Prana Biotechnology (PRAN) shares surged 18.7% after the company announced that the FDA has granted orphan drug designation to its Huntington disease candidate, PBT2.
We note that the FDA grants orphan drug designation to candidates being developed to treat rare diseases that affect less than 200,000 people in the U.S. The status makes the candidate eligible for seven years of marketing exclusivity in the U.S. following approval. This designation also makes Prana Biotechnology eligible for certain other incentives (including tax credits for qualified clinical testing) for developing PBT2.
The company plans to apply for orphan drug designation for PBT2 in other regions as well including Europe.
Earlier this year, Prana Biotechnology had announced encouraging results from a phase II study evaluating the use of PBT2 in patients with Huntington disease. The company intends to submit a post phase II study dossier to the FDA and discuss the development path.
Huntington disease is a neurodegenerative genetic disorder which affects more than 30,000 people in the U.S. Currently available drugs for Huntington disease include H. Lundbeck’s (HLUYY) Xenazine, which is indicated only for involuntary movements associated with Huntington’s disease.
As per the company’s press release, there are no currently approved treatments for the cognition and executive function symptoms of Huntington disease. This underscores an unmet market need for newer therapies.
Some well-ranked stocks in the health care sector include Allergan (AGN) and Gilead Sciences Inc. (GILD). Both are Zacks Rank #1 (Strong Buy) stocks.
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