Neuren Pharmaceuticals (ASX: NEU) announced that the US Food and Drug Administration (FDA) has accepted for review the New Drug Application (NDA) of trofinetide for the treatment of Rett syndrome, that was submitted by Neuren’s US partner Acadia Pharmaceuticals (Nasdaq: ACAD).
The FDA has granted a Priority Review and assigned a Prescription Drug User Fee Act (PDUFA) action date of 12 March 2023. The FDA has also informed Acadia that at this time they are not planning to hold an Advisory Committee meeting. Acadia’s news release is attached to this ASX announcement.
Acadia has exclusive rights to develop and commercialize trofinetide in North America. Neuren retains all rights to trofinetide for all countries outside North America and has a fully paid-up, irrevocable licence for use in those countries to all data generated by Acadia. Under the terms of Neuren’s agreement with Acadia, the development and commercialisation of trofinetide in North America is fully funded by Acadia and Neuren may receive potential milestone payments of up to US$455 million, plus double-digit percentage royalties on net sales of trofinetide in North America, plus one third of the market value of a Rare Pediatric Disease Priority Review Voucher if awarded by the FDA upon approval of a NDA for trofinetide.
If the NDA is approved by the FDA, Neuren expects to earn revenue over 2022 and 2023 for Rett syndrome in the US alone of A$118 million plus double-digit percentage royalties on net sales. The expected revenue in addition to the royalties comprises:
- A milestone payment in 2022 of US$10 million (A$14 million at assumed exchange rate of 0.70) following acceptance of the NDA for review by the FDA
- A milestone payment in 2023 of US$40 million (A$57 million), following the first commercial sale of trofinetide in the United States
- US$33 million (A$47 million) in 2023 as Neuren’s one third share of the market value of a Priority Review Voucher, estimated as US$100 million.
Neuren’s additional ongoing revenue from potential sales has two components:
- Double digit percentage royalties on net sales of trofinetide in all indications. The annual net sales are recorded in tiers and an escalating percentage is applied to each successive tier.
- Payments of up to US$350 million (approximately A$486 million) on achievement of a series of 4 thresholds of total annual net sales for all indications.
No royalties or similar costs are payable by Neuren to third parties, which means that Neuren’s revenue from Acadia will flow through to pre-tax profit.