Neuren‘s market cap was ~ $900m (sp. $7.70) just prior to FDA approval last month. Prior to Phase 3 trial results being announced, the market cap was just $250m. (sp. ~ $2). Three years ago (March/April 2020) the sp briefly fell just under $1, as the company’s largest shareholder dumped all of his shares, most for just $1, the market plunged in the early days of COVID and enrolments in trofinetide's Phase 3 trial were paused (again because of COVID). Share price recovery wasn’t helped by the exit of NEU's long-term CEO shortly after.
In retrospect NEU seems to have been a great bet at that time (and I did add to my holdings) but that was a bet against the market which was viewing this combination of “red flags” as a warning of Phase 3 failure.
In response to your question about comparing the market cap of NEU when it was at the same stage as PYC is now, my view is that's not really possible.
Firstly, when Neuren was entering its first Phase 1 trial (not in trofinetide) approximately 20 years ago, the company was not yet listed.
Something else to consider is that by the time the trofinetide in Rett syndrome clinical program had commenced, Neuren’s first drug programme (glypromate) had failed Phase 3. While trofinetide was a different drug, it was closely related to glypromate. The failure of glypromate hung over NEU’s market cap for several years. Arguably, the impact was even longer, because some people were still referencing the 2008 glypromate failure right up until the time trofinetide succeeded in Phase 3. Hence, NEU had a heavily weighed down share price which then saw a steep share price trajectory post-Phase 3 success in late 2021.
Also impacting valuations of the two companies are differences in disease area and drug type.
Neuren’s lead programs for trofinetide are in neurology whereas PYC’s are in opthalmology. At commencement of clinical trials, a neurology drug has ~8% likelihood of marketing approval (LOA), compared to ophthalmology drugs with a likelihood of approval at the same stage of ~17%.
The difference in drug types also needs to be considered. Firstly, precision RNA therapeutics are more highly valued by the market compared with small molecule drugs. Although Neuren’s portfolio is aimed at orphan monogenic diseases, its small molecule drugs don’t target the causative gene. Rather, they target the critical role of the growth hormone, IGF1, in the brain. In comparison, PYC’s cell delivery-enhanced antisense drugs target the single gene variant identified as the root cause of the disease. This doubles the likelihood of clinical success. And if the monogenic disorder targeted is rare (as PYC’s leading indications are), the likelihood of approval is further increased. Consequently, at the time they enter clinical development, PYC’s therapies have a 4-5 x likelihood of approval compared with the average same-stage drug.
Perhaps instead of comparing with Neuren, one might compare PYC’s current market cap with similar-stage US-based antisense-focused biotechs.
One example is Dyne Therapeutics (DYN). It commenced clinical development in two lead indications 6 months ago. Its focus is on antisense therapies for muscular diseases. While there are no already approved therapies in one of its lead indications, there are several competing therapies in clinical development, including a couple of Phase 3 assets. The second lead indication (DMD amenable to exon 51 skipping) already has two approved (antisense) therapies and several others in clinical development. Dyne’s current market cap is A$744m, but that includes around A$400m in cash and marketable securities.
Another example is Entrada Therapeutics (TRDA). Its lead drug is targeting another DMD subtype, for which there are several competing antisense therapies in development. The target population for Entrada’s lead indication is half, or less, than that for PYC’s lead indication, RP11. Entrada submitted its lead indication IND last December, but that was put on hold as the FDA requested further information. TRDA current market cap is A$779m, including ~ A$300m in cash and marketable securities.
Finally, as to what is possible post FDA approval, if everything happened to go well, one might look at Sarepta (SRPT) which had its lead antisense drug in a DMD subtype approved by the FDA in 2016.
Post-approval, Sarepta's market cap rose to ~A$5 bn. Current MC is ~ A$18bn.
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