Buy Neurocrine Bio. (NBIX) on Recent Weakness - Leerink
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Leerink Partners analyst Paul Matteis notes shares of Neurocrine Bio. (NASDAQ: NBIX) are down 18% over the past few weeks versus a drop of 10% for the biotech index. He believes the stock weakness offers a buying opportunity in the context of upcoming catalysts and exaggerated investor concerns.
Matteis commented, "While the specific nature of the stock weakness is difficult to pinpoint, we've recently been receiving questions from investors on (1) the size of the market opportunity for VMAT2s (vesicular monoamine transporter 2) in Tardive Dyskinesia (TD), followed by (2) our thoughts on labeling scenarios & implications for Elagolix (endometriosis). Regarding the former, our doc survey (LINK) of 51 neuros/psychiatrists underlies our view that there exists a target market of ~300k TD patients for NBIX/TEVA's VMAT2 inhibitors; enough to offer a significant revenue opportunity for both drugs. Meanwhile, based on our assessment of the ASRM (American Society for Reproductive Medicine) Elagolix abstracts, the ph3 data, and conversations with NBIX, we continue to believe that the 150mg 1x/daily dose will receive a label allowing chronic dosing upon approval. Duration of the 200mg 2x/daily dose may initially be restricted until add-back studies complete, which should be expected (based on the top-line release) and does not impact our sales estimates. In the meantime, upcoming ph2 data in Tourette's Syndrome - which we believe has a high probability of success - offers a nice catalyst for investors around YE16/1Q17."
The firm reiterated an Outperform rating and price target of $70 on NBIX.
Shares of Neurocrine Bio. closed at $45.00 yesterday.
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