On Thursday, Citi adjusted its outlook on shares of Neurocrine (NASDAQ:NBIX) Biosciences, raising the price target to $158 from the previous target of $150 while maintaining a Neutral rating. The adjustment comes in response to the company's second-quarter 2024 performance and corporate updates which showcased a notable earnings beat driven by its product Ingrezza.
Neurocrine Biosciences reported that Ingrezza sales exceeded expectations, coming in approximately $40 million above the consensus and about $50 million higher than Citi's conservative estimate. Management attributed this success to robust patient demand and increased sales volumes, leading them to raise the full-year 2024 revenue guidance to between $2.25 billion and $2.3 billion.
In light of the updated guidance, Citi has revised its full-year 2024 sales estimate for Neurocrine to the upper end of the company's forecast, previously set at $2.1 billion. Additionally, the peak sales estimate for Ingrezza has been increased to $2.7 billion from the earlier projection of $2.5 billion, which is the primary factor behind the new price target of $158.
The upcoming phase 2 readout of NBI-˜568 for schizophrenia, expected in the third quarter of 2024, is anticipated to be a significant catalyst for the company. Despite the potential impact of this development, Citi noted during the question-and-answer session that due to the limited public information available, the molecule has been challenging to assess.
Citi's analysis suggests that for Neurocrine to experience over 20% upside, NBI-˜568 would need to demonstrate a best-in-class profile. However, if the results show efficacy and safety that are in line with competitors, the potential upside could be in the range of 10-15%. The firm's Neutral rating persists amid the forthcoming leadership transition, with CEO Kevin Gorman set to retire and Kyle Gano taking over in October 2024.
In other recent news, Neurocrine Biosciences has been making significant strides in the pharmaceutical sector. The company introduced a new sprinkle formulation of INGREZZA®, designed to assist adults with tardive dyskinesia and chorea associated with Huntington's disease who have difficulty swallowing. Additionally, the U.S. Food and Drug Administration (FDA) has accepted for Priority Review two New Drug Applications (NDAs) for Neurocrine Biosciences' crinecerfont, a potential new treatment for congenital adrenal hyperplasia (CAH).
In the financial analysis sector, RBC Capital maintained its Sector Perform rating on Neurocrine Biosciences, while Wells Fargo reiterated its Overweight rating on the company's shares. Meanwhile, UBS increased the price target for Neurocrine Biosciences shares to $193 from the previous $174, reiterating a Buy rating on the stock.
In terms of leadership, Neurocrine Biosciences announced the appointment of Kyle Gano, Ph.D., as the CEO-elect, set to take over in October 2024. Dr. Gano will succeed Kevin Gorman, Ph.D., the company's long-standing CEO who will retire but continue to serve on the Neurocrine Board of Directors. These are among the recent developments that continue to shape the trajectory of Neurocrine Biosciences.
InvestingPro Insights
Following Citi's updated outlook on Neurocrine Biosciences, real-time data from InvestingPro offers additional context to the company's financial health and market performance. Neurocrine, with a market capitalization of $15.48 billion, has been trading at a high earnings multiple, with a current P/E ratio of 40.1 and an adjusted P/E ratio for the last twelve months as of Q1 2024 of 36.58. This high valuation is supported by the company's robust revenue growth, which stands at 23.99% for the last twelve months as of Q1 2024.
An InvestingPro Tip highlights that Neurocrine's stock generally trades with low price volatility, which may appeal to investors seeking stability. Additionally, the company's cash flows can sufficiently cover interest payments, and its liquid assets exceed short-term obligations, suggesting a strong financial position. These factors are crucial for investors considering the stock's potential, especially with the upcoming phase 2 readout of NBI-568 for schizophrenia.
For those looking to delve deeper into the financial metrics and forecasts for Neurocrine Biosciences, InvestingPro provides a wealth of additional tips—12 more are available at https://www.investing.com/pro/NBIX. These insights offer a comprehensive view of the company's performance and can inform investment decisions in the context of the evolving biotech landscape.
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