Why this small cap ASX healthcare share is dropping lower today

The Neuren Pharmaceuticals Ltd (ASX:NEU) share price is dropping lower on Friday despite the release of a positive update…

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The Neuren Pharmaceuticals Ltd (ASX: NEU) share price has dropped lower with the market on Friday despite the release of a positive update.

In morning trade the pharmaceutical company’s shares are down 3.5% to $1.98.

What did Neuren Pharmaceuticals announce?

This morning Neuren Pharmaceuticals released compelling results from a dose ranging study of NNZ-2591 in a model of Phelan-McDermid syndrome (PMS).

PMS is a rare genetic condition in which the most common characteristics are intellectual disability, delayed or absent speech, symptoms of autism, low muscle tone, motor delays, and epilepsy. There is currently no specific treatment for PMS.

According to the release, the study was conducted in the SHANK3 knockout mouse model, in which the SHANK3 gene is deleted to mimic Phelan-McDermid syndrome in humans. As well as causing PMS, disruption of the SHANK3 gene is believed to be associated with a large number of cases of autism spectrum disorder.

Wild type mice and knockout mice were treated with either placebo or one of four escalating doses of NNZ-2591 for six weeks.

The results showed that the lowest dose was not effective, the 2x mg/kg dose was partially effective, the 4x mg/kg dose was fully effective and indistinguishable from the highest dose of 8x mg/kg.

Management believes this clearly demonstrates that the 4x mg/kg dose is the optimum dose level in the mouse model. Looking ahead, comparison with pk data from Neuren’s planned Phase 1 clinical trial will inform the equivalent human dose for the planned Phase 2 trials in patients.

This study builds on the positive results it previously reported from a study of three weeks’ treatment with NNZ-2591 compared with placebo. This particular study formed the basis for the Orphan Drug designation granted by the US FDA.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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