In major news on Australian stocks, shares of Neuren Pharmaceuticals Limited (AU:NEU) plunged 10.8% as the 30% jump in the Q4 U.S. sales of the company’s Rett syndrome drug Daybue failed to impress investors. Daybue’s U.S. net sales reached $87.1 million, up from $66.9 million in the previous quarter. The company’s U.S. partner, Acadia Pharmaceuticals (NASDAQ:ACAD), released the figures in its 2023 results. It expects Daybue’s FY24 net sales to be between $370 million and $420 million.
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Daybue (trofinetide) was launched in the U.S. in 2023, with Neuren licensing its distribution to Acadia. The drug is used to treat a rare genetic neurological disorder, Rett syndrome.
The Impact of Short Seller Report
Although the sales growth of Daybue is robust, it seems to have missed expectations, leading to apprehension among investors. Notably, concerns stemming from short seller Culper Research’s recent report likely contributed to the sell-off.
Earlier this month, Culper alleged that Acadia misrepresented the safety and patient retention rates of Daybue. Neuren, however, issued a statement countering the accusations and reassuring the market. However, it appears that the response did not quell concerns as much as expected.
The anticipated royalties for Neuren are AU$12.8 million for the fourth quarter of 2023, compared to AU$10.4 in Q3 2023. For the full year 2023, the expected royalties are AU$26.87 million. It is projected that royalties for 2024 will be in the range of AU$61 million to AU$70 million.
Despite the recent slump, NEU stock has grown by a huge 155% in the last 12 months.
Is Neuren a Good Buy?
Speaking of the share price growth, analysts are highly optimistic about Neuren’s prospects and have rated the stock a Strong Buy. According to TipRanks’ rating consensus, NEU stock has received three Buy recommendations. The Neuren share price forecast is AU$28.78, indicating an upside of almost 50% from the current levels.
