It was the ASX 200 healthcare stock of the year in 2023, with its share price catapulting 214% in just 12 months.
But today is a challenging one for Neuren Pharmaceuticals Ltd (ASX: NEU), with its share price crashing 10.6% to an intraday low of $17.97 this morning.
This followed the release of its Q1 FY24 update on sales of its maiden drug, Daybue.
The ASX 200 biotech has since retraced some of those losses. Neuren shares are changing hands for $18.97 apiece, down 5.62%, at the time of writing.
It appears investors aren't too pleased with the progress of DAYBUE sales in the US.
Let's look into the details of the update.
ASX healthcare star falls on Q1 sales update
The update issued by Neuren Pharmaceuticals today contains highlights of the Q1 FY24 earnings reported by its United States partner, Acadia Pharmaceuticals (NASDAQ: ACAD).
Acadia is responsible for the global sales and commercialisation of Neuren's first approved drug, DAYBUE, which received US Food and Drug Administration (FDA) approval last year.
DAYBUE is a world-first drug treatment for Rett syndrome. It's approved in the US for adults and pediatric patients aged two years and up.
Acadia announced that Q1 net sales of DAYBUE in the US totalled US$75.9 million. This only just missed the guidance range of US$76 million to US$82 million.
Neuren anticipates it will receive royalty revenue of A$11.6 million for the quarter. It expects full-year FY24 royalties of between A$61 million and A$70 million.
That's on top of sales milestone revenue of A$77 million, assuming Acadia meets its guidance range and the US/AUD exchange rate is 65 cents.
Today's sales data for 1Q FY24 was lower than last quarter's net sales of US$87.1 million.
Acadia reiterated its full-year 2024 guidance for net sales of between US$370 million and US$420 million.
Why were 1Q FY24 sales lower than 4Q FY23?
Neuren has previously explained that seasonal effects negatively impacted 1Q FY24 sales.
These included refills that were due in January and actioned in December, prior to the holidays, and reduced Rett clinic days in January.
The company said discontinuations during Q1 were higher following a surge in new patient starts in the previous quarters.
Gross-to-net discounts were slightly higher in Q1, too.
Net patient additions have resumed, with increases in each of the past six weeks.
The company said:
Approximately 25% of the 5,000 diagnosed Rett syndrome patients in the United States have initiated therapy.
Persistence on therapy continues to track more than 10% higher than the clinical trial experience, with 58% remaining on therapy after treatment for 9 months. 862 patients are currently on therapy.
What's next for this ASX healthcare stock?
Neuren Pharmaceuticals said Acadia had made good progress on its international expansion for DAYBUE.
A New Drug Submission in Canada was accepted for filing, and priority review was granted, with
potential for approval around the end of 2024.
A pediatric investigation plan (PIP) was filed with and accepted by the European Medicines Agency,
with a Marketing Authorisation Application anticipated in Q1 2025.
A formal meeting with the Japanese regulatory agency (PMDA) to discuss the clinical plan is
scheduled in Q2 2024.
What's next for Neuren Pharmaceuticals?
Neuren's second drug candidate, NNZ-2591, is in Phase 2 development for Phelan-McDermid syndrome (PMS), Angelman syndrome, Pitt-Hopkins syndrome and Prader-Willi syndrome.
Neuren is focused on developing new drug therapies to treat serious childhood neurological disorders
that have no or limited approved treatments available.
All of its drugs have 'orphan drug' designation for rare and serious diseases in the US, which gives Neuren access to incentives to support its work.
Typically, an orphan drug is not profitable to produce without government assistance, as the diseases they treat are rare and affect only small portions of the population.
Neuren Pharmaceuticals share price snapshot
Over the past 12 months, this ASX healthcare share has risen 39.5%. Obviously, that encapsulates part of that magnificent 214% gain over the 12 months to 31 December.
But the company hit a snag in February, which impacted its share price trajectory, as shown below.
Neuren Pharmaceuticals was hit with a short seller's report on 15 February.
The report described DAYBUE as a "flop" amid "horror stories" of side effects among patients.
Neuren's response was not enough to stop the ASX healthcare share tumbling, and it's moved sideways ever since.
