CervoMed’s stock rises as FDA grants orphan drug status to dementia drug

The US Food and Drug Administration (FDA) has granted orphan drug designation to CervoMed’s lead investigational therapy neflamapimod for the treatment of frontotemporal dementia, a rare neurodegenerative disease.

Following the announcement, CervoMed’s stock price rose by 14.6%, climbing from $7.98 at the market close on 26 November to $9.15 at the close of trading on 27 November.

While neflamapimod’s orphan designation is specific to frontotemporal dementia, the drug is currently being studied in treating early-stage dementia with Lewy bodies. The ongoing RewinD-LB Phase IIb study (NCT05869669) is evaluating the oral therapy in 159 patients with early-stage Lewy body dementia, with topline results expected next month.

CervoMed’s CEO John Alam noted that the company anticipates advancing neflamapimod to a Phase III trial in mid-2025, with data readout and regulatory submission targeted for 2027 , assuming positive topline results in the RewinD-LB trial.

In earlier trials, neflamapimod demonstrated promising results. In the AscenD-LB Phase IIa trial (NCT04001517), the drug candidate improved clinical dementia severity scores – assessed by clinical dementia rating sum-of-boxes (CDR-SB) – and functional mobility, as measured using the timed up and go test (TUG), compared to placebo. Notably, patients with early-stage Lewy body dementia without tau pathology showed a strong response.

The FDA’s orphan drug designation offers financial incentives to developers for rare diseases, including tax credits for clinical trial costs, a waiver of marketing application fees, and seven years of US market exclusivity upon approval.

While there are approved treatments such as acetylcholinesterase inhibitors to help symptoms of Lewy body dementia, there are no approved treatments that target the cause of the condition. Neflamapimod is an oral p38MAP kinase alpha (p38a) inhibitor that has the potential to treat synaptic dysfunction. It is the reversible aspect of the underlying neurodegenerative processes in dementia with Lewy bodies.

Frontotemporal dementia – which affects fewer than 200,000 people in the US – also currently has no approved treatments.

“We are pleased to have received orphan drug designation as it implicitly recognises the scientific rationale and potential for neflamapimod to treat this debilitating condition,” said Alam. He emphasised the heavy burden the disease places on patients and caregivers.

CervoMed’s progress has been supported by a robust financial foundation. In March 2024, the company secured up to $149.4m in private placement funding led by RA Capital Management, with participation from Armistice Capital, Special Situations Funds and Soleus Capital. These funds are expected to facilitate the ongoing and future clinical development of neflamapimod.