From Scott Power - Morgans Senior Analyst Neuren selloff a...

From Scott Power - Morgans Senior Analyst


Neuren selloff a ‘complete overreaction’

2023 sector market darling Neuren Pharmaceuticals (ASX:NEU) fell 4% in trade on Thursday (11% in morning trade before recovering) after reporting a Q1 CY24 earnings update by its US partner Acadia Pharmaceuticals (NASDAQ: ACAD).

Net sales of NEU’s lead drug DAYBUE (trofinetide) drug to treat Rett Syndrome in the US came in at US$75.9m, below its guidance of US$76 to US$82m, and below the Q4 2023 sales of US$87.1m.

NEU put the decline down to some seasonal effects, including refills due in January actioned in December prior to the holidays, and reduced Rett clinic days in January.

Plus, the company says more patients bailed on treatment during Q1 after a surge of new patients in previous quarters.

But NEU says it’s seeing new patients hopping back on board, with numbers climbing in the last six weeks.

About 25% of the 5,000 diagnosed Rett syndrome patients in the US have commenced therapy. Furthermore, 58% are still on board after nine months of treatment, which is 10% higher than in clinical trials.

Anticipated payments to NEU for DAYBUE include:

• Q1 2024 royalties of $11.6m
• Full-year 2024 royalties of between $61m and $70m plus sales milestone revenue of $77m

Acadia have reiterated the full-year 2024 guidance for net sales of between US$370m and US$420m

NEU became the market darling of the biotech sector in 2023 with its share price rising more than 200% during the year after receiving US FDA clearance for trofinetide to treat Rett Syndrome in adult and paediatric patients two years of age and older.

Power says the share sell-off of NEU on Thursday was “a complete overreaction” and presented a buying opportunity.

“Their marketing partner in the US Acadia reported their quarterly results which were in line with what the market was expecting and they’ve reconfirmed their full year guidance but despite that the market just slammed it down,” he says.

“We see it as a pretty good buying opportunity.”

NEU is due to report results for its Phase 2 clinical trial for Pitt Hopkins before the end of this quarter.