It has been a tough week for Neuren Pharmaceuticals Ltd (ASX: NEU) shares.
Since this time last week, the ASX 200 healthcare stock is down 20%.
Is this a buying opportunity? Let's see what Bell Potter is saying about the pharmaceuticals company.
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What is the broker saying about this ASX 200 healthcare stock?
Bell Potter notes that Neuren was given some surprising and bad news out of Europe this week relating to its Daybue (trofinetide) drug. It said:
The EU's drug advisory body, the CHMP, has adopted a "negative trend vote" on the marketing application for Daybue (trofinetide) in Europe. In other words, when the formal CHMP recommendation is passed down at the end of February, it will almost certainly be to not recommend Daybue for approval in Europe. The CHMP decision clouds what was the key near-term catalyst for NEU.
What's next?
The broker acknowledges that this has created a lot of uncertainty, with a number of potential outcomes. It estimates that the probability of Acadia having the decision reversed in the first instance sits at around 25% to 50%. It explains:
Best case: NEU's partner, Acadia, seek re-examination which leads to reversal of the CHMP's initial decision and Daybue is approved in ~June-July 2026 with a label in Rett patients aged >2yrs. Middle case: Re-examination leads to reversal of CHMP decision and Daybue is approved but with restricted label limited only to patients aged >5 years (as opposed to > 2years), which was the age group included in the Phase 3 trial. Worst case: CHMP does not change its negative decision after a reexamination and Acadia would likely be required to provide further additional evidence to support approval, potentially including additional clinical data.
There are precedents for CHMP reversals: recent examples include Rezurock in GVHD (Jan 2026) and lecanemab and donanemab for Alzheimer's (Nov 2024 and July 2025). Our best guess is the CHMP's negative view in this instance was most likely related to scrutiny of the RSBQ co-primary endpoint used in the Phase 3 trial rather than safety concerns. While difficult to predict based on the very limited detail, we tentatively ascribe a ~25-50% chance of a CHMP reversal in the first instance.
Should you buy the dip?
Bell Potter has responded to the news by retaining its buy rating on the ASX 200 healthcare stock with a reduced price target of $22.00 (from $25.00).
Based on its current share price of $13.27, this implies potential upside of 66% for investors over the next 12 months.
It concludes:
NEU remains attractively valued based on the upside potential from its second drug candidate, NNZ-2591, hence we maintain our BUY. The Phase 3 trial for NNZ-2591 still has ~18 months until its readout, so investors will require patience to see through to this catalyst. Royalties from Daybue in the US alone will generate ~A$65m in CY26 income by our estimate, so NEU's balance sheet remains very healthy regardless of the EU decision.
