Shares of Neurocrine Biosciences (NASDAQ:NBIX) were jumping 12.5% higher as of 3:22 p.m. EDT on Thursday. The big gain came after it was announced that Neurocrine will replace O-I Glass in the S&P MidCap 400 Index.
The addition of the biotech stock to the S&P MidCap 400 Index means that any funds tracking this index must buy shares of Neurocrine. This prospect of significant buying is music to the ears of Neurocrine shareholders.
However, Neurocrine's addition to the mid-cap index should be viewed as a temporary boost. Whether or not the stock can hold onto its gains will depend on its financial performance and its clinical results.
The company hasn't fared well on the latter front recently. Earlier this month, Neurocrine announced disappointing results from a phase 2 study of luvadaxistat in treating adults with negative symptoms of schizophrenia.
Neurocrine has more potential catalysts on the way. The company expects to report results from a late-stage study of valbenazine in treating chorea (abnormal involuntary movements) in Huntington's disease in the fourth quarter of 2021. Neurocrine also plans to begin another late-stage study of the drug in treating a neurological indication.