Dutch drugmaker Prosensa Holding received a buoyant welcome in its market debut on the Nasdaq, a day after U.S. health regulators granted a "breakthrough status" to its drug to treat a rare disease.
Prosensa's shares opened $7 above its initial public offering price of $13 and were up 46 percent at $19.05 about an hour after they started trading.
Prosensa developed drisapersen in partnership with GlaxoSmithKline Plc to treat Duchenne Muscular Dystrophy (DMD), a muscle-wasting disorder that affects one in every 3,500 newborn boys and has no available cure.
While Glaxo is responsible for most of the future development and marketing responsibilities of drisapersen, Prosensa itself has a host of ribonucleic acid-based compounds it is experimenting with to create drugs for rare genetic disorders for which there are no treatments at present.
"There is a lot of enthusiasm for Prosensa ... if a company has a strong collaboration partner and an advanced drug pipeline, they make for a good investment," said Francis Gaskins, a partner at IPO research company IPODesktop.com.
Much of Prosensa's product pipeline is aimed at treating different types of muscular dystrophies and each product has an "orphan" status in the United States and Europe -- a designation granted to drugs targeted at diseases affecting a small population.
As per the terms of a 2009 partnership agreement, Glaxo has the exclusive right to market drisapersen and options to develop various other drugs in Prosensa's portfolio.
Prosensa is eligible for up to £428 million ($650.79 million) in milestone payments from Glaxo and percentage royalties in the low tens on future global sales of drugs under the deal.
Prosensa and Glaxo are competing against Sarepta Therapeutics Inc in a race to bring the first DMD drug to market, and drisapersen, with its recently acquired "breakthrough" status, could move ahead in the regulatory review process.
Sarepta's shares were down only marginally at $38.05 after Prosensa's debut. ($1 = 0.6577 British pounds)
(Reporting by Zeba Siddiqui in Bangalore; Editing by Sreejiraj Eluvangal)