Even though Health Care sector (XHJ) is slightly down, there are some ASX listed companies, which are bucking the trend. Two stocks of such growing companies to invest in are
Neuren Pharmaceuticals (ASX: NEU)
Neuren Pharmaceuticals (ASX: NEU) recently announced a significant on-market share buy-back program of up to A$50 million, demonstrating management's confidence in its growth outlook. In conjunction, Neuren released its Q3 2024 update, highlighting royalties earned in the quarter at A$13.2 million, up from A$12.7 million in Q2, bringing cumulative royalties for the year-to-date to A$37.5 million. Based on Acadia Pharmaceuticals’ guidance for DAYBUE (trofinetide) net sales and cumulative net sales to date, Neuren estimates Q4 royalties to fall between A$16 million and A$18 million. Importantly, Acadia’s DAYBUE has already surpassed its 2024 sales milestone threshold of US$250 million, which entitles Neuren to a milestone payment of US$50 million to be recognized in Q1 2025.
Projected 2024 income for Neuren, which includes royalties, milestone payments, a share of the Priority Review Voucher (PRV) net proceeds, and approximately A$11 million in interest income, is anticipated to range between A$216 million and A$218 million. Neuren’s cash and term deposits stood at A$210.2 million as of 30 September 2024, down slightly from A$213.2 million at the end of June, with year-to-date interest income fully covering the company's corporate expenses. Acadia reported Q3 2024 net sales of US$91.2 million for DAYBUE, marking an 8% sequential growth and a 36% increase year-over-year. For 2024, Acadia narrowed its guidance to US$340–350 million in net sales, aligning closely with its initial estimates.
In a further growth driver, Health Canada approved DAYBU in October 2024 for treating Rett syndrome in patients aged two and older, expanding DAYBU’s market reach in North America. Canadian net sales will contribute to total North American sales, impacting Neuren’s royalty and milestone payments. Rett syndrome prevalence in Canada is estimated at 600–900 patients, adding incremental revenue potential to DAYBUE’s sales momentum. Neuren is among the best growth stocks to buy now as it is entitled to quarterly royalties and up to US$350 million in milestone payments as cumulative sales targets are achieved. Beyond DAYBUE, Neuren is progressing its clinical pipeline, specifically preparing for a Phase 3 trial for PMS, including selecting trial sites, service providers, and manufacturing supplies. CEO Jon Pilcher emphasized the company’s commitment to advancing innovative treatments, aligning closely with significant unmet medical needs. As Neuren deepens its partnership with Acadia and moves forward with promising clinical candidates, the company is positioned to deliver substantial shareholder value. Neuren’s robust financial standing, milestone achievements, and a well-defined clinical strategy highlight its potential for strong, sustained growth. The share buy-back underscores management’s confidence, adding further value to shareholders. Looking ahead, Neuren’s revenue stream from DAYBUE royalties, milestone payments, and its expanding clinical pipeline makes it an attractive candidate for long-term investors focused on biopharmaceutical growth in rare diseases.
Mesoblast Limited (ASX: MSB)
Mesoblast Limited (ASX: MSB) has had a highly productive first quarter of FY2025, with significant advancements in its clinical programs and business operations. A key achievement was submitting the Biologics License Application (BLA) for Ryoncil® (remestemcel-L) to the U.S. FDA. This is a significant step toward gaining approval for the drug as a treatment for children with steroid-refractory acute graft-versus-host disease (SR-aGvHD). The FDA has been expected to take action as of the PDUFA goal date of January 7, 2025. Ahead of such approval, Mesoblast entered into a strategic financing arrangement, through which it obtained up to US$50 million in convertible notes. Meanwhile, the company has been cutting costs and has managed to bring down its net operating spend by 26% compared to the same period last year, resulting in US$10.5 million for the quarter.
The company is one of the growth stocks having also advanced several of its other lead therapies. For Ryoncil, the company remains readying for a targeted commercial launch, where a manufacturing process is already established, and its product inventory is ready to go into distribution once approval is obtained. For Revascor® (rexlemestrocel-L), Mesoblast received both Rare Pediatric Disease and Orphan-Drug Designations from the FDA for the treatment of children with hypoplastic left heart syndrome (HLHS), a life-threatening congenital heart defect. Additionally, Mesoblast is preparing for an FDA meeting to discuss Revascor's potential accelerated approval for treating chronic heart failure with reduced ejection fraction (HFrEF) in patients with left ventricular assist devices (LVADs).
Mesoblast's Phase 3 program for rexlemestrocel-L in chronic low back pain due to degenerative disc disease is on track as planned with enrolment has begun in the confirmatory Phase 3 trial across multiple U.S. sites. This trial follows a successful earlier study showing significant pain reduction and potential opioid cessation benefits. The company also received Regenerative Medicine Advanced Therapy (RMAT) designation from the FDA, which accelerates the approval process. As of September 30, 2024, Mesoblast has cash of US$51.1 million and access to an additional US$60.0 million on FDA approval of Ryoncil, putting the company in a healthy position going forward for future growth and commercialization.
Source: Company’s Report
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