Neurocrine Biosciences Shares Take a Hit on Drug Miss

The drug company's experimental Tourette's treatment failed a mid-stage study

Shares of Neurocrine Biosciences, Inc. (NASDAQ:NBIX) are down 21% at $67.77, after the company said its Tourette's drugfailed a mid-stage trial. The dramatic early drop sent NBIX stock to a new annual low of $64.72, and the security is pacing for its worst day since September 2013.

NBIX has surrendered roughly 47% since its record high of $126.98 in mid-September, and is back in the red on a year-to-date basis. Prior to today, the stock was testing its footing atop the $85 level, with resistance emerging around $90.

The drug concern could be at risk for a round of downgrades and price-target cuts, too. Twelve of 13 analysts consider NBIX a "strong buy" or "buy," with not a single "sell." Plus, Neurocrine Biosciences sports a lofty $129.80 consensus 12-month price target -- at a 91% premium to current levels.

Recent option buyers may be kicking rocks. NBIX sports a 10-day call/put volume ratio of 20.36 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio indicates that traders have bought to more than 20 NBIX calls for every put during the past two weeks. What's more, this ratio stands higher than 91% of all other readings from the past year, pointing to a healthier-than-usual appetite for long calls over puts lately.

Today, puts are more popular, unsurprisingly. NBIX has seen roughly 4,200 puts change hands -- 27 times the average intraday pace -- compared to just under 3,700 call options. Put volume is pacing for an annual high, in fact, with the December 70 put most active today.