Why Neuren shares are edging lower on Thursday

Neuren Pharmaceuticals Ltd (ASX: NEU) shares are trading slightly lower on Thursday afternoon. The move follows an announcement released after market close yesterday.

At the time of writing, the Neuren share price is down 0.60% to $13.35.

The decline comes despite the company unveiling a new capital management initiative.

Here is what was announced.

Neuren launches on market share buyback

According to the release, Neuren confirmed it will commence a new on-market share buyback program.

The buyback will run for up to 12 months and will be carried out under New Zealand corporate law. The company said it may purchase up to 5% of its issued shares over that period.

Any shares bought back will be cancelled, which reduces the total number of shares on issue. A lower share count is likely to improve earnings per share (EPS) and support shareholder returns over time.

Management said the decision reflects the board’s view that the current share price does not fully reflect the company’s underlying value. However, the buyback will be conducted at the company’s discretion and may be paused during blackout periods, including the lead-up to financial results.

Neuren is scheduled to release its 2025 full-year results on 27 February 2026.

How Neuren makes its money

Neuren is a biopharmaceutical company focused on treatments for serious neurological disorders that appear in early childhood.

Its main source of revenue comes from Daybue, also known as trofinetide. The treatment was approved by the US Food and Drug Administration in 2023 for Rett syndrome and is commercialised in the United States by Acadia Pharmaceuticals under a global licence agreement.

Neuren earns royalty and milestone payments linked to sales performance. Since launch, Daybue has become a key driver of the company’s financial results.

The company is also developing NNZ 2591, a drug candidate currently in clinical trials. It is being studied across several rare childhood conditions, including Phelan McDermid syndrome, Pitt Hopkins syndrome, and Angelman syndrome.

What investors will be watching next

In the near term, attention will likely turn to Neuren’s upcoming full-year results later this month.

Investors will be looking for updates on Daybue sales trends, royalty income, cash position and progress across the NNZ 2591 trials.

While today’s share price movement is modest, the announcement signals that management is prepared to return capital and support the stock at current levels.

Keep in mind that with biotech companies, future performance depends heavily on regulatory milestones, clinical data and commercial execution.

The post Why Neuren shares are edging lower on Thursday 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.