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On Thursday, shares of Neurocrine (NASDAQ:NBIX) Biosciences, Inc. (NASDAQ:NBIX) stock received an upgrade from Piper Sandler from Neutral to Overweight, coupled with a price target increase to $159 from the previous $131. The revision reflects a positive outlook on the company's prospects despite some concerns over recent clinical trial data.
The upgrade was influenced by the potential of Neurocrine's investigational drug NBI-1117568, also known as NBI-'568, a selective muscarinic M4 agonist for treating schizophrenia in adults. While acknowledging the absence of a dose-response relationship in the Phase II data, Piper Sandler expressed confidence in the 20 mg once-daily dose's ability to position the drug as a viable alternative in the antipsychotic market.
Piper Sandler emphasized the importance of the existing data on the 20 mg dose and suggested that even with limited differentiation from competitors, such as Bristol's KarXT and AbbVie (NYSE:ABBV)'s emraclidine, NBI-'568 could still hold substantial value. This is due in part to the drug's potential to move the antipsychotic space away from atypical antipsychotics, which are known for their safety concerns.
Furthermore, the firm highlighted Neurocrine's commercial infrastructure, which is already focused on psychiatry. This existing network is seen as an asset that could drive significant operating leverage with the addition of NBI-'568 to the company's portfolio.
The price target adjustment to $159 reflects a more optimistic view on Neurocrine's stock, suggesting that Piper Sandler sees a stronger performance ahead for the biopharmaceutical company. The upgrade to Overweight indicates a recommendation that investors could potentially expect the stock to outperform others in the sector.
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