NEW YORK — Shares of Neurocrine Biosciences Inc. edged higher in Tuesday premarket electronic trading after a Baird analyst upgraded the biopharmaceutical company and said any disappointing news related to insomnia drug Indiplon would likely be offset by gains from other products.
Neurocrine's stock plunged on Friday after the company said it planned to conduct more studies on Indiplon. The Food and Drug Administration rejected a high-dose version of the drug and also requested more information on two lower dose versions.
But analyst Lawrence H. Neibor upgraded his rating on the stock to "Neutral" from "Underperform," expecting the company to see gains from other products, including its Gonadotropin-Releasing Hormone, or GnRH, antagonist in endometriosis a condition where endometrial tissue grows outside the uterus and forms painful cysts on the ovaries, fallopian tubes and abdominal cavity.
"With investor expectations currently running at a seven-year low, we believe the potential for future Indiplon disappointment is balanced by the potential for positive updates on earlier-stage products in the pipeline such as the GnRH antagonist in endometriosis," Neibor said.
In a Phase 1 dosing trial, data showed that its endometriosis treatment lowered levels of a female hormone, estradiol, associated with the disease.
Neibor also said his upgrade was based on a stock price that is approaching his $7 price target, as well as Indiplon gains once the drug is finally launched.
"The launch of Indiplon would quickly transition the company from the development stage to an operating entity and could make the company profitable shortly thereafter," Neibor wrote in a client note.
The stock rose 12 cents to $7.96 in the premarket electronic session, after closing at $7.73 on the Nasdaq.
http://www.chron.com/disp/story.mpl/ap/fn/4315974.html
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