I just had a feeling the report (Phase 2 trial shows significant improvements in Pitt Hopkins) released 27/5 wasn’t as up beat as previous.

@NewbieHK regarding the PH Phase2 result and the PMS Phase 2 (announced in December), there is of course every possibility that the Phase 3 result is not great.

The point in your question I have difficulty with is " ... not as good as people are exepcting..." I have no doubt that there are many retail holders and problably even some funds who aren't very capable at assessing drug development and commercial risk. So I have no doubt that some expectations aren't well-founded. However, a lot of the institutional recommendations are formed by analysts who are very experienced at valuing these risks. Therefore I think the share price is probably a reasonable expression of risked value. However, there are no doubt a wide range of views, because there is a lot of uncertainty.

Having said that, when we look at the analyst views, against today's cloing SP of $19.34, we have SP target of $28.56, with a range [$25 - $31; n=6].

So from that perpsective, you might argue that the market is undervaluing $NEU or, alternatively, that the market is right, and the analysts are biased to the upside. Or some mix of both. Clear as mud. This is actually a very tight valuation range given the uncertainty that no doubt exists. But we have to remember this is is a range of expected values - each of the six valuations recognises that there is a wide range of outcomes, even if they don't write it up explicitly. I describe my assessment below in this post.

I actually think the analysts are missing something, because there wasn't much of a reaction on valuations to the 1Q DAYBUE sales result. We need to wait a few months to see if I am right.

On the clinical trials: Regarding PH, in the charts you posted - there are two things to note: 1) the small sample size - 11 - and 2) the wide range of results for each indication.

In Phase 3, the sample size will be larger and the trial placebo-controlled. Which is important. In this Phase 2 trial, which was focused on safey and finding the dosing level, the clinicians and caregivers know the trial subjects were taking a clinical trial drug. In Phase 3 they won't. (The design, training and validation of the tests is intended to reduce observer bias; however, the tests are fairly subjective, so that is why Phase 3 is so important.)

Now that said, at a reasonably high level of confidence, the trial demonstrates a positive effect on average. The strength of the effect is reasonable, There are many drugs that have gone on to be commercial successes with a weaker "positive signal" at Phase 2.

By comparision with the Trofinetide Retts Phase 2 several years ago, I understand the PH trial is comparable on effectiveness on the priority indicators. The December PMS trial result was slightly "better" - albeit impossible to make much of a comparison at any reasonable level of confidence, given the small sample size and the spread of individual results.

Bottom line, for a Phase 2 drug, PH and PMS results were individually reasonably good. Taken together you might be tempted to infer that we will see the posititive signal repeated at Phase 3. But I don't know if that can be defended with any rigour.

In holding $NEU you have a accept that sigificant increases in value from here lie in clinical development risk. So you have to decide how much value you give to trofinetide, already on sale in the US and hopefully rolling out globally over the next 3-5 years (and likely in my view, to hit peak sales in the US in the next 2-3 years, but the peak global sales might not be for abother 3-5 years, depending on approvals elsewhere), and how much value to give to NNZ-2591 - which might still never be commercialised.

Speaking for myself only, I am comfortable that I can see more risked upside from here that I can see downside. So I am a "hold" today. My valuation on SM is at $31.00 [range of $16-$50 at p10% to p90%]. That valuation is 6-months old, and pre-dates the positive trial results of the PMS and PH trials, offset by the weaker sales and concerns I have written up in detail about DAYBUE in the US.

In all likelihood, these two factors have widened my valuation range, lowering the downside and increasing the upside. So, if I am being honest, I am not sure where I put the current expected value based on my analysis, but I think it is certainly well north of $20. Because of the widening range, I recently sold down 1/3 of my holding, as I decided to have a smaller (but still significant exposure) to the business. Today, $NEU is about 4% of my RL-ASX portfolio.

I want to wait for the following before updating my valuation and taking further action:

1) next quarterly DAYBUE sales numbers in August, as I will get a lot of insight to finetune my DAYBUE model,

2) the Q3 Angelmann Phase 2 result and

3) feedback from the planned Q3 meeting with the FDA. (I think Jon and his team might get some steers on endpoint selection for the Phase 3 trial.)

Absent any further news, I am happy to maintain my holding, and I don't expect to see that much happening with the SP. One thing that could change is a material change to Acadia's FY guidance on DAYBUE. Such an update would likely be a downgrade, given where we are with 1Q sales, IMHO - based on my modelling. (My model might be wrong if I screwed up something like the phasing of reimbursement, for example. But the Q2 result will help me to fix it.)

Hope that helps. I only feel comfortable holding a stock like this because I feel confident assessing clinical development risk. However, we each have to make a decision based on 1) our view of value (risk/reward), 2) other things in our portfolios, and 3) individual risk appetite.

That's probably a much more complicated answer than you were looking for. But that's my view and rationale, which I am recording here as much for my own benefit!