NEU (ASX) Share Price

Originally posted by Kjt1969: ↑

I'm not a big one for conspiracy theories. However, there is certainly some food for thought here.

There's no question in my mind that the positive Ph 2 results for Pitt-Hopkins were a big deal. One positive Ph II might be good luck, but 2 out of 2 with not just positive but super strong results (check out those low p values!) really validates the platform drug concept. I'd think a 'platform drug' could be worth 10x a single-indication drug like Reata's Skyclarys. With such good results so far, who would be betting against the Angelman results? These are barely a few months away - at which point, if Neuren also releases positive pre-clinical studies for another half-a-dozen indications, well - its all wrapped up with a nice bow for a TO. And you'd have to agree that if the Angelman results are positive the Prader-Willi trial is probably irrelevant...

Every valuation I've done shows Neuren hugely undervalued. So I was thinking the second Ph II results would finally remove remaining much of the remaining uncertainty and risks re NNZ-2591. Does it really have the potential we think it might? The answer to that question was strongly reinforced with last week's results as almost certainly yes.

Monday trading was good, but not huge. However, it was still the weekend in the US. It would be a few days before US investors got back to work and digested the results. Once they did - surely the smart money would come flooding in?

In fact, once the US woke up we appear to have had the opposite - a big drop on strong volume - back to where the share price was before the results. So Neuren was worth $25 on one positive Ph II, it's now worth less on based on two positive Ph IIs?

At the same time Acadia has been plunging to its lowest price in years. Close to being back to where they were in 2013 11 years ago. The positive news on NNZ-2591 should be good news for Acadia too. They have the rights to NNZ-2591 for Retts and Fragile-X, which they could make alot of $ from.

Over the last couple of years Acadia has almost doubled its revenue from $441m in 2020 to a current TTM of $814m. They've also gone from a loss of $283m in 2020 to a TTM EBITDA of $6m. So they're finally profitable. Any which way you look at it, this is a huge improvement for Acadia. But looking at their last couple of years share price you'd never know they'd successfully launched a new drug and dramatically improved their financials. Instead they're hitting fresh lows. Sure the Daybue sales came in at bottom of forecast, but any which way you look at it Daybue is doing OK.

I've always thought the obvious goal for any acquirer would be to take out both Acadia and Neuren together. This gives you unfettered world rights to NNZ-2591 as well as Acadia's clear experience now in neurodevelopment trials & patient support.

So is it a coincidence that just as we're getting to the pointy end of validating NNZ-2591 as a highly valuable platform play that the share prices of the parties standing to benefit most from this, Acadia and Neuren, have both been heading downwards despite both companies fundamentals moving strongly upwards?

DCF modelling, multiples of peak sales, and comparable deals suggest NNZ-2591 worldwide rights (i.e. Acadia + Neuren) should be worth at least US$20 billion and if you add in the platform play possibilities you're talking about US$30-$50 billion. NNZ-2591 is not approved yet, but as I've posted in the past, the risks of Ph III are overblown. NNZ-2591 probably has better than 75% chance of Ph 3 approval based on current data and historical averages.

So there are many $billions of profits at stake here potentially. Considering how large this could be, could it make good sense for someone (US based?) to spend $50-$100 million of chump change (relatively speaking) to soften up Acadia and Neuren for some coming TO offers?

Expand

I tend to agree yesterday's price action was not just profit taking as I have seen suggested.

Any institution wishing to exit a sizeable position will do it gradually using algos so as not to unnecessarily depress their exit price. Yesterday was not that - it was a short attack designed to depress the SP in the absence of a fundamental reason (that we know of).

Shenanigans are afoot already.

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(20min delay)
Last $20.10		Change -0.620(2.99%)		Mkt cap ! $2.569B

Open	High	Low	Value	Volume
$20.41	$20.45	$19.92	$5.947M	296.0K

I tend to agree yesterday's price action was not just profit...

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I tend to agree yesterday's price action was not just profit...

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