Neurocrine Biosciences has hit a roadblock with its experimental oral therapy NBI-1070770, commonly referred to as ‘770, after the drug failed to produce a meaningful reduction in depression severity during a Phase II clinical trial. The result tempers the biotech’s recent wave of positive momentum.
Study Details
In an update, Neurocrine reported that ‘770 did not achieve its main goal of the study, which involved 73 adults with major depressive disorder who had not responded adequately to at least one prior antidepressant. Researchers evaluated three different dose levels of the candidate, measuring changes in depressive symptoms using the Montgomery-Åsberg Depression Rating Scale (MADRS) from baseline.
Next Steps
Neurocrine did not share detailed trial data, with Chief Medical Officer Sanjay Keswani stating that the company will continue reviewing the results to decide on its next course of action. Keswani has not yet indicated when Neurocrine plans to reveal its future strategy for ‘770.
Analyst Reaction
In a note to investors, analysts from BMO Capital Markets described the phase 2 failure as unexpected, considering the therapy’s mode of action. Neurocrine’s ‘770 is a negative allosteric modulator of the NMDA receptor that operates through a mechanism comparable to Johnson & Johnson’s approved nasal spray, Spravato, according to BMO.
BMO noted that although the agents don’t act through the exact same mechanisms, many had viewed Spravato as partially validating Neurocrine’s chosen path heading into the phase 2 updates for ‘770. The latest results, however, diverge sharply from the precedent set by Spravato.
Industry Context
The firm added that the findings once again underscore how neuropsychiatric drug development carries particularly high uncertainty, with failure rates surpassing those seen in most other therapeutic areas.
Company Performance
Neurocrine has been on a strong upward trajectory recently. In late October, the biotech reported third-quarter total net product sales of nearly $800 million, marking a 28% increase from the same period last year. Its flagship therapy for tardive dyskinesia, Ingrezza, contributed the bulk of revenue with just under $690 million, reflecting a 12% rise year over year.
Recent Deals
Earlier in November, Neurocrine inked an $881.5 million deal with China-based TransThera Sciences, granting it global rights to TransThera’s NLRP3 inhibitor programs across several disease areas, likely within metabolic and inflammatory categories, while TransThera will maintain exclusive rights to the portfolio throughout the Greater China region.
Past Setbacks
This is not the first instance where Neurocrine’s investment in Takeda’s neuroscience portfolio has failed to yield the desired results. The San Diego-based biotech handed the Japanese drugmaker $120 million upfront in 2020 for access to a collection of seven experimental therapies.
Since then, one of those programs – a GPR139 antagonist – was unable to lessen anhedonia – the condition wherein one cannot feel pleasure – in patients with depression during a phase 2 study. Meanwhile, another candidate, the DAAO inhibitor luvadaxistat, fell short in two midstage schizophrenia trials.
Broader Implications
The failure of NBI-1070770 may force Neurocrine to re-evaluate its depression program. Given the drug’s oral route, favorable tolerability, and novel mechanism, the company may decide to dig deeper into subpopulations, alternative dosing regimens, or biomarker-driven strategies. Alternatively, Neurocrine might shift focus toward its other pipeline assets — especially those with more promising efficacy or clearer regulatory pathways.
Moreover, this setback may affect investor sentiment broadly: if a well-capitalized, neuroscience-focused biotech like Neurocrine can stumble at this stage, other companies developing NMDA modulators may face renewed skepticism.
Looking Forward
Neurocrine has other irons in the fire. For instance, it continues to develop osavampator (NBI-1065845), a positive allosteric modulator of the AMPA receptor, which is currently in its own mid-to-late-stage clinical program. The company’s ability to pivot and reallocate resources will be critical.
At the same time, Neurocrine may engage with academic partners, regulatory authorities, and patient advocacy groups to decide whether ‘770 can be retooled. The key question now is whether Neurocrine will double down on this mechanism or cut losses.
