Neuren Pharmaceuticals Ltd (ASX: NEU) shares are crashing deep into the red today.
At one stage today, the ASX 200 pharmaceuticals stock was down 15% to $18.16.
Neuren's shares have recovered a touch since then but remain down by 12%.
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Why is this ASX 200 pharmaceuticals stock crashing?
Investors have been hitting the sell button today after Neuren released its first sales update since a short seller described its Daybue product as a flop with horrific side effects.
According to the release, its partner Acadia Pharmaceuticals (NASDAQ: ACAD) has announced fourth quarter Daybue net sales in the United States of US$87.1 million. This is up by a sizeable 30% from US$66.9 million in the third quarter.
This was the second full quarter of sales since the product was launched in April 2023. Net sales for 2023 since April came to US$177.2 million.
In addition, Acadia has provided Daybue sales guidance for FY 2024. It expects full-year net sales in 2024 of between US$370 million and US$420 million. This equates to an average of US$92.5 million to US$105 million per quarter.
While this is strong growth, it appears to have fallen short of expectations and spooked investors.
What does this mean for Neuren?
Neuren estimates that Acadia's update means royalties of A$12.8 million for the fourth quarter, which is up from A$10.4 million for the third quarter. This will bring its full year royalties to A$26.8 million for 2023
And based on Acadia's guidance, management expects the ASX 200 pharmaceuticals stock to generate royalties of between A$61 million and A$70 million in 2024 from Daybue.
Neuren shares remain up over 150% since this time last year despite recent weakness.
