I'm not as negative on the number as I don't think it has too much of a direct effect on the value of NEU, although will probably have a big effect on the SP. For me the value in NEU is in the milestone payments, the steady royalty income and then the continued success and commercialism/sale of NNZ-2591.

I think this is a bit of an own goal from ACAD, they really did a shit job of managing expectations, they had a good system going last year of giving only next quarter guidance and then exceeding it. To shift to annual guidance after only three quarters, and to have a high target set, that was more than 4 times your best quarter to date, did seem aspirationally silly. Now with the downgraded guidance, the good news story starts to get eroded. Good call by @mikebrisy on the likelihood of a downgrade earlier this year. Even to hit the lower level ($340m) of the revised guidance will require an acceleration from where they are currently with only $162m for Q1 and Q2 combined. Plotting the actual quarterly numbers does look like that at worst, they have hit an asymptote and at best have reached a much lower level of growth rate going forward.

While more patients is better than less, it isn't the main game for NEU as the big payoff is the milestone payments. The US$50m payment looks safe as the $250m threshold should comfortably be exceeded this year, but the $500m milestone does look like a stretch, and becomes more of a medium term payoff if it eventuates. The difference in guidance changes NEU revenue royalty at the lower end from $AUS61 to $55m, not great but kinda immaterial in the overall scheme of things.

I listened to the ACAD call and some interesting bits for me were the total patient pool can be capped at 5000, more might get diagnosed but I don't think this is a near term event and shouldn't be included in growth forecasts. The overseas milestones will be longer term as Japan will require more clinical data, it wasn't clear if Europe will need this as well. So ROW milestones are probably more like a FY2027 or beyond payoff.

This line is a bit misleading - In market research, physicians surveyed stated that over the next 24 months they expect to expand prescribing to more than 70% of their eligible patients. From the Q/A it became clear that these docs might have 40% of their patients on Daybue currently and will likely increase to 70% over time. So the counterfactual is that their are 30% of the patient pool that the docs just don't think are suitable for Daybue. So of our 5000 potential patient pool we can drop this by 30%, so now we have a more likely number of 3500 total patients that might try Daybue.

-They also said that 1/3 of the patient pool (5000) have now tried Daybue, up from 25% last quarter. So 1500 patients have tried the drug and they currently have 900 patients still using Daybue. So the drop out rate is 40%, which tracks with their rate of persistence which is 58%. It also sounded like only 20% of these drop out patients have retried, (I think it was within 60 days, otherwise very few do) but most have not. This may change as symptom management improves as alluded to, but some of their story around patient recapture has probably been over-egged.

So of the 3500 patient pool, 58% will persist. This gives a ballpark patient pool of 2030. Price rise of 4% has gone through so a treatment cost is now $390k/yr, most patients are on 75-80% of a full dose so per patient they are getting between $292-312k. So at full penetration the US market is probably worth a maximum revenue of $593-633m. Plenty of wiggle room on these numbers but gives a ceiling view of Daybue and what it means for NEU. At US$500m revenue the royalty is worth US$55m as an annual royalty and the $50m milestone payment. Compared to this year where if they meet the low end of guidance and grow no further they will get the $250m milestone payment (US$50m) plus an annual royalty of US$25m.

Just wanted to get this down while it was fresh in my head. @mikebrisy I also don't rate the ACAD management team very highly, I think they try to confuse, just as much as illuminate in their investor engagements. NEU is a different story though.