Hapoalim Securities Reiterates Buy Rating on Neurocrine Biosciences (NBIX)

Hapoalim Securities is out with a research report this afternoon, where it reiterates its Buy rating on Neurocrine Biosciences

; it has a $7.50 price target on the stock. The HS analysts cited the company’s most recent earnings report, which was better than expected; the company said that they had cash on hand of $131 million as of late June. Hapoalim analysts believe that Neurocrine and Abbott are in the process of compiling the necessary information to file end of Phase II meeting requests with the FDA in 3Q10, with Phase III trials potentially beginning in late 2010. The HS analysts increased revenue estimates on the name for 2010-2014, as well as operating cost estimates. The net of these changes increases their 2010-2014 EPS estimates from “$(0.48), $(0.18), $(0.36), $(0.11) and $0.03 to $(0.25), $(0.01), $(0.06), $0.48 and $0.62, respectively.” As for valuation, the HM analysts said, “Our $7.50 price target is based on a sum-of-the-parts valuation, using our peak sales estimate of products, pipeline value, and adding the company’s estimated cash position. We give elagolix royalties an 8 multiple on our peak sales estimate, discounted 35%. We value Neurocrine at $429 million based on this sum-of-the-parts model, or approximately $7.50 per share.”