Lower dose of Neurocrine's movement disorder drug fails in study

Reuters

(Reuters) - Neurocrine Biosciences Inc said a lower dose of its experimental drug to treat a rare movement disorder did not meet the main goal of a mid-stage clinical study, sending its shares down 32 percent in after-market trade. A number of analysts, including those from Jefferies, Oppenheimer, Roth and Zacks, had been upbeat on the prospects of the drug, NBI-98854, being developed to treat tardive dyskinesia -- a disorder that causes involuntary, repetitive body movements. Most of the enthusiasm was because there is no available treatment for the disorder yet. Some analysts over the last few months also said the drug could be the company's next biggest potential growth driver after Elagolix -- Neurocrine's most advanced clinical product, developed in partnership with AbbVie Inc, to treat uterine fibroids and endometriosis pain. However, after the release of the clinical trial data late Monday, Zacks analyst Jason Napodano tweeted that investors should not buy Neurocrine shares just for Elagolix. "My model says royalties & milestone on Elagolix are only worth $4-$6 per share," Napodano said. According to the results of the mid-stage study, the 50 milligram dose of NBI-98854 did not show statistical significance in reducing symptoms of tardive dyskinesia after six weeks of treatment. The investment website Seeking Alpha cited Morgan Stanley saying that Neurocrine's trial failure will get "gobbled up, as the endometriosis story seems to be the main driver of the stock." The 100 milligram dose, however, showed clinically meaningful reduction in reducing the symptoms after two weeks of treatment, Neurocrine said in a statement. Neurocrine now plans to conduct additional mid-stage trials, using the 100 milligram dose and other higher doses of the drug. The next mid-stage study on the drug will have a size similar to the recently completed study and is expected to cost about $8 million to $10 million, Neurocrine Chief Executive Kevin Gorman said on a conference call. Apart from Elagolix and NBI-98854, the San Diego company is also developing treatments for stress-related disorders, cardiovascular diseases, diabetes and insomnia. Neurocrine's shares closed at $16.70 on the Nasdaq on Monday. (Reporting by Zeba Siddiqui in Bangalore; Editing by Sriraj Kalluvila and Anil D'Silva)