Neurocrine Bio. stock jumps as rival drug faces modest Medicare price cut

Investing.com - Neurocrine Biosciences (NASDAQ:NBIX) stock rose approximately 6% on Thursday after Medicare announced negotiated prices for drugs covered under Part D for 2027, with a competing medication facing a relatively small discount. The stock, which has gained over 23% in the past six months according to InvestingPro data, is now trading near its 52-week high of $157.67 and appears undervalued based on InvestingPro’s Fair Value assessment.

Medicare revealed that Teva’s Austedo, which competes with Neurocrine’s Ingrezza in treating tardive dyskinesia and Huntington’s disease chorea, will receive a 38% discount from its 2024 list price. This represents the lowest discount percentage among all drugs on the 2027 negotiation list under the Inflation Reduction Act.

Canaccord Genuity reiterated its Buy rating on Neurocrine with a $164.00 price target following the news. The firm noted that Teva had previously indicated during its third-quarter earnings call that IRA pricing negotiations were proceeding as expected, maintaining its $3 billion peak sales outlook for the Austedo franchise. This aligns with the broader analyst consensus, as InvestingPro shows Neurocrine has a strong 1.41 analyst recommendation score and analyst price targets reaching as high as $203.

Neurocrine’s share price outperformed the broader market on Thursday, with the S&P 500 rising 0.9% and the XBI biotech index gaining 1.1% during the same session.

Canaccord Genuity stated it continues to view Neurocrine as "undervalued largely on approved products alone" including Ingrezza and Crenessity, while suggesting investors are "ascribing very little value, if any" to the company’s pipeline, which will be discussed at an upcoming R&D Day on December 16, 2025.

In other recent news, Neurocrine Biosciences announced that its investigational compound NBI-1070770 did not meet the primary endpoint in a Phase 2 study for major depressive disorder. Despite this, the drug was generally well tolerated among participants. On the financial front, Truist Securities raised its price target for Neurocrine Biosciences to $172, citing the strong launch trajectory of Crenessity as a primary reason. Similarly, BMO Capital increased its price target to $147, highlighting another strong quarter of Crenessity sales as a positive development. In terms of regulatory news, the Centers for Medicare and Medicaid Services announced a reduction in the cost of Teva’s Austedo, which Stifel believes will have a positive impact under the Inflation Reduction Act. Stifel reiterated its Buy rating and maintained a price target of $183. Additionally, Neurocrine Biosciences published a review in CNS Spectrums, comparing FDA-approved VMAT2 inhibitors for tardive dyskinesia treatment, emphasizing the differences between INGREZZA and deutetrabenazine. These developments reflect Neurocrine Biosciences’ ongoing activities in both research and market performance.

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