In a repeat setback, Neurocrine flags a failure for Tourette syndrome study — shares sink

Shares of Neurocrine $NBIX got hammered Tuesday morning after the biotech conceded that its Phase IIb study of valbenazine for Tourette syndrome had flopped.

The stock swiftly plunged more than 20% on the news.

The primary endpoint for their study was a reduction in facial tics among patients with the disease. We’re not getting to see the actual data yet to see just how bad a setback this is.

Kevin Gorman, CEO Getty

Neurocrine has had plenty of problems to deal with in this field. Their drug failed an earlier study for Tourette syndrome in the spring of 2017, spurring execs to vow they would come back with a better study design that would include better dosing.

But that didn’t play out well.

The FDA approved Ingrezza (valbenazine) for tardive dyskinesia in April, 2017, their first ever regulatory OK. Then soon after its partner AbbVie came through with promising late-stage data for their endometriosis drug elagolix, now on the market as Orilissa, which the biotech had outlicensed to them in 2010.

Repeat failure in hand, they’ll be studying next steps regarding this drug’s future in Tourette syndrome — if it has one.

Stifel’s Paul Matteis had some apologizing to do after the news hit.

(W)e were wrong to have been optimistic here as we had modeled a 75% probability-of-success. The press release lacks data, but it does transparently convey that, (1) treatment-related adverse events were consistent with other studies, (2) placebo performed as expected, but (3) the drug effect was smaller than management had anticipated. Therefore, it seems likely that the announcement will lead investors to remove TS from the model.

And Baird’s Brian Skorney went back to do some math on his peak sales estimates, shaving off close to a billion dollars.

(W)e are reducing our peak sales estimate for Ingrezza from $2.09B to $1.17B to account for the removal of the Tourette market opportunity.

“We are very disappointed with the top-line data from the T-Force GOLD study given that children and adolescents with Tourette syndrome need better treatment options. This study was well-conducted with a placebo response as expected, but the treatment effect of valbenazine was lower than we had anticipated,” said Neurocrine CEO Kevin Gorman in a prepared statement.

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