Junior biotech's shares jump 10% on good news out of the US

This drug developer will soon start recruiting patients for a drug trial after a key tick from the FDA.

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Key points

  • Neurizon's key drug candidate for ALS has passed a key milestone in the US.
  • The company will soon start recruiting patients for a clinical trial.
  • Early data shows the drug candidate shows promise to treat ALS.

Neurizon Therapeutics Ltd (ASX: NUZ) shares are up more than 10% in early trade after the company said there had been a key development in the US for its lead investigational drug, NUZ-001.

The company stated that the US Food and Drug Administration (FDA) had lifted the clinical hold on the drug, which the company claims has shown promising results in both preclinical and clinical studies.

Neurizon has so far had positive results in a Phase I clinical trial of NUZ-001, "highlighting the safety, tolerability and potential for long-term efficacy" for treating the neurodegenerative disease ALS.

The company's Managing Director, Dr Michael Thurn, said on Monday that the FDA clearance was a significant milestone.

We are deeply grateful to the key opinion leaders and patient advocacy groups whose steadfast support and engagement were instrumental in shaping and advancing this program. Their efforts in raising awareness and lobbying for the urgent needs of the ALS community have been invaluable in helping us reach this point. We are now partnering with the HEALEY ALS Platform Trial team to take the next critical steps in advancing NUZ-001.

Dr Thurn said they had so far delivered "compelling" preclinical data, and the team believed NUZ-001 "has the potential to meaningfully slow the progression of this devastating disease''.

Way cleared for development

The company said opening an "investigational new drug" (IND) process with the FDA would establish a regulatory foundation which "not only accelerates the development of the first candidate but also streamlines future programs''.

By creating a validated framework for safety, manufacturing, and clinical design, it reduces regulatory risk, shortens timelines, and enables efficient expansion into new indications. In this case, the IND is further strengthened by the robust and comprehensive package of preclinical safety data and the detailed manufacturing and quality information secured through our licensing agreement with Elanco.

Neurizon said with the IND now active, it expected Mass General Hospital to file a protocol amendment to their IND for the HEALEY ALS Platform Trial "to incorporate our specific protocol regimen early in the coming weeks''.

The company said it expected to start patient enrolment for that trial in the fourth quarter of calendar year 2025.

Together, these milestones advance Neurizon's mission to accelerate patient access to innovative therapies, create long-term value for shareholders, and establish NUZ-001 as a potential effective treatment for ALS.

ALS, or amyotrophic lateral sclerosis, is a progressive neurodegenerative disease that affects nerve cells in the brain and spinal cord, leading to the loss of muscle control.

Neurizon shares traded as high as 16.5 cents, up 13.8%, before settling to 15 cents.

The company was valued at $77.5 million at the close of trade on Friday.

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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