Neuren Extends Buy-Back as Cash Reserves and Daybue Sales Grow

About Neuren Pharmaceuticals Ltd

Neuren Pharmaceuticals Limited (ASX: NEU), a biopharmaceutical company focused on developing therapies for neurological disorders, announced the continuation of its A$50 million on-market share buy-back program, which commenced in November 2024. The initiative is designed to enhance shareholder value by reducing the number of outstanding shares, thereby increasing earnings per share and return on equity.

Overview of the Buy-Back Program

Neuren Pharmaceuticals launched a $15 million on-market share buy-back in late 2023, targeting a reduction in capital base while increasing shareholder value. As of May 2025, approximately $3.75 million worth of shares have been repurchased, representing a quarter of the intended buy-back volume. The transactions are being executed progressively to avoid distorting market pricing and to ensure flexibility depending on liquidity and market conditions.

The buy-back aligns with Neuren’s long-term capital management strategy, which prioritises shareholder returns while maintaining a robust balance sheet. The company stated that the shares were undervalued relative to intrinsic value, given its strong royalty stream from its commercialised rare disease drug, Daybue™, developed in partnership with Acadia Pharmaceuticals.

Rationale and Timing

The decision to initiate the buy-back stems from a combination of factors, including perceived undervaluation, excess cash reserves, and a desire to return value to long-term shareholders. With more than $120 million in cash and zero debt, Neuren is in a solid financial position to fund both internal R&D and opportunistic capital returns.

Timing-wise, the program also coincides with a period of global biotech volatility, in which many growth-stage biotech companies are experiencing depressed share prices. By executing a buy-back now, Neuren not only signals confidence but also capitalises on price inefficiencies to enhance EPS and shareholder ownership per share.

Financial Context and Cash Reserves

Neuren’s financial strength is underpinned by ongoing royalty revenue from Daybue™, which launched commercially in the US in 2023 and has gained strong traction in treating Rett Syndrome. In its most recent quarterly report, Neuren confirmed receipt of more than $30 million in royalties from Acadia since launch, with future milestone payments expected as international expansion continues.

In addition to royalties, the company’s fiscal discipline has allowed it to maintain a lean operating model, supporting a cash runway that covers multiple clinical programs. This healthy cash buffer not only enables the buy-back but also supports Neuren’s development pipeline, including trials for other neurodevelopmental disorders such as Phelan-McDermid syndrome and Pitt-Hopkins syndrome.

Market Reaction and Shareholder Response

Investor reaction to the buy-back announcement has been broadly positive, with the share price maintaining stability and trading volumes reflecting steady institutional support. Fund managers have noted that buy-backs of this scale in the biotech space are rare, particularly for companies with multiple development programs underway.

The buy-back has also attracted interest from longer-term investors looking for disciplined capital management in a high-risk sector. The consistent communication and transparency from Neuren regarding the pace and rationale of the repurchases have helped build investor trust and mitigate uncertainty.

Capital Management Strategy

The share buy-back program also plays a role in reinforcing Neuren’s long-term capital management philosophy. By returning surplus capital to shareholders while retaining sufficient liquidity for strategic initiatives, the company demonstrates a balanced approach to growth and value preservation. The program also signals management’s confidence in the intrinsic value of the company’s shares, often perceived by markets as a bullish indicator, particularly when supported by consistent revenue performance and a strong pipeline.

From a governance perspective, Neuren has maintained transparent communication with investors throughout the buy-back process, regularly disclosing repurchase volumes and price ranges via ASX announcements. This openness has supported investor trust and reduced uncertainty during a period of broader market volatility. It also reflects best practices in shareholder engagement, which can contribute to stronger institutional interest over time.

Neuren’s continued ability to generate cash from its existing products and its measured use of capital markets mechanisms such as the buy-back position it favourably within the ASX-listed biotechnology sector. With many peers still in pre-revenue phases or dependent on equity dilution for funding, Neuren’s model of sustainable self-funding growth places it in a stronger position to execute on its clinical and commercial goals while delivering value to shareholders.

Outlook and Pipeline Progress

Looking ahead, Neuren is well-positioned to deliver further upside through clinical readouts in its Phase 2 studies for multiple conditions. These include Phelan-McDermid and Pitt-Hopkins syndromes, both of which represent significant unmet needs in paediatric neurodevelopment.

The company is also exploring expanded use of its lead compounds in broader indications, leveraging strong relationships with regulators and rare disease advocacy groups. With Daybue™ already showing durable demand in the US, Neuren’s focus now shifts to building new commercial partnerships and seeking regulatory approvals in Europe and Asia.