Neuren Pharmaceuticals Limited

ASX:NEU

Neuren Pharmaceuticals Limited

ASX:NEU
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Pinned straw:
mikebrisy
Last edited 3 months ago

Short Report on Acadia and Daybue.

$NEU SP plunges 17% on open.

It will be interesting to see how $ACAD responds in its results report next week.

I have a full position on $NEU, so won't be buying more on this opportunity.

Interesting. Short reports provide entertainment value, but sometimes there can be something in it.

Disc: Held RL and SM



Culper Research discloses short position in Acadia Pharma

February 15, 2024 at 12:26 pm EST

 Share

Feb 15 (Reuters) - Culper Research has taken a short position on Acadia Pharmaceuticals' stock, it said on Thursday, sending the drugmaker's shares down as much as 8%.

Acadia's drug, trofinetide, to treat Rett syndrome, a genetic brain disorder, was launched in the U.S. last year under the brand name Daybue.

"Acadia has misrepresented Daybue's safety profile, and in turn, patent retention rates," Culper Research alleged in its report.

"The company now faces a wall of discontinuations due to insurance reauthorization requirements. Numerous insurance plans we reviewed require tangible proof of improvement on the drug," the report said.

Reuters could not immediately verify the short seller's allegations.

San Diego California-based Acadia, which licensed trofinetide from Australian drugmaker Neuron Pharmaceuticals , did not immediately respond to a request for comment.

The approval had allowed use of the drug in adult and pediatric patients two years of age and older, with a label warning of diarrhea and weight loss.

Culper the drug "will continue to decline over time as patients discontinue" treatment and the company "runs out of new patients to fill the gap" and estimates revenue from Daybue will be $316 million in 2024.

Analysts were expecting revenue of about $379 million for the drug in 2024, as per LSEG data.

Acadia has an antipsychotic drug sold under the brand name Nuplazid approved for patients with a type of Parkinson's disease.

The company's shares clawed back some lost ground and were last down 2.1%.

Short sellers make money by betting that the price of a security (such as a stock) will decrease.

(Reporting by Pratik Jain in Bengaluru; Editing by Shilpi Majumdar)
mikebrisy
3 months ago

Culper Research Report

For completeness on today's coverage, here is the link to the Cupler Research Report on Acadia Pharmaceuticals, which I've linked to their website.

These report are usually pretty scarey and convincing, so if you're not used to reading short reports, brace yourself.

The way I think about it, is that if the short thesis is true, then DAYBUE will struggle to meet the lower bound of guidancefor Q4 (Oct-Dec 2023).

However, we know that on 9th Jan, $ACAD reiterated guidance. Having been put on the spot, what $ACAD say will be very important. Particularly the next lot of forward guidance offered.

I'm happy to sit it out and hear what they say.

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mikebrisy
3 months ago

I thought I'd close out, what has been an eventful week, with a little analysis of Culper Research's track record.

In the table below, I've listed the short reports on the Culper website, the SP on the trading day close before the report publication, and yesterday's close.

The % Delta is where the SP is at yesterday's close compared with the "undisturbed" SP.

695618f808091533aeec0eeb295ff4d98b6285.png


Of the 5 stock reported, 2 are still below the pre-publication SP, by an average of about -5.5% or -14%, depending on whether you take the first or second short report for $RUM.

However, three are up 16%, 53% and 243%!

It's not a meaningful sample to do stats on. But the track record is patchy at best. If there is any bias, its towards outperformance months down the track

Track record is probably comparable with many equity analysts. Enough said.

Happy Weekend All.

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mikebrisy
3 months ago

$NEU Respond to Short Report.

Just out. Here's the full text.

A placeholder IMO. Nothing more they can say, as they have no insight into how $ACAD reports.

==================

Comment on research report Neuren Pharmaceuticals (ASX: NEU) advises that on 15 February 2024 in the US, a report on Neuren’s partner Acadia Pharmaceuticals (Nasdaq: ACAD) was published by Culper Research, which disclosed that they hold a short position on Acadia.

Neuren notes the following:

• There are numerous analyst research reports published on Acadia and on Neuren, many incorporating surveys of US physicians, that present a different view to Culper.

• In its J.P. Morgan Conference presentation on 9 January 2024, Acadia reiterated guidance for net sales of DAYBUE in Q4 2023 of US$80 million to $87.5 million. Net sales of US$67 million and US$23 million were reported for Q3 2023 and Q2 2023 respectively.

• In that presentation, Acadia updated the data on persistence of DAYBUE treatment, with 76% remaining on therapy after 6 months based on confirmed discontinuations, or 68% based on confirmed discontinuations and patients who were 60 days past their scheduled refill.

• The after-hours ACAD share price on 15 February 2024 Eastern Time was up 1.19%.

• Acadia’s Q4 earnings announcement is scheduled for 27 February 2024 Eastern Time.

About Neuren

Neuren is developing new drug therapies to treat multiple serious neurological disorders that emerge in early childhood and have no or limited approved treatment options. Recognising the urgent unmet need, all programs have been granted “orphan drug” designation in the United States. Orphan drug designation provides incentives to encourage development of therapies for rare and serious diseases. DAYBUE™ (trofinetide) is approved by the US Food and Drug Administration (FDA) for the treatment of Rett syndrome in adult and pediatric patients two years of age and older. Neuren has granted an exclusive worldwide licence to Acadia Pharmaceuticals Inc. for the development and commercialisation of trofinetide. Neuren’s second drug candidate, NNZ-2591, is in Phase 2 development for each of Phelan-McDermid syndrome, Angelman syndrome, Pitt Hopkins syndrome and Prader-Willi syndrome.

Contact: Jon Pilcher, CEO: jpilcher@neurenpharma.com; +61 438 422 271 ASX Listing Rules information

This announcement was authorized to be given to the ASX by the CEO & Managing Director of Neuren Pharmaceuticals Limited, Suite 201, 697 Burke Road, Camberwell, VIC 3124 Forward-looking Statements This announcement contains forward-looking statements that are subject to risks and uncertainties. Such statements involve known and unknown risks and important factors that may cause the actual results, performance or achievements of Neuren to be materially different from the statements in this announcement.

17
mikebrisy
3 months ago

$NEU into a Trading Pause. Presumably, they want time to issue a response to the Short Report.


16
Nnyck777
3 months ago

Well that was an unpleasant way to start the day. JP Morgan conference Acadia reaffirmed guidance in late Jan. A little perplexed. I suspect an opportunistic short attack based on very little. The drop out rates are expected and lower than that in the Lilac study. What has changed in 20 or so days?

The cynic in me knows big pharma is circling Neuren and people were not co-operating and selling their shares. Is this too conspiratorial of me?

19
mikebrisy
3 months ago

@Nnyck777 Yes - I think there is a simpler explanation (I go with Ocam's Razor).

With a significant and known proportion of patients who either don't benefit or who can't tolerate, or both, weaving that into a short thesis is an obvious target. So, there's money to be made in shorting, then putting the research out there.

It all comes down to does $ACAD conduct its reporting ethically? So far, the results are in line (albeit slightly ahead of) clinical studies, so I don't smell a rat.

It will be interesting to see how $ACAD responds, as will the continued sales trajectory, which we will hear about in 12 days. Of course, it is possible that $ACAD brings forward a sales report as part of any response they give, so am definitely monitoring their releases.

The statement "Acadia has misrepresented Daybue's safety profile, and in turn, patent retention rates," if false, will surely (?) lead to legal action by $ACAD against Culver Researc. If it is false, then $ACAD can surely demonstrate this in court ... but of course that process will take a long time.

It looks like a high stakes short report to me.

17
Nnyck777
3 months ago

Looks like Acadia SP largely rebounded. 13% drop is a massive market reaction. However as Daybue is currently Neuren’s only revenue stream shareholders will be edgy.

Yes I agree Culper’s report wording is potentially defamatory. There were some very large XT last 2 nights in Neuren. It all seems odd. Hopefully Neuren will re-iterate guidance from Acadia.

15