How did NBIX's Q4 2024 earnings surprise impact investor sentiment?

Neurocrine Biosciences (NBIX) reported an earnings per share (EPS) surprise of $0.12 for Q4 2024, which had a mixed impact on investor sentiment.

1. **Positive Sentiment from FDA Approval and Revenue Potential**:
- The FDA approval of CRENESSITY for congenital adrenal hyperplasia (CAH) was a significant positive catalyst for the stock. This approval marked a major milestone as it is the first new treatment for CAH in 70 years.
- Analysts and market participants recognized the potential of CRENESSITY to become a blockbuster drug, with estimated global peak sales of $1.5 billion by 2030. This positive outlook was reinforced by the drug's orphan disease status, which provides NBIX substantial pricing power.
2. **Negative Sentiment from Earnings Miss and Pipeline Setbacks**:
- Despite the positive news from CRENESSITY, the Q4 earnings miss was a notable concern. NBIX reported earnings per share (EPS) of $1.24 for Q4 2024, missing the Zacks Consensus Estimate of $1.47. This marked the second quarter in a row where NBIX's earnings fell short of expectations, raising questions about the company's operational efficiency and growth trajectory.
- Additionally, the company's pipeline faced challenges, with the discontinuation of the Luvadaxistat program and mixed results from the Phase 2 trial of NBI-1117568. These setbacks contributed to investor uncertainty about NBIX's long-term growth prospects.
3. **Broader Market and Economic Factors**:
- It's important to consider that investor sentiment is influenced by broader market conditions and economic factors. While the CRENESSITY approval is a positive development, it may not immediately address all investor concerns, especially in a volatile market environment.

In conclusion, while the FDA approval of CRENESSITY brought optimism to NBIX's future revenue potential, the Q4 earnings miss and pipeline setbacks tempered investor enthusiasm. The net effect on investor sentiment likely depended on individual analysts' and investors' weightings of these factors, with broader market conditions also playing a role.