Neurocrine Turns To Gene Therapy To Bolster Its Movement Disorder Franchise

Summary

• Neurocrine has chosen to in-license some early-stage CNS gene therapy assets that could significantly build its movement disorder franchise down the line.
• Voyager's lead candidate targets restoring AADC enzyme function in patients with Parkinson's; early results have been encouraging, and this could be a multibillion-dollar drug if pivotal results are positive.
• Neurocrine is taking a broader perspective to building its business than many biotechs, and I think this is good for investors; these programs are risky but worth the risk.

I have been pretty consistently bullish on Neurocrine (NASDAQ:NBIX) for a while, but one of my more frequent criticisms has been a relatively spartan pipeline. Where some biotechs will throw numerous compounds into trials in the hopes that something "sticks", Neurocrine has been far more selective in what it brings into human studies. While that almost certainly saves the company some money, it also leads to a thin pipeline and that weakness was brought back into focus recently with the failure of Ingrezza in a pivotal study of pediatric Tourette.

Neurocrine has taken a significant step to change that, with the announcement on January 29 of a partnership with Voyager (VYGR) for potentially four gene therapy programs in the CNS space. The most advanced program likely wouldn't be approved until 2024 (assuming the data are good enough), but Neurocrine could be acquiring some high-potential compounds in areas that are increasingly core to the company.

To Boldly Go…

Neurocrine is still at a size where it's more common for biotechs to be partnering with larger companies than seeking out their own in-licensing deals, but the fact is that Neurocrine has a growing, and thus far pretty effective, sales force focusing on movement disorders, and it makes sense to build out that business - part of the logic in licensing BIAL's opicapone (which should get FDA approval in 2019 and launch in 2020). With the Tourette's indication no longer viable and prior disappointments with early-stage compounds for essential tremor, Neurocrine was looking for other movement disorder drug candidates.

Neurocrine announced on Tuesday that it had reached a development partnership agreement with Voyager Therapeutics (VYGR), a small biotech working on AAV-based gene therapies for CNS diseases. In exchange for $165 million upfront ($50 million of which will be an equity investment in Voyager), R&D program

Analyst’s Disclosure:I am/we are long NBIX, RHHBY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.