Looking for some exposure to the healthcare sector?
If you are, it could be worth considering the ASX 200 stock in this article.
That's because Bell Potter believes that its shares could generate big returns over the next 12 months.
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Which ASX 200 stock?
The stock that Bell Potter is tipping as a buy is Neuren Pharmaceuticals Ltd (ASX: NEU).
It is a biotechnology company targeting disorders of the central nervous system (CNS). Its lead asset is Daybue (trofinetide) which is licensed to Acadia (NASDAQ: ACAD).
Bell Potter notes that Neuren has released an update on Acadia's sales and its expected royalties. It said:
Q2 sales US$96.1m (+14% on pcp and +14% qoq), a 2% beat to US consensus of US$94m. 1H25 Daybue sales of US$181m are now up +13% from the pcp and tracking in line with reaffirmed guidance for full-year growth of 9-16% (US$380-405m). Expectations coming into the Q2 result were toward the low end of the guidance range, hence the slight beat along with expected continued momentum in 2H25 from the increased sales force activities, leads to increased confidence that the Daybue franchise will continue to grow in the short-medium term from the critical US market.
The broker notes that next year should see Daybue launched officially in the European market, which will be another boost to sales, milestone payments, and royalties. It adds:
EMA approval reaffirmed for ~Q1CY26. An undisclosed (and likely immaterial) number of patients are already receiving Daybue in the EU prior to formal approval via the 'named patient supply' program however this has not yet qualified for the first EU sales milestone to NEU.
Time to buy
In light of the above, the broker is feeling even more upbeat about the ASX 200 stock's outlook.
As a result, it has reaffirmed its buy rating on Neuren's shares with an improved price target of $22.00.
Based on its current share price of $17.62, this implies potential upside of approximately 25% between now and this time next year.
Commenting on its buy recommendation, the broker said:
PT increased from $20.00 to $22.00 due to roll forward of our model and minor increases near-term earnings, hence we maintain our BUY recommendation. The Daybue royalty stream is an increasingly stable and growing source of income and worth ~$9/share in discounted present value terms in our view (excl. the current cash balance of ~$3/sh). The key driver for NEU in the next 1-2 years will be progress in late-stage clinical trials for its second drug candidate, NNZ-2591, which we anticipate will start Phase 3 recruitment in Phelan McDermid syndrome in the current quarter.
