If you want to give your portfolio a boost, then it could be worth looking at Neuren Pharmaceuticals Ltd (ASX: NEU) shares.
That's because one leading broker is tipping the ASX stock to rise over 60% from current levels.
Image source: Getty Images
What is the broker saying about this ASX stock?
Bell Potter has been looking at its calendar and notes that there are two major events on the horizon for the pharmaceuticals company.
One is the release of a quarterly update from the ASX stock's partner Acadia Pharmaceuticals Inc (NASDAQ: ACAD), which has licensed the Daybue product from Neuren. It commented:
Acadia's 2Q24 earnings will provide an important update on whether (1) CY24 Daybue guidance of US$370-US$420m is maintained; (2) to what extent patients on treatment increased in recent months (after declining in 1Q); and (3) how persistency is tracking relative to current expectations of ~50% long-term.
Bell Potter notes that if the Acadia achieves its guidance, it will bring about a big pay day for Neuren. It adds:
US consensus of US$376m is already near the bottom end of guidance, hence, we expect even the maintenance of CY24 guidance paired with an increase in patient numbers back towards ~900 would be received positively. Even at the bottom end of guidance, NEU will receive ~A$138m in royalties and milestones for CY24. Beyond the US, potential approval in Canada by end-CY24 and Europe by end-CY25 also reflect smaller tailwinds for Daybue.
What else?
The broker also notes that the ASX stock has important study data due in the near future for NNZ-2591, which it is particularly positive on. It said:
After two successful readouts in Phelan-McDermid and Pitt Hopkins, positive AS Phase 2 results would further demonstrate NNZ-2591 has multi-indication potential. However, even in the event of a successful AS readout, we expect Phelan McDermid and Pitt Hopkins will remain top priority. NNZ-2591 has clear first-to-market potential in these first two indications whereas AS has more competing therapies in clinical trials.
Big returns
According to the note, Bell Potter has retained its buy rating and $28.00 price target on the ASX stock.
Based on its current share price of $16.99, this implies potential upside of almost 65% for investors over the next 12 months.
Bell Potter concludes:
While Daybue quarterly updates will likely be a key short-term focus, and there is some scepticism around ACAD's guidance, we maintain longer-term conviction in NEU's second asset NNZ-2591. We expect the start of Phase 3 trial(s) for NNZ-2591 in CY25 in two first-to-market indications (akin to trofinetide in Rett) will provide greater confidence in the NNZ-2591 opportunity.
