Neurocrine Biosciences (Nasdaq: NBIX), which looked like it was stuck in perpetual retrenchment mode, just pulled off its second big deal in two days. Yesterday, the San Diego biotech agreed to grant German drug maker Boehringer Ingelheim worldwide rights to experimental diabetes drugs. Neurocrine will get an up-front payment of $10 million and milestone payments of up to $225 million in return.

The deal was preceded Wednesday by an even larger pact with Abbott Laboratories (Nasdaq: ABT). The U.S. drug giant is paying Neurocrine up to $575 million for global rights to Neurocrine's experimental drug for endometriosis.

Neurocrine also stands to receive royalty payments from its partners if the drugs reach the marketplace.

Is this the beginning of a long-awaited turnaround at Neurocrine? Investors seem optimistic. The company's shares are up 18.5 percent since Tuesday's close. Jason Napodano, an analyst with Zach's Investment Research, said in a note Wednesday that the Abbott deal was a "game changer" for Neurocrine.

Of course, it's important to remember that Neurocrine has more or less been in this position before. Back in 2002, pharmaceutical giant Pfizer (NYSE: PFE) agreed to pay up to $400 million -- including an up-front payment of $100 million -- for rights to Neurocrine's experimental sleeping pill indiplon. That made Neurocrine one of San Diego's hottest companies -- until four years later, when Pfizer walked away from the deal after the FDA declined to approve the drug. Neurocrine's shares once traded between $40 and $50, climbing above $70 before the FDA acted. Thursday's close of $5.57 is a long parachute jump from the stock's previous heights.

Neurocrine is no longer working on indiplon, and the company has enacted seemingly endless cuts that have reduced its workforce by nearly 80% in less than five years. Neurocrine employed 125 people at the end of 2009, compared to 588 at the end of 2005. Projects were shelved, and good people were let go, so the company could continue to invest in the clinical programs involved in the latest deals.

Napodano likes the Abbott deal because the majority of the company's milestone payments are for drug development. That means Neurocrine will see the bulk of the money before FDA approval, which he says may come in 2012 or 2013. On top of that, Neurocrine gets a $75 million up-front payment. He estimates a royalty rate of 20%.

He likes Abbott as a partner for Neurocrine because Abbott markets luprolide, an injectible drug that works on the same receptor as the experimental Neurocrine drug, which is taken orally. Napodano writes that Neurocrine's drug is a logical replacement in the OB/GYN market for luprolide, which will lose patent protection in 2015.

Endometriosis, a painful condition in which uterine tissue grows outside the womb, affects about 7.5 million women in the U.S., according to Neurocrine. The company has reported promising results from mid-stage studies; late-stage trials are expected to begin later this year.

Napodano estimated that Neurocrine will have $135 million in cash on its books at the end of the second quarter. The cash should help Neurocrine push forward on development of some internal drug candidates, such as a drug designed to control the involuntary movements often caused by Parkinson's disease medications.

Thursday's deal only improves Neurocrine's financial position. Under the terms announced yesterday, Neurocrine will receive a $10 million up-front payment, research funding to support diabetes drug discovery efforts, and up to $225 million in milestone payments from Boehringer, based in reaching development, regulatory, and commercial goals.

The companies will jointly identify diabetes-drug candidates and advance them through pre-clinical development. Their research will focus on a class of drugs called GPR119 agonists. Neurocrine says GPR119 is a receptor found on cells in the digestive system and on pancreatic islet cells. When activated, the receptor enhances the secretion of insulin.

People with Type 2 diabetes have reduced ability to secrete and respond to insulin, which is needed to regulate the level of glucose in the blood. Nearly 25 million people in the U.S. have the disease, which is associated with obesity.

What is next for Neurocrine? I put in a call to Jane Sorensen in investor relations but didn't hear back from her by deadline. Maybe company honchos think they've made enough news for one week. We'll certainly be watching to see what happens next.

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Denise Gellene is a former Los Angeles Times science writer and regular contributor to Xconomy. You can reach her at dgellene@xconomy.com.