ASX biotech stock Neuren Pharmaceuticals Ltd (ASX: NEU) finally delivered some good news. Shares jumped 5.7% on Wednesday to $13.00, outpacing the 2.6% gain of the S&P/ASX 200 Index (ASX: XJO).
This followed the biotech company announcing a new commercial milestone for its flagship Rett syndrome therapy.
For investors, it was a welcome reprieve. But the ASX biotech stock is still down more than 30% since the start of 2026, leaving some long-term holders wondering if now is the time to step back in.
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A fresh commercial milestone
A new commercial milestone for Neuren's lead Rett syndrome therapy DAYBUE drove Wednesday's lift. Partnered with US biotech giant ACADIA Pharmaceuticals Inc. (NASDAQ: ACAD), Neuren confirmed its DAYBUE STIX powder formulation is now widely available across the US.
The therapy, approved by the US Food and Drug Administration in December, first launched on a limited basis during the March quarter. The expanded rollout means more patients and caregivers now have access to the treatment.
The powder formulation gives families greater flexibility in dosing and taste as they can mix the powder with water-based liquids. This small change can make a meaningful difference in managing Rett syndrome day to day.
Increasing royalty income
Neuren receives royalties on all global net sales of trofinetide under its licensing agreement with ACADIA. Historically, commercial milestones like this one tend to have an immediate impact on the price of the ASX biotech stock.
At its FY25 results, Neuren reported $65 million in royalty income and expects further growth in 2026 as DAYBUE sales expand. ACADIA has guided for DAYBUE net sales of US$460–490 million this year, implying another strong year of royalty growth for Neuren.
Strengths and risks
Neuren's strengths are clear. Its lead therapy addresses an underserved rare disease market, and the royalty model gives it high-margin, recurring income with minimal operational risk. The broader rollout also demonstrates increasing commercial traction, which can help restore investor confidence.
That said, risks remain. The fortunes of the ASX biotech stock are tightly linked to ACADIA's commercial execution. Any delays, pricing pressures, or regulatory hurdles could weigh on revenue.
The company also operates in the volatile biotech sector, where investor sentiment can swing sharply on clinical or regulatory news.
Analyst snapshot
Bell Potter remains bullish. The broker recently reaffirmed its buy rating and $22.00 price target. At the current share price of $13.00, this implies potential upside of roughly 70% over the next 12 months.
TradingView data show that brokers are upbeat on the ASX biotech stock. The most bullish average 12-month price target is $29.00, which points to a 123% upside, while the most conservative forecast comes in at $18.40. That still suggests a potential gain of 41%.
Foolish Takeaway
For investors willing to tolerate biotech volatility, Neuren's recent milestone, strong royalty pipeline, and underappreciated market potential could make this battered ASX biotech stock one to watch closely.
