Why are ASX:NEU, ASX:KLS and ASX:FLT in focus today?

Highlights:

• Neuren Pharmaceuticals faces a 14.2% share price decline due to a short-seller report targeting its US partner Acadia, alleging misrepresentation regarding the Trofinetide drug's efficacy.
• Kelsian Group experiences a significant 14.11% drop in shares, marking its most substantial decline since its ASX debut in 2013, amidst concerns over a marginal slip in profit during the first half of 2024.
• Flight Centre Travel Group witnesses an 8% share price decrease despite reporting strong half-year results, reinstating its interim dividend and showing notable improvements in net profit and operational metrics.

Neuren Pharmaceuticals faced a significant setback

Neuren Pharmaceuticals (ASX: NEU) faced a significant setback as its shares plummeted by 14.2% following a short-seller report targeting its US-based drug licensing partner, Acadia. The report, released by Culper Research, alleged misrepresentation regarding the safety and effectiveness of Neuren's Trofinetide drug, used for treating Rhett syndrome. Culper claims the drug's launch under the name Daybue has been a "total flop", contradicting sell-side estimates of over $800 million in peak revenues.

Allegations and Response

Culper's report cited data from the FDA Adverse Event Reporting System and feedback from caregivers and physicians, alleging low patient retention rates due to safety concerns. However, Neuren defended its partner, referencing analyst reports and data from Acadia suggesting a substantial portion of patients remained on therapy. Despite the controversy, Acadia's share price experienced only a modest decline.

Market Impact and Reaction

Neuren's shares had surged over 1000% since December 2021, driven by optimism surrounding the drug's launch. However, the short-seller report cast doubts, leading to a sharp decline. Notably, ASIC-disclosed short positions on Neuren had reduced significantly in recent months, indicating strong investor confidence prior to the report.

Kelsian Group Faces Market Plunge

Shares of Kelsian Group (ASX: KLS) witnessed a staggering 14.11% decline, marking the most significant drop since its ASX debut in 2013. The company's financial performance during the first half of 2024 showed a marginal slip in profit, prompting concerns among investors. Despite the downturn, Kelsian announced an interim dividend, showcasing its commitment to shareholders.

Flight Centre's Share Downturn Despite Strong Results

Flight Centre Travel Group Ltd (ASX: FLT) experienced an 8% drop in its share price despite reporting robust half-year results. The company reinstated its interim dividend and reported significant improvements in net profit and operational metrics. However, investor sentiment remained shaky, possibly due to unmet high expectations and the company maintaining its previous outlook.

Conclusion

The recent turmoil surrounding Neuren Pharmaceuticals, Kelsian Group, and Flight Centre highlights the volatile nature of the stock market. While Neuren grapples with allegations, Kelsian and Flight Centre face challenges in maintaining investor confidence despite solid fundamentals. As these companies navigate through turbulent times, their strategic decisions and communication with stakeholders will be crucial in shaping their future trajectories.

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