The ASX-listed shares of Neuren Pharmaceuticals (ASX:NEU) plunged over 14% today after short seller Culper Research targeted the company’s U.S. partner Acadia Pharmaceuticals (NASDAQ:ACAD). Culper slammed Acadia for the safety concerns related to its Daybue (trofinetide) drug for the treatment of Rett Syndrome (a rare, genetic neurological disorder). Daybue, which was launched in the U.S. last year, was licensed to Acadia by Neuren.
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Short Seller’s Allegations
Culper alleged that the highly-awaited Daybue, which is touted as the first and only drug to treat Rett Syndrome, has been a “total flop.” The short seller accused Acadia of misrepresenting the drug’s safety and patient retention rates.
Culper alleged that Acadia characterized Daybue’s side effects as “mild and manageable,” while its analysis of FAERS (FDA Adverse Event Reporting System) data indicates that about 1 of every 10 to 11 Daybue patients are getting hospitalized. It anticipates that the drug’s peak revenue will just be a fraction of the sell-side estimates of more than $800 million.
In response to the allegations, Neuren released a statement saying that several reports published on the company and its partner Acadia have a different view than Culper’s opinion. Many of these reports include the surveys of U.S. physicians. The company pointed out that despite the short seller’s report, Acadia stock was up 1.19% in Thursday’s after-market hours.
Last month, in its Q4 2023 activity report, Neuren disclosed that it is currently getting 10% of Daybue’s net sales as royalty.
With two Buys, NEU stock scores a Moderate Buy consensus rating on TipRanks. The Neuren Pharmaceuticals share price target of AU$27.86 implies 42.5% upside potential. Even after today’s decline, NEU shares have rallied 172%.
