Acadia Pharmaceuticals Inc. (NASDAQ:ACAD) will request a re-examination of a negative opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) on its marketing application for trofinetide in Rett syndrome — a move that keeps the door open, but prolongs uncertainty.
The CHMP has formally adopted its refusal, confirming an earlier trend vote. Acadia on Tuesday said it has reviewed the grounds for refusal and intends to trigger the re-examination process, a mechanism that allows companies to challenge and address specific concerns raised by regulators.
For Australia’s Neuren Pharmaceuticals Ltd (ASX:NEU), which licensed trofinetide to Acadia, the development extends what has already been a volatile stretch.
Neuren shares were down 8.5% on Tuesday to A$12.60, leaving the stock 14% lower over the past month, though still modestly higher over the past week. In the US, Acadia fell 7.1% to US$22.81, down nearly 8% over the month.
Why Europe said no — for now
Trofinetide, marketed as DAYBUE in the US, is approved in the United States, Canada and Israel as the first and only treatment for Rett syndrome, a rare neurodevelopmental disorder that primarily affects girls.
The pivotal LAVENDER trial met its co-primary and key secondary endpoints. However, according to Acadia and Neuren, the CHMP’s refusal centred on several perceived deficits:
- The magnitude of treatment effect at 12 weeks, while measurable, was viewed as limited.
- The study did not capture all core symptoms of Rett syndrome.
- Longer-term outcomes were complicated by patient discontinuations over time.
Acadia CEO Catherine Owen Adams said the company remains “encouraged by the meaningful benefits trofinetide has demonstrated” and is committed to working constructively with EU regulators.
Neuren CEO Jon Pilcher added that the company “fully supports a re-examination” and pointed to the ongoing unmet need in Europe.
Regulatory fault lines emerge
This latest chapter underscores a theme familiar to biotech investors: the divergence that can emerge between regulatory jurisdictions.
Trofinetide secured approval from the US Food and Drug Administration in 2023, marking a landmark moment for the Rett community and for Neuren, whose royalty stream and milestones are tied to commercial success.
Europe, however, has taken a more cautious stance. The CHMP’s concerns appear to focus less on statistical success and more on clinical meaningfulness and durability — a distinction that can carry significant weight in rare disease settings, where trial design is often constrained by small patient populations and heterogeneous symptoms.
The re-examination process does not guarantee a different outcome, but it does provide an opportunity for Acadia to respond directly to the CHMP’s objections. Timelines can extend several months.
For Neuren investors, the key variables remain unchanged: continued US commercial performance, potential expansion into additional markets, and progress across the broader pipeline, including NNZ-2591 programs in multiple neurodevelopmental disorders.
Market mood and the longer view
The immediate share price reaction reflects the market’s sensitivity to regulatory risk. Biotech valuations often hinge on binary events. When those events stretch into drawn-out review processes, volatility tends to follow.
Europe represents a meaningful commercial opportunity for trofinetide, particularly given the chronic, lifelong nature of Rett syndrome and the lack of alternative disease-specific therapies. At the same time, the product is already generating revenue in the US, where it has been on the market for nearly three years.
The focus now turns to how the re-examination unfolds and whether Acadia can sufficiently address the CHMP’s concerns around clinical impact and longer-term data. The process introduces more time — and more uncertainty — into the European pathway.
For investors, the key question is whether this becomes a temporary regulatory hurdle or a more structural barrier to approval in the region.