Trading Hult:

Oddly 15min after the start of trade a notice is out and trading halted, because:

The trading halt is requested pending an announcement by Neuren regarding US Food & Drug Administration feedback on NNZ-2591 in Pitt Hopkins syndrome and Hypoxic-ischemic encephalopathy (HIE); 

I doubt it has anything to do with the previous announcement, but timing is acute!

@Tom73 I need to refresh my understanding on this one, but so far we’ve only had the top line read out for Phase 2, FDA confirmation of fast track status, and orphan designation for PH for NNZ-2591.

I’m not sure when we’ll see the full results from Phase 2, which would normally be a precursor to FDA engagement on Phase 3 trial design

However, particular for drugs with a fast track designation, it is entirely possible that the FDA is giving input of Phase 3 design before there has been any publication on the full Phase 2 results. That’s because the FDA have the full phase 2 dataset, and engagement with them on Phase 3 design is quite independent of whether the full phase 2 analysis has been published to the public.

So my guess is that the announcement is something to do with NNZ-2591 moving to Phase 3.

I am as close to 100% sure as I can be that it is nothing to do with the Europe trofinetide issue, and that the timing is coincidental other than it is not usual for announcements to occur a month or so after the winter holiday season, because I guess the internal machinations of the FDA involve teams or committees getting together to take decisions, as is the case in Europe.

I agree @mikebrisy that it's almost certainly nothing to do with Europe trofinetide issues, also I don't think the timing is orchestrated, some companies may to deflect from bad news in this way but I that isn't the Neuren MO. Your guess on Phase 3 related to NNZ-2591 seems solid.

Hi @Tom73

I'm curious as to your comment: "... this news also undermines the basic value prospects for NNZ2591 ... "

I read today's news as solely impacting the valuation due to trofinetide/DAYBUE.

My making a reference to NNZ2591 in my post, is that my original investment thesis for $NEU was that the market value could essentially be attributed solely to the full value of DAYBUE/trofinetide. And therefore buying shares back in 2024 at $10-$14 meant you were essentially paying for less than the value of DAYBUE (which I estimated to be worth from $12 - $20), and getting a free, speculative upside for NNZ-2591, which I estamated (of guesstimated) could be worth anything from $0 - $32 on its own.

Now, with there being reduced prospects for sales of trofinetide outside the US, and indeed the US profile looking to be at the lower end of my forecasts, if you are buying $NEU shares today at $14+, then I think you are paying for part of the exposure to NNZ2591.

In other words, my "two for the price of one" thesis no longer holds.

I realise that in writing this, I haven't updated by valuation on Strawman for some time, so I will put a placeholder in now, because what is showing at my valuation is no longer how I view things.

I'll do a proper valuation after the next results are in.

Placeholder: DAYBUE reduce to $10, add 50% to the p50 for NNZ-2591 gives $8 for a sum of parts valuation of $18, but with wide uncertainty.

@Goldfish thanks, but credit goes to the platform @Strawman . Hopefully, across the membership we get to see different views and perspectives, which helps our individual discovery, evaluation, and decision-making.

And for the record, I've made as many if not more bad calls on biotech / pharma, ... so never put yourself in a position where you are acting on my work alone!

Heck, even though I no longer own $NEU, NNZ-2591 could still be a blockbuster. So, I'll mark your gratitude as able to be recalled at any time.

Disc: Not held

Hi @mikebrisy ,

Noted that the announcement relates only to trofinetied/DAYBUE, however my understanding was that the testing approaches used to get trofinetied approved are the same or similar to those begin used for NNZ-2591.

Hence the clinical package that was able to get through FDA may not be aligned with what is needed to get approval in Europe? So NNZ-2591 will not have as smooth a regulatory path as anticipated on a successful trofinetied path.

I have to say I need to spend a lot more time working out NEU and have taken a shoot first ask questions later approach today, but that’s because I figured I am going to have plenty of opportunities at lower prices to come back on board if my investigation suggests to do so, but didn’t want to be sitting at half the current price when I finally capitulated should I find my investment thesis broken. 

The Canada reimbursement issue also had weight and I don’t expect any large value uplift from any success from NNZ-2591 for a while (probably 2027+), so figure there is time to assess.

Cheers.

@Tom73 I defintely wouldn't make any read across from trofinetide to NNZ-2591, as they act on fundamentally different biological mechanisms, even though they are both treating rare neurological conditions. I see this as very DAYBUE-specific.

But you raise an interesting point.

Generally speaking, FDA-approval materially de-risks EU approval. There's lots of data to support that, and at least formally, the CHMP does not consider economics, but is focused on safety and efficacy.

So, even if CHMP had approved the MAA, trofinetide might well have still failed to get the support of a European HTA recommendation on pricing and reimbursement at the next step. That was what happened in Canada, and that was the risk I foresaw.

When I originally wrote my "Canada = Canary in the Coalmine" I was anticipating problems at the reimbursement level, and not a rejection by the CHMP outright. So I got ahead of myself a bit this morning when I wrote that I had foreseen the CHMP "negative trend vote". I didn't.

Now, having said that, it is commonplace for the CHMP to grant a narrower label than the FDA, for drugs first approved by the FDA. So it is possible (economics aside) that the CHMP is negative on trofinetide because of the side effects profile when weighed with the benefits. And perhaps its vote is tending to be negative because it could not easily define a narrower indication that could play to the stregnths of the drug in balance to its side effects. It will be interesting to see if the $ACAD appeal is able to move them on that.

I'm guessing a bit here, and I don't have the granularity of knowledge as to the CHMP's track record on making assessments on the type of data in the trofinetide package (e.g., caregiver and HCP assessments to symptoms.) It is entirely possible that someone expert in that area would have some deeper insights. And of course if that were the case, then a read-across to NNZ-2591 could be valid, in concept. (Note to self: this one goes onto the NNZ-2591 research list!)

Hopefully, we will learn more as this process continues to play out.

So, having thought about your point, for now, I will continue to consider NNZ-2591 entirely on its merits. I'm not going to change my risking for a US=YES, RoW=NO outcome.

But you have raised an interesting question, and one that deserves future consideration.