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Did Neurocrine leave door open to Teva on Tourette med?

May 24, 2017

Neurocrine Biosciences (NBIX) may have left the door open for Teva Pharmaceuticals (TEVA) to get an early lead in Tourette’s syndrome treatment after Neurocrine’s drug failed in a mid-stage trial, an analyst said Wednesday.

In afternoon trading on the stock market today, Neurocrine was down 9.8%, near 48.30, after earlier falling as much as 10.3% to a month-low. Shares dipped below their 50-day moving average for the first time since April 12. Teva stock lifted 1%, near 29.10.

Teva is working on a rival drug, known as SD-809. It belongs to the same class of drugs as Neurocrine’s Ingrezza. The Food and Drug Administration is looking at SD-809 under priority review in the same disorder for which Ingrezza is approved.

“Neurocrine has reason to be close to the vest with the details given competitive concerns with Teva’s SD-809,” Leerink analyst Paul Matteis said Wednesday, a day after Neurocrine said Ingrezza failed to improve tics in children with Tourette’s syndrome.

Ingrezza is already approved to treat tardive dyskinesia, involuntary movements of the face, tongue, lips, trunk and extremities associated with longtime use of certain medications. Neurocrine is also looking at Ingrezza in pediatric and adult patients with Tourette’s syndrome.

But late Tuesday, Neurocrine said Ingrezza missed its goal of improving tics in a pediatric trial. That followed a failed trial in adult patients earlier in the year. Still, Matteis says the “program (is) not dead.” There could be dosing issues.

Further analysis shows children might need a higher dose of Ingrezza to see a change in tics, Needham analyst Alan Carr said. In the adult trial, Ingrezza missed its goal at the eight-week mark, but “a dose dependent trend toward efficacy was evident,” he noted.

“The implication is children and adolescents require proportionately more drug than adults,” Carr wrote in a note to clients. A second Phase 2 trial to test higher doses is set to begin later this year.

Most analysts had expected Ingrezza to grab Food and Drug Administration approval to treat pediatric Tourette’s syndrome by 2021. Carr assumes a year delay and cut his price target on Neurocrine stock to 58 from 62. He kept his buy rating on Neurocrine.

Carr models $378 million in 2021 Ingrezza sales, down from his earlier view for $408 million. He also cut his expectation for Neurocrine adjusted earnings per share to $3.89 from $4.19 for 2021.

Leerink’s Matteis also sees a delay for Ingrezza in Tourette’s syndrome. He now expects Ingrezza to get FDA approval in this disorder in 2022 vs. earlier views for 2020.

Matteis cut his price target on Neurocrine stock to 66 from 68, though he kept his outperform rating on shares. He, too, noted Neurocrine could see some success in treating Tourette’s syndrome with a higher dose of Ingrezza.

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