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What A Gas

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1647

04/11/23

08:47

Post #: 70724587
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Originally posted by Epichemist: ↑

So with 2023 nearing an end Neuren has already reported first half earnings of $48 million and the next half includes the USD100 million up front from Acadia so should reasonably double that in the second half. With shares on issue of 129 million then EPS should be north of $1 for 2023. Now one could say that's all inflated from the milestones but then look ahead to 2024. Conservatively we could expect say USD400 million in sales which would trigger another USD50 million payment plus about USD43 on royalties and quite likely say USD32 million from the PRV so there's USD125 million or at least $190 million which could again have EPS above $1 if a decision to fund phase 3 trials is deferred or outsourced. Going into 2025 you're likely to trigger another USD50 million milestone, maybe even a further USD100 million if Daybue gets to USD750 million that year. Further out ROW comes on board, boosting royalties, possibly going to blockbuster at USD1 billion per annum and triggering additional milestones.

So a scenario with EPS greater than $1 for an extended period looks very reasonable barring a big reversal in the Daybue rollout trend or the emergence of competition which doesn't appear to be a near term likelihood. Now any kind of success with Nnz-2591 would surely highlight major growth potential and justify a PE ratio of 25 or more surely. This future should be very easy to describe once the numbers for the next annual report are set in stone early next year and the outlook for Daybue sales is firmed up even more and PMS phase 2 results are out.

Could a share price below $25 be possible then?? It certainly shouldn't but the market will decide. What would definitely get things rolling though will be genuine takeover offers and I would be shocked if we don't hear of any by mid next year when at least two or more of the phase 2 trials have read out. A company sitting on a pile of cash from an approved drug with a related but potentially superior follow up looking good in the CNS disease space would be irresistible!

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.... well .... if you put it that way!

[Great post. Well done.]

NEU Price at posting: $12.25 Sentiment: Hold Disclosure: Held
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