Ann: Type C Meeting granted by FDA for Phelan-McDermid syndrome, page-44

E & P Comments:

What Happened?

• Neuren Pharmaceuticals (ASX:NEU) today announced that the US FDA has granted a Type C meeting to discuss the primary efficacy endpoints in Neuren’s planned Ph3 clinical trial program for NNZ-2591 to treat Phelan-McDermid syndrome (PMS).
• NEU also announced that it has today received in cash its one-third share of the net proceeds from the sale of the Rare Paediatric Disease Priority Review Voucher (PRV), which was sold by partner, Acadia Pharmaceuticals (NASDAQ:ACAD), for US$150m in December 2024.

E&P Comments

• The Centre for Drug Evaluation and Research’s (CDER’s) process for reviewing Clinical Outcome Assessments (COA) has two pathways for new drugs:

1) the Clinical Outcome Assessment Qualification Program; or

2) under an individual drug development program.

• • NEU are progressing through the latter of these (2), whereby CDER’s Division of Clinical Outcome Assessment (DCOA) is consulted on a case-by-case basis by the primary review team.
  • DCOA provides advice to the team, who then issues final comments to the sponsor.
• We note that the DCOA is a team of measurement experts within CDER – not domain qualified in the specific clinical disorder relevant to the application. It supports patient-focused drug development by providing leadership and expertise in the development, validation, and communication of COA endpoints, while also advancing COA standards and managing the CDER COA Qualification Program to address unmet medical needs.
• Whilst DCOA involvement is not ideal (and a new experience for NEU), we continue to anticipate alignment with the FDA on primary efficacy endpoints, given the high unmet need in these patients, and the stated intent for the DCOA to integrate the patient voice into drug development through appropriate COA endpoints that are meaningful to patients, valid, reliable, and responsive to treatment.
• Pending confirmation of endpoint alignment, a Phase 3 registrational study for PMS remains on track to commence in mid-2025.
• The Type C meeting which will take place face-face in early April, brings a clearer timeframe with an FDA response time of 75 days.
• PMS has the potential to be the most economically powerful asset for Neuren if it is successful in Ph3 trials as well as other key checkpoints.

Outlook

• NEU remains well funded for the Ph3 trials PMS with ~A$210M of cash at the end of Sep’24, plus the US$50M in PRV proceeds received today.
• We estimate a cost of ~A$100M to complete the Ph3 trial in our base case.
• Further detail on estimated timelines and costs will be provided after the efficacy endpoints are confirmed.
• NEU will release FY24 results on 28-Feb’25, following Acadia’s EOFY results. NEU are guiding to CY=FY2024 topline revenue of A$216-218M based on the assumption of between A$16-18M in royalties in Q4 2024.
• E&P forecast FY24 Daybue sales of US$346M – which is in the upper half of ACAD’s guidance range and implies A$16.7M of forecast royalties in Q4 (based USD:AUD=1.52) to NEU.
• We acknowledge scope for upside risk to our topline forecasts for NEU given FX moves over the quarter. But note that NEU’s operations and revenue are all within the United States, and the cash received will remain in USD, as such there is no material impact for the company from FX moves.