The Neuren Pharmaceuticals Ltd (ASX: NEU) share price is pushing higher today after the company released a fresh update to the market.
At the time of writing, the Neuren share price is up 6.37% to $13.52.
Let's take a closer look at what is driving the move.
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Sales forecast points higher
According to the release, Neuren confirmed that updated projections for DAYBUE suggest global net sales could reach around US$700 million by 2028.
DAYBUE is approved in the United States for the treatment of Rett syndrome, a rare neurological disorder that mostly affects young girls. It remains the first and only approved treatment for this condition.
Neuren does not sell the drug itself. Instead, it earns royalties from Acadia on sales. That means when sales increase, Neuren receives a larger share of revenue without having to fund manufacturing or marketing.
Recent quarterly updates from Acadia have shown solid growth in DAYBUE sales. Quarterly revenue has exceeded US$100 million, and royalty income to Neuren has continued to increase year over year.
Pipeline adds longer-term potential
While DAYBUE is currently the main source of revenue, Neuren also has another drug candidate in development called NNZ 2591.
This treatment is being studied for several rare childhood neurological disorders, including Phelan McDermid syndrome, Pitt Hopkins syndrome and Angelman syndrome.
Earlier this month, Neuren began a Phase 3 clinical trial in the United States for Phelan McDermid syndrome. Phase 3 studies are typically the final stage before a company seeks regulatory approval.
If successful, NNZ 2591 could open the door to additional commercial products and new royalty streams.
However, it is important to remember that drug development carries significant risk. Clinical trials take time, and outcomes are never guaranteed.
Europe remains a watchpoint
Neuren shares have been volatile in recent weeks.
Earlier this month, challenges emerged in the European approval process for trofinetide, the active ingredient in DAYBUE. That update weighed heavily on the stock, which shed around 25% in a matter of days.
Although the long-term opportunity remains significant, regulatory decisions in major markets such as Europe can have a meaningful impact on sentiment.
Foolish bottom line
The lift in the Neuren share price reflects renewed confidence in the growth outlook for DAYBUE and the strength of the company's royalty model.
With rising United States sales and a late-stage pipeline advancing through trials, Neuren stands out among ASX biotechnology companies.
That said, shareholders should expect continued volatility. Updates on sales performance, regulatory decisions and clinical trial results are likely to influence the next moves in the share price.
