Tonix Pharmaceuticals (NASDAQ:TNXP) is up 22% today on news that the U.S. Food and Drug Administration has cleared its treatment for chronic migraine headaches to proceed with a Phase 2 clinical trial.

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The FDA clearance of Tonix’s migraine drug, called TNX-1900, is welcome news for the tiny company based in Chatham, New Jersey. Prior to today’s move higher, TNXP stock had fallen 60% over the past six months to 47 cents a share.

Adding to the good news, Tonix says it should be eligible for the 505(b)(2) pathway at the FDA, a process designed to expedite the approval of certain drugs. While the company’s migraine treatment still has several regulatory hurdles to clear, this latest news is an encouraging sign for Tonix and its stock.

What Happened With TNXP Stock

Tonix Pharmaceuticals’ migraine headache treatment was initially developed at Stanford University. It is based on the compound Oxytocin that is a naturally occurring human hormone. Oxytocin has no addiction potential, according to the company, but has been proven to lessen the duration and severity of migraine headaches. Tonix’s TNX-1900, is delivered to people trough a spray administered in the nose. The FDA approval for Tonix to now begin Phase 2 clinical trials is a big step toward getting the medication approved and commercially available in the U.S.

“We are excited to have received the FDA’s clearance to begin clinical trials,” said Dr. Seth Lederman, President and Chief Executive of Tonix, in a news release.

That TNX-1900 may also qualify for the FDA’s expedited approval process is also good news for Tonix. The 505 (b)(2) pathway provides manufacturers who have certain types of drugs with an opportunity to acquire FDA approval without having to perform all of the typical tests. Often, the 505 (b)(2) clearance is reserved for generic medications that are not entirely new. This makes perfect sense then for Tonix.

Why? Tonix Pharmaceuticals says that its focus is on developing “repurposed drugs” that involve taking existing drugs and using them for new therapeutic purposes.  

Why It Matters

A clear pathway to approval of TNX-1900 is great news for Tonix Pharmaceuticals as the migraine medication is the company’s primary drug candidate and there is a huge potential market for treating migraines.

A migraine headache is a neurological condition that is characterized by throbbing headaches that last four hours or longer. The headaches can lead to nausea, vomiting and sensitivity to bright light and loud noises. Tonix Pharmaceuticals says that as many as 1.2 billion people around the world suffer from migraines each year.

In the United States, approximately 39 million Americans suffer from migraines, with 4 million people experiencing what are known as “chronic migraines.” Chronic migraines involve 15 or more headache days each month. If Tonix Pharmaceuticals’ TNX-1900 medication is approved, it could help boost the company’s sales and enable it to move forward with other medications in its pipeline.

Formed in 2011, Tonix Pharmaceutical is focused on developing therapeutics for patients suffering from chronic conditions, primarily having to do with the central nervous system. The company had announced that it is developing a Covid-19 vaccine, but it has yet to begin testing any such medication.

What’s Next for Tonix Pharmaceuticals

While TNXP stock will get a nice jump today, the company needs to follow through on the FDA approval and get TNX-1900 into clinical trials. From there, the results need to be positive.

While the FDA clearance is an important step in the right direction, Tonix Pharmaceuticals still has a long road to travel before consumers are able to purchase its migraine treatment. Investors should keep this in mind, along with the fact that Tonix Pharmaceuticals is a penny stock that has struggled mightily this year in volatile trading. Until the company manages to successfully bring a prescription drug to market, that volatility is likely to continue.