Neuren Pharmaceuticals Ltd (ASX: NEU) shares have been on fire in recent months.
So much so, the ASX 200 healthcare stock has risen over 100% since hitting a 52-week low in April.
The good news for investors is that it isn't too late to invest in the pharmaceuticals company according to analysts at Macquarie Group Ltd (ASX: MQG).
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What is the broker saying about this ASX 200 healthcare stock?
Macquarie was pleased with the company's recent update, highlighting that its royalties in the first half were in line with expectations, though a touch below consensus estimates.
In addition, its total income was comfortably ahead of expectations thanks to higher interest and foreign exchange movements. It explains:
Royalty revenue in line with MRE, total ahead: As we previously reported (see here) Acadia's 1H25 sales of DAYBUE totalled US$180.7m (up from US$160.5m in 1H24), which translated into royalties of A$28.3m for NEU (up from A$24.3m), in line with our forecasts but -6% vs VA consensus. However, higher interest and FX gain led to total income above expectations (25%/32% vs MRE/VA).
Looking ahead, there are a number of potential catalysts on the horizon, which have supported a valuation upgrade. It advises:
NEU first phase 3 trial site initiated in the US: NEU announced on 25-Aug the phase 3 randomised controlled trial will go for 13 weeks in ~160 children aged 3-12 with PMS. Other trial sites in the US are at various stages of the initiation process. As such, we slightly de-risk our valuation for PMS from 20% contribution to 30%.
ROW expansion: We expect ROW expansion for DAYBUE is imminent, with Acadia anticipating EMA approval in 1Q26. This would trigger further royalty and milestone payments from Acadia, presenting upside to our earnings forecasts. Given the ROW expansion on track in Europe, we de-risk our ROW valuation from 50% to 75%.
Shares tipped to rise
According to the note, Macquarie has retained its outperform rating on the ASX 200 healthcare stock with an improved price target of $21.20.
Based on its current share price of $19.01, this implies potential upside of almost 12% for investors between now and this time next year.
Commenting on its results and recommendation, the broker said:
A good result for NEU, with NPAT well ahead of expectations. NEU's strong cash position enables pipeline acceleration, potentially providing significant long-term upside if approved.
Valuation: TP increases ~14% to A$21.20 (from A$18.60), reflecting model roll-forward, EPS changes, minor sum of the parts de-risking. Catalysts: Acadia's 3Q25 result; PMS trial; DAYBUE Canada launch; DAYBUE EMA approval (potentially 1Q26E).
