Neuren Pharmaceuticals continues to build its cash balance as it makes strong progress with its next drug asset under development, NNZ-2591. For 2024, Neuren will receive a total of A$56.2 million in royalties from DAYBUE (trofinetide) sales by Acadia Pharmaceuticals for the treatment of Rett Syndrome. In February, the company indicated it had received the first US$50 million sales milestone payment from Acadia, as well as its one-third of the Priority Review Voucher, which will also be US$50 million (less costs).

The next financial milestone for the company is a one-time US$35 million payout for the first commercial sales of trofinetide in Europe. In January, Acadia filed trofinetide for approval in Europe, with potential approval in the first quarter of next year. Next quarter, Acadia will provide DAYBUE in Europe under a managed access scheme.

While there are around 6,000 diagnosed patients with Rett syndrome in the US, there are at least 9,000 patients in Europe. However, pricing in Europe for pharmaceuticals is generally lower than in the US. Another milestone payment may also be achieved when North American sales eclipse US$500 million, although that is unlikely to occur until the end of 2027 at the earliest.

In 2024, DAYBUE net sales were US$348 million, including US$97 million in the December quarter. The full-year result was at the upper end of Acadia's estimate. For 2025, Acadia is forecasting net sales for DAYBUE of between US$380 million and US$405 million for the US. This guidance excludes Canada, where the product is expected to be launched in the September quarter.

Based on these estimates, Neuren will stand to receive US$62 million to US$67 million in royalties. For sales under US$250 million, Neuren receives a 10% royalty, which increases to 12% for sales between US$250 million and US$500 million. Notably, US market penetration of diagnosed patients has reached approximately 30% in its second year, astonishing even for an orphan drug. Acadia is reinforcing its success by expanding its field force by 30% and launching direct-to-consumer marketing campaigns.

Commercial revenue derived in 2023 and 2024 from Acadia by Neuren totalled US$445 million. For context, DAYBUE's first full-year sales compare favourably to Biogen's neurology orphan drugs (see table).

 

Biogen and Acadia Neurology Orphan Drug Sales

 

Crown Jewel NNZ-2591

Neuren's follow-on compound, NNZ-2591, which may have an even better safety and efficacy profile, has generated positive results in three Phase II studies. The lead indication will be in the treatment of Phelan McDermid syndrome. Next quarter, the company is meeting with the FDA to discuss the Phase III trial endpoints, with consensus already reached with the regulator on other parameters within the study design. Neuren is planning a Phase III study in PMS to begin mid-year.

The company estimates there are around 21,000 individuals with PMS in the US and 28,000 in Europe. Neuren had around US$359 million in cash at the end of 2024. This exists on a pro-forma basis, accounting for milestone payments received from Acadia and Neuren's tax obligation for the December quarter.

Neuren is capitalized at US$1.6 billion. The company commenced a share buyback in November last year for up to US$50 million. To date, just over 1 million shares have been bought back by the company.

NNZ-2591 Recent Phase II Trial Results

Key areas of improvement were similar in all three trials:

• Phelan-McDermid Syndrome: Communication, heavier cognition, socialization
• Pitt Hopkins Syndrome: Communication, social interaction, cognition, motor abilities
• Angelman Syndrome: Communication, behavior, cognition, motor abilities

Bioshares recommendation: Buy

 

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