Bell Potter new target of $17, report from a couple of days ago,...

Bell Potter new target of $17, report from a couple of days ago, in case you've not seen. This is an excerpt....

"Strong first quarter of DAYBUETM sales
Acadia announced first commercial sales of DAYBUETM in mid-April. Within 10 weeks Acadia has reported Q2 sales of US$21m-$23m and provided Q3 guidance of US$45m-$55m – a significant beat of previous analyst consensus (Q2 US$2.5m, Q3 US$7.5m). Note the annual net realised cost of treatment is US$375k. Factoring for potentially lower initial dosing due to patient size and the gastrointestinal management plan, this implies there are at least 200 patients already on treatment. Q3 guidance would suggest Acadia estimates 450+ patients will be on therapy by this stage. Note there are at least 4,500 patients with Rett Syndrome in the US and ~ 20% of patients have insurance coverage for DAYBUETM. The remainder of patients are accessing treatment through medical exemption/letter of necessity process through insurers or via Medicaid pathways.

Acadia strengthens partnership with Neuren
Following the successful commercial launch, Acadia has expanded its licensing agreement to include ROW territories for trofinetide. This agreement includes US$100m upfront payment to Neuren with a further US$35m and US$15m for first commercial sales in Europe and Japan respectively. Further tiered royalties (mid-teens to low-20s) and US$363m will be potentially payable to Neuren. Acadia has also secured the exclusive global license for NNZ-2591 in Rett and Fragile X Syndrome with the identical milestone/royalty structure as the trofinetide agreement.

Investment View:
Maintain Buy, PT increased to $17.00We maintain our Buy recommendation and increase our target price to $17.00. This has been driven by assumptions of greater patient adoption of DAYBUETM and additional milestone payments from the expanded licensing agreement. Guidance for Q3 already indicates US$200m annual run-rate for DAYBUETM and we expect continued acceleration with subsequent royalty payments flowing straight to the bottom line for Neuren. Further potential catalysts include NNZ-2591 phase 2 study developments with top-line results in Phelan McDermid expected in December 2023."