Investors in Neuren Pharmaceuticals Ltd (ASX: NEU) have experienced an exhilarating year. The ASX 200 healthcare stock has exploded with over 115% since hitting a 52-week low in April.
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Stock tipped to rise
Analysts at Macquarie Group Ltd (ASX: MQG) don't think it's too late to invest in Neuren Pharmaceuticals. In a 10 November research note, Macquarie has retained its outperform rating on the ASX biotech stock, with a price target of $21.20.
Neuren Pharmaceuticals shares are trading for $18.90 at the time of writing. This suggests 12% upside from here over the next 12 months.
The broker comments:
A good result for NEU, with royalty revenue ahead of expectations, driven by growth in new patient prescriptions. NEU's strong cash position enables pipeline acceleration, potentially providing significant long-term upside if approved. Outperform.
Royalties and premium pricing
Neuren Pharmaceuticals is an Australian biopharmaceutical company that develops new therapies for serious neurodevelopmental disorders that appear in early childhood, where treatment options are limited or non-existent.
Its leading product is DAYBUE (trofinetide), for which Acadia Pharmaceuticals has a worldwide exclusive distribution license. Two years ago, Acadia received marketing approval from the US FDA for DAYBUE to treat Rett syndrome.
This made it the first FDA-approved treatment for the disease. This enables Acadia to achieve premium pricing in the US market, with the broker noting in earlier research that DAYBUE sells for US$400k per patient per annum.
Under the agreement, Acadia handles all costs associated with selling its DAYBUE, while Neuren collects royalty payments of 10% to 15%.
Beating expectations
Macquarie notes in its recent report that the royalty revenue is ahead of expectations:
Acadia's 3Q25 net sales increased 11% YoY and 5% QoQ to US$101.1m. This translates to royalty income to NEU of A$16.4m in 3Q25, up 24% YoY. Acadia narrowed its FY25 guidance to US$385–400m (from previous US$380-405m), implying FY25 royalty income for NEU of A$63–66m (previously A$62-67m). Our forecasts remain unchanged at A$64m (VA consensus A$64.5m), just below the mid-point of guidance. Given 3Q25 royalty revenue of A$16.4m, NEU requires A$19.3m royalty earned in 4Q25E to meet our forecasts.
Looking ahead, the broker anticipates several potential catalysts:
NEU first phase-3 trial site initiated in the US, with the phase 3 RCT to go for 13 weeks in ~160 children aged 3-12 with PMS. We expect ROW expansion for DAYBUE is imminent, with Acadia anticipating EMA approval in 1Q26. This would trigger further royalty and milestone payments, presenting upside to our earnings forecasts.
