Author: ALLISON GATLIN
Source
Reata Pharmaceuticals (RETA) seemingly won Food and Drug Administration approval for its neurological disease treatment late Tuesday. RETA stock skyrocketed, nearly tripling in value in after-hours trading.
X
Late Tuesday, the FDA posted the label for Reata’s Skyclarys, previously called omaveloxolone. While there has yet to be a formal announcement, the label posting is seen as a sign of approval.
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 189% in late trading after initially being halted. Shares hovered around 91.
On today’s stock market, RETA stock ended the regular trading 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.
YOU MAY ALSO LIKE:
Novavax Stock Plummets On ‘Substantial Uncertainty’ For Its Future
Watch IBD’s Investing Strategies Show For Actionable Market Insights
IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today
Find Today’s Best Growth Stocks To Watch With IBD 50
The post Reata Pharma Stock Skyrockets After Winning ‘Coin-Flip’ FDA Approval appeared first on Investor’s Business Daily.