The Neuren Pharmaceuticals Ltd (ASX: NEU) share price has jumped into the green during afternoon trading on Friday.
Neuren shares are on the move after the company made a key announcement earlier today.
Let's investigate further.
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What did Neuren announce?
Neuren advised that the US Food and Drug Administration (FDA) has granted "orphan drug designation" to one of the company's drug candidates.
For reference, the term "orphan drug" is a label given to a drug or treatment that has been developed for medical conditions that are so rare, it would be unprofitable to produce without assistance from either a sponsor or the government.
The orphan drug designation gives companies involved a special tax window of 7 years. It also gives them exclusivity over the rights to develop a cure for these kinds of rare conditions.
According to today's announcement, the FDA granted the orphan status to Neuren's drug candidate "NNZ-2591", which is about to initiate Phase 2 clinical trials across a number of complex diseases.
NNZ-2591 was granted orphan drug status for the treatment of Prader-Willi syndrome. This is a neurodevelopmental disorder that causes issues with weight regulation, learning disabilities, growth hormone deficiencies, gastrointestinal issues, and difficulty controlling emotions, amid other signs and symptoms.
Neuren had previously demonstrated positive outcomes from studies of NNZ-2591 in mice.
Investors have favoured the news and are rewarding the company, pushing the Neuren Pharmaceuticals share price higher.
Neuren shares are now exchanging hands at $2.50 apiece, an 11.11% jump on the day.
What did management say?
Speaking on the announcement, Neuren CEO Jon Pilcher said:
We were excited by the strong pre-clinical efficacy of NNZ-2591, which clearly demonstrated the potential for the mechanism of action to have a positive impact on Prader-Willi syndrome. We are now delighted to receive Orphan Drug designation from the FDA following review of our rationale and data. This underpins the commercial opportunity and follows Orphan Drug designation already granted for PhelanMcDermid, Angelman and Pitt Hopkins syndromes.
Neuren Pharmaceuticals share price snapshot
The Neuren Pharmaceuticals share price has climbed 89% into the green this year to date. It has also gained 94% over the past 12 months.
These results have outpaced the S&P/ASX 200 index (ASX: XJO)'s return of about 25% over the past year.
