Source – Reata Pharmaceuticals
After receiving approval in the spring, Reata Pharmaceuticals has been eagerly awaiting the launch of its first commercial product, Skyclarys. However, a setback caused by an impurity issue delayed the introduction of this rare disease medication. Fortunately, the Plano, Texas-based pharmaceutical company has resolved the problem with the FDA well ahead of schedule.
As a result, analysts are optimistic about Reata’s prospects as it enters the commercial stage and believe that the company can meet or even surpass its projected sales target for 2023.
The FDA granted early approval, one and a half months ahead of schedule, for a prior approval supplement (PAS) that updates the drug substance specification for Skyclarys. This medication, which was approved by the FDA in March, is the first and only drug for the treatment of Friedreich’s ataxia, a hereditary neurological disorder that typically affects individuals during adolescence and often leads to life-long mobility limitations.
Following the initial approval of Skyclarys, Reata disclosed an impurity issue in May and stated in a press release that FDA clearance of the Skyclarys supplement would be necessary before the product could be launched. At that time, Reata anticipated receiving an updated regulatory decision around mid-August. Without approval of the supplemental application, the drug could not be made available to patients.
Reata’s PAS, which aimed to address the manufacturing glitch by adjusting Skyclarys’ impurity specification, was accepted in mid-June and received approval this week, thereby paving the way for the launch of this rare disease medication. Reata announced on Tuesday that Skyclarys is now accessible to patients with Friedreich’s ataxia in the United States.
Analysts at SVB Securities expected this positive outcome, as they wrote in a note to clients that they anticipated the manufacturing issue to be resolved in the near future. With the final regulatory hurdle cleared, the SVB Securities team believes that Reata’s launch is a promising opportunity and expects Skyclarys to meet or exceed the analysts’ projected sales of $45.9 million for 2023.
“On the heels of the PAS approval, we expect [Reata] shares to trade higher, and believe the stock can continue to work as the launch gets underway,” SVB Securities added.
Reata has priced Skyclarys at $370,000 per year before discounts. Taking this cost into consideration, Jefferies analyst Maury Raycroft previously estimated the potential US sales of Skyclarys to reach $400 million by 2030. Reata has also submitted an application for approval in Europe and aims to launch Skyclarys across the continent in early 2024.