Neuren well funded for clinical trials

Neuren Pharmaceuticals (ASX:NEU) should have adequate cash reserves to fund its clinical development through to the establishment of its first licensing deal, according to Bell Potter Securities.

Neuren last week reported its results for calendar 2013, revealing it ended the year with a cash balance of NZ$26.5 million ($24.8 million).

In a research note, Bell Potter said it believes this should be enough to fund the company’s cash burn through to 2015. These include the costs of its four watershed clinical trials for drug candidate NNZ-2566 in Rett syndrome, Fragile X syndrome, traumatic brain injury and concussion.

Bell Potter expects the company to license NNZ-2566 in the second half of calendar 2015 for a total of US$680 million ($759.3 million), including upfront payments of US$120 million, which would cover the company’s financing needs beyond 2015.

Results from the Rett Syndrome trial are expected in the second half of this year, while completion of recruitment in the Fragile X syndrome and traumatic brain injury trials is expected by the end of the year.

Neuren’s total net loss for 2013 grew 91% to NZ$12.3 million, due to increased operating costs and an impairment charge related to the decision to cease development of former lead drug candidate Motiva.

During the year, Neuren moved its corporate office to Australia, and plans to start reporting its financial results in Australian currency from the current quarter.

Bell Potter increased its 12-month price target on Motiva shares by $0.02 to $0.19. The company has revalued the shares at $0.19 base case and $0.22 optimistic case, with a ‘buy’ rating.

Neuren Pharmaceuticals (ASX:NEU) shares were trading 3.3% higher at $0.094 as of around 1.30 pm on Wednesday.