If adversity offers up opportunity, as Neurocrine Bioscience's
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
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
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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