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Neurocrine Biosciences (NBIX - Free Report) is an $8.5 billion neuroscience-based company focused on the discovery and development of novel therapeutics for neuropsychiatric, neuroinflammatory and neurodegenerative diseases and disorders.
The company's neuroscience, endocrine and immunology disciplines provide a unique biological understanding of the molecular interaction between central nervous, immune and endocrine systems for the development of therapeutic interventions for anxiety, depression, insomnia, stroke, malignant brain tumors, multiple sclerosis, obesity and diabetes.
It's lead drug on the market, Ingrezza, is a medication used to treat tardive dyskinesia (TD), a condition which manifests as uncontrolled body movements. Here's how the company describes the condition on the Ingrezza website...
TD is a distinct condition and different from other movement disorders like Parkinson's disease, dystonia, or essential tremor disorder, which can also present as involuntary movements. TD can result from taking certain mental health medicines (antipsychotics) for a while.
Investing in Success is Hitting EPS
Neurocrine reported Q4 results on February 11 with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of $0.61. This compares to earnings of $3.58 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -113.11%. A quarter ago, it was expected that this biopharmaceutical company would post earnings of $0.51 per share when it actually produced earnings of $0.23, delivering a surprise of -54.90%.
The company delivered Q4 revenue of $312 million vs. the consensus of $317.5 million. We'll look at the downward revisions in EPS estimates that made NBIX a Zacks #5 Rank in a moment, but it's worth noting that sales for Ingrezza are strong and growing as analysts project the company topping $1.35 billion this year, representing 19% growth while next year is pegged to cross $1.6 billion for a 20% advance.
"As we exited last year with restored growth for INGREZZA, investments we are making this year will further accelerate our ability to help many more patients with tardive dyskinesia who remain undiagnosed and untreated. Additionally, we now have 12 clinical programs in mid-to-late-stage studies, many which will generate important data readouts over the next two years," said CEO Kevin Gorman. "With a blockbuster product in INGREZZA, a novel and diverse pipeline, and a strong balance sheet, Neurocrine Biosciences is uniquely positioned to be a leading neuroscience-focused company."
Estimates Were Headed Down Before Earnings
Neurocrine profits are expected to soar the next two years -- +110% in 2022 and +80% in 2023 -- and so healthcare investors should keep the stock on their watchlists.
But in the last two months, analysts have scaled back their upside projections as the company reveals new pipeline R&D and investment plans with their cashflow.
60 days ago, the Zacks EPS consensus for this year called for $2.86. That was lowered to $2.59 before earnings and now has been dropped to $1.93 afterwards.
Likewise two months ago, the EPS consensus for next year sat at $4.53 and got knocked down to $4.13 before the company report. Now analysts have taken it down to $3.47.
So the strong growth for Ingrezza is still there, but the recent tapping of the brakes by analysts is what moved NBIX into the cellar of the Zacks Rank.
Analyst Reactions
Mizuho analyst Vamil Divan lowered the firm's price target on Neurocrine Biosciences to $95 from $103 and kept a Neutral rating on the shares after Q4 results. Management commentary suggests reasonable conservatism is baked into the guidance because of the pandemic, leaving room for potential upside, but the analyst awaits more pipeline progress before getting more positive on the shares.
Goldman Sachs analyst Chris Shibutani upgraded Neurocrine to Buy from Neutral with an unchanged $115 price target. The analyst is positive on the stock based on its "underappreciated but strengthening catalyst path over the coming 12-18 months." Shibutani also cites Neurocrine's solid balance sheet and a genuine strategic optionality of being well-positioned to build their asset base through strategic business development activities.
Bottom line on NBIX: Trading under 6X sales with growing expertise in neurological treatments, NBIX should stay on your radar after the estimates stop going down. The Zacks Rank will let you know.
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Bear of the Day: Neurocrine Biosciences (NBIX)
Neurocrine Biosciences (NBIX - Free Report) is an $8.5 billion neuroscience-based company focused on the discovery and development of novel therapeutics for neuropsychiatric, neuroinflammatory and neurodegenerative diseases and disorders.
The company's neuroscience, endocrine and immunology disciplines provide a unique biological understanding of the molecular interaction between central nervous, immune and endocrine systems for the development of therapeutic interventions for anxiety, depression, insomnia, stroke, malignant brain tumors, multiple sclerosis, obesity and diabetes.
It's lead drug on the market, Ingrezza, is a medication used to treat tardive dyskinesia (TD), a condition which manifests as uncontrolled body movements. Here's how the company describes the condition on the Ingrezza website...
TD is a distinct condition and different from other movement disorders like Parkinson's disease, dystonia, or essential tremor disorder, which can also present as involuntary movements. TD can result from taking certain mental health medicines (antipsychotics) for a while.
Investing in Success is Hitting EPS
Neurocrine reported Q4 results on February 11 with a quarterly loss of $0.08 per share versus the Zacks Consensus Estimate of $0.61. This compares to earnings of $3.58 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -113.11%. A quarter ago, it was expected that this biopharmaceutical company would post earnings of $0.51 per share when it actually produced earnings of $0.23, delivering a surprise of -54.90%.
The company delivered Q4 revenue of $312 million vs. the consensus of $317.5 million. We'll look at the downward revisions in EPS estimates that made NBIX a Zacks #5 Rank in a moment, but it's worth noting that sales for Ingrezza are strong and growing as analysts project the company topping $1.35 billion this year, representing 19% growth while next year is pegged to cross $1.6 billion for a 20% advance.
"As we exited last year with restored growth for INGREZZA, investments we are making this year will further accelerate our ability to help many more patients with tardive dyskinesia who remain undiagnosed and untreated. Additionally, we now have 12 clinical programs in mid-to-late-stage studies, many which will generate important data readouts over the next two years," said CEO Kevin Gorman. "With a blockbuster product in INGREZZA, a novel and diverse pipeline, and a strong balance sheet, Neurocrine Biosciences is uniquely positioned to be a leading neuroscience-focused company."
Estimates Were Headed Down Before Earnings
Neurocrine profits are expected to soar the next two years -- +110% in 2022 and +80% in 2023 -- and so healthcare investors should keep the stock on their watchlists.
But in the last two months, analysts have scaled back their upside projections as the company reveals new pipeline R&D and investment plans with their cashflow.
60 days ago, the Zacks EPS consensus for this year called for $2.86. That was lowered to $2.59 before earnings and now has been dropped to $1.93 afterwards.
Likewise two months ago, the EPS consensus for next year sat at $4.53 and got knocked down to $4.13 before the company report. Now analysts have taken it down to $3.47.
So the strong growth for Ingrezza is still there, but the recent tapping of the brakes by analysts is what moved NBIX into the cellar of the Zacks Rank.
Analyst Reactions
Mizuho analyst Vamil Divan lowered the firm's price target on Neurocrine Biosciences to $95 from $103 and kept a Neutral rating on the shares after Q4 results. Management commentary suggests reasonable conservatism is baked into the guidance because of the pandemic, leaving room for potential upside, but the analyst awaits more pipeline progress before getting more positive on the shares.
Goldman Sachs analyst Chris Shibutani upgraded Neurocrine to Buy from Neutral with an unchanged $115 price target. The analyst is positive on the stock based on its "underappreciated but strengthening catalyst path over the coming 12-18 months." Shibutani also cites Neurocrine's solid balance sheet and a genuine strategic optionality of being well-positioned to build their asset base through strategic business development activities.
Bottom line on NBIX: Trading under 6X sales with growing expertise in neurological treatments, NBIX should stay on your radar after the estimates stop going down. The Zacks Rank will let you know.