It wasn't all that long ago that I last updated my thoughts on Neurocrine Biosciences (NASDAQ:NBIX),
but the company has made a few noteworthy moves since then that are
worth mentioning. Neurocrine remains a very promising biotech on
multiple levels. First, the company has two late-stage compounds that
each have more than $1 billion in revenue potential. Second, the company
has recently shown that it can, in fact, add new compounds to its
pipeline. Third, the company has quite a bit of cash on hand, ending the
last quarter with nearly half a billion dollars. Last and not least,
there remain multiple upcoming events that can attract attention and
drive positive sentiment.
The "but" is valuation. It's hard to
recommend any development-stage biotech unless the potential gains are
such that it's worth overlooking the industry's generally poor track
record (most biotechs never develop a commercial product). I do think
that Neurocrine is undervalued, and my underlying assumptions may prove
conservative, but investors may want to hope for another biotech sector
freakout that could push the price down 20% or more.
Read more here:
Neurocrine Biosciences Has The Flash And The Cash
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