The price of shares in the Australian-based company Prana Biotechnology Ltd. jumped by about 31% after the announcement that its new drug, PBT2, gave an improvement in cognitive function in patients with Huntington's disease.
Huntington's disease causes neurodegeneration and affects about 1 in 10,000 people in America. The disease is hereditary, with a 50% chance that the causative gene will be passed to a child.
The results of a Phase II clinical trial on 109 patients with Huntington's disease demonstrated a significant improvement in executive function, even though the trial size was small. The drug was shown to be safe and well-tolerated, with no substantial difference in adverse effects between patients receiving PBT2 or a placebo. MLV & Co analyst Graig Suvannavejh pointed out, "In a small trial, you don't expect to hit statistical significance on a secondary endpoint of efficacy. You would hope at best to see positive trends."
Prana will run a Phase III clinical trial of the drug as a treatment for Huntington's disease, as well as a Phase II study on patients with Alzheimer's disease. The only other drug approved for treatment of Huntington's disease is Xenazine, from the company Lundbeck. Xenazine generated about $220 million in 2012, but only treats the involuntary movements associated with Huntington's disease. It does not cure the disease or treat other symptoms. Reported side effects are depression, suicidal thoughts, and suicidal actions. If approved, annual sales of PBT2 could reach $500 million.
Prana shares reached a high of $9.46, with more than 10 million shares changing hands before 11am.