San Diego--Neurocrine Biosciences Inc. said an early trial of its experimental insomnia treatment shows the drug is safe and effective for humans.
Shares in Neurocrine, a money-losing company that has yet to bring a product to market, have doubled over the past month amid hopes for the prospects of the treatment, which is dubbed NBI-34060.
The stock could fall now that the highly anticipated news is out, analysts and investors said. That’s because the company hasn’t yet gathered enough evidence to prove whether its product candidate is superior to sleeping pills like Monsanto Co.'s Ambien and American Home Products Corp.'s Sonata, two leaders in the $1-billion-a-year market for sleeping pills.
“The data seems extremely preliminary,” said Charles Engelberg, an analyst with AmeriCal Securities.
The San Diego-based company on Oct. 27 issued a statement saying it would release data from the trial in early December. It also said early safety studies on humans as well as trials in animals and test tubes showed that its compound may be more potent than Ambien and Sonata.
Shares in Neurocrine fell 56 cents to close at $14.44 on Nasdaq. That’s up from a 52-week low of $3.75 in July. The company released the information after the close of U.S. stock exchanges.
The information released from a study of 228 patients showed that the drug has promise, analysts said. The company has said it plans to test the drug on at least another 2,000 patients as it seeks more information on its safety and effectiveness.