Share Price, page-13354

Why is NEU Falling?

The recent fall in Neuren Pharmaceuticals’ share price, linked to uncertainties around Robert F. Kennedy Jr.’s potential appointment as U.S. Secretary of Health and Human Services (HHS), appears overstated. While investor concerns regarding potential drug pricing reforms and regulatory changes are valid, the immediate impact on Neuren’s pricing for Daybue and the clinical trial process for NNZ-2591 is likely to be limited.

Impact on Daybue’s Pricing

Daybue (trofinetide), marketed by Acadia Pharmaceuticals in the U.S. for Rett syndrome, benefits from orphan drug designation. Orphan drugs, designed to treat rare conditions, are rarely the focus of pricing reforms. Historically, U.S. pricing interventions have targeted broadly used medications with significant Medicare expenditures, such as insulin or cholesterol-lowering drugs, rather than niche therapies for rare diseases.

For example:

• Insulin reforms capped out-of-pocket costs to address a large patient population.
• Hepatitis C treatments faced scrutiny due to their widespread use and significant cost impact on healthcare systems.

Rare disease therapies like Daybue are typically excluded from such reforms due to their limited patient base and the need to incentivise innovation in underserved areas. Additionally, once prices for orphan drugs are established, they tend to remain stable and are rarely revisited, barring significant changes to the drug’s label or market dynamics.

Approval Process for NNZ-2591

Neuren’s clinical trials for NNZ-2591, targeting several neurodevelopmental disorders, have already benefitted from clear guidance from the FDA, particularly for Phelan-McDermid Syndrome (PMS). The FDA’s feedback has streamlined the design of the Phase 3 trial, ensuring alignment with regulatory expectations and significantly reducing the risk of delays or complications.

While the appointment of a new HHS Secretary might signal broader healthcare reform, the FDA operates with a high degree of independence, especially in matters concerning rare diseases and clinical trial design. Historical precedence shows that rare disease therapies are a bipartisan priority, with regulatory frameworks designed to support their development remaining consistent across administrations.

It is also worth noting that ongoing clinical trials with FDA-approved protocols have rarely been impacted by changes in political leadership. Even during periods of significant healthcare reform, such as the introduction of the Affordable Care Act or subsequent regulatory changes, established clinical trials for rare diseases proceeded without disruption.

Timing and Complexity of Clinical Trials

With FDA guidance already in place, Neuren is well-positioned to advance its Phase 3 trial for PMS efficiently. The prior feedback ensures that the trial design is compliant and targeted, reducing complexity and potential regulatory hurdles. As a result, the timeline for the trial is unlikely to be extended due to political changes. Instead, the clear roadmap provided by the FDA supports continuity and investor confidence in Neuren’s clinical programs.

Conclusion

While Kennedy’s appointment as HHS Secretary may introduce some uncertainties, particularly around pricing for broadly used medications, its impact on Neuren is expected to be minimal. Rare disease drugs like Daybue are unlikely to be the focus of reform efforts, and NNZ-2591’s clinical trials have already received crucial regulatory guidance, reducing the risk of disruption. Neuren’s focus on rare diseases, supported by orphan drug protections and established FDA pathways, positions it favourably against broader market concerns. Investors should view the recent share price fall as an overreaction, reflecting broader uncertainty rather than a fundamental challenge to Neuren’s business or regulatory strategy.