Tuesday, September 10, 2013

Seeking Alpha: Neurocrine Takes Strike 2 On VMAT2

Right up until today, Neurocrine (NBIX) had been a pretty strong call for me. I last wrote about this biotech for Seeking Alpha on September 18 ("Neurocrine Still Looks Significantly Underrated"), and the stock had been up more than 100% since then. While making money in biotechs has hardly been difficult over the last year, a lot of optimism had been building around both Neurocrine's endometriosis and fibroid treatment Elagolix (being developed under license by AbbVie (ABBV)) and its VMAT2 inhibitor ('854) for tardive dyskenesia (TD).

That all came to a screeching halt when Neurocrine announced yet another Phase II trial failure for '854 in TD. Although the KINECT-1 study may not be technically a failure, as the 100mg arm showed a statistically significant impact at two weeks, the 50mg arm failed, there were more than a few odds aspects to the study, and the company is going back to the Phase II drawing board to design another study.

While I do remain bullish on Neurocrine on balance, I would suggest investors ignore those who try to look past this setback with some version of "VMAT2 doesn't matter, it's all about Elagolix". The market potential for Elagolix is hardly guaranteed and the company's troubles with getting '854 through the clinic have me more than a little concerned.

Please read more here:
Neurocrine Takes Strike 2 On VMAT2

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