Proteostasis Therapeutics, Inc. (NASDAQ:PTI) gained a considerable amount of strength during the session on Monday on the back of some news related to one of its lead development trials and, as we head into the middle of this week, this momentum continues.
Right now, the company trades for $6.40 a share heading into the start of play on Wednesday. This is a close to 1% premium on yesterday’s close, which, in and of itself, was a 55% premium on the Tuesday open price.
So what is driving the action?
Well, on March 12, 2018, the FDA issued Breakthrough Therapy Designation for Proteostasis’ lead development asset, a drug called PTI-428.
The company is trying to get this drug approved in a target indication of cystic fibrosis (CF) and, specifically, for the treatment of cystic fibrosis patients with two copies of the F508del genetic mutation who are currently on background therapy with Vertex Pharmaceuticals’ (NASDAQ:VRTX) Orkambi.
The drug is what is called a CFTR amplifier and Proteostasis believes that it could provide a real advance in clinical benefit to pretty much the full range of CFTR modulators as well as a component part of its triplet therapy (PTI-808, PTI-801, PTI-428).
Of course, this belief isn’t enough to get the drug on shelves and a development program is necessary to support the belief with quantitative data and it is this program that is ongoing at time of writing and that is the basis of the just announced designation from the FDA.
So what does Breakthrough Therapy Designation really mean?
Well, it brings with it a host of benefits associated both with the ongoing development program and any subsequent commercialization efforts (assuming the drug picks up approval), including more intensive guidance from the FDA on development, the involvement of more senior agency personnel and a rolling review of the marketing application.
Markets will now turn to data from the trial, which is scheduled for release at some point during the second half of this year, to compound the positive sentiment associated with the designation and to push the company’s market capitalization up further heading into a commercialization effort.
Chances are, then, we’ll see Proteostasis trade flat on current levels throughout the rest of the week or potentially up slightly as latecomers enter on the recent development.
AbbVie (NYSE:ABBV) is also moving during the middle of this week with the action rooted in an ongoing partnership that the pharmaceutical behemoth has in place with Neurocrine Biosciences, Inc. (NASDAQ:NBIX). The partnership is rooted in the development of a drug called elagolix, which the company is trying to get approved in a target indication of uterine fibroids.
It’s a combination asset, just as is the above discussed Proteostasis lead asset, with this one under investigation in combination with low-dose hormone therapy.
The latest data refers to a phase 3 trial that the two companies conducted on the back of the just discussed partnership and, as per the result, the drug looks like it has a pretty strong chance of picking up regulatory approval as and when it goes in front of the FDA in the form of a registration application.
We didn’t get too much detail as far as numbers are concerned but AbbVie did report that the drug was able to hit against its primary endpoint of reduced heavy menstrual bleeding in patients with the above-mentioned uterine fibroids and, as a result, the trial is considered to have been successful from a clinical benefit perspective.
On the safety side of things and the tolerability side of the picture, things also look pretty successful, with the company reporting no major adverse events (or at least, that is, none that caused dropouts and, by proxy, shouldn’t be major causes for concern for the FDA), which, again, puts a big check in the box next to tolerability – an often overlooked but crucial part of this sort of trial.
So what happens next with this one?
There is a posttreatment safety study for which data will be presented at a conference later this year and, beyond that, we expect the two companies to put together a registration application and submit to the FDA.
As is to be expected, both AbbVie and Neurocrine have picked up a bit of strength on the back of the news and we will likely see this trend continue heading into the early session on Wednesday.
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