San Diego’s Neurocrine Biosciences Scores Second Big Deal in Two Days

6/18/10

Neurocrine Biosciences, which looked like it was stuck perpetual retrenchment-mode, just pulled off its second big deal in two days. Yesterday, the San Diego biotech agreed to grant German drug maker Boehringer Ingelheim worldwide rights to experimental diabetes drugs. Neurocrine will get an upfront payment of $10 million and milestone payments of up to $225 million in return.

The deal was preceded Wednesday by an even larger pact with Abbott Laboratories. The US drug giant is paying Neurocrine up to $575 million for global rights to Neurocrine’s experimental drug for endometriosis.

Neurocrine (NASDAQ: NBIX) also stands to receive royalty payments from its partners if the drugs reach the marketplace.

Is this the beginning of a long-awaited turnaround at Neurocrine? Investors seem optimistic. The company’s shares are up 18.5 percent since Tuesday’s close. Jason Napodano, an analyst with Zach’s Investment Research, said in a note Wednesday that the Abbott deal was a “game changer” for Neurocrine.

Of course, it’s important to remember that Neurocrine has more or less been in this position before. Back in 2002, pharmaceutical giant Pfizer agreed to pay up to $400 million—including an upfront payment of $100 million—for rights to Neurocrine’s experimental sleeping pill indiplon. That made Neurocrine one of San Diego’s hottest companies—until four years later when Pfizer walked away from the deal after the FDA declined to approve the drug. Neurocrine’s shares once traded between $40 and $50, climbing above $70 before the FDA acted. Thursday’s close of $5.57 is a long parachute jump from the stock’s previous heights.

Neurocrine is no longer working on indiplon, and the company … Next Page »

Denise Gellene is a former Los Angeles Times science writer and regular contributor to Xconomy. You can reach her at dgellene@xconomy.com Follow @

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