Neurocrine Biosciences Drops 11% on Disappointing Guidance
💡 Key Takeaway
Despite a 10.6% stock drop due to conservative 2026 guidance, major analysts maintain bullish ratings seeing the sell-off as a buying opportunity for long-term growth.
What Sparked the Sell-Off
Neurocrine Biosciences reported mixed Q4 results with earnings slightly missing estimates at $1.88 per share versus $1.89 expected, while revenue beat expectations at $805.5 million. The company's flagship drug Ingrezza, which treats involuntary movements, generated $657.5 million in Q4 sales and $2.51 billion for full-year 2025, showing 7-9% year-over-year growth.
The disappointment came from 2026 guidance for Ingrezza, projecting sales of $2.70-$2.80 billion, which analysts viewed as conservative and already priced into expectations. Additionally, the company's newer drug Crenessity showed declining new prescription growth quarter-over-quarter without providing 2026 guidance for that product.
Despite strong underlying demand with double-digit prescription volume growth for Ingrezza, investors focused on the cautious outlook and sent shares down 10.64% to $122.82. The stock reaction appeared to punish what many analysts considered guidance that merely met, rather than exceeded, market expectations.
The mixed signals - beating Q4 sales but providing conservative forward guidance - created uncertainty that triggered the significant sell-off despite what analysts see as fundamentally strong business performance.
Why This Guidance Matters for Investors
The market's negative reaction highlights how sensitive biotech stocks can be to guidance, even when current results are strong. Neurocrine's situation shows that beating quarterly numbers isn't enough if future projections don't excite investors.
For long-term investors, the key question is whether this represents a temporary setback or fundamental weakening. The 2026 guidance suggests management is being conservative, possibly due to formulary pricing pressures and the timing of clinical catalysts rather than diminished demand.
The analyst community's unified bullish stance is significant because it suggests professionals see this dip as disconnected from the company's underlying value. When multiple firms maintain buy ratings despite a guidance miss, it often signals confidence in the long-term story.
Neurocrine's pipeline development timeline matters because 2026 is expected to be light on clinical milestones, making near-term performance more dependent on existing products. This creates a 'waiting period' that tests investor patience but could set up significant future catalysts.
Bobby Insight
This sell-off represents a buying opportunity for patient investors with a long-term horizon.
Major analysts maintained bullish ratings with price targets up to $192, seeing the guidance as conservative rather than indicative of fundamental weakness. The company's pipeline sets up for significant catalysts beyond 2026, and current prescription growth remains strong.
What This Means for Me
