Reata gets a new lease of life

The approval decision on Reata’s omaveloxolone had looked like a coin flip, and some took as a bad omen Monday’s departure of the FDA’s neuroscience chief, Billy Dunn, a champion of controversial drugs with scant clinical backing. So yesterday’s news of a green light in Friedreich’s ataxia, with a surprisingly broad label and benign toxicity warnings, was greeted with a 180% hike in Reata’s share price this morning. The product, branded Skyclarys, could bring in over $1bn in the US at peak, Stifel analysts estimate, based on a list price of $370,000 per year. A lack of other approved therapies should work in Reata’s favour, and the group also has $388m in the bank plus a priority review voucher that could be worth around $100m. Still, Reata might choose to raise money while it can, as the track record of small company solo launches is poor. Stifel says the FDA nod could also revive interest in Nrf2 activation – the antioxidant mechanism behind omaveloxolone, Reata’s other late-stage project bardoxolone, and certain MS drugs like Tecfidera. There is not much activity here, although Astrazeneca recently licensed an Nrf2 activator programme from C4X.