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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