Neurocrine Drifting, But The Total Package Is Still Appealing

Although Neurocrine Biosciences (NBIX) has a strong primary commercial asset in Ingrezza, a slower-building but still promising secondary asset partnered to AbbVie (ABBV) in Orlissa, and an improved pipeline, the reality is that the shares of biotechs in Neurocrine’s stage of life can flounder or drift for stretches of time. In the absence of new clinical data to get excited about, investors will instead fixate on short-term details or just get bored and move on, and I think that explains at least some of Neurocrine’s lackluster recent performance.

All in all, though, I still like this stock. I believe Ingrezza still has upside, and while Orlissa is taking longer to build than most investors would like, it’s still a good opportunity. Beyond that, opicapone may still be an underrated opportunity, and likewise with NBI-74788, and Neurocrine has some early-stage assets worth watching now, including its second VMAT-2 compound and its Voyager (VYGR) partnership.

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Neurocrine Drifting, But The Total Package Is Still Appealing

Lundbeck Thriving On Cost Control

Kåre Schultz left H. Lundbeck A/S (OTCPK:HLUYY) (LUN.CO) to take over as CEO of Teva (TEVA) in the fall of 2017, but the man's legacy as CEO continues to drive strong profit growth at this Danish drugmaker. While Lundbeck continues to benefit from surprisingly strong sales of its older drugs and is seeing good growth in its new generation, the corporate restructuring carried out by Schultz has led to significant margin leverage that continues to drive better than expected profit growth.

Between a surprising positive decision from the FDA on Trintellix labeling and this very strong quarter, the shares are up more than 15% over the last month and up more than a quarter year-to-date. As the Street dials in the latest positive cost guidance, I believe quarterly beats of similar magnitude are going to get harder and harder to achieve. What's more, Lundbeck's pipeline is unlikely to provide much positive news in the short term, so I have some concerns as to what can/will continue to push these shares even higher.

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Lundbeck Thriving On Cost Control

Neurocrine Biosciences Shows Again That Sometimes The Tortoise Wins

After a very good 2017, highlighted by the approval and strong initial launch of Ingrezza, Neurocrine Biosciences (NBIX) has a high bar to make 2018 even better. While a carbon copy repeat of the 100% gain in 2017 is likely too ambitious of a target, Neurocrine should nevertheless benefit from ongoing strength in Ingrezza in tardive dyskinesia, the approval of elagolix in endometriosis, and data on Ingrezza in Tourette's, elagolix in uterine fibroids, and '74788 in CAH before the end of 2018.

All told, Neurocrine is on course to be a four-product, six-indication company in 2022, with the company's drugs primarily addressing large markets with little-to-no strong competition. Although my fair value in the low $90s does not suggest huge undervaluation today, I'm using what I believe to be very conservative approaches to the Tourette's and CAH indications and clinical success in those indications could unlock a lot of value. Accordingly, I still think the risk/benefit balance favors owning these shares.

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Neurocrine Biosciences Shows Again That Sometimes The Tortoise Wins

Neurocrine Stumbles With Ingrezza In Pediatric Tourette's

Biotech stocks will drive an investor crazy, as there's a seemingly never-ending supply of worries and negative developments to offset the occasional major steps forward. Such is the case (again) with Neurocrine Biosciences (NASDAQ:NBIX). Fresh off some momentum from the FDA approval of Ingrezza in tardive dyskinesia and a surprisingly robust pricing decision, as well as encouraging Phase IIb data from AbbVie (NYSE:ABBV) on the company's drug Elagolix in uterine fibroids, Neurocrine announced disappointing results from its Phase II T-Force GREEN study of Ingrezza in pediatric Tourette's.

Neurocrine shares are, not surprisingly, down on the news, though the decline seems to be a little excessive relative to the likely real-world contribution of the drug to the company's profits. What's more, Neurocrine is not giving up on this drug/indication, and a better-designed Phase II study could restore much of the optimism that has packed its bags today. With the shares still below my fair value and two valuable commercial/late-stage compounds (and a third that is more of a wild card), I believe these shares are worth considering on this disappointment sell-off.

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Neurocrine Stumbles With Ingrezza In Pediatric Tourette's

Busy Neurocrine Biosciences Faces A Phase II Setback

Although Neurocrine Biosciences (NASDAQ:NBIX) shares have been getting buffeted around as investors worry about the potential impact of the incoming administration's policies on drug pricing and the potential for competition to the company's major programs, management has been doing a respectable job of handling what they can. In particular, the company continues to focus its efforts on building awareness and establishing the initial launch plans for its lead wholly-owned drug valbenazine in tardive dyskenesia.

Clinical trial results fall outside of the spectrum of what biotech management teams can control, though, and Neurocrine disappointed the Street Tuesday night with negative results from its Phase II T-FORWARD study of valbenazine in adults with Tourette's. Although this particular indication was not a meaningful contributor to the stock's fair value, and there may still be a path forward, it's more bad news at a time when the shares and market sentiment toward biotechs are already weak.

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Busy Neurocrine Biosciences Faces A Phase II Setback

Neurocrine Biosciences Building To A Big 2017

With Neurocrine Biosciences (NASDAQ:NBIX) these days, there's an element of "wait for it… wait for it… wait for it...," as the cat is largely out of the bag with respect to the efficacy and safety profile of the biotech's two lead drugs, but investors are still waiting for the new drug applications (or NDAs) to be filed with the FDA. At the same time, the company is probably in a window where most of the news updates on those programs are going to skew negative - there's just not all that much positive information left to come out at this point.

Still, these shares remain undervalued on the potential of those two lead drugs - elagolix and valbenazine. Competition, safety concerns, and cost will be relevant factors for both drugs, but both address significant under-served patient populations and I believe the revenue potential is significant.

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Neurocrine Biosciences Building To A Big 2017

Seeking Alpha: Neurocrine Biosciences Racks Up Some Much-Needed Good News

Stock prices in the biotech sector are getting carpet-bombed as investors bail out of the sector, but this is still fundamentally a data-driven industry where good data almost always win out in the end. To that end, Neurocrine Biosciences' (NASDAQ:NBIX) recent run of good news should encourage shareholders even as the market has turned cold on these once-outperforming shares.

Neurocrine Biosciences remains a challenging biotech to value, due in part to the fact that the markets that the company's lead drugs are targeting could prove to be substantially more robust than they seem at present. Even with what I believe to be relatively conservative assumptions, though, Neurocrine's shares look appealingly undervalued.

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Neurocrine Biosciences Racks Up Some Much-Needed Good News

The Motley Fool: A Smart Move for Endo International?

It's hard to find fault with Endo International PLC (NASDAQ: ENDP  ) . Management has done a great job of unwinding the mistakes of past management and has pursued an aggressive growth-by-M&A strategy that has the company well-positioned for the future and domiciled in low-tax Ireland. Over the past two months management has given investors another two examples of its ability to generate value – settling a large part of its vaginal mesh litigation and announcing another accretive M&A transaction.

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A Smart Move for Endo International?

The Motley Fool: Is Mylan a Good Buy?

As branded drugs have become more complicated and global growth has become more important to generic franchises, scale matters more than ever. That's a definite check mark in the plus column for Mylan (NASDAQ: MYL  ) , as it is among the largest generic drug makers in the world and one of the few with the scale and capability to operate not only efficiently, but to crack the code on hard-to-manufacture generics.

Wall Street is definitely keen on the shares right now. The stock has risen almost 80% over the last year, and more than 140% over the last two years, as investors have gotten excited about the potential for generic Lidoderm, Copaxone, and Advair, as well as the potential for additional value-creating M&A deals.

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Is Mylan a Good Buy?

Seeking Alpha: Receptos Coming Along Nicely

In making Receptos (RCPT) an Alpha-Rich pick on August 13, I certainly had bullish expectations for the company and the stock. I was attracted by the company's S1P1 modulator technology and the prospects of the lead drug RPC1063 in both multiple sclerosis and ulcerative colitis. Combined with an earlier-stage drug for eosinophilic esophagitis (for which there are no pharmaceutical treatments) and a preclinical oral GLP-1 program, I thought it likely that Receptos would see a higher share price as the MS program matured and the probability of partnership or acquisition grew.

I didn't expect the pace or magnitude of the move that was to come. Receptos shot up almost 100% in just two months. While at least some of that action was likely due to rumors of multiple bidders for the company and the shares did ease off, Receptos still stands about 60% higher today than it did when I first wrote about it. What's more, incremental data from the RADIANCE multiple sclerosis trial will be pushing the drug forward into a Phase III study. Expectations are definitely higher for these shares now, but given the revenue potential of Receptos' pipeline and the possibility of incremental data points over the next year or two, I can see these shares continuing to move higher.

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Receptos Coming Along Nicely

Investopedia: Akorn Scores A Rare Win-Win Acquisition

The world of generics and specialty pharmaceuticals includes many companies that fly below the radar of most investors, but Akorn (Nasdaq:AKRX) may be worth the time it takes to know it better. Not only is Akorn a leading player in generic ophthalmology drugs, but the company's acquisition of Hi-Tech Pharmacal (Nasdaq:HITK) looks like an all-too-rare case where both parties in the deal come out ahead.

Investors who took my advice regarding Hi-Tech a year ago are sitting on gains of nearly 50% (though the intervening 14 months was not smooth), but I'm not sure I'd rush to reinvest the proceeds into Akorn. Although I do like Akron and I believe this deal strengthens the company, the valuation there doesn't leave a lot of upside unless Akorn can drive even better synergies than its guidance suggests.

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Seeking Alpha: Receptos Could Meet With A More Positive Reception

Investors do well to be very skeptical of the biotech companies that go public in the late stages of a multi-year bull market. In many cases, bankers, executives, and insiders are looking to cash in on hope and hype and exploit a market that isn't too discriminating about the details. So while I went into researching Receptos (RCPT) with ample skepticism, I walk away more than a little intrigued.

Receptos seems like a pretty straightforward story - basically a "2.0" version of the already-successful oral multiple sclerosis drug Gilenya sold by Novartis (NVS), but one with a potentially much better tolerability profile. Add to that the possibility of clinically meaningful activity in ulcerative colitis and a "call option" drug for eosinophilic esophagitis, and Receptos shares may be as much as 50% undervalued even in this aging biotech bull market. What's more, investors won't have long to wait for significant news, as multiple trial read-outs in 2014 should further clarify the odds and opportunities.

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Receptos Could Meet With A More Positive Reception

Investopedia: Novo Nordisk Getting Its Trial By Fire

The past year or so has shown that Novo Nordisk (NYSE:NVO) isn't immune from seeing some serious challenges to its business. Between a serious setback in its insulin development program and nagging worries about incretins, 2013 isn't going to go down as a great year in the history of Novo Noridsk. All of that said, I have little doubt that the company will continue to be an uncommonly strong pharma company, with huge leverage to one of the fastest-growing diseases in the world. Although I think broadening both the diabetes business and the overall business would be beneficial, Novo Nordisk really doesn't have to do much to continue performing at a high level.

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Investopedia: Does Amgen Deserve To Be Part Of The Biotech Bull Run?

For as much as the sell-side seems to complain about Amgen (Nasdaq:AMGN), it doesn't seem to have resulted in the company missing out on the run-up in biotech and pharma names over the last 12 to 18 months. With uncertain risk from biosimilars and a pipeline that strikes many investors as lackluster, Amgen isn't the easiest name to like today, and the risk of the company overpaying for Onyx Pharmaceuticals (Nasdaq:ONXX) doesn't help. On balance, it's difficult to work up a lot of enthusiasm for Amgen at this price, but key clinical data in early 2014 could add some solid support to the stock.

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Investopedia: Adasuve Deal Is Very Good For Alexza, But What About Teva?

It was just a week when I wrote that Teva Pharmaceutical (NYSE:TEVA) seemed undervalued on the basis of its probable free cash flow (FCF) trajectory, but that a host of uncertainties (including its strategic direction/priorities) made it a tough stock to love. Wednesday's announcement of a U.S. marketing partnership with Alexza (Nasdaq:ALXA) for the controversial inhaled acute agitation therapy Adusave is a good case-in-point. While Teva may see a diamond in the rough here, a lot of investors and analysts are going to look at this as a sign that the company is flailing around in search of a new direction and embracing longshots as a strategy.

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Investopedia: Teva Still Too Cheap, But Still Too Uncertain

The story on the generics giant Teva Pharmaceutical (Nasdaq:TEVA) really hasn't changed all that much over the past year. For investors who can just buy, ignore the volatility, and maintain a long-term perspective, the shares look too cheap. On the other hand, the generic drug business has clearly lost momentum, and it's uncertain if “bio-similar” and a more focused approach to drug development will deliver the promised returns for this company. Consequently, value investors have a lot to like here, but they have to accept that the Street is probably not going to share that enthusiasm for some time yet.

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Seeking Alpha: Controversial Questcor Still Looks Like A Buy

Questcor (QCOR) investors have had quite the ride over the past year. In addition to positive clinical data, the company has seen encouraging success in expanding its business in nephrology and rheumatology, but investors will not soon forget the nearly two-thirds dive that the stock took on word that Aetna (AET) was essentially dropping coverage on the company's only product.

There's no doubt that Questcor is a risky stock. All of the company's revenue comes from a single product that is off-patent (but very hard to manufacture) and the company has no pipeline to speak of. Even so, the shares appear undervalued with relatively little downside at present.

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Controversial Questcor Still Looks Like A Buy

Seeking Alpha: The Street Is Much Too Optimistic About Hospira

It's probably true that a company would be hard-pressed to do worse than Hospira (HSP) has managed in recent years, but it doesn't automatically follow that conditions will get quite a bit better. Hospira certainly could be a better company in a few years' time, but "could" is a dangerous word when it comes to investing. So although I am bullish on Hospira's opportunities in biosimilars, I struggle to come up with a scenario where this stock is priced to outperform.

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The Street Is Much Too Optimistic About Hospira

Seeking Alpha: Biogen Idec Has BG-12, But What Excites Investors Next?

If Biogen Idec (BIIB) follows the usual pattern, the launch of BG-12 for multiple sclerosis isn't likely to generate huge investor enthusiasm (another example of "buy the rumor, sell the news"). That's particularly true given management's effort to take down the high end of BG-12 launch expectations within the last month. Accordingly, while Biogen Idec is a well-run franchise with a great niche in MS, and may well attract attention from a larger pharma, the company may need another exciting asset in its pipeline to keep up investor enthusiasm.

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Biogen Idec Has BG-12, But What Excites Investors Next?

Investopedia: The Week Ahead In Healthcare

Healthcare investors should enjoy the respite in the healthcare sector over the next few weeks. Once the calendar turns to September, major conferences start again, early earnings warnings will begin to pop up and analysts and investors in general will start to pay a great deal more attention to the companies and stocks. Likewise, while the FDA's calendar is relatively empty this month, activity ought to be picking up shortly.

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