On Thursday, H.C. Wainwright adjusted its price target for shares of Neurocrine (NASDAQ:NBIX) Biosciences (NASDAQ:NBIX), raising it to $160 from $150, while maintaining a Buy rating on the stock. The adjustment follows Neurocrine's promising developments in its Phase 2 study of NBI-1117568, an M4 agonist aimed at treating psychosis.
The firm's analyst highlighted the potential of NBI-1117568, noting a significant 50% improvement in the Positive and Negative Syndrome Scale (PANSS) for patients compared to the control group. This improvement suggests that NBI-1117568 could be on par with the next-generation antipsychotics.
The primary endpoint of the study was the PANSS scale, where a 15-20 point difference from the baseline was expected in the active arms group, compared to a 5-10 points difference in the placebo group.
The analyst also pointed out the importance of the drug's selectivity and its ability to activate the central M1 receptor without affecting the peripheral M1 receptor, which could differentiate it from other treatments.
Current next-generation drugs often struggle with side effects due to peripheral muscarinic receptor agonism, such as nausea and vomiting, which poses tolerability challenges. The tolerability profile of NBI-1117568 is therefore seen as a key advantage.
Moreover, the firm's reassessment of Neurocrine's Ingrezza, a treatment for tardive dyskinesia, took into account the increased patient demand and expanded commercial efforts. The potential label extension for Huntington's disease chorea also contributed to the re-evaluation. This led to an increased revenue forecast for Ingrezza, projecting $2.2 billion in 2024 and growing to $2.9 billion by 2031.
The overall positive outlook on Neurocrine's pipeline and commercial strategy underpins H.C. Wainwright's decision to raise the price target, signaling confidence in the company's future performance and its ability to bring innovative treatments to market.
InvestingPro Insights
As Neurocrine Biosciences (NASDAQ:NBIX) continues to make strides in its clinical developments, the financial metrics and analyst insights provide a broader context for investors. Neurocrine's market capitalization stands at a robust $14.39 billion, reflecting investor confidence in the company's potential.
The company's P/E ratio, a measure of its current share price relative to its per-share earnings, is 38.18, with an adjusted P/E ratio for the last twelve months as of Q1 2024 at 34.05. This indicates that while the stock may not be the cheapest in the market, investors are willing to pay a premium for its earnings potential.
InvestingPro Tips highlight that Neurocrine's net income is expected to grow this year, which aligns with the positive developments mentioned in H.C. Wainwright's report. Still, investors should be aware that 8 analysts have revised their earnings downwards for the upcoming period.
This suggests that while the long-term outlook remains positive, there may be some caution in the short-term expectations. Moreover, with a PEG ratio for the last twelve months as of Q1 2024 at 0.95, the stock's price is somewhat aligned with its expected earnings growth, providing a balanced view on its valuation.
For investors seeking a deeper dive into Neurocrine Biosciences' financials and market performance, InvestingPro provides an array of additional tips. There are 16 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/NBIX. To enhance your InvestingPro experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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