Neurotech is following in the footsteps of 2023 market darling of the ASX biotech sector Neuren with another possible treatment for Rett Syndrome.

Biopharmaceutical company Neurotech International (ASX:NTI) has hopes of becoming the world’s only second approved treatment for rare neurological and developmental genetic disorder Rett’s syndrome.

NTI recently announced it had received Human Research Ethics Committee (HREC) approval and Clinical Trial Notification (CTN) scheme clearance by the Therapeutic Goods Administration (TGA) to investigate the use of NTI164 in female Rett Syndrome patients.

The Phase 1/2 clinical trial will examine the effects of daily oral treatment of NTI164 on 14 Rett Syndrome female patients initially and will be conducted across three centres in Australia.

Executive director Dr Thomas Duthy is hopeful with its positive effects on neuroinflammation, NTI164 could represent an effective intervention in Rett Syndrome, where mutations in the MECP2 gene are known to exacerbate neuroinflammation.

The progressive neurological disease occurs almost exclusively in girls, with an incidence of one in 10,000 female live births. There are ~15,000 girls and women in the US with the syndrome and ~350,000 globally.

“If you look at Rett syndrome it’s about a US$2 billion market opportunity,” Duthy said.

Another Aussie has only approved Rett syndrome treatment

The share price of Neuren Pharmaceuticals (ASX:NEU) has multiplied more than 7x since early 2022 when the company announced that it was close to launching the first ever drug for Rett syndrome to the market.

Results from the Phase 3 Lavender study of trofinetide were positive, and in March this year NEU announced that its large US pharma partner Arcadia Pharmaceuticals (NASDAQ:ACAD) had received FDA approval for the drug, now marketed under the name Daybue.

NEU last week announced it had extended its current licensing agreement with Arcadia outside of the US which includes US$100 million upfront and US$427 million in potential milestones plus royalties.  The original deal signed in 2018 for North American market rights was worth up to US$465 million in upfront and milestone payments.

Arcadia has provided positive early insights into the US launch of DAYBUE, expecting net sales of $21-23 million in Q2 2023 and $45-55 million in Q3 2023.

Focus on pediatric neurological disorders

NTI’s clinical stage pharmaceutical asset NTI164 and is focused predominantly on pediatric neurological disorders.

“Our primary focus to date has been autism spectrum disorder (ASD) and we are now running a Phase 2/3 clinical trial in Australia in 54 ASD patients,” Duthy said.

He said previous data in a Phase 1/2 clinical trial in Australia has yielded exceptionally promising results.

“Children’s behaviour and – more particularly – their adaptive behaviours improved significantly whilst on daily oral treatment of NTI164 over 52 weeks and counting,” he said.

NTI also has a program in a rare orphan disorder called PANDAS/PANS.

PANDAS stands for Pediatric Autoimmune Neuropsychiatric Disorders Associated with Streptococcus Infections while PANS stands for Pediatric Acute-onset Neuropsychiatric Syndrome.

“Collectively PANDAS PANS is a disorder where children go to bed perfectly normal but wake up with uncontrollable tic movements in their hands and legs and become severely obsessive compulsive with heightened anxiety and depression,”  Duthy said.

“The reason that disease manifests is there’s some dysregulation from streptococcus or some other unknown pathogen that initiate’s an autoimmune response which sees inflammation in their brain.

“NTI164 has very demonstrable and positive impacts on neuroinflammatory processes in the brain and also has ability to protect neurons in the brain so that dual mechanism of action is why we are targeting these kinds of disorders in children.”

Following in Neuren’s footsteps

Duthy said he has been following the story of NEU, now trading at ~$13.59/share throughout his career.

“This has been a story that’s taken 20 years to develop and Neuren’ share price used to be measured in cents at one point,” Duthy said.

“The reason we like Neuren’s strategy is they have basically received a lot of regulatory incentives and have received orphan drug designation (ODD).”

Duthy said ODD is also applicable for NTI in Rett syndrome and PANDAS/PANS.

“Part of our strategy is to receive orphan drug designation in Europe and also the United States,” he said.

“If you receive an orphan drug designation in Europe you have 10 years of market exclusivity and 7 years in the US.”

He said this means it would be very difficult for a third party to gain orphan designation for a trofinetide-like drug in Rett Syndrome while Neuren have that orphan drug designation, and likewise for a drug like NTI164.

“It’s a regulatory monopoly over and above a US patent so I particularly like orphan drug designation and we have a desire to follow that strategy,” he said.

Unlike trofinetide, NTI164 is a proprietary drug formulation derived from a unique cannabis strain with low THC and a novel combination of cannabinoids including CBDA, CBC, CBDP, CBDB and CBN.

He said the ODD is assigned to the drug for the disease and not the disease itself.

“You can have multiple drugs that have orphan drug designation for the same disorder so in this case its Rett Syndrome but there are many examples of rare disorders where there’s three or four pharmaceutical companies with different drugs,” he said.

Cannabis play with prescription medicine focus

Duthy said while NTI164 is derived from a cannabis plant in every respect it is being developed as a biopharmaceutical drug product.

“We’re not NTI164 as an off the shelf or over the counter product with an unsubstantiated medical claim,” he said.

“We’re developing NTI164 as a drug product with a medical claim that allows us to be regulated by the TGA and US FDA and charge a price where we can receive reimbursement for our product,” Duthy said.

He said a lot of the other cannabis players on the ASX are simply not regulating themselves as a drug product for human use where they can make a medical claim.

“They haven’t run clinical trials to prove their CBD or THC has a medical benefit,” he said.

“There’s nothing wrong with selling CBD over the counter in Australia and it has been regulated by the TGA but that’s not what Neurotech is doing and we’re developing NTI164 as a prescription drug product.”

Duthy said NTI164 is derived from a cannabis strain with low THC – the psycho-active component – which makes it attractive for use among clinicians treating children.

“They don’t want children receiving THC and it’s the reason why clinicians are endorsing the product safety here for use in children,” he said.

“We believe it’s the combination of these different cannabinoids that exert these profound clinical effects which we’ve now shown in autism, and hope to replicate in Rett Syndrome and PANDAS/PANS.”

NTI also has plans for trials of NTI164 into the treatment of cerebral palsy.

This article was developed in collaboration with Neurotech International,  a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.