The U.S. Food and Drug Administration (FDA) has postponed its decision on an experimental treatment from Disc Medicine Inc. (NASDAQ: IRON) for an additional two weeks, moving the anticipated date to February 10, 2024. This delay comes as the company seeks approval for bitopertin, a drug being developed to treat erythropoietic protoporphyria, a rare blood disorder that causes extreme sensitivity to sunlight.
Disc Medicine’s stock has shown resilience despite the delay, gaining traction in the market. Analysts are investigating the factors contributing to this positive momentum. Concerns raised by regulators include whether the secondary endpoint of “pain-free time in the sun” is a statistically reliable measure of the drug’s effectiveness. Additionally, FDA staff are evaluating potential risks associated with misuse or addiction, as noted by a report from Reuters.
Analysts Remain Optimistic
Analyst Douglas Tsao from H.C. Wainwright expressed confidence in the company’s prospects, suggesting that the current situation is likely “noise” rather than a signal of deeper issues. Tsao mentioned that Disc Medicine was not informed of a specific action date from the FDA before the report was published, although the implied date of January 27 aligns with previous FDA guidance and the company’s expectations.
The company received CNPV designation in October, which typically accelerates the review process. In December, Vinay Prasad, head of the FDA’s Center for Biologics Evaluation and Research, expressed skepticism regarding bitopertin’s efficacy. However, Disc Medicine indicated that the interactions with the FDA have been part of a “regular” review process, albeit more frequent due to the expedited timeline.
Market Reaction and Future Outlook
Despite the uncertainties, Tsao remains confident that approval for bitopertin is likely. He noted that even in the event of a Complete Response Letter (CRL)—an unlikely outcome—the delay would be minimal. H.C. Wainwright has reiterated a “Buy” rating for Disc Medicine, projecting a price target of $118 per share.
At the time of publication, Disc Medicine’s stock was up 2.59%, trading at $72.88. Investors are closely monitoring the situation as the FDA’s decision date approaches, with many hoping for a favorable outcome that could significantly impact the company and its stakeholders.
As the review process continues, the focus remains on the potential of bitopertin to provide relief for those suffering from erythropoietic protoporphyria, a condition that currently lacks effective treatment options.
