Newron is a publicly listed Italian company which is currently conducting a potentially pivotal Phase 2/3 trial of sarizotan in the treatment of apneas (breathing disturbance) in Rett Syndrome. The randomized, double-blind, placebo-controlled trial of 129 adolescent and adult patients is being conducted in the United States, India and Italy. Twice daily dosage of either a 5mg or 10 mg capsule of sarizotan will be compared with placebo.
Sarizotan is a novel drug which Newron licensed from Merck in 2011. It acts by modulating the activity of serotonin and dopamine in the brain. Merck halted its development program of sarizotan in 2006 after failure in two Phase 3 trials in the treatment of dyskinesia (involuntary shaking) in advanced Parkinson’s. Since 2011, Newron has conducted preclinical testing with both acute and chronic dosing of sarizotan, which demonstrated a 70 to 85% reduction of apneas and hyperventilation episodes in a Rett mouse model. No significant safety concerns were observed. Orphan drug designation was received from both the FDA and EMA in mid-2015 and Newron announced that it had received IND approval for a clinical study of sarizotan in Rett in May 2016.
In July 2016, US$26 million was raised through placement of stock with sophisticated investors and Newron initiated its Phase 2/3 clinical study. The study duration is 24 weeks and estimated completion date is in October this year. If approval is received, Newron plans to market sarizotan through its own specialist field force globally.
ValuationLAB financial analysis of Newron predicts Rett peak sales for sarizotan of EUR 400+ million. It estimates sarizotan to have a risk-adjusted NPV of CHF 14 (AU$0.18) per share. Its valuation is based on a treatment cost per patient of between USD 60,000 (US) and EUR 35,000 (EU/ROW), and a market penetration peaking at around 70% of diagnosed patients with disordered breathing. Further assumptions are that there are 15,000 Rett syndrome patients in the US and 20,000 in Europe, with the population growing 2% annually, of which roughly 50% have breathing disturbances that sarizotan addresses. It is noted that only around 10-15% of Rett patients in the US are currently diagnosed and that an educational effort to increase awareness of Rett syndrome among physicians and parents would be crucial to achieve sales forecasts.
Newron’s Primary Outcome Measure for its Rett trial is reduction in respiratory abnormality as measured by the percent reduction in the number of apnea episodes per hour during awake time. This will be calculated using an ambulatory data acquisition system, or wearable device - BioRadio – which records specific respiratory and cardiac parameters.
Although not explicitly stated, during its recently completed Phase 2 trial of trofinetide in paediatric Rett patients, Neuren has also measured cardio-respiratory response using the BioRadio wearable device. Measuring cardio-respiratory response in children with Rett syndrome is considered difficult and prone to inaccuracy as involuntary movements can create significant background noise on traditional monitoring equipment. The device minimises interference while recording respiration using RIP sensors and ECG to determine how cardio-respiratory patterns may change as a function of the trofinetide therapy.
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