On Tuesday, UBS increased the price target for shares of Neurocrine (NASDAQ:NBIX) Biosciences (NASDAQ:NBIX) to $193 from the previous $174, while reiterating a Buy rating on the stock.
The firm's positive outlook is based on several factors, including the steady growth of Ingrezza, a base business product, the anticipated successful launch of crinecerfont in 2025, and significant upcoming read-outs from two major schizophrenia pipeline projects expected in the third quarter.
Neurocrine Biosciences' Ingrezza, utilized for the treatment of tardive dyskinesia, continues to perform well, contributing to the company's robust financial position.
Looking ahead, the firm is optimistic about crinecerfont, a treatment for congenital adrenal hyperplasia, which is slated for launch in 2025 and is expected to be strong from the start.
The UBS analyst's confidence is further bolstered by the potential of two schizophrenia treatments in Neurocrine's pipeline. The firm has conducted an in-depth review of NBI-'568 and luvadaxistat, leading to an increased conviction in the higher risk-adjusted net sales for these assets.
For NBI-'568, the firm models $1.3 billion in risk-adjusted peak sales, assuming a 10% market share in the schizophrenia market, which is an increase from the previously estimated 5% market share. Additionally, the firm projects nominal peak sales of $3.2 billion for this treatment.
Similarly, for luvadaxistat, UBS has adopted a conservative approach, modeling a 15% probability of success, up from the prior 10%, and doubling the market share estimate to 20% from the previous 10%. This adjustment leads to risk-adjusted peak sales of approximately $770 million and nominal peak sales of around $5.1 billion.
The updated $193 price target is supported by an unchanged 6.2 times enterprise value to estimated 2029 sales multiple and is reinforced by a discounted cash flow (DCF) framework.
This revised target reflects the firm's anticipation of Neurocrine Biosciences' continued growth and successful market penetration with its developing treatments.
InvestingPro Insights
As Neurocrine Biosciences (NASDAQ:NBIX) garners attention with UBS's updated price target and optimistic projections, real-time data from InvestingPro provides a broader financial perspective. With a market capitalization of $14.03 billion and a P/E ratio standing at 37.23, the company's valuation reflects expectations for future growth. The recent revenue growth is impressive, showing a 23.99% increase over the last twelve months as of Q1 2024, which aligns with UBS's positive outlook. Additionally, the company's robust gross profit margin of 68.54% underscores its financial health and efficiency.
InvestingPro Tips indicate that Neurocrine Biosciences is expected to grow its net income this year, which could further strengthen the company's financial position. However, analysts have revised their earnings downwards for the upcoming period, which suggests some caution may be warranted. For investors looking for more detailed analysis, there are over 9 additional InvestingPro Tips available, offering deep dives into the company's financials and market performance. To access these insights, visit InvestingPro's dedicated page for Neurocrine Biosciences. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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