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

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:

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.