Today we got the big announcement, but really it is just the start. We first wrote about NEU back in October off the back of previous good news. Today’s announcement saw the price jump up as high as $0.13 (44%), while the price settled to $0.12 (33%) at the close of trade today.
So what actually happened?
Neuren Pharmaceuticals Limited today announced that their phase 2 clinical trial using Trofinetide in treating Fragile X Syndrome was indeed successful. In more simple terms, the trial of their drug used to treat Autism succeeded. This was the proof of concept meaning the success was a vital step in achieving FDA (US Food and Drug Administration) approvals.
NEU found through testing that doses of the drug were effective in treating Fragile X, and saw no adverse effects on the patients tested.
All of this is pretty technical I know. But the good news is the market has already begun to respond, positive to us NEU investors.
While all this is happening NEU have a few more irons in the fire. NEU has drugs which are being tested for the treatment of Rett syndrome and mild brain trauma injuries. Across the three treatments the results to date have been positive. NEU has been able to obtain fast track approvals for the clinical trials, and have patents in place protecting the investment.
What happens next?
Well the drawn out process might frustrate us investors, NEU will stay the course. They need to continue clinical trials to satisfy the demands of the FDA and other countries respective bodies. NEU need to show significant evidence which demonstrates substantial improvement in patient’s conditions, when compared to existing alternative treatments.
While that happens there are a few possible implications on the shareholders. A bigger fish might come along, and buy out NEU and/or specific treatments and patents. This would likely involve a premium paid above market price and pending shareholder approval could see a tidy return. The other option is that NEU continue to progress, and at each stage investors will reassess the potential returns, company condition to decide on a fair market price.
Assuming all goes well, it is the latter option which would prove more lucrative. But a short term payoff eliminating the risks, the former shouldn’t be scoffed at.
Early 2016 has been earmarked for the next round of results in the treatment of mild brain trauma injuries, while treatment for Rett Syndrome is funded through to 2017, with paediatric trials to commence next year.
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