Why Shares of Ignyta Are Trading Higher

Shares of Ignyta Inc RXDX were trading higher by more than 6 percent during Monday's pre-market session after the company announced that the FDA designated its entrectinib, a lead product candidate an Orphan Drug for the treatment of neuroblastoma.

The FDA grants Orphan Drug Designation to novel drugs or biologics that treat rate diseases or conditions that affect fewer than 200,000 patients in the United States. The designation allows the drug developer to be eligible for a seven-year period of U.S. marketing exclusivity upon final approval of the drug.

"We are pleased that the FDA has provided us these designations, which highlight the potential for entrectinib to address unmet needs of patients with rare cancers," said Jonathan Lim, M.D., Chairman and CEO of Ignyta in a press release. "Although Ignyta is intrinsically motivated to continue to aggressively pursue our clinical development program for entrectinib in solid tumors for the benefit of adult and pediatric cancer patients everywhere, we are pleased that the incentives provided by these designations including the potential for seven years of marketing exclusivity and the potential to obtain a valuable Pediatric Disease Priority Review Voucher from the FDA can potentially provide additional avenues for creating value for our stockholders."