Neuren Media and Analyst Coverage, page-1355

However, the success of giants such as CSL has cemented Australia’s reputation as a breeding ground for successful biotechnology companies. The challenge is sorting the winners from the losers.

Carving out a niche developing applications used to treat rare diseases is a credible starting point, fund managers say.

One example is Neuren Pharmaceuticals, which has increased its market value by almost six times in five years after successfully bringing to market a drug called Daybue to treat the cognitive disorder Rett syndrome, a genetic brain disorder. It has also recorded positive Phase 2 clinical trial results for its drug to treat the cognitive disorder Phelan-McDermid syndrome in children.

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BOTBotanix Pharmaceuticals

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“Neuren has been successful as a rare disease company. The benefits for Australian companies is their clinical trials are far less expensive, and you can expedite clinical trials to get the assets to market,” says Rory Hunter, a portfolio manager of SG Hiscock’s Medical Technology Fund.

“It is very hard for an Australian company listed on the ASX to go after a blockbuster application because they need hundreds of millions if not billions invested in clinical trials.”

However, the stock has fallen out of favour this year, slipping 43 per cent, after a strong run in 2022 and 2023. Many see it as a buying opportunity.

Hashan De Silva, the managing partner of biotech investment fund KP Rx, says: “In the short term, the share price might continue to struggle if sales growth in the US slows and if Acadia, Neuren’s commercial partner, is slow to launch in other markets.

“That said, the real driver of value longer term is going to be Neuren’s pipeline drug, NNZ-2591, which has generated very strong data in early Phase 2a trials.”