IBD Stock Analysis
- Stocks in pullback mode as they hold above the 50-day moving average
- The sector ranks second among 197 industrial groups; the action is fourth in the group
- The composite score is 96 out of a possible 99; Relative strength ranks 92
Industry Group Classification
* Not real-time data. All data shown was captured at 12:42 pm EDT on 08/31/2022.
IBD Day Stock Neurocrine Biosciences (NBIX) is shrugging off broader market troubles, buoyed by movement disorder drug Ingrezza and hopes among NBIX stock investors of another blockbuster.
The company recently ruled out a high-profile treatment for essential tremor. Typically, a move like that would sink a biotech stock.
Instead, NBIX shares rose 8.5%. Since then, stocks have managed to hold onto those gains, even as Wall Street feels the pangs of a lower-than-expected jobs report and continued concern about rising interest rates.
In midday trading on the stock market today, shares of Neurocrine were up 1.8% at 105.19.
During the June quarter, Neurocrine’s biggest moneymaker, Ingrezza, generated $350 million in net sales. Ingrezza treats an involuntary movement disorder called tardive dyskinesia. Sales increased by a double-digit percentage and exceeded expectations.
Other Drugs Drive NBIX Stock
Neurocrine also sells a Parkinson’s disease drug called Ongentys and two women’s health drugs called AbbVie (ABBV). Those sales are smaller and have disappointed investors.
True, Neurocrine just ruled out its potential essential tremor treatment, saying the drug failed in the middle stage of the trial. But there is still a lot to like in the pipeline, analysts say.
Mizuho Securities analyst Uy Ear notes that Neurocrine is also testing the same drug that failed to help essential tremor patients in patients with a pediatric form of epilepsy. He expects the first test results from that effort this year. In addition, Neurocrine is expected to soon petition US regulators to approve Ingrezza for Huntington’s disease patients with movement complications.
Neurocrine also hopes to start studies in schizophrenia and an undisclosed illness this year. The company could also have trial results for depression and seizure treatments next year.
“Looking ahead to 2023, we see more room for optimism with top-line readings expected across multiple mid- and late-stage shows,” Ear said in a report to clients. He kept his neutral rating on NBIX shares but raised his price target from 95 to 98.
Wedbush analyst Laura Chico is looking at a drug called crincerfont. Neurocrine is testing it in patients with an inherited disorder of the adrenal glands that affects growth and development. Neurocrine is on track to release additional test data in 2023, she said in her note to clients.
five years and growing
Chico recently raised his expectations for revenue from Neurocrine this year, reflecting momentum from the company’s guidance. Now, she projects $1.405 billion in Ingrezza sales, above Neurocrine’s call of $1.35 billion to $1.4 billion in sales.
“All in all, even after five years on the market, Ingrezza appears to have favorable growth dynamics,” he said. “The (essential tremor) loss is unfortunate, but we expect more pipeline opportunities to emerge in the next 12-18 months.”
Apparently, that’s what investors in NBIX stock are doing right now. The stock remains well above its 50-day moving average, according to MarketSmith.com.
Biotech stocks also hold a strong position. The industry group is ranked second out of 197 groups tracked by Investor’s Business Daily. In that group, Neurocrine shares rank fourth by composite rating. Its CR of 96 puts NBIX shares in the top 4% of all stocks for fundamental and technical measures, according to IBD Digital.
Meanwhile, Neurocrine’s relative strength line is at a 52-week high. The stock has a relative strength rating of 92. This places NBIX stock in the leading 8% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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