Neurocrine was founded in 1992 and is headquartered in San Diego, California. It develops treatments for neurological, neuroendocrine, and neuropsychiatric disorders. Its FDA-approved products include INGREZZA, ALKINDI, EFMODY, Orilissa, and Oriahnn. INGREZZA is marketed as DYSVAL in Japan and REMLEAS in Asia. ALKINDI SPRINKLE is sold by Eton Pharmaceuticals in the US.

Neurocrine has entered into a high-profile collaboration with TransThera Sciences (Nanjing) Inc., securing rights to develop and commercialize preclinical NLRP3 inhibitors outside China. The agreement, worth up to $881.5m through upfront, development, and sales milestone payments, targets promising inflammation pathways linked to neurodegeneration and many other diseases. Both companies will conduct joint research to further broaden NLRP3 technology, with Neurocrine holding the exclusive rights for markets beyond Mainland China, while TransThera retains rights within the region. This deal significantly expands Neurocrine’s pipeline into immunology and neuroinflammation.

Positive long-term outlook

Neurocrine posted strong performance over FY 21-24, achieving a revenue CAGR of 27.6%, reaching $2.4bn in FY 24, driven by the sales growth of its flagship drug INGREZZA and expansion in Medicare coverage and patient onboarding. EBIT registered a CAGR of 41.0%, reaching $583m, with margins improving from 18.3% to 24.8%.

Over FY 21-24, the company experienced a rise in FCF from $248m to $458m, propelled by the rise in cash from operations (from $256m to $595m). In addition, gearing improved from 33.3% to 19.1%.

Moreover, Neurocrine reported impressive Q3 25 results, with revenue up by 27.8% y/y and EBIT by 29.2% y/y, driven by overall product demand.

In comparison, Ionis Pharmaceuticals, Inc., a local peer, reported a negative revenue CAGR of minus 4.5% over FY 21-24 to $705m in FY 24. EBIT grew at CAGR of 150.6% to minus $475m.

Looking ahead, consensus estimates EBIT to rise at a CAGR of 24.8% to $1.1bn, with margins expanding from 24.2% to 30% over FY 24-27. Its net profit CAGR is 32.1% to $860m. Meanwhile, for Ionis Pharmaceuticals, analysts estimate an EBIT CAGR of 30.7% and a net profit CAGR of 28.6%.

Robust stock returns

Over the past 12 months, the company's stock delivered strong returns of approximately 12.4%. In comparison, Ionis Pharmaceuticals' stock delivered higher returns of around 130.9% over the same period.

Neurocrine is currently trading at a P/E of 28x, based on FY 25 estimated EPS of $5, which is lower than its 3-year historical average of 57.1x but higher than Ionis Pharmaceuticals' valuation of minus 34.9. The company is currently trading at an EV/EBIT multiple of 19.3x, based on FY 25 estimated EBIT of USD 637.7m, which is lower than its 3-year historical average of 36x, but higher than Ionis Pharmaceuticals (minus 33x).

Neurocrine is largely liked by 27 analysts, with 24 having 'Buy' ratings, with the remaining three having 'Hold' ratings for an average target price of $174.6, implying 23.6% upside potential over the share's current price.

Overall, Neurocrine posts strong financial performance and has good growth prospects, supported by strategic collaborations and expanding product demand. Despite higher valuation multiples compared to peers, analysts remain positive, attributing the stock with substantial upside potential, making Neurocrine a compelling investment opportunity in the biopharmaceutical sector. However, the company faces risks in product development, regulatory approvals, reliance on third parties, commercial concentration, rising expenses and market volatility, affecting both its margins and growth.