Neuren Pharmaceuticals (NEU: $16.50) has received some pleasing news from the European drug regulator the EMA. The CHMP (part of the EMA) has recommended DAYBU (called DAYBUE outside of Europe) be granted approval for the treatment of Rett syndrome. The drug was approved in the US in March 2023.
If the EMA does act on the recommendation of the CHMP and grants approval in Europe, Neuren will receive a US$35 million payment from its partner Acadia Pharmaceuticals (upon first commercial sale) as well as royalties from net sales (ranging from mid teens to just over 20%). Sales-based milestones are also applicable and can reach US$170 million.
The decision is a surprise following the 'negative trend vote' delivered by the CHMP in February this year. Neuren CEO Jon Pilcher had previously said that the chances of reversing the decision lay between 20%-30% based on historical results. A final decision from the EMA is expected in the coming months.
In the US, DAYBUE sales are growing at 20% a year and tracking at US$400 million based on the March quarter sales figures. If annual sales pass US$500 million in the US, then Neuren will be entitled to a further US$50 million milestone payment from Acadia.
The short positions in Neuren have fallen from 5.94% before the announcement to 4.90% (most available date as of 7 July).
Bioshares recommendation: Buy
Disclaimer:
Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressed represent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may have interests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s or company’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe the information herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Details contained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. The Directors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: Analyst MP: 1AD, ACR, AVR, CGS, CUV, CYC, DXB, IMM, LBT, MX1, OPT, NEU, PAB, PXS,RNO,SOM. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.
