Neurocrine Biosciences is Wednesday's IBD Stock Of The Day after the biotech topped Wall Street's sales expectations and wrapped a key regulatory filing.
Last month, Neurocrine asked the Food and Drug Administration to approve its drug, crinecerfont, the company said in Wednesday's news release. Neurocrine developed crinecerfont to treat congenital adrenal hyperplasia, a genetic condition that limits a child's growth and development.
The filing came a quarter ahead of expectations, Wedbush analyst Laura Chico said in a report. Further, Neurocrine expects to have the results of two Phase 2 studies in the third quarter. They're testing drugs for schizophrenia and cognitive impairment tied to the same disease.
"Looking forward, pipeline updates will become an increasingly important part of the Neurocrine story to diversify beyond Ingrezza's success," she said. "With that in mind, we look forward to additional readouts in the third quarter."
Neurocrine stock rose 4% to close at 143.03. Shares are forming a flat base with a buy point at 148.37, according to MarketSurge. But investors could also use the April 23 high of 145 as an early entry.
Neurocrine Stock: Ingrezza Beats Most Forecasts
Ingrezza is Neurocrine's treatment for movement disorders, including tardive dyskinesia and chorea associated with Parkinson's disease. Chorea and tardive dyskinesia cause uncontrolled movements. In the first quarter, Ingrezza generated $506 million in sales, surging 23% year over year.
That topped the forecast for $502.1 million, according to FactSet. Other estimates ranged from $501 million to $507 million, according to various analysts' reports. Total revenue — which includes collaboration revenue — climbed almost 23% to $515.3 million, above calls for $512 million.
"Management noted benefits from both patient demand and gross/net improvements," Chico said. She kept her outperform rating on Neurocrine stock.
Adjusted earnings reversed from a year-earlier loss to a gain of $1.20 per share, beating forecasts by a dime.
Outlook Retained With Readouts On Deck
Neurocrine kept its outlook for the year, guiding to $2.1 billion to $2.2 billion in sales of Ingrezza. The Street projected $2.18 billion from Ingrezza.
But analysts are watching for Neurocrine's next move beyond Ingrezza.
RBC Capital Markets analyst Brian Abrahams noted Neurocrine is testing a potential major depressive disorder treatment. The company is testing that drug, dubbed NBI-1065845, in patients with hard-to-treat depression.
Neurocrine's drug is likely less effective than Johnson & Johnson's Spravato, "but appears to be rapid vs. SSRIs," Abrahams said in a report. SSRI-based drugs treat depression by increasing levels of a neurotransmitter called serotonin in the brain.
Abrahams says Neurocrine's depression treatment has a 40% chance of winning approval and a $2.3 billion potential peak in sales. Neurocrine developed the drug with Takeda Pharmaceutical. Abrahams raised his price target on Neurocrine stock to 141 from 136, but maintained his sector perform rating.
Neurocrine is the No. 1 biotech stock by Composite Rating and Relative Strength Rating, according to IBD Digital. These ratings weigh fundamental and technical strength as well as recent stock performance against all other stocks.
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