(Reuters) - Neurocrine Biosciences Inc’s experimental drug for tardive dyskinesia, a neurological disorder, was effective in a late-stage study, bringing it a step closer to becoming the first treatment to win U.S. approval for the condition.
The drug developer’s shares rose as much as 21 percent to $47.24 on Thursday.
Data showed the drug, NBI-98854, was significantly more effective than a placebo in reducing involuntary movements in patients with tardive dyskinesia, a condition frequently afflicting patients taking antipsychotic drugs.
While there exists no therapy in the United States that specifically fights the disorder, those affected typically change their antipsychotic regimen, either by lowering dosage or by switching drugs.
About 10 percent of the 6 million U.S. patients who are currently on antispychotics develop tardive dyskinesia, Leerink Partners’ analyst Paul Matteis estimated, assigning an 80 percent probability that the drug would be approved.
Data announced on Thursday is one portion of the late-stage study, which compared the drug to a placebo.
In the second portion of the study all patients were given only the drug.
Neurocrine said it expects to add data from this second stage and a separate one-year safety data to support a U.S. marketing application for the drug, planned for 2016.
Matteis said he expects the drug to be launched in 2017 and rake in peak U.S. sales of about $1.15 billion and cost about $45,000 per patient per year.
Teva Pharmaceutical Industries Ltd’s drug, SD-809, is also in late-stage development to treat involuntary movements associated with Huntington disease. Teva got the drug through its $3.5 billion acquisition of Auspex Pharma in March.
“I think both Teva and Neurocrine look good”, Evercore ISI’s Umer Raffat said.
Danish drugmaker H. Lundbeck A/S also sells a drug to tackle involuntary movements associated with Huntington’s disease, a neurodegenerative genetic disorder.
The drug, Xenazine, costs about $90,000 per year, said Zacks Investment Research Inc’s analyst David Bautz, adding that he expects NBI-98854 to be priced at about $10,000-$20,000 annually.
The San Diego, California-based company’s shares gave up most of their gains and were up about 9.1 percent in afternoon trade.
About 5.8 million shares traded, more than four times the stock’s 25-day average.
Reporting By Samantha Kareen Nair in Bengaluru; Editing by Sriraj Kalluvila