Neuren Pharmaceuticals Reports A$65M Royalty Income as DAYBUE Hits A$510M Milestone

Neuren reports A$65 million royalty income as DAYBUE franchise reaches A$510 million milestone

Neuren Pharmaceuticals has delivered Neuren Pharmaceuticals 2025 Financial Results showing A$65 million in royalty income, representing a 15% increase from the previous year. The biotechnology company recorded a profit after tax of A$30 million for the full year ending 31 December 2025, demonstrating the commercial strength of its DAYBUE (trofinetide) franchise for Rett syndrome treatment.

Since DAYBUE launched in April 2023, Neuren has earned cumulative income of A$510 million from its licensing agreement with Acadia Pharmaceuticals. The company closed 2025 with A$296 million in cash and short-term investments, up from A$222 million twelve months earlier. Net cash generated from operating activities reached A$125 million, marking a substantial turnaround from net cash used of A$11 million in 2024.

Jon Pilcher, CEO

“In 2025 we achieved a critical milestone for Neuren’s value creation strategy with the commencement of our Koala Phase 3 clinical trial of NNZ-2591 in Phelan-McDermid syndrome. All of this is self-funded by our growing revenue from DAYBUE, which has now reached A$510 million since launch in 2023.”

Understanding biotech royalty models and why recurring revenue matters

Pharmaceutical royalty agreements represent one of the most valuable commercial structures in biotechnology. When a company licenses its drug to a larger pharmaceutical partner, it typically receives both upfront payments and ongoing royalties calculated as a percentage of net sales.

Neuren’s tiered royalty structure with Acadia demonstrates this model in action:

1. 10% of net sales up to US$250 million annually
2. 12% of net sales between US$250 million and US$500 million
3. 14% of net sales between US$500 million and US$750 million

Recurring royalty income differs fundamentally from one-time milestone payments. Milestones reward achievement of specific development or sales thresholds, whereas royalties provide predictable, growing revenue streams tied directly to commercial success. For Neuren, this translates to quarterly cash flows that fund research and development programs without requiring capital raises or shareholder dilution.

The key benefits of royalty-based income models for investors include:

1. Predictable cash generation – Quarterly royalties from established products provide visibility into future revenue
2. High-margin revenue – Royalties typically carry minimal associated costs, flowing directly to the bottom line
3. Self-funding growth – Recurring income eliminates the need for dilutive capital raises to fund clinical programs

DAYBUE net sales grow 12% to US$391 million with new formulation launched

DAYBUE delivered net sales of US$391 million during 2025, representing 12% growth from the US$348 million recorded in 2024. The number of unique patients receiving DAYBUE exceeded 1,000 for the first time, whilst the persistency rate after twelve months of treatment improved to approximately 55%.

Significant headroom for expansion remains within the US market. Two-thirds of the 6,000 diagnosed Rett syndrome patients have not yet tried DAYBUE. Acadia completed a ~30% expansion of its US field force during 2025 to accelerate penetration beyond specialist Rett syndrome centres of excellence. Momentum built throughout Q4 2025, with 76% of new prescriptions originating from community physicians rather than specialist centres.

In December 2025, the US Food and Drug Administration approved DAYBUE STIX (trofinetide) for oral solution, a dye- and preservative-free powder formulation. The new formulation launched on a limited basis in Q1 2026, with broader availability planned for early Q2 2026. The powder format addresses families who had declined or discontinued the liquid formulation due to taste or volume concerns, potentially converting a meaningful number of new patients.

Acadia has provided guidance for 2026 net sales of US$460-490 million, implying royalty income to Neuren of A$70-77 million based on exchange rates of 0.70-0.72 AUD/USD. This guidance reflects US sales and international named patient programmes only, excluding any potential European Union commercial sales.

International expansion and Japan timeline

The Israel Ministry of Health approved DAYBUE oral solution in January 2026, adding another territory to Neuren’s international footprint. In Japan, trofinetide received Orphan Drug Designation, and Acadia commenced a clinical trial to support a marketing application. Results are anticipated in Q4 2026 or Q1 2027, facilitating a regulatory submission in 2027.

Named patient supply programmes continue to expand across Europe, the Middle East and Latin America, providing early access whilst regulatory approvals are pursued. In Europe, the Committee for Medicinal Products for Human Use informed Acadia of a negative trend vote on the Marketing Authorisation Application in February 2026. Acadia intends to request a re-examination following formal opinion adoption in late February, with the re-examination decision expected at the end of Q2 2026.

Phase 3 Koala trial commences with FDA alignment on single pivotal study

Neuren commenced its Koala Phase 3 clinical trial for Phelan-McDermid syndrome (PMS), with the first two participants beginning dosing in February 2026. The trial represents a critical value creation milestone, positioning NNZ-2591 for potential regulatory approval as a first-in-class treatment for a severe neurodevelopmental disorder with no approved therapies.

Koala is a randomised, double-blind, placebo-controlled trial evaluating NNZ-2591 in approximately 160 children aged 3-12 years with PMS. Following a screening period of up to four weeks, participants receive treatment for 13 weeks, with all participants eligible to continue in a 12-month open-label extension.

The FDA agreed in April 2025 to accept a single Phase 3 trial to support a New Drug Application, significantly de-risking Neuren’s pathway to market. This agreement followed an End of Phase 2 Meeting where other key programme features received FDA alignment. The co-primary endpoints pair the Vineland Adaptive Behavior Scales (VABS-3 Receptive-Raw Score) with the Phelan-McDermid Syndrome Assessment of Change (PMSA-C). Both measures demonstrated robust, clinically meaningful improvements in Neuren’s Phase 2 open-label trial.

Neuren received Fast Track designation from the FDA in October 2025, enabling more frequent interactions with regulators and potential eligibility for accelerated approval pathways. The company’s financial position means no additional funding is required to execute the programme through to New Drug Application submission.

The US Congress reauthorised the Rare Pediatric Disease Priority Review Voucher programme to 30 September 2029. Recent voucher sales achieved US$200 million and US$205 million, demonstrating the significant non-dilutive value these instruments command. Neuren holds Rare Pediatric Disease designation for NNZ-2591 in PMS, meaning FDA approval would qualify the company for a voucher with 100% ownership and proceeds from any future sale.

Pipeline expansion into Pitt Hopkins syndrome and HIE

Neuren received Fast Track designation for Pitt Hopkins syndrome (PTHS) during 2025, alongside a new US patent covering NNZ-2591 to treat PTHS with expected expiry in 2040. In early 2026, FDA feedback indicated that a PTHS-specific clinical global impression scale may serve as a co-primary endpoint if accompanied by an observer-reported functional outcome measure, similar to the approach agreed for PMS.

The company initiated development of NNZ-2591 for hypoxic-ischaemic encephalopathy (HIE), a brain injury caused when insufficient oxygen reaches a baby’s brain before or shortly after birth. Neuren partnered with Hope for HIE in September 2025, the global organisation connecting families, researchers and clinicians focused on improving outcomes for children with HIE.

FDA feedback received in February 2026 on Neuren’s IND application pathway for HIE generally accepted the proposed initial clinical study design and NNZ-2591 doses. The FDA requested additional juvenile animal study data to support dosing in neonatal participants prior to study initiation. Neuren plans to generate this data before submitting the IND application.

Neuren’s NNZ-2591 development programmes now encompass:

• Phelan-McDermid syndrome – Phase 3 trial active, Fast Track designation
• Pitt Hopkins syndrome – Fast Track designation, patent protection to 2040
• Hypoxic-ischaemic encephalopathy – IND-enabling studies underway
• SYNGAP1-related disorder – Preclinical validation completed

Capital management strategy signals board confidence in undervaluation

Neuren completed its A$50 million on-market share buyback during 2025, acquiring shares at an average price of A$12.27. The Board initiated a new buyback programme commencing 2 March 2026, explicitly stating that the current share price “materially undervalues Neuren’s assets, relative to internal analyses and the range of recently published analyst valuations.”

The new buyback will not exceed 5% of total shares on issue twelve months prior to commencement. Management emphasised that all NNZ-2591 development programmes for PMS, PTHS and HIE remain well-funded alongside the capital return initiative. Throughout the twelve-month buyback period, Neuren will assess market conditions, share price performance, operational results and investment opportunities, retaining discretion to vary, suspend or terminate the programme.

Cash and short-term investments stood at A$296 million at year-end, up from A$222 million at 31 December 2024. Net cash from operations totalled A$125 million for 2025, compared with net cash used of A$11 million in the prior year. This operational cash generation, combined with growing DAYBUE royalties, positions Neuren to simultaneously fund clinical development, return capital to shareholders, and maintain financial flexibility.

2026 catalysts and investment thesis

Neuren enters 2026 as a profitable, cash-generative biotechnology company with multiple near-term value drivers across its commercial and clinical portfolios. The company has transitioned from capital-intensive development to sustainable operations funded entirely by DAYBUE royalties, eliminating dilution risk whilst advancing multiple high-value programmes.

Key catalysts for 2026 include:

1. DAYBUE STIX broad launch – Q2 2026 rollout of powder formulation targeting patients who declined liquid format
2. CHMP re-examination decision – End of Q2 2026 verdict on European approval pathway
3. Japan trial results – Q4 2026/Q1 2027 data enabling 2027 marketing application
4. Koala Phase 3 enrollment – Ongoing patient recruitment across approximately 160 participants
5. Royalty growth trajectory – A$70-77 million guidance represents 8-19% growth from 2025

The Board’s decision to initiate a second buyback whilst explicitly stating shares are materially undervalued sends a clear signal regarding management’s view of intrinsic value relative to current market pricing. Combined with FDA alignment on a single Phase 3 trial for PMS, reauthorisation of the Priority Review Voucher programme, and ongoing DAYBUE franchise expansion, Neuren presents a rare combination of commercial profitability, clinical advancement and active capital returns within the ASX biotechnology sector.

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