The Neuren Pharmaceuticals Ltd (ASX: NEU) share price is on course to end the week on a very positive note.
In early trade, the pharmaceutical company's shares are up 26% to $14.69.
This means its shares are now up 265% over the last 12 months. This can be seen on the chart below.
Why is the Neuren share price charging higher?
Investors have been bidding the Neuren share price higher today after the company released another positive announcement.
According to the release, Neuren has expanded its partnership with Acadia Pharmaceuticals (NASDAQ: ACAD) for trofinetide to a worldwide licence. This compares to its current agreement which covers just North America. Trofinetide is a new treatment for Rett syndrome.
Neuren will receive US$100 million up-front, plus additional potential milestone payments of up to US$427 million and royalties on net sales of trofinetide outside North America.
The existing milestone payments and royalties to Neuren for trofinetide in North America are unchanged.
What happened?
It seems that Acadia has been pleased with the success of trofinetide, which is being marketed as Daybue, since its commercial release this year.
The release reveals that Acadia has provided very encouraging early insights into the US launch of Daybue. It is expecting net sales of US$21 million to US$23 million in Q2 2023 and US$$45 million to US$55 million in Q3 2023.
This is good news for Neuren, which earns a 10% royalty on annual sales under US$250 million. This increases to upwards of 15% on annual sales greater than US$750 million.
In addition, it also earns milestone payments. These range from US$50 million for sales greater than US$250 million in a calendar year and up to US$150 million if sales reach US$1 billion in a calendar year.
What else?
Another positive is that the two parties have signed an exclusive worldwide licence for Acadia to develop and commercialise NNZ2591 for Rett syndrome and Fragile X syndrome only.
Potential milestone payments and royalties payable to Neuren for NNZ-2591 in Rett and Fragile X are identical to the trofinetide milestone payments and royalties in each of North America and other regions. This could bode well for the Neuren share price if they are equally successful.
Neuren's CEO, Jon Pilcher, commented:
We are very pleased to be able to expand our highly successful partnership with Acadia. The unique knowledge and expertise that the Acadia team has built from the successful development and commercialisation of DAYBUE in the United States, as well as the established supply chain, places them in the ideal position to achieve the optimum outcome globally for all stakeholders. We have also enhanced the position for NNZ-2591, adding the exciting potential to further increase its value through Acadia in Rett and Fragile X.
