The science behind the therapy that catapulted a biopharma’s stock 1,400% and counting

Biopharmaceutical company Spruce Biosciences’s stock surged almost 1,400% to $130.40 the day it announced FDA breakthrough therapy device designation for its rare disease drug.

That was on Oct. 6. Since then, the late-stage startup has announced $50 million in private financing, with its stock peaking at $240 on Oct. 7.

For comparison, a 2025 meta-analysis found stock prices on average increase 5.8% after breakthrough therapy designations, which speed up the drug development and review process for potentially transformative drugs.

Of course, investors and scientists’ opinions don’t always line up. Take simufilam, an ultimately failed Alzheimer’s drug that attracted investor attention and millions of funding, catapulting creator Cassava Sciences to a valuation of $5 billion in 2021, even while scientists questioned its evidence.

In this case, however, preliminary data has scientists feeling optimistic—with caveats.

The details. The therapy, tralesinidase alfa enzyme replacement therapy (TA-ERT), treats Sanfilippo syndrome type B, a rare fatal disease with no available cure, with doses weekly or biweekly.

This syndrome occurs when babies are born without an enzyme that breaks down a specific sugar, which then accumulates to a toxic level, leading to childhood dementia and death, according to nonprofit the Cure Sanfilippo Foundation.

Preliminary results published on Spruce Biosciences’s website in August suggest its therapy reduced this sugar to “normal or near-normal” levels over a five-year span in cerebral spinal fluid by artificially replicating that missing enzyme.

Patricia Dickson, professor and chief of the division of genetics and genomic medicine at Washington University School of Medicine in St. Louis, told us these results suggest the drug is working.

“I think this is the best thing that is in the pipeline [for this disease],” Dickson told us. “It’s a very promising therapy.”

Ifs and buts. The drug also appeared to stop cognitive decline, according to the preliminary results, though patients didn’t seem to progress past the toddler-level cognition they had when they started treatment.

However, Rita Redberg, a cardiologist and professor of medicine at the University of California, San Francisco, who researches drug and medical device regulation, told Healthcare Brew via email she feels this data is “weak and preliminary.”

This data is not from a double-blind randomized controlled trial, she said, which is considered the most rigorous way to determine a cause-and-effect relationship. Instead, Spruce Biosciences’s research compared treated patients to untreated patients whose disease progression was tracked in a natural history study.

Though some earlier clinical data has been peer reviewed, the full August data has not, and there isn’t a public timeline for when that might happen yet, Spruce Biosciences President and CFO Samir Gharib told Healthcare Brew via email.

Kim Hemsley, head of the childhood dementia research group at Australia-based Flinders Health and Medical Research Institute at Flinders University, told Healthcare Brew via email that she believes double-blind randomized controlled trials are “unethical” for rapidly progressing childhood dementia-causing disorders. In instances like this, she added, when the disease’s typical progression is well documented and predictable, there’s a very short window to intervene, and children might miss it if they’re part of an untreated control group.

A 2023 review in journal Frontiers of Neurology notes natural history studies can be used as control cohorts when a placebo-controlled study would be “difficult or unethical.”

The future. Before this upturn, Spruce Biosciences was struggling. After multiple drugs for rare endocrine disorders had failed, the company laid off over half its staff in April—an estimated $1 million expense.

Now, according to an Oct. 6 press release, the company plans to submit a biologics license application—a request to the FDA for permission to start marketing the drug—in Q1 2026.

An Oct. 6 report from investment banking firm Jefferies found about 72% of treatments that have gotten breakthrough therapy designation since 2013 eventually get FDA approval.

“On the basis of the data obtained thus far, I sincerely hope TA-ERT advances under the accelerated approval pathway,” Hemsley said.