(Reuters) – Shares of U.S. biotech firm Reata Pharmaceuticals Inc more than doubled in premarket trading on Wednesday, a day after the Food and Drug Administration (FDA) approved its rare disease drug and ended years of uncertainty over its future.
The drug Skyclarys is the first approved treatment for Friedreich’s Ataxia, a rare genetic disorder that causes progressive damage to the nervous system and can lead to premature death. It is also Reata’s first approved product.
The approval follows years of back and forth between Reata and the FDA, which in 2020 said the data from a mid-stage trial was not enough to support an approval. In 2022, the regulator extended its review after Reata submitted additional analyses.
“We’ve followed some pretty dramatic stories in the past, but the Reata odyssey is in the Hall of Fame,” said Baird analyst Brian Skorney.
The FDA has previously approved drugs for neurological conditions based on limited data such as for Biogen Inc’s Alzheimer’s drug Aduhelm and Amylyx’s ALS drug.
Those approvals were made under the leadership of Billy Dunn, who resigned from the agency on Monday after which Reata’s shares tumbled 30% as investors fretted about the possibility of approval under a new division head.
The company priced the drug at a wholesale acquisition cost of $370,000 annually.
Reata’s shares were up 174.2% to $85.47 before the bell.
(Reporting by Aditya Samal in Bengaluru; editing by Shweta Agarwal and Uttaresh Venkateshwaran)
