Neurocrine Biosciences is Monday's IBD Stock Of The Day. Milestones are stacking up in 2024 and Neurocrine stock just topped its 50-day line on the road to a breakout.
Investors know Neurocrine best for its tardive dyskinesia treatment, Ingrezza. Tardive dyskinesia was a relatively unknown condition when Ingrezza launched in 2017. The movement disorder is a side effect of some antipsychotics. Now, diagnosis rates are on the rise.
But enthusiasm is also building for Neurocrine's early-stage efforts to target muscarinic receptors in the brain. Doing so could lead to new treatments for other movement disorders, schizophrenia and central nervous system conditions. One analyst says the portfolio of muscarinic receptor-targeting drugs could be worth $1 billion.
Further, the Food and Drug Administration is currently reviewing Neurocrine's drug, crinecerfont, in patients with congenital adrenal hyperplasia, or CAH. This condition limits the adrenal glands from making certain hormones, impacting a child's normal development and growth.
"Our detailed analysis of the muscarinic platform and crinecerfont suggests solid growth opportunities into the next decade, which we believe is currently not priced in," UBS analyst Ashwani Verma said in a February report to clients. "We are increasing our 2029 sales to $3.64 billion (prior $3.29 billion) which includes pipeline programs."
Neurocrine Stock: The Case For Crinecerfont
Analysts remain fairly split on the opportunity for crinecerfont. UBS' Verma calls for a peak of $798 million in sales, while Wall Street broadly expects $741 million.
The company expects to file for approval of crinecerfont in the U.S. sometime in the second quarter. It's angling for approval in both children and adults. But that means the FDA won't make its decision on approving crinecerfont until late this year or early next.
Verma, the UBS analyst, acknowledges Neurocrine will have to spend handsomely to build awareness of CAH. The company plans to spend $50 million in prelaunch activities.
"Crinecerfont adoption may still be slow among endocrinologists who are not familiar with CAH management," he said. "CAH treatment needs a fine balance of glucocorticoid doses and androgen level."
He kept his buy rating on Neurocrine stock, but raised his price target to 159 from 128.
Muscarinic Portfolio Highlighted
With crinecerfont's review still a distance away, investors are now focusing on the company's early-stage schizophrenia treatment, NBI-568, RBC Capital Markets analyst Brian Abrahams said in a note to clients last month. This drug is one of Neurocrine's targeting a muscarinic receptor.
"We see a theoretically promising profile for '568 as well as favorable attributes and market opportunity for the muscarinic class overall," Abrahams said.
Karuna Therapeutics and Cerevel Therapeutics have muscarinic receptor-targeting treatments in development for schizophrenia.
Bristol Myers Squibb is buying Karuna for $14 billion, while Cerevel accepted AbbVie's $8.7 billion bid. These acquisitions have highlighted the excitement around the muscarinic drug class, which could be worth $1 billion across multiple diseases.
Abrahams notes Neurocrine is one of only five companies with a clinical-stage muscarinic drug.
"Though shares have since cooled off a bit since Neurocrine's earnings, our sense form investors has been that Neurocrine's recent strength was partially driven by enthusiasm around its muscarinic program," he said. He kept his sector perform rating and 129 price target on Neurocrine stock.
Neurocrine Stock Eyes Early Entry
Neurocrine stock is currently forming a flat base with a buy point at 143.35, MarketSurge.com shows. Promisingly, shares just retook their 50-day moving average. Friday's high of 140.33 offers investors an early entry.
Shares have a perfect IBD Digital Composite Rating of 99. This means Neurocrine stock ranks in the top 1% of all stocks on technical and fundamental metrics. Shares also have a Relative Strength Rating of 89. The RS Rating is a 1-99 scale of a stock's 12-month performance.
Neurocrine is also an IBD Tech Leader.
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