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Neurocrine Biosciences Inc. Message Board

  • chs1111 chs1111 Feb 25, 2014 5:08 PM Flag

    Stock Offering. Greater than 10% dilution?

    Any guess as to what the pps will be?

    Whoever invests in this better look very closely at how NBIX changed their endpoints from Kinect-I to Kinect-2. NBIX was apparently "reprimanded" by the FDA as mentioned in a previous post. I bet this is related.

    There are ways to "prove" things are statistically significant that truly may not be. Changing how you measure outcomes on the fly in order to prove what you want to prove is one way. I'm sure the FDA will look carefully into this, even though NBIX says the results are "real". They may require another phase II study - hence the need for more cash even though they have more than $100 million on hand. Also we need to see the safety data from second study. What happens to patients when the dose is increased? On Jan 9 the safety data from the first study was released, not the second study.

    Now we know why insiders sold and why Morgan Stanley and Alpha Street downgraded.

    NBIX has a market cap of over 1.2 billion - almost what it would be if they could currently generate revenue from selling NBI-98854. So the company is overvalued. Moreover, FDA approval is no guarantee and far away if the FDA sees problems in what NBIX has done between Kinect1 and Kinect2.

    I bet whoever invests in NBIX will realize this. 7-8 million shares is more than 10% dilution. Maybe a generous starting point for pps is $15. That is about 10% below where the CEO dumped 40% of his stake.

    Frankly I think it ought to be lower. This company definitely should have a market cap of less than $1billion. $10/share would yield a market cap of $750 million after dilution to about 75 million shares. But I recognize that would be drastic. I bet investors end up overpaying at $14-15. Things just do not seem right to me about this company. Maybe people have already priced in positive results on Elagolix Phase IIb which should be out soon. Even if that data is good, it should now warrant a "sell the news".

    Good Luck!

    Good luck!

    Sentiment: Strong Sell

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