Shares of Neumora Therapeutics fell Monday after the company disclosed a small clinical trial testing one of its experimental medicines for schizophrenia has been halted by the Food and Drug Administration.
According to Neumora, the hold comes on the heels of new data from animal testing that found rabbits convulsed after receiving the medicine, which is codenamed NMRA-266. The company noted that, in the now-paused Phase 1 trial, researchers have dosed around 30 people and seen no evidence of convulsions.
Neumora said it’s working with the FDA to resolve the hold. But with discussions ongoing, the company warned that any prior guidance regarding NMRA-266 is “no longer applicable.” Neumora plans to provide an update on on the program “when available.”
“We are disappointed with the unanticipated safety findings in rabbits and are discussing next steps with the FDA,” said CEO Henry Gosebruch in a statement. “In parallel, we’re continuing to make significant progress across the rest of our portfolio as we seek to fulfill our mission to develop medicines for serious brain diseases.”
Founded in 2019, Neumora spent two years building a drug discovery and development platform that it claims can crack one of the most challenging areas of pharmaceutical research: brain disorders. The Massachusetts-based company officially launched in 2021 with $500 million in funding, then brought in another $250 million last year through an initial public offering.
Neumora’s most advanced medicine, called navacaprant, is in development as a possible treatment for depression. A late-stage study evaluating it in patients with major depression should produce high-level results later this year, while a mid-stage study focused on bipolar depression is set to kick off before the end of June.
Right behind those programs is NMRA-266, which Neumora designed to regulate a specific member of a protein family known as “muscarinic receptors.”
These proteins are involved with the release of a neurotransmitter vital to brain function, and their potential to treat psychotic conditions has attracted considerable attention and investment over the past few years. The two companies at the forefront of muscarinic research, Karuna Therapeutics and Cerevel Therapeutics, each received multibillion-dollar takeover bids in December. Karuna’s “KarXT” therapy could be approved in schizophrenia before the end of September, making available for the first time in decades a new form of antipsychotic.
Following those deal announcements, Stifel analyst Paul Matteis said it’s “definitely possible” dealmakers could take a greater interest in Neumora as well as Neurocrine Biosciences and MapLight Therapeutics — two other developers targeting muscarinic receptors.
It’s not yet clear how a clinical hold will affect the perception of NMRA-266. Neumora shareholders didn’t take the news well, however, as the company’s stock price dipped by as much as 15% Monday morning. Shares traded below $12 apiece, or about one-third less than when Neumora went public.
In a note to clients, Matteis described the hold as a “surprising announcement” that raises questions about the viability of Neumora’s drug.
“[F]rom the investor perspective the situation here is largely unvettable, and for the stock ... the prospects of '266 (or other back-up compounds) will be heavily discounted for the time being,” he wrote.
Neumora has another experimental medicine for schizophrenia, though it’s in preclinical testing and targets a different protein tied to memory, learning and psychosis.