Our 12-month target price of $99, raised $7, reflects a 23.2x multiple of projected '23 EPS, about in line with NBIX's historical forward average. We lift our '22 EPS estimate by $0.23 to $3.24, and similarly '23's by $0.11 to $4.27. Rival firm Teva Pharmaceuticals (TEVA 8 Hold) has settled patent litigation over its tardive dyskinesia drug, Austedo, which should result in a commercially-available generic version of Austedo no earlier than April 2033. Given that NBIX faces similar patent litigation for its flagship product Ingrezz (which also treats tardive dyskinesia), we think the settlement could provide a road map for NBIX to address its own litigation. We also think the ongoing recovery in clinical visits to doctors (relative to earlier in the Covid-19 environment) may enable demand for Ingrezza to improve. The company recently repurchased some of its 2024 convertible notes, leaving only $200M in such notes outstanding.
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