On Monday, Goldman Sachs (NYSE:GS) adjusted its price target for shares of Neurocrine (NASDAQ:NBIX) Biosciences (NASDAQ: NBIX), increasing it to $182 from $177, while maintaining a Buy rating on the stock. The company, currently valued at $12.8 billion with shares trading at $126.70, has attracted strong analyst interest.
According to InvestingPro data, analyst targets range from $121 to $192, with 12 analysts recently revising their earnings estimates upward. The revision follows the recent U.S. Food and Drug Administration (FDA) approval of Neurocrine Biosciences' drug, Crenessity, which is designed for the treatment of classic congenital adrenal hyperplasia (CAH) in both adult and pediatric patients.
The FDA's nod to Crenessity on Friday marks a significant advancement in the treatment of CAH, a condition that has seen little innovation over the years. The drug, a corticotropin-releasing factor type 1 receptor (CRF1) antagonist, is the first of its kind to directly decrease excess adrenocorticotropic hormone (ACTH) and subsequent adrenal androgen production, as shown in phase 3 study results.
The approval comes as Neurocrine demonstrates strong financial health, with InvestingPro analysis showing impressive revenue growth of 25.7% and robust liquidity with a current ratio of 4.37.
The approval is viewed as a major validation for Neurocrine Biosciences, establishing the company's ability to develop multiple drugs across different therapeutic categories. This achievement is expected to enhance the company's standing and reduce the risk associated with its market opportunities beyond the United States.
Goldman Sachs anticipates further details on Crenessity's pricing strategy, which should emerge from the company's management as the drug's commercial launch is expedited to the end of this week, ahead of the previously planned January schedule.
While initial sales data may be difficult to track due to the absence of reliable third-party prescription data, Goldman Sachs aims to evaluate the launch's progress through various indicators, such as patient adoption, particularly among the pediatric and adolescent demographics, insurance coverage expansion, and the initial clinical experiences of patients and healthcare providers.
The bank reaffirms its Buy rating on Neurocrine Biosciences, emphasizing the positive outlook for the company following the FDA approval. The new 12-month price target of $182 reflects the analyst's confidence in the potential growth and success of Crenessity in the market.
InvestingPro analysis suggests the stock is currently undervalued, with additional insights available through their comprehensive Pro Research Report, which offers deep-dive analysis of the company's financials, valuation metrics, and growth prospects.
In other recent news, Neurocrine Biosciences has reported strong third-quarter earnings, with sales of its drug Ingrezza totaling $613 million. This led to an updated annual revenue guidance of $2.3 to $2.32 billion.
The company's CEO, Kyle Gano, has also announced a $300 million share repurchase plan. These developments come alongside the recent approval of the company's new drug, Crenessity, for use in adults and children aged 4 and above for Congenital Adrenal Hyperplasia (CAH) management.
BMO Capital and Piper Sandler have maintained their Market Perform and Overweight ratings on Neurocrine Biosciences, respectively, with BMO Capital setting a price target of $121 and Piper Sandler a target of $160. These ratings and targets reflect the firms' positive outlook on the company's performance and potential, particularly with the anticipated uptake of Crenessity and the continued growth of Ingrezza.
Furthermore, Neurocrine Biosciences has revealed promising study results indicating that nearly 60% of participants achieved remission of tardive dyskinesia after 48 weeks of treatment with Ingrezza.
The company is also advancing its pipeline with Phase III studies for NBI-845 and NBI-568 slated for 2025. These recent advancements highlight the company's ongoing commitment to developing effective treatments for neurological and endocrine-related diseases and disorders.
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