On Tuesday, Neurocrine (NASDAQ:NBIX) Biosciences Inc. (NASDAQ:NBIX) experienced a boost in confidence from Oppenheimer, as the firm raised its share price target on the stock to $200 from the previous $170, while maintaining an Outperform rating. The adjustment comes amid growing enthusiasm for Neurocrine's M4 agonist, NBI-568, as Phase 2 top-line results are anticipated in the second half of 2024.
The analyst from Oppenheimer cited several factors contributing to the positive outlook, including the recent acquisitions of companies CERE and KRTX, valued at $8.7 billion and $14.0 billion respectively. In addition, Neurocrine's recent R&D Day focused on its muscarinic compounds and the company's management has provided encouraging commentary regarding trial execution. These elements are believed to create an attractive setup for the company's shares.
Oppenheimer's scenario analysis suggests that there could be over 30% upside potential for Neurocrine's stock if NBI-568 demonstrates a competitive profile, assuming a 60% probability of success. Conversely, there's a projected 15% downside risk if the probability is adjusted to 40%. The introduction of NBI-568 into their model is a key driver behind the new $200 price target.
Moreover, the filing of a patent by Neurocrine for GPR52 agonists for various central nervous system disorders has been noted. This move, along with the €755 million collaboration deal between Boehringer Ingelheim and Sosei Heptares, is seen as a validation of Neurocrine's differentiated approach in the neuropsychiatry field.
The analyst concluded that the pipeline for neuropsychiatric treatments being developed by Neurocrine Biosciences is still not fully appreciated by the market, suggesting that there may be more room for growth as the company continues to progress with its clinical trials and development programs.
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