On the heels of a strong second-quarter report, Neurocrine Biosciences shelved a closely watched essential tremor drug, but NBIX stock jumped Friday.
The company didn't offer much insight other than to say the drug, dubbed NBI-827104, failed to meet its key goals in a midstage study.
"Based on the totality of data from the Phase 2a study, at this time, we do not plan to proceed further with the clinical development of NBI-827104 in essential tremor," Neurocrine said in a news release. It's still testing the drug in pediatric epilepsy and adult seizures.
On today's stock market, NBIX stock surged 8.5% to 104.04.
NBIX Stock: Second-Quarter Beat
The second quarter represented a beat.
Neurocrine earned 84 cents per share, on an adjusted basis, and reported $378.2 million in sales. Earnings climbed about 17% and topped forecasts for 62 cents. Sales rocketed 31% and came in above NBIX stock analysts' expectations for $342 million, according to FactSet.
Ingrezza, Neurocrine's bread-and-butter drug, generated about $350 million in sales and beat estimates for $324 million to $328 million, SVB Securities analyst Marc Goodman said in a report to clients. Ingrezza treats a movement disorder known as tardive dyskinesia. The rest of Neurocrine's sales came from collaboration revenue.
NBIX stock analysts had looked to NBI-827104 as a means to expand Neurocrine's growth drivers beyond Ingrezza. Neurocrine was coming from behind, trailing Jazz Pharmaceuticals and Praxis Precision Medicine in the roughly $13 billion market. Jazz and Praxis shares were unmoved late Thursday.
But SVB Securities' Goodman noted Neurocrine is still hopeful for NBI-827104 in other disorders with data from two programs due before year-end. Goodman kept his market perform rating on NBIX stock.
Cautious Guidance For The Year
For the year, Neurocrine increased its guidance to $1.35 billion to $1.4 billion in sales of Ingrezza. NBIX stock analysts had predicted adjusted income of $2.19 per share and $1.38 billion in sales.
Covid and seasonality are likely to weight on third-quarter results, Needham analyst Laura Chico said.
"While Ingrezza did well in the second quarter, management comments on the third quarter and the modest increase in sales guidance may raise questions on Ingrezza's growth trajectory for which we believe expectations are already high," she said in her note to clients.
Chico maintained her hold rating on NBIX stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
