Biotech stocks Disc Medicine and Revolution Medicines jumped Friday after the duo received some of the first Commissioner's National Priority Review vouchers.
The new program from the Food and Drug Administration aims to shorten the review period for an experimental therapy to just one to two months. Typical review periods span six to 10 months. In total, the agency selected nine companies to receive the first batch of CNPVs.
"On the backdrop of the XBI's recent strength (+15% MoM), visibility toward lower rates, the MFN overhang reducing somewhat, and M&A picking back up, we think Thursday's announcement can further reduce regulatory risk for innovative biotech, and fuel continued appreciation across the sector," RBC Capital Markets analysts wrote in a report.
Shares of Disc Medicine surged 21%, closing at 89.94, while Revolution Medicine stock rose 8.9% to 54.10. Small biotech stock Achieve Life Sciences, which also received a CNPV, popped 36.4% to 4.20.
Disc Medicine's Sun Sensitivity Drug
Disc Medicine received the CNPV for its lead program, bitopertin. Watertown, Mass.-based Disc is developing bitopertin as a treatment for erythropoietic protoporphyria, an inherited blood condition that causes painful, non-blistering sun sensitivity. The company submitted its request for approval in September.
The CNPV recognizes "both the quality of the data generated to date and the substantial unmet medical need for a disease-modifying therapy for EPP patients," Leerink Partners analyst Thomas Smith said in a note to clients.
The expedited timeline could see bitopertin approved in 2025 vs. expectations for 2026. Smith boosted his price target on the biotech stock to 100 from 85. He now sees a 95% chance bitopertin wins FDA approval, up from 70% previously.
"We remain encouraged by IRON's continued clinical and regulatory execution, as evidenced by bito's streamlined regulatory path in EPP that we expect will accelerate time to commercialization while unlocking meaningful value for IRON shares," he said.
Cancer Drug From Revolution Medicines
Revolution Medicines won a CNPV for its pancreatic cancer treatment. This could push the launch date to Jan. 1, 2027, up from previous expectations for March 1, 2027, Wedbush analyst Robert Driscoll said in a client note.
Recent tests show Revolution's drug, daraxonrasib, outperformed historical benchmarks in leading to improvement in median overall survival. Overall survival measures how long patients live before dying of any cause.
"Daraxonrasib was one of just nine drugs to receive the grant (nominated by the FDA), and the only oncology drug to do so, which we believe is validating of its potential ahead of regulatory discussions and commercialization," Driscoll said.
He rates the biotech stock an outperform with a 77 price target.
Other notable recipients include Regeneron Pharmaceuticals for its gene therapy for an inherited form of deafness and Achieve for its smoking cessation drug.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
