An ASX healthcare stock is back in focus today after a fresh update lifted confidence in its long-term outlook.
The Neuren Pharmaceuticals Ltd (ASX: NEU) share price is up 7.77% to $20.80.
Over the past year, the stock has climbed around 70%, making it one of the strongest ASX performers in the healthcare sector.
Let’s take a closer look at what the company announced to the market.
What’s behind today’s update
Today’s update focused on the company’s main product, DAYBUE, which is used to treat Rett syndrome, a rare neurological condition.
The company’s US partner now believes global sales could reach about US$700 million by 2028. That is a big increase from current levels and suggests demand for the treatment is continuing to grow.
More than 2,000 patients in the US have now been treated with DAYBUE. Importantly, around 55% of patients are still using the drug after 12 months, which has helped support steady, repeat revenue over time.
Further growth is anticipated from the introduction of a new powder version of the drug, a larger US sales team, and potential approvals in Europe and other markets.
A key benefit for Neuren is that it earns milestone payments and royalties, while its partner handles most of the sales and marketing costs.
Why investors are taking notice
This update helps explain why investors continue to back the stock, even after its strong run.
Neuren is now valued at about $2.5 billion, despite having just one approved product. However, that product is already generating solid income and still has plenty of room to grow.
The company also has another drug in late-stage development, which could add a second source of revenue in the future.
What the chart is telling us
Looking at the technical side of things, the share price remains in a healthy uptrend.
The stock has been moving sideways between $18.50 and $21 for several months, with buyers stepping in around the $18.50 to $19 level. The price is still sitting above key trend lines.
The relative strength index (RSI) is sitting near neutral levels, suggesting the stock is not overbought, despite the strong 12-month run. That leaves room for further upside if positive news continues.
Foolish bottom line
Today’s announcement supports the long-term growth outlook for Neuren.
There is clear momentum in sales and patient numbers, with more growth opportunities ahead. While expectations are high, the business continues to make steady progress.
The post The next 3 years could be huge for this ASX healthcare stock. Here’s why appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras 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.
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