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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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.
