Shares in Australian biotech Actinogen Medical Ltd (ASX: ACW) are crawling lower today, currently trading down 15.79% at 16 cents apiece.
Investors are selling Actinogen shares today despite the company receiving clearance from the US Food and Drug Administration (FDA) to commence a phase 2 trial on its Xanamem label.
Here are the details.
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But first – what even is Actinogen Medical?
Actinogen is a biotechnology and research company. It is working on a medical breakthrough in neurological disorders that cause cognitive impairment.
Its lead drug candidate, Xanamem, is being investigated for potential breakthroughs in Alzheimer's disease, Fragile X syndrome and other neurological diseases.
Many kinds of neurological conditions are either genetic, irreversible or have no known effective treatments – and unfortunately, no cure.
The compound works by modulating the 'stress hormone' cortisol, which has been shown to impair brain function and has been associated with several neurodegenerative conditions.
At the time of writing, Actinogen Medical has a market capitalisation of $317 million.
Why is the Actinogen share price sinking lower?
Actinogen advised it has received approval from the FDA to commence a Phase 2 trial on its Xanamem candidate, under an Investigational New Drug (IND) designation.
Being a Phase 2 trial, it is investigating the efficacy and safety of the Xanamem compound in treating male adolescents and young adults with Fragile X syndrome.
Fragile X syndrome is a hereditary disorder that causes mild to moderate intellectual disability, alongside behavioural and learning challenges.
It is thought to affect 1 in 4,000 males and 1 in 5,000–8,000 females worldwide. As observed, it primarily affects males, as it relates to genetics and the passing down of genes from parent to child.
Actinogen's trial will enrol around 50 patients. The cohort will receive treatment over 12 weeks to observe the effects of Xanamem on Fragile X syndrome.
Investors can expect readouts from the study's results sometime in 2023, per the announcement.
Aside from this, Actinogen also advised it had signed a letter of intent with Worldwide Clinical Trials Limited (WWC) to 'operationalise' the trial.
The move appears to be strategic from Actinogen, given that WWC is a research organisation that specialises in neurological, paediatric and rare diseases.
The letter of intent was signed for an amount of $944,724 and funds will be used "for start-up activities to enable prompt activation of [trial] sites".
It has a duration of 60 days whilst a full contract is negotiated but can be cancelled with a full refund of any unused monies.
Actinogen Medical share price snapshot
It's been a year of outsized returns for the Actinogen Medical share price, having posted a gain of 627% in the last 12 months after rallying 662% this year to date.
Each of these results has shot past the benchmark S&P/ASX 200 index (ASX: XJO)'s climb of around 20% in that time.
