What happened? Acadiareleased its1Q25 resultforDAYBUE which was...

What happened?

• Acadiareleased its1Q25 resultforDAYBUE which was expected to be softer q/q given seasonality, changes to Medicare and pull forward of sales from Jan’25 into Dec’24.
• DAYBUE 1Q25 sales of $84.6M vs E&Pe of US$93.7M, down 9.7% from our estimate and down 12.5% from 4Q24 of US$96.7M. Compare to consensus (FactSet) of US$88.5M.
• Unique patients of 954 in 1Q25 vs E&Pe of 920, up 3.7% on our estimate and compares to 920 in 4Q24 (We had expected little to no change).
• Discontinuations improved 35% q/q vs a 15% improvement over 4Q24.
• Dosage in the “very high” 60s (%) vs 75% in Dec’24 (which was talked down to low 70s percent). Acadia attributed the change to increased confidence in caregiver titration strategies while suggesting it could be helping with persistency.
• Our estimate of 1Q25 royalties to Neuren was A$15.1M at USD:AUD of 1.61 from US$93.7M of sales. Given the release, we re-calculate this to be A$13.2M in royalties at current spot USD:AUD of 1.56 (image below) with Neuren confirming royalty income of A$13.5M.
• We continue to expect key drivers of unique patients, bottle volumes and net price to improve through the year with FY25 guidance for DAYBUE reiterated.

*Assumes FX (USD:AUD) of 1.56.

Guidancesummary

• Incremental improvements to dosage anticipated (~very high 60s of percent).
• FY25 DAYBUE net sales guidance reaffirmed of US$380M-405M in 2025 (Acadia guidance).
• DAYBUE royalty income of A$62M — A$67M anticipated in 2025 (NEU guidance) vs E&Pe of A$65M (unchanged).
• Starting in Q2, expect DAYBUE net price to increase on a quarter-by-quarter basis.
• First sales in Canada are expected in Q3 2025, pending price negotiations while acknowledging a fluid tariff situation. Net sales from ex-US markets are not included in DAYBUE revenue guidance.
• 2H25 to see impact from Acadia’s increased sales force as it targets patients outside of key centres of excellence.
• Approval of DAYBUE in Europe anticipated in Q1 2026.

• Further expansion into new geographies, including Japan and potentially other jurisdictions.
• Ongoing royalty and milestone revenue growth expected from DAYBUE, especially with enhanced economics outside North America.

E&P Comments

Overall, a mixed result with 1Q25 DAYBUE sales softer than expected (down 9.7% from E&Pe of US$93.7M) although, the outlook is supported by reaffirmed guidance for DAYBUE. Dosage amounts were down ~500bps and broke a three-quarter improvement streak, falling from ~75% in 4Q24 to very high 60s in 1Q25, partly balanced out by expectations that bottle volumes would improve through the year as Acadia expands it customer model and deploy tactics to further broaden HCP engagements. On the positive side, the number of unique patients lifted from 920 to 954 and was ~4% ahead of our estimates with discontinuations showing a 35% improvement q/q from a 15% improvement over 4Q24. The number of patients who have been on treatment for 12 months or longer also lifted ~300bps to 65%, which supports the suggestion that after one year there is very high levels persistency. The important takeaway here is discontinuations are continuing to decline, and this pattern is happening across all cohorts. While no specific numbers on prescriber base were mentioned, management said it had seen a higher number of new scripts from the community ahead of the planned field force expansion, which was encouraging. In regard to tariffs, Acadia said it had “a few” years of inventory on hand for DAYBUE as active pharmaceutical ingredient (API) is made in Canada and US. We note any tariff related impact would likely be a small portion of COGS with Acadia working on shore as much as possible. Elsewhere, questions on the recent Most Favoured Nation drug model were played with a straight bat given the fluidity of the situation, management said they’d worry about approval of DAYBUE in the EU first, noting reimbursement takes some time before assessing any recommendations to come out of the administration.

We would like to again emphasise the current share price of NEU is roughly aligned with our segmental valuation for the existing NEU-ACAD license, for which the core element (i.e. DAYBUE royalties) is now significantly derisked by solid DAYBUE guidance. As such, in our estimation, the non-ACAD-licensed indications for NNZ-2591 are essentially a free ~$7.6/share option.