Neuren Pharmaceuticals (ASX:NEU) Surges 6% on US$700m DAYBUE Target: Time to Buy?

DAYBUE royalties could climb fast if US targets land

Neuren Pharmaceuticals (ASX: NEU) jumped 6% on Wednesday after its US partner, Acadia Pharmaceuticals, shared big news at the J.P. Morgan Healthcare Conference. Acadia now expects DAYBUE sales to hit US$700 million by 2028, sending Neuren shares to around A$20.47. The stock has climbed more than 60% over the past year, making it one of the top performers in the ASX healthcare space. For investors, the key question is whether there’s still upside after such a strong run.

The update is simple but important. Acadia outlined a target of US$1.7 billion in combined sales by 2028, with DAYBUE making up about US$700 million. For Neuren, which earns royalties on every dollar of DAYBUE sold, this could mean a much larger income stream ahead. We believe this strengthens the investment case, though valuation remains something to watch.

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Acadia’s Growth Roadmap Strengthens Neuren’s Royalty Outlook

What makes this update matter for Neuren shareholders is how the licence deal works. Neuren earns tiered royalties ranging from 10% to 15% on DAYBUE sales, starting at 10% on the first US$250 million and rising to 15% for sales above US$750 million. Better still, Neuren pays no royalties to anyone else, so this revenue flows straight to profit.

If Acadia hits US$700 million in sales by 2028, Neuren could earn around A$100 million to A$115 million in yearly royalties. That compares to guidance of A$63 million to A$66 million for 2025, suggesting royalties could nearly double over three years.

Several things support this growth. DAYBUE STIX, a new powder version approved by the FDA in December 2025, is now rolling out on a limited basis in the US, with full availability expected in Q2 2026. This format helps patients who struggled with the original liquid. In Europe, Acadia expects approval in Q1 2026, opening access to 9,000 to 12,000 more Rett syndrome patients. Since launch, DAYBUE has treated over 2,000 patients, with 55% still on therapy after 12 months.

NNZ-2591 Pipeline Offers Bigger Long-Term Opportunity

Beyond DAYBUE, Neuren has a second drug that could be even more valuable over time. NNZ-2591 targets four childhood brain disorders: Phelan-McDermid syndrome, Angelman syndrome, Pitt Hopkins syndrome, and Prader-Willi syndrome. The combined patient population across these conditions is five times larger than Rett syndrome.

The company recently started a Phase 3 trial in Phelan-McDermid syndrome and has received FDA Fast Track status, which speeds up the review process. Phase 2 trials showed positive results across three conditions, giving investors reason for optimism. If NNZ-2591 succeeds, it could become a second major revenue driver and reduce Neuren’s reliance on a single drug.

The Investor’s Takeaway

For growth investors, Neuren offers an attractive setup. The company earns high-margin royalty income with almost no manufacturing costs. Its balance sheet is strong after a completed A$50 million share buyback program.

Six analysts covering Neuren have an average price target of about A$25, suggesting roughly 22% upside from current levels. The bull case rests on scaling royalties, European expansion, and NNZ-2591 progress. However, risks remain. After a 60% run, the stock is pricing in a lot of growth. Neuren depends heavily on one drug and one partner. If European approval delays or patient uptake disappoints, the growth story could stall.

Our view: Neuren looks attractive for investors with a two- to three-year horizon who can handle volatility. Those wanting more safety may prefer to wait for pullbacks.