It doesn’t make a lot of sense to do all the heavy lifting with trof and then not want ROW.
My guess is that it is not so much a case of ACAD not wanting ROW rights for trofinetide; rather, ACAD is perhaps not willing or able to pay what NEU wants/needs.
ACAD is committing ~ US $55m for a Phase 3 Rett trial and is also on the hook for funding of further trials in Fragile-X. How much these Fragile-X trials might cost is unknown, but it is certain it will be more than $55m.
ACAD is probably unwilling to pay a more sizable upfront at the present time for ROW rights. The company has yet to reach the profit making stage. Although it had sales of ~$63 m last quarter, it also had an operating loss of $87.63m, bringing its operating loss for the last 4 quarters to ~$280m. Compare this with larger players in the space, such as Biogen, which had an operating profit for the last 4 quarters of ~$6.5bn, or Abbvie, which had an operating profit for the last 4 quarters of ~$12bn.
As well as retaining rights to trofinetide outside of North America, Neuren has free and full access to utilise the US regulatory package, put together by ACAD, for registration in other territories. This regulatory package has considerable value.
After the deal with ACAD was announced last August, Neuren said it would be engaging with regulatory authorities in other territories to confirm any additional requirements beyond US data for registration in Rett syndrome. Provided that further trials aren’t required for registration of trofinetide, a licensee in the EU, for example, would potentially save US$55m in getting trofinetide to market for Rett syndrome. Spared that cost, one could argue that a more sizeable upfront is warranted for the EU rights. Indeed, Neuren has stated that its free access to the US regulatory package to use in registration in other territories has enabled it to “pursue additional value from further commercial partnerships in those territories.”
In my view, that additional value will best be realized by a company other than ACAD.
NEU Price at posting:
$1.20 Sentiment: Hold Disclosure: Held
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