Shares of PhaseRx Inc. (NASDAQ: PZRX) more than doubled on Monday after the company announced that it received a key U.S. Food and Drug Administration (FDA) approval. The company announced that its lead candidate, PRX-OTC, which is being developed for the treatment of ornithine transcarbamylase deficiency (OTCD), has received orphan drug designation by FDA.

The FDA grants orphan drug designation to investigational drugs and biologics that are intended for the treatment of rare diseases that affect fewer than 200,000 people in the United States. The idea behind the Orphan drug status is to facilitate drug development for rare diseases that may provide several benefits to drug developers, including assistance with clinical study design and drug development, tax credits for qualified clinical trials costs, exemptions from certain FDA application fees, and seven years of market exclusivity upon regulatory product approval.

For some background, OTCD is a rare liver disorder caused by an inherited single-gene deficiency that results in hyperammonemia (elevated ammonia in the blood) and can lead to irreversible neurological impairment, coma and death. PRX-OTC is an intracellular enzyme replacement therapy (i-ERT) designed to replace the missing or defective enzyme in patients with OTCD, thereby correcting the disease.

PRX-OTC has shown therapeutic potential in a preclinical model of OTCD, including lowering of blood ammonia and survival of 100% of treated mice.

Robert W. Overell, Ph.D., president and CEO, commented:

The FDA’s decision to grant PRX-OTC orphan drug designation for OTCD is another important milestone in the development of our lead product candidate, as we prepare to file the IND by the end of 2017 and initiate our clinical trial in 2018. PRX-OTC is the first of three drugs in development using our Hybrid mRNA Technology, and we believe it has the potential to correct the disease in children, a population that could particularly benefit from treatment for this rare disease. Our team at PhaseRx is driving hard to advance these drugs to help the lives of families affected by this devastating liver disease that causes irreversible brain damage and potentially fatal ammonia toxicity.

Shares of PhaseRx were last seen up roughly 107% at $2.35 on Monday, with a consensus analyst price target of $10.00 and a post-IPO trading range of $0.95 to $5.77.

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