4 Reasons Behind Stifel's Neurocrine Bull Thesis
Neurocrine Biosciences, Inc. (NASDAQ: NBIX), which already has two strong drugs in the market in the form of Ingrezza and the recently approved elagolix, has a promising pipeline ahead, according to Stifel.
The Analyst
Analyst Paul Matteis initiated coverage of Neurocrine with a Buy rating and $137 price target. The stock was added to Stifel's "Select List."
The Thesis
Notwithstanding the run-up in shares, Neurocrine stock has scarcity value in the midcap space due to its "blockbuster lead asset, strong patent protection, multiple shots on goal and near-term profitability," Matteis said in the initiation note.
These factors give a positive twist to Neurocine's long-term growth story even in the presence of very few attractive near-term clinical catalysts, the analyst said.
Stifel's bullish stance is predicated on four factors, Matteis said:
Ingrezza, the company's lead asset for tardive dyskinesia, possesses blockbuster potential, the analyst said: nearly 8,000 patients who took Ingrezza in the second quarter and represent a small fraction of the total candidate pool. The analyst estimates that Ingrezza will hit the $1-billion mark in tardive dyskinesia sales in 2021.
The belief that Ingrezza has a reasonable chance of succeeding and expanding its market in Tourette's syndrome.
Stifel's projection that endometriosis-related pain treatment elagolix will generate close to $2 billion in cash flows.
The analyst's view that little of Neurocrine's remaining pipeline is priced into the stock.
"We expect Neurocrine to continue to diversify its pipeline with both in-house candidates and the consideration of small acquisitions or licensing arrangements," Matteis said.
The Price Target
Neurocrine Biosciences shares have gained roughly 50 percent year-to-date.
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Latest Ratings for NBIX
Aug 2018 | Stifel Nicolaus | Initiates Coverage On | Buy | |
Aug 2018 | Barclays | Maintains | Overweight | Overweight |
Jul 2018 | Baird | Maintains | Outperform | Outperform |
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