Neurocrine, Boehringer to develop diabetes drug

Neurocrine Biosciences Inc (NBIX.O) said it signed a deal with privately held German drugmaker Boehringer Ingelheim to develop drug candidates for the treatment of Type II diabetes and other indications.

The company’s shares rose as much as 8 percent Thursday on Nasdaq to hit a new 52-week high for the second consecutive day.

The companies will develop small molecule agonists that would activate GPR119, a G protein-coupled receptor located in the digestive system and pancreatic islet belt, thus stimulating increased insulin production. Under the terms of the deal, Neurocrine will get a $10 million upfront payment and research funding to support discovery efforts. The company is also eligible to receive up to $225 million in milestone payments, the company said.

Hapoalim Securities analyst Jon LeCroy said the deal was good as it allowed Neurocrine, which had been cash-restrained, to now push its pipeline drugs forward without a lot of expenditure.

Boehringer Ingelheim is responsible for the global development and commercialization of potential GPR119 agonist products, Neurocrine said.

On Wednesday, Neurocrine said it signed a collaboration deal with Abbott Laboratories Inc (ABT.N) to develop and commercialize Neurocrine’s experimental drug to treat endometriosis. [ID:nSGE65F0DK]

Shares of Neurocrine were up 4 percent at $5.56 in late morning trade on Nasdaq. They touched a 52-week high of $5.79 earlier in the session. (Reporting by Shailesh Kuber in Bangalore; Editing by Vyas Mohan)

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* To get up to $225 mln in milestone payments

* Shares up as much as 8 pct

(Adds analyst comment, updates share movement)

June 17 (Reuters)