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Neurocrine Biosciences Inc. Message Board

  • sleep4unow sleep4unow May 13, 2006 9:46 AM Flag

    be careful of the advice

    This is obvious of course, but be careful of the advice on this or any board. When posters say "sell on the news", what do you think they are interested in seeing? This is also true of the optimists, but less so. An equities natural tendency will be to go up, when someone uses this board to motiviate people to sell, I would wonder what they have to gain. It is clear the naysayers are shorts that would like to see their short positions in the money. I consider this manipulative. The longs, and I am one, are not scaring people (manipulation) into adjusting their position. There is a difference IMHO.

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    • I am curious how this drug will impact the botto line at NBIX. They bought the compound from DOV. Tell me what DOV's cut, Wyeth's cut (is DOV part of Wyeth now?) and Pfizer's cut are and I wonder after all that what's left for the folks in La Jolla. All you guys talking about pops, puts, longs, shorts. Do you even factor this stuff in your equations.

      I think the real story is DOV. Indiplon and Merck's triple uptake inhibitor. I guess there are some good scientists there.

    • I beg to differ. Everyone has motivation depending on which side of the trade you're on. Seems obvious to me that it works both ways. I'm out of the stock right now but I can tell you from unbiased experience "sell the news" works when the news is expected. Sometimes you even have to sell b/4 it's released. The key word is "expected".

      • 1 Reply to razzledazzle5050
      • I agree with you in most cases. If the valuation includes "expectation" of an approval than selling upon the news maybe okay if the valuation has gotten ahead of intrinsic value. And selling before the news captures the excess valuation and eliminates the risk of negative news.

        However, that is only true if the valuation has gotten ahead of itself. Some might argue that NBIX has gotten ahead of itself, but I would argue NBIX is very undervalued.

        As a valuation comp look to SEPR. SEPR is in a weaker position,except they have approval and NBIX does not. SEPR's valuation is way ahead of NBIX and with the expectation of Indiplon approval, this is unjustified.

        Indiplon is expected to be a blockbuster with sales peaking at $2 billion/year. NBIX gets about 1/2. So lets say you value NBIX at 8x revenues of $.5 billion to $1 billion. This gives a value of somewhere between $4billion and $8billion. Then consider the big NBIX cash position and robust phase II pipeline. They don't have partners yet for this pipeline so on one hand it is hard to value, but on the other hand, NBIX has options.

        IMHO, NBIX is undervalued, substantially. The valuation is even below the low revenue estimates for Indiplon meaning the market has a built in possibility that Indiplon is not approved. With an approval, uncertainty goes away and the only other question is what will sales be. Good question, but put Pfizer will be the 800 pound gorilla in the category.

        So, the bottom line, sell on the news doesn't work in this case, unless you are short. But I hear your comment and it is helpful.

    • While obvious, it was nice to read your post. This board used to be mostly longs who all seemed to be in the same boat and only occasionally was there a harebrained post from a short. These past few weeks leading up to Appoval have brought the shorts out of the woodwork and all we can do is smile. Good luck to the Vets of NBIX for May 15th is almost here!

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