During earnings season, it's not uncommon to see large share price swings as investors react to results. Unfortunately for two ASX healthcare shares, recent announcements sent their share prices tumbling.
Neuren Pharmaceuticals Ltd (ASX: NEU) and Clarity Pharmaceuticals Ltd (ASX: CU6) experienced share price declines yesterday of 10% and 4% respectively.
Both ASX healthcare shares have had a tough past week.
Does this create a buy low opportunity? Or is it going to be more of the same moving forward?
Let's find out.
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Neuren Pharmaceuticals Ltd (ASX: NEU)
Neuren Pharmaceuticals is a biopharmaceutical company specialising in developing new therapies for neurodevelopmental disorders that emerge in early childhood and are characterised by impaired connections and signalling between brain cells.
Its share price crashed almost 10% yesterday after news was released that its partner, Acadia Pharmaceuticals Inc. (NASDAQ: ACAD), received a negative trend vote from Europe's drug regulator for trofinetide, its treatment for Rett syndrome.
This dealt a potential blow to future revenue.
While the drug is already approved in the US, Canada, and Israel, the uncertainty around European approval has investors selling, even though Acadia plans to appeal the decision.
For potential investors, the appeal process will certainly be worth monitoring, as it will directly impact future earnings.
Its stock price is now down 15% in just the last 5 days of trading.
Based on analyst ratings via TradingView, this could be a buy low opportunity for investors.
Analysts ratings via TradingView have an average 12 month price target of $24.73 on this ASX healthcare stock.
That indicates a massive upside of 69% from yesterday's closing price of $14.63.
However it doesn't come without risk, pending the result of the company's appeal.
Clarity Pharmaceuticals Ltd (ASX: CU6)
This ASX healthcare stock has also been on the decline in the past week following the release of its quarterly report.
It is a clinical stage radiopharmaceutical company developing next-generation theranostic (therapy and imaging) products, based on its platform SAR Technology.
Clarity Pharmaceuticals shares fell 3.9% yesterday and are down more than 15% in the last week.
After such a large fall in a short period of time, it could be a buy-low opportunity.
This ASX healthcare stock closed trading yesterday at $2.96 per share.
However the TradingView has an average analyst price target of $7.35.
This indicates an upside of more than 148%.
An important factor for future investors to monitor is the ongoing Phase II SECuRE clinical trial, which is testing a targeted treatment for advanced prostate cancer.
