Canaccord report
1Q24 Daybue sales in line, guidance maintainedInvestment Recommendation Daybue distributor Acadia (ACAD-NASDAQ) reported its 1Q24 result, in line with expectations and maintaining guidance. The market reacted negatively to the result, despite being in line with our numbers and guidance being maintained. A weaker 1Q was already expected and disclosed by ACAD, with the first bolus of discontinuations and lower clinic volumes around the holiday period.
We do not view the sell-off as warranted, especially with maintained FY24 guidance, improved new patient starts over the last six weeks, and persistence data in line with expectations (58% atnine months). Our focus remains on the '2591 data read-outs which could be more material drivers to the stock in the near and medium term.
Result summarisedACAD reported 1Q24 Daybue sales of US$75.9m, a touch below the guidance range of US$76-82m and a slight miss to consensus. 25% of diagnosed Rett patients have been prescribed Daybue, with the company reporting 50% market share in centres of excellence. We like this market share growth in centres of excellence and think higher volume sites and community practices are likely to follow.FY24 guidance was maintained at US$370-420m.
We note the quarterly figure amounts to royalty payments of A$11.6m to NEU, with FY24 royalties of A$61-70m. We also expect Daybue to qualify for its US$50m milestone for sales of US$500m) expected in 2026. NEU remains eligible for a one-third share of the Priority Review Voucher that Acadia received (in the US$33m range), and milestones for commercial launches in international jurisdictions.Daybue update
The Daybue launch has been solid so far, with over 1,000 patients that have started treatment and 862 patients on drug. As the initial cohort of patients started therapy, the first bolus of discontinuations followed, and we believe NEU investors may have been a little bit spooked by the higher discontinuation rate. We see this as a timing issue, with discontinuations following high volume of treatment starts, and expect more stability from here, as Daybue progresses on a linear growth curve.Persistence on drug is a variable given the GI tolerability profile.
Positive experiences with real world usage are coming in and likely to be helpful tools for parents and clinicians who are on the fence about starting treatment. Real world persistency at month nine now sits ~10 points higher than that seen in clinical studies, at 58%. Longer term, the company anticipates persistency at 50%, 10 points higher than that in the LILAC trial.Acadia is progressing well on the international front, with the European Paediatric Investigation Plan filed and accepted by EMA, and filing anticipated in 1Q25, a meeting with the Japanese regulatory agency in 2Q24, and potential Canadian approval in late 2024. No additional clinical trials appear to be necessary at this time. Our forecasts assume a 2026 launch.'2591 remains the key potential catalyst
We have consistently viewed '2591 as the key value driver for the company, with the potential to address a TAM 5x that of Daybue, with better potency and safety. Positive Phelan-McDermid data in December 2023 was very encouraging, with clinical catalysts for Pitt Hopkins expected this quarter, and Angelman in 3Q24. Seeing positive results across multiple indications, all with different underlying mutations, further de-risks the IGF-1 mechanism, in our view,$250m>
no changes to our forecasts, noting our assumptions sit in line with the guidance range. Our BUY rating and $31 price target incorporates $17 share from Daybue, and a risked $14 share for NNZ2591. Our figures indicate upside potential to upwards of $50 on a derisked basis .
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