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What: Shares of Neurocrine Biosciences (NASDAQ:NBIX) are trading up 21% on Thursday after reporting positive results from the first of two Phase 3 trials of elagolix, which it is developing in cooperation with AbbVie (NYSE:ABBV).

So what: AbbVie and Neurocrine recently wrapped a 24-week trial of elagolix that enrolled 872 women across the United States and Canada. Elagolix is designed to treat endometriosis in premenopausal women and inhibits gonadatropin releasing hormone receptors in the pituitary gland to reduce non-menstrual pelvic pain and menstrual pain associated with endometriosis. The drug achieved its target goals for pain reduction under these conditions for both a 150-milligram daily dose and a 200-milligram twice-daily dose after both three and six months of trials.

Now what: Effective endometriosis treatments are certainly worthwhile pursuits for biotech and pharmaceutical companies, as the World Endometriosis Research Foundation estimates that 170 million women suffer from it worldwide. However, the potential upside for Neurocrine may be somewhat limited by the fact that elagolix will effectively compete with a wide range of existing pain relievers and anti-inflammatory drugs.

Still, it appears likely elagolix will steam onward toward FDA approval, which will result in royalty payments for Neurocrine on top of the estimated $450 million in developmental and regulatory milestone payouts left to be earned from its deal with AbbVie. AbbVie clearly expects beaucoup bucks from elagolix, which means Neurocrine is likely to earn significant royalty payments over the long run.