Published - March 02, 2023 @ 3:15 PM (EET)
Shares of Reata Pharmaceuticals (NASDAQ:RETA) surged as much as 195% Wednesday after the Food and Drug Administration approved Skyclarys a day earlier, a drug treating Friedreich's ataxia.
Closing at $31.17 on Tuesday, the US biotech firm's shares jumped to $93 Wednesday, the highest since late 2021, on more than 16 million shares traded, a record one-day volume for the stock.
The treatment, targeting a rare nervous-system disease that affects about 4,500 diagnosed adults and adolescents age 16 and older in the US, is expected to generate substantial revenue for the company and show the value of its drug pipeline.
Responding to the news, CEO Jen Farmer of Friedreich's Ataxia Research Alliance said,
"Today's approval of SKYCLARYS represents a significant milestone in our effort to advance research and achieve treatments for Friedreich's ataxia […] The entire Friedreich's ataxia community, including patients, clinicians, scientists, pharmaceutical companies, government agencies, and others, have worked collaboratively for decades to enable therapeutic development for this debilitating disease."
The company told investors the newly approved treatment would have a wholesale acquisition of $370,000 annually. More notably, this is the first FDA-approved treatment for patients living with this ultra-rate and progressive disease that could lead to premature death.
ABOUT REATA PHARMACEUTICALS INC.
Founded in 2002, Reata Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company that develops novel therapeutics targeting molecular pathways that regulate cellular metabolism and inflammation. Its lead programs are omaveloxolone for the neurological Fridreich's ataxia and bardoxolone for rare forms of chronic kidney disease.
After years of uncertainty over the company's future, multiple analysts reacted positively to the news, with Robert W. Baird raising its price target from $40.00 to $85.00 and Cantor Fitzgerald's Charles Ducan, who reiterated an Overweight rating on the stock, citing a model update and Skuclary's clean safety profile.
Meanwhile, as of March 2023, Reata has a market cap of $3.42 billion, making it the world's 2994th most valuable company by market capitalization.
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