–3 November 2023–

Neuren  Pharmaceuticals' (NEU: $11.29) partner Acadia Pharmaceuticals has reported a strong second quarter of sales of its drug DAYBUE for Rett syndrome after having been launched in the US in April this year.

Sales totaled US$67 million, up from US$23 million in the June quarter. Sales are expected to grow by at least 19% in the December quarter to over US$80 million. For Neuren this will translate to expected royalties for this calendar year of between $26 - $28 million. The September quarter sales exceeded Acadia's previous expectations of US$45 - US$55 million.

Neuren has reported its second consecutive cashflow quarter, with net cash from operations of $180 million over the last nine months. This included a $146 upfront payment from Acadia for ex-North America rights to the drug for Rett syndrome and Fragile-X syndrome.

At the end of September 800 patients were receiving the Neuren development therapy with 81% of patients remaining on therapy after four months of treatment and label compliance being between 75% - 80%. Around 80% of payors (covered lives) are now reimbursing the treatment, up from 33% in August.

Both doctors and caregivers are reporting meaningful benefit from the treatment according to Acadia with over 500 doctors now prescribing the treatment. The number of scripts written outside of specialty centres has growth to 50%.

Currently Neuren receives a 10% royalty from net sales ($10.4 million for the September quarter). However when annual sales reach US$250 million, Neuren is eligible for its next milestone payment of US$50 million, and its royalty rate increases to 12% for sales exceeding US$250 million. Neuren is also entitled to one third from proceeds of the sale of the Rare Pediatric Disease Priority Review Voucher, which should see Neuren receive an additional US$33 million.

Neuren is capitalised at $1.5 billion with $230 million in cash at the end of September.

 

Bioshares recommendation: Hold

 

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