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Update 2 July, 2020: After this story was published, Alterity Therapeutics announced the proposed issue of more than 47.6 million shares at around 3.3 cents each. ATH shares then plunged from close to 40 cents each down to 15 cents before the market closed, and on the morning of 2 July they dropped a further 54 per cent down to 7.6 cents each.
Shares in Melbourne-headquartered Alterity Therapeutics (ASX: ATH, NASDAQ: ATHE) surged 1,782 per cent this morning as a delayed reaction to an agreement with the US Food and Drug Administration (FDA).
The announcement yesterday related to Alterity's lead compound ATH434 for treating the Parkinsonian disorder multiple system atrophy (MSA), a condition that currently has no approved treatments.
Following a successful Phase 1 clinical trial last year and data analysis, Alterity recently reached an agreement with the FDA on the non-clinical investigations required to support a Phase 2 study.
The regulator is also amenable to Alterity's proposed patient population, safety monitoring plan, and strategy for evaluating drug exposure.
The FDA has also encouraged Alterity to utilise data from a natural history study that is planned with clinical and neuroimaging experts at Vanderbilt University Medical Center in Nashville, Tennessee.
The company also announced it was pursuing a regulatory pathway in Europe and Australia, with planning already underway to meet with European authorities.
"The FDA clearly recognizes the seriousness of MSA and the need for new treatments to address this devastating Orphan disease," Alterity chief medical officer David Stamler said.
"Our pre-IND meeting was very collegial, and I look forward to again collaborating with the Division of Neurology to determine the best development path for ATH434 in the US.
"With the information obtained from this meeting, we have a clear path forward for conducting our Phase 2 study in MSA."
Shares in the company, formerly known as Prana Biotechnology and co-founded by its current CEO and chairman Geoffrey Kempler, barely budged when this breakthrough was announced.
But overnight, traders in the US appeared to see greater significance and ATHE shares rose 103.4 per cent on the NASDAQ to US$1.19 each.
The Australian share market reaction then went into overdrive this morning as the market capitalisation of Alterity ballooned from $17.64 million to $332.8 million before a pause in trading was called at 11:21 AEST.
Kempler is also the non-executive chairman of Opthea (ASX: OPT), a company valued at $676 million that specialises in the treatment of retinal eye diseases.
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