Hi TP
Good to see you on the NEU thread. Thanks for your thoughtful post.
As you say, there is nothing new about volatility in the NEU share price – we have seen some big ups and downs before, sometimes in quite a short space of time.
I want to focus on the four downturns in share price referred to in your chart and discussion.
Back in February 2020 a massive fall of 66% from $3 to $1 in just 7 weeks! (i.e. mid-Feb –mid-Apr 2020)- SP was ~$3 at end of Jan 2020
- Lang Walker first tranche sale @$2.50 on 14 Feb 2020
- Lang Walker sale of remaining 14% NEU stake @ $1 in mid-March 2020
- Pandemic declared and international border closures mid-March 2020
- NEU announced it would defer ROW deal to post-Ph 3 on 17 March 2020
- Ph 3 trial halted due to COVID on 24 March 2020.
- ASX All Ords falls 33% from 17 Feb - 23 Mar 2020
Then back down 45% to $1 again in 29 weeks! (May-Nov 2020)- $20m cap raise in late June 2020
- Long period of no news
Then back down 32% from $14.75 to $10 (late July – late Oct 2023)- Share price rose ~$3 to $14.75 following ROW deal announcement mid-July
- $100m upfront received (27/7)
- Half year after-tax profit of A $48m announced for H1 23. (28/8)
- Director (J Basile) purchases A $60,000 of NEU shares on market. (14/09)
- NEU addition to ASX 200 on 18/9 announced on 01/09.
- ASX 200 all Ords falls ~ 7% over same period
Now 40% down in just 7 weeks (i.e. 17 July - 9 Sep 2024)- NEU received rare paediatric disease designation for NNZ-2591 in PMS. If NNZ-2591 is approved in PMS, this is potentially worth US$150m+ to NEU (19/07)
- Q2 24 Daybue sales announced, up from US$75.9m to US$84.6. (07/08)
- FY 24 Daybue sales guidance revised down by ACAD from US$370-420m to US$340 –370m, potentially lowering NEU’s FY 24 licence fee revenue by ~A7m. But this was balanced by positive real world data for Daybue, 46% reduction in discontinuation rate and confirmation of EU filing in Q1 2025
- Announcement of positive Ph2 results for Angelman syndrome – a trifecta for NNZ-2591! (09/08)
- Director (J Basile) purchases A$100,000 of NEU shares on market. (16/08)
- Investor roadshow presentation released (19/08)
- H1 2024 results announced – A$24.3m royalty income; A$8m profit after tax; COH A$213m
- ASX All Ords falls just 1% from 17 July – 9 Sep 2024
I see a significant difference between the two share price downturns seen in 2020 and the two seen since just over a year ago.
The two downturns in 2020, in retrospect, I can understand.
The 32% downturn in shareprice from July to October last year was against a background drop of just 7% in the market and a number of positive announcements. So it makes less sense. The key event here, I believe, was the announcement of NEU’s addition to the ASX200 on 01/09/23.
More concerning, and making even less sense, is the downturn NEU is in at the moment. Down 40% in just 7 weeks against a backdrop drop of just 1% in the market. One modest reduction in guidance on licence revenue for 2024 (perhaps A$7m less over the full year) versus multiple positive announcements.
To me, it's not just overdone, it smells off.
(My apologies that there’s no chart in this post!)
(20min delay)