Neuren Shows Biotechs can Succeed on the ASX

Author

Future Money
December 19, 2023

⚡ Five Second Summary:

Neuren Pharmaceuticals saw a 29.5% surge in its share price, reaching a record $2.8BN market cap, following positive phase-two trial results for its NNZ-2591 drug targeting Phelan-McDermid syndrome in children.

Neuren’s success builds on its commercialised DAYBUE product, an oral Rett syndrome treatment launched in the US.

📊 The Chart

🤔 What's Happening:

  • Neuren Pharmaceuticals achieves a significant valuation boost after the successful phase-two clinical trial results for its NNZ-2591 drug, focusing on Phelan-McDermid syndrome in children.

  • The company recently launched DAYBUE, an oral treatment for Rett Syndrome in the United States, contributing to its positive market performance.

  • The results have seen Neuren Pharmaceuticals re-rate by more than 2000% in 3 years.

  • Neuren has benefited from the US FDA’s Orphan Drug regime, which made commercialisation of the treatment more lucrative.

🔢 Numbers + Facts:

  • Neuren reached a record valuation of $2.8BN.

  • The successful phase-two trial for NNZ-2591 demonstrated significant improvements in patients within 13 weeks of treatment.

  • Neuren is conducting additional phase-two trials for NNZ-2591 targeting neurodevelopmental disorders, including Angelman syndrome, Pitt Hopkins syndrome, and Prader-Willi syndrome.

🔮 Looking Ahead:

  • Neuren’s results show that biotechs with good results can re-rate in a variety of market conditions.

  • The market for biotechs could improve with rate cuts being eyed by the market over the course of 2024.

  • Biotechs that solve for hard to treat and debilitating disorders can continue to benefit from the US FDA’s Orphan Drug regime, which provides powerful incentives for the treatment of rare diseases.

📈 The Company: Neurotech International (ASX:NTI)

Market Cap: $48M | Share Price: $0.05 | Industry: Biotech

NTI is a clinical stage biotech company advancing clinical trials targeting rare and severe neurological disorders predominantly in children.

NTI is seeking to prove its primary treatment NTI-164 is a both safe and effective treatment for disorders such as Autism Spectrum Disorder, Rett Syndrome, PANDAS/PAN and Cerebral Palsy.

How does NTI fit into the story?

Neuren Pharmaceuticals is a good blueprint for small cap biotechs on how to successfully commercialise a treatment.

NTI is looking to follow Neuren’s playbook by targeting a range of “orphan” diseases.

NTI is also currently undertaking a Phase I/II trial for Rett Syndrome with results due in Q1 CY2024.

This is the same disease that Neuren Pharmaceuticals commercialised a treatment for, which helped take the company to a ~$2.8BN market cap.

📰 Mainstream Media Coverage

The Herald Sun

Positive results from Neuren’s Phase 2 trial of its drug for Phelan- McDermid syndrome has been a gift for both the company and affected children.


Australian Financial Review

The biotech’s clinical success has powered its shares 17-fold in two years as it earns royalty payments from US sales of DAYBUE, which partner Acadia expects to reach up to $US87.5 million ($130 million) in the December quarter alone.