Neurocrine Biosciences (NBIX) is establishing at least some reputation and track record for “underpromising and overdelivering”, with yet another quarter of better-than-expected sales for lead drug Ingrezza. Whether it adds much value to the share price is another story, though, given the shares have largely just chopped around for the last couple of months, as the Street seems to feel that the Ingrezza story is well-understood and future pipeline catalysts are still a ways down the road.
I’ve been concerned all year that Neurocrine could drift a bit in 2020 given the absence of game-changing catalysts, and the shares have underperformed the sector by a noticeable amount. Still, I think the Street is undervaluing the moves the company has made to deploy capital toward building a diverse, deep early-stage pipeline, and I likewise continue to believe that the shares are undervalued below $140. Whether the 15% or so upside that implies is good enough for a profitable, cash flow-positive biotech is something investors will have to decide for themselves.
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