Why Neurocrine Biosciences Shares Plummeted This Week

Neurocrine Biosciences (NBIX 3.77%) had some major news to report a few days ago, but it was hardly good for the company’s stock. The latest information from the lab dampened enthusiasm for the company, sending its stock down 16% year to date as of Friday morning, according to data compiled by S&P Global Market Intelligence.

One clear success out of four

Biotech companies like Neurocrine are highly dependent on the drugs they develop and (ideally) bring to market. The Neurocrine news was about its investigational schizophrenia drug, NBI-‘568, being put to the test in a phase 2 clinical trial.

Early Wednesday, Neurocrine reported the results of that trial. At first glance, they seemed encouraging: One of four doses of the oral drug met the primary endpoint, resulting in a significant reduction in symptoms compared with placebo. The other three doses, however, did not show such a significant difference between drug and placebo.

It was rather awkward that the lowest of the four doses performed best. In successful drug trials, higher doses tend to be more effective, all other things being equal.

Nevertheless, Neurocrine was positive about the outcome. Chief Medical Officer Eiry Roberts said the trial “achieved our goal of identifying a once-daily, well-tolerated dosing regimen with an attractive and competitive risk-benefit profile.”

Phase 3 testing to begin next year

Neurocrine is continuing to develop the treatment for schizophrenia, saying it would move into a phase 3 trial in 2025. It did not elaborate on timing.