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Neurocrine Biosciences Inc. Message Board

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  • beachbarbob beachbarbob Jul 5, 2006 4:29 PM Flag

    annual meeting - dilution

    Just part of Biotech investing they need to fund the business as part of their overall business strategy and keeping that sales force intact is smart as it is a valuable asset, But at this price $10 it will be serious dilution for current investors, at least 10M shares need as its going to cost $150M to $200M or more to do a deal for a marketed drug that can generate positive off-setting sales force expenses. They need to do a deal by September or sooner and no short term catalyst to push stock price higher.

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    • I am becoming a bit leary of what I see from the annual meeting. In addition to voting a 220% increase in shares, I see that they set aside another 1 million shares for issuance in their stock incentive plan (from 3.3 million to 4.3 million).

      With the present negative market (increasing oil prices, North Korea tension, & Fed policy), it appears that the price will probably sink lower during the next few days and may plunge when it hits major stops. Funds may be forced to dump if it sinks to $10... if they wait that long.

      I had thought that this stock would move up much higher by now, but see that it never made the jump I expected and is now moving back down. I'll wait until tomorrow to make a decision.

    • my view is that they fire the sales force and concentrate on getting their pipeline developed on a ASAP basis. Indiplon 5/10MG version won't generate enough revenue to justify a 400+ person sales force as they need to call on PCP's and it takes a lot of man-power to get sales penetration. A 3rd party drug will be dilutive as you pointed out as it will cost at least a $100M to $200M. NBIX is better off with no sales force and seeking a 3Rd part scenario to sell 5/10MG Indiplon if approved in FY07 on class 11 review cycle.

      • 2 Replies to coldpizza33
      • Gary lions looks at the 200 person sales force as a very valuable asset, If they can strike the right deal on a drug to sell, including 5Mg and 10Mg Indiplon ($150M or so in peak sales) and their is some outside chance that 15Mg could get approved by FY08 (if ever), it would be a very good strategy to raise the cash to support a salesforce as NBIX would have significant leverage with 15Mg, won't need to partner this drug and if they can generate $400M in peak sales from 15Mg, its worth 10M shares in dilution today as the EPS growth would be huge. its a high risk/reward scenario and If 15Mg's a bust, Lions sells the company. one way or the other its dilution today or a low double digit royalty partnership down the road,take your poison

      • NBIX does not need to buy a drug to comarket one - they just need someone willing to pay them to detail their products to their current contacts

    • 5 and 10mg Indiplon need to be sold. Everyone acts like they dont even matter, but they will be approved soon, and they are certainly worth some sales, or they wouldnt have bothered submitting that dosage. 15mg is really the only dosage in question.

 
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