Neurocrine's 3rd Ingrezza flop in Tourette dashes hopes for sales expansion

Last year, Neurocrine’s Ingrezza failed a phase 2 trial in pediatric Tourette Syndrome patients, prompting the company to use what it learned in designing a new phase 2b. But now Ingrezza has flunked that trial, too.

The San Diego company broke the bad news to investors Wednesday, noting that Ingrezza failed to top placebo at registering a change on the Yale Global Tic Severity Scale (YGTSS). And there was no sugar-coating the drug’s performance.

"This study was well-conducted with a placebo response as expected, but the treatment effect" of Ingrezza "was lower than we had anticipated," CEO Kevin Gorman, Ph.D., said in a statement, adding that the company was "very disappointed."

Investors were, too, and they showed it by sending shares down by about 14% at market close.

The failure was Ingrezza's third in Tourette. After the first—a January 2017 stumble in adult patients—the drugmaker pinned its hopes on pediatric use. But more negative results followed in May.

Still, Neurocrine explained away that flop, admitting it had underestimated the dose needed to deliver benefits in children and blueprinting its phase 2b study. "The program is not dead, in our view," Leerink Partners analysts wrote at the time.

Now, though? It’s dead to analysts, all right. Neurocrine itself instructed them on a Wednesday investor call to remove Tourette sales from their models, and they tweaked downward accordingly.

Jefferies’ Biren Amin, for one, lowered the price target for Neurocrine to $110 from $131. Leerink’s Marc Goodman went even further, noting that he and his colleagues had taken "this opportunity to re-evaluate our model in aggregate." He slashed his price target to $84 from $110 and revised his sales forecast for the drug in its approved indication, tardive dyskinesia (TD), downward to about $2 billion from about $2.5 billion.

"While management has executed well on the TD launch so far, we believe our peak sales numbers in TD were just too high," he wrote to clients.

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