If adversity offers up opportunity, as Neurocrine Bioscience's (Nasdaq: NBIX) CEO asserted during a conference call yesterday, then Neurocrine should be overflowing with opportunities right now. Yesterday, Neurocrine released its year-end earnings numbers and updated investors on the progress (or lack thereof, in some cases) with its lead drugs.

In December, Neurocrine was stunned to hear that its lead drug, the insomnia treatment indiplon, had received a second approvable letter from the FDA. It wasn't so much the fact that Neurocrine received an approvable letter in December that was shocking -- after all, the FDA fails to approve new drugs all the time -- but why Neurocrine got the letter. The company was rightly surprised that the FDA gave a whole new set of reasons not previously raised with its past approvable letter for the drug.

The second FDA rejection followed an earlier approvable letter it received from the FDA in May 2006, and then the subsequent canceling of an indiplon partnership agreement by Pfizer (NYSE: PFE). On the conference call yesterday, Neurocrine didn't have anything new to say about indiplon except that it was still getting ready to meet with the agency this quarter, and that it would update investors on the status of the drug during its first-quarter financial-results conference call, which should occur around early May.  

Neurocrine made it pretty clear in its December approvable letter announcement that indiplon's chances of eventually getting approved by the FDA were extremely slim. Cementing its outlook on the future of indiplon, Neurocrine stated during the conference call that it has downsized and "removed all the functions that were dedicated to indiplon" and would only take on further development of the drug if it had a partner and if the FDA meetings this quarter were positive.

So what's left of Neurocrine sans indiplon? Currently, it has three compounds in phase 2 development, a partnership with GlaxoSmithKline (Nasdaq: GSK), and almost $180 million in cash on its balance sheet. Its burn rate for the year is expected to be around $65 million-$70 million, and it's looking to use some of its cash to possibly acquire new pipeline candidates.

The early-stage nature of Neurocrine's pipelines and its particular drug and disease targets aren't my cup of tea, but with a rock-bottom, sub-$200 million market cap, I'm sure some specialty pharma investors can make a rational case that shares of Neurocrine are cheap.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Pfizer is an active Inside Value pick. GlaxoSmithKline is an active Income Investor pick. The Fool's disclosure policy is way beyond the developmental stage.