The Neuren Pharmaceuticals (ASX:NEU) share price has soared 102% so far this month. Here’s why

The ASX biopharmaceutical company is having a stellar month.

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The Neuren Pharmaceuticals Ltd (ASX: NEU) share price has more than doubled in less than a month.

The biopharmaceutical company’s share price has gained 102%, shooting from $1.80 at the end of last month to $3.64 at the time of writing. Even with the company’s share price down almost 6% today, it’s an impressive gain.

Let’s delve into what might be driving investor confidence in the company in December.

A merry December

Investors seem to be reacting to promising phase three clinical trial results on a new drug.

The massive surge in the company’s share price started on December 7 when the company announced promising top-line results from a drug trial undertaken in the US.

Neuren reported it is making significant progress on the use of its lead compound trofinetide to treat young women with Rett Syndrome.

Rett Syndrome is a neurological disorder caused by mutations on the X chromosome on a gene called MECP2. It is often misdiagnosed as autism and is identified in one of every 10,000 to 15,000 female births in the US.

The company’s partner Acadia Pharmaceuticals (NASDAQ: ACAD) is conducting and funding the trials and plans to meet with the US Food and Drug Administration to progress a new drug application in 2022.

Neuren told investors it could earn AU$111 million in revenue over 2022 and 2023 for its Rett syndrome treatment. In the US alone, the company sees sales potential of US$500 million.

Further, the company is eligible for double-digit percentage royalties on net sales if trofinetide is approved and launched in the US.

This was the only significant price-sensitive news the company released to the market during December.

However, Neuren is also working on phase two trials of the drug candidate NNZ-2591. This drug has the potential to treat multiple neurodevelopmental disorders. In fact, the company sees the the target market for this drug candidate to be five times the Rett Syndrome opportunity.

For perspective, the S&P/ASX 200 Health Care (ASX :XHJ) sector is down 2.76% since the start of the month.

Neuren Pharmaceuticals share price recap

The Neuren Pharmaceuticals share price has surged 181% in the past 12 months and up 178% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned more than 11% over the past year.

In the past week, the company’s shares have shed just over 6%.

The company has a market capitalisation of about $450 million based on its current share price.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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