Here’s why Reata Pharmaceuticals gained 20% on Wednesday

The U.S. Food and Drug Administration (FDA) sent a communication to Reata Pharmaceuticals Inc. (NASDAQ: RETA) on Wednesday, recommending that it submits a new request for a pre-NDA meeting. The pharmaceutical company’s shares gained 20% in the morning session.

Reata had previously requested a Type C meeting to discuss the development program for its oral drug Omaveloxolone that it intends to use as a treatment for Friedreich’s Ataxia (FA) – a rare, life-shortening, inherited degenerative neuromuscular disorder.

Reata is happy to comply with the U.S. FDA

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The federal agency’s Division of Neurology Products 1, however, asked the Texas-based company on Wednesday to withdraw its previous request. The new one for pre-NDA, it added, will be approved upon receipt.

According to Reata Pharmaceuticals, it is happy to comply with the FDA’s recommendation and will request a pre-NDA meeting as soon as the new briefing package is ready. CEO Warren Huff said on Wednesday:

“We welcome the opportunity to have a pre-NDA meeting regarding our Omaveloxolone development program for the treatment of patients with FA. We look forward to working with the FDA on our goal of securing the regulatory review and approval necessary to make Omaveloxolone available to patients with FA.”

In separate news from the U.S. healthcare sector, Pfizer said on Wednesday it will start producing a key component of its COVID-19 vaccine at an Irish facility.

Reata Pharmaceutical’s Q1 financial results

Earlier in May, Reata Pharmaceuticals reported $0.9 million (£0.64 million) of collaboration revenue for the fiscal first quarter versus the year-ago figure of $1.4 million. It valued its cash and cash equivalents at the end of Q1 at $777.6 million – a decline from $818.2 million at the start of 2021.

The Pharmaceutical company lost $1.16 per share in the first quarter on non-GAAP basis, compared to 89 cents per share in Q1 of the previous year. Other notable figures in its financial update included $12.8 million of general and administrative expenses (non-GAAP) and $28.1 million of research and development expenses (non-GAAP).

Reata Pharmaceuticals is currently trading at $101 per share after closing the regular session on Tuesday at $83 per share. In comparison, it had started the year at a higher $121 per share.

Last year in February, Reata Pharmaceuticals had hit a record high of $226 per share in the stock market. At the time of writing, the Nasdaq-listed company has a market capitalisation of $3.68 billion.