Over the last two months, there have been some strong price movements in several major and minor biotech stocks. Following a downturn that has lasted almost two years, has the Australian sector finally bottomed?
We reviewed Clinuvel Pharmaceuticals, Dimerix, Imugene, and Neuren.
Neuren Pharmaceuticals (NEU) – Up 56% (up $729 million)
When considering the largest increase in market cap over the last two months, Neuren has been the best performing stock since its low of $10.18 at the end of October. The market value of the company has increased by $729 million.
This improved performance has been primarily driven by strong market progress with the drug DAYBUE for the treatment of Rett syndrome, licensed to Acadia Pharmaceuticals. Sales for DAYBUE for the September quarter were US$67 million, increasing from the inaugural June quarter sales of US$23 million. Previous forecasts by Acadia were for sales of between US$45 - US$55 million for the September quarter.
Neuren expects royalties for this calendar year of between $26 - $28 million. DAYBUE sales are forecasted (by Acadia) to reach US$80 million in the December quarter.
An additional driver of growth is the exceptional licensing deal with Acadia Pharmaceuticals for rest-of-world trofinetide rights. Signed in July, the agreement includes an upfront payment of US$100 million that has already been received.
The third driver for the company is the impending release of Phase II study results for Neuren's second drug candidate, NNZ-2591, building on its encouraging preclinical data. If positive it is poised to further propel the company's growth. That trial is in patients with Phelan-McDermid syndrome.
NNZ-2591 exhibits a significantly enhanced bioavailability compared to trofinetide, granting it a wider therapeutic window. Both are used for the treatment of neurodevelopment disorders.
Bioshares recommendation: Hold
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