Why is this ASX 200 pharmaceuticals stock crashing 15% today?

Investors haven't responded positively to a sales update.

| More on:
A man in a white coat holds a laptop in one hand and his head in the other, it's bad news.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Neuren Pharmaceuticals Ltd (ASX: NEU) shares are crashing deep into the red today.

At one stage today, the ASX 200 pharmaceuticals stock was down 15% to $18.16.

Neuren's shares have recovered a touch since then but remain down by 12%.

Why is this ASX 200 pharmaceuticals stock crashing?

Investors have been hitting the sell button today after Neuren released its first sales update since a short seller described its Daybue product as a flop with horrific side effects.

According to the release, its partner Acadia Pharmaceuticals (NASDAQ: ACAD) has announced fourth quarter Daybue net sales in the United States of US$87.1 million. This is up by a sizeable 30% from US$66.9 million in the third quarter.

This was the second full quarter of sales since the product was launched in April 2023. Net sales for 2023 since April came to US$177.2 million.

In addition, Acadia has provided Daybue sales guidance for FY 2024. It expects full-year net sales in 2024 of between US$370 million and US$420 million. This equates to an average of US$92.5 million to US$105 million per quarter.

While this is strong growth, it appears to have fallen short of expectations and spooked investors.

What does this mean for Neuren?

Neuren estimates that Acadia's update means royalties of A$12.8 million for the fourth quarter, which is up from A$10.4 million for the third quarter. This will bring its full year royalties to A$26.8 million for 2023

And based on Acadia's guidance, management expects the ASX 200 pharmaceuticals stock to generate royalties of between A$61 million and A$70 million in 2024 from Daybue.

Neuren shares remain up over 150% since this time last year despite recent weakness.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

Man in business suit carries box of personal effects
Healthcare Shares

Monash IVF shares jump 9% as CEO quits after second embryo incident

Two incidents at its clinics have cost this CEO his job.

Read more »

Woman with an amazed expression has her hands and arms out with a laptop in front of her.
Share Gainers

Guess which ASX 200 stock turned $5,000 into $34,264 in just three years!

Investors have been piling into this ASX 200 stock for years, sending the share price soaring.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Healthcare Shares

Cochlear shares sink 9% on guidance downgrade

Investors haven't responded positively to this update. Let's dig deeper into it.

Read more »

Scientists working in the laboratory and examining results.
Healthcare Shares

Telix shares push higher on investor day update

This radiopharmaceuticals company has grand plans for the future.

Read more »

Shot of a young scientist using a digital tablet while working in a lab.
Healthcare Shares

3 leading ASX healthcare shares with global reach

These 3 healthcare companies are having an outsized impact far beyond local markets.

Read more »

Man looks shocked as he works on laptop on top a skyscraper with stockmarket figures in graphic behind him.
Healthcare Shares

Macquarie tips more than 100% upside for this ASX All Ords healthcare stock

This company could be set to soar.

Read more »

A little boy, soon to be a brother, kisses and holds his mum's pregnant tummy.
Healthcare Shares

Monash IVF shares fall 25% following second embryo incident

Its been a forgettable start to 2025 for Monash IVF shareholders.

Read more »

Shot of two young scientists using a laptop in a laboratory.
Healthcare Shares

Buying CSL shares? Meet your new board director

CSL’s new board director has spent the last 11 years in an executive role at Australia’s $240 billion Future Fund.

Read more »