Neuren Pharmaceuticals has initiated a discretionary on-market share buy-back program of up to 5%, citing a strong cash position and undervaluation relative to internal and analyst assessments.
- New on-market share buy-back up to 5% of shares over 12 months
- Buy-back discretionary and subject to market conditions
- Strong cash flow supported by DAYBUE franchise
- Ongoing funding for NNZ-2591 clinical development programs
- Shares bought back will be cancelled, reducing total shares on issue
Neuren’s Strategic Move to Enhance Shareholder Value
Neuren Pharmaceuticals (ASX, NEU) has announced a new on-market share buy-back program, allowing the company to repurchase up to 5% of its total shares over the next 12 months. This move reflects the board’s confidence that the current share price does not fully reflect the company’s intrinsic value, as highlighted by Chair Patrick Davies.
According to Davies, Neuren’s shares are materially undervalued compared to both internal analyses and recent analyst valuations. The company’s robust cash position, bolstered by growing revenues from its DAYBUE® franchise, provides the financial flexibility to pursue this buy-back without compromising ongoing operations or development programs.
Balancing Buy-Back with Ongoing Development
The buy-back program is designed to be flexible and discretionary. Neuren will continuously assess market conditions, share price movements, operational performance, and investment opportunities before executing any purchases. The company also confirmed that the buy-back will be paused during blackout periods, including the lead-up to its full-year financial results release scheduled for 27 February 2026.
Importantly, Neuren emphasised that its clinical development pipeline remains well funded alongside the buy-back. The company’s NNZ-2591 candidate, targeting rare neurodevelopmental disorders such as Phelan-McDermid syndrome and Pitt Hopkins syndrome, continues to progress with ongoing Phase 3 and positive Phase 2 trial results. These programs benefit from orphan drug designations in both the US and EU, which provide regulatory incentives and market exclusivity.
Market Implications and Shareholder Impact
Shares repurchased under the program will be cancelled, effectively reducing the number of shares on issue and potentially enhancing earnings per share and shareholder value. The buy-back will not require shareholder approval as it remains within the prescribed limits under Australian law.
Neuren’s decision to initiate this buy-back signals a proactive approach to capital management, aiming to support the share price and return value to investors while maintaining momentum in its drug development efforts. The company’s partnership with Acadia Pharmaceuticals for the commercialisation of DAYBUE® in the US further underpins its growth prospects.
Bottom Line?
Neuren’s buy-back sets the stage for renewed investor focus ahead of upcoming trial milestones and financial results.
Questions in the middle?
- How aggressively will Neuren execute the buy-back amid fluctuating market conditions?
- What impact will the buy-back have on Neuren’s share liquidity and trading volumes?
- How will upcoming clinical trial results influence Neuren’s valuation and buy-back strategy?