Neuren Pharmaceuticals (ASX:NEU) facing regulatory uncertainty in the European Union (EU) for its investigational drug trofinetide to treat Rett syndrome may delay royalties from sales in the region, Jefferies said in a note on Thursday.

The European Medicines Agency (EMA) Committee for Medicinal Products for Human Use (CHMP) gave a negative trend vote this week on the drug candidate's market authorization application, possibly due to concerns about the effect size in the confirmatory trial.

Jefferies said the negative trend vote is an early indication that the regulatory authority might issue a negative opinion on the application at the final vote.

The investment firm now expects royalties from EU sales of trofinetide to kick in the fourth quarter of fiscal 2026, and not second quarter.

Meanwhile, it projects Neuren's experimental drug NNZ-2591 for treating Pitt-Hopkins Syndrome, a rare neurodevelopmental disorder, will receive reimbursement approval in the US in fiscal 2029.

Jefferies lowered the company's fiscal 2026 EPS estimate by 17% and cut its price target to AU$27 from AU$27.75, while maintaining a buy rating.

Neuren Pharmaceuticals' shares fell past 2% in recent Friday trade.