succeeded in one final-phase study, but failed in another.
RBC Capital Markets analyst Brian Abrahams said Dunn’s retirement could have “reverberations throughout (the) space.”
“Overall, we believe loss of a more permissive, industry-friendly voice is a long-term negative, though near-term there should be some degree of continuity which limits the effects,” he said.
Similarly, SVB Securities analyst Joseph Stringer noted the decision around Reata’s Skyclarys likely came before Dunn’s exit. Teresa Buracchio, who was acting deputy director of the Office of Neuroscience since November, became Dunn’s successor.
Stringer kept his market perform rating on RETA stock ahead of the approval.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.