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Good day, everyone, and welcome to today's Neurocrine Biosciences Reports Q4 and Fiscal Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions. Please note today's call will be recorded. And I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Vice President of Investor Relations, Todd Tushla.

Thank you, and a good Thursday afternoon to everyone. Welcome to Neurocrine Biosciences fourth quarter and full year 2024 earnings call. Joining me today are Kyle Gano, Chief Executive Officer; Matt Abernethy, Chief Financial Officer; Eric Benevich, Chief Commercial Officer; and Eiry Roberts, Chief Medical Officer. During our call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. We'll go to Q&A after prepared remarks. And as is our custom, and with your help, we will try to get to everyone's questions. At this point, I'll turn the call over to Kyle.

Thanks, Todd. Good afternoon, everyone. Over the last several years, Neurocrine has evolved meaningfully across our entire enterprise, from research and development to commercialization. Our 2024 results demonstrate positive impacts from this evolution, and we are excited to build upon these successes. With four approved medicines coming from our own efforts, we enter 2025 as a fully integrated biopharmaceutical company that is strong, stable, and growing. We are prepared to take on industry challenges and capitalize on opportunities to continue to deliver to patients and shareholders. From a commercial perspective, INGRE

Thanks, Kyle. 2024 was a tremendous year for Neurocrine with record sales growth for INGRE

Thanks, Matt. 2025 marks an important year of transformation and execution for our commercial organization. With the recent launch of Quinicity, we have the opportunity to raise the standard of care for the congenital adrenal hyperplasia community and to add an important second growth driver to Neurocrine's commercial portfolio. Before I provide further insight on Quinicity, I want to take a moment to highlight that 2024 was an all-time record growth year for INGRE

Thanks, Eric, and good afternoon to everyone. When I joined Neurocrine over seven years ago, INGRE

Thanks, Eiry. Operator, I think we're ready to take questions now.

And we'll take our first question from Phil Nadeau with TD Cowen. Your line is open.

Good afternoon. Thanks for taking our question. It's been very clear that you expect a measured launch for Quinicity in terms of revenue during the first half of this year. You've also guided to giving new start forms as you did today. There's a very vigorous debate among investors as to what is a good trajectory of new start forms and what isn't. We're curious if you'd be willing to provide any of Neurocrine's perspective on what pace of new start forms we should anticipate through the first half of this year and into the second half of 2025. Thanks.

Yeah. Thanks, Phil. This is Eric. So first off, just really pleased that we got an early approval last year, late last year, and a great, very broad label to work with. And, obviously, it gave us an opportunity to get moving a little bit before the end of the year. So those, as we had said earlier this year at the JPMorgan conference, we would be providing updates each quarter on the prior quarter's treatment forms that have come in. And that eleven represents just a few working days, frankly, before the turn of the year. We're really pleased with the early launch dynamics here. Really excited about the feedback that we're getting from providers. And I'm not gonna comment specifically on what constitutes a good ramp, but, you know, so far, so good, and I'd say more than good in terms of the Quinicity launch dynamics. Just a reminder, this is the first new medicine for these patients in over seventy years. So thinking about what the adoption curve might look like, Phil, you know, it's really, I think everybody is wanting to know what that would look like. But as Eric said, receptivity has been incredibly strong so far, and I think you probably sense that in all the market checks that you and the other investors do. So so far, so good. But we're early in the launch and not gonna claim a victory yet. And we'll share more detail in May.

Thanks for taking my question. We'll move next to Paul Matteis with Stifel. Your line is open.

Hey. Thanks so much. Appreciate the question. Can you expound upon this INGRE

Yeah. I'll tackle that, Paul. So first of all, I just wanna reiterate that, you know, it's amazing that seven years after the launch, that we had a record growth year for INGRE

And we'll move next to Tazeen Ahmad with Bank of America. Your line is open.

Great. Thank you for taking my question. Mine is also on INGRE

Yeah. Thanks, Tazeen. So, you know, I can't comment on the specifics of our inner quarter performance, but, you know, typically, this is a challenging time of the year due to the need to get our many continuing patients refills in a timely manner, and our teams are really busy executing their plans and working with their HCP customers and with the dispensing pharmacies to minimize any treatment gaps and, of course, retain patients. As you know, Q1 is the quarter each year with the biggest growth-to-net impact due to commercial co-pay contribution and it sets an incremental rebate agreements kicking in. You know, I'll be able to provide a little bit more color on Q1 performance when we get to the Q1 earnings call. But, you know, this is, you know, typical for us to be working through all of these payer-related issues. And it's something that we've got better at each year over the course of the launch. So to be clear, Tazeen, you mentioned net revenue per script year over year. I would just say that embedded in our guidance is an assumption that net revenue per script in 2025 is gonna be very similar to what we saw in 2024. But sequentially, there is that headwind moving from Q4 into Q1, which is around 3%, call it, this year. The other item that I just flagged is that I am keeping an eye on ordering patterns. The way that the calendar sets itself up at the end of the quarter, there may be a little bit of noise. It's all obviously very hard to predict how folks will order, and we obviously don't influence that, but we flag it for you just in case it causes noise at the end of the quarter, but would largely net itself out through the rest of the year and wouldn't be unique to Neurocrine. So a lot of moving parts here. I think our focus remains for TD is to just get more diagnosis, get new patients being generated, and our sales force is very hungry to be able to help in that regard.

We'll move next to Akash Tewari with Jefferies. Your line is open.

Hi. Thanks so much. A quick one on INGRE

Maybe I'll start with the INGRE

Yeah. You know, certainly, I do think there are some endocrinologists that are prepared or comfortable to prescribe Quinicity remotely or virtually without necessarily an accompanying patient visit. But all the work that we've done leading up to the launch indicates that the majority of endocrinologists are gonna wanna see their patient first and have that conversation with them in person before they recommend treatment with Quinicity. And given the fact that it's a new medication with a totally new mechanism of action, it's understandable. And then over time, I think as doctors get more experience, they'll get more comfortable and potentially start to initiate treatment without a patient visit corresponding.

We'll move next to Cory Kasimov with Evercore. Your line is open.

Good afternoon, guys. Thanks for taking the question. Wondering if you could provide additional detail on payer traction with Quinicity, kind of feedback thus far, and how long you expect the free drug program might last? Thank you.

Yeah. So, you know, we put a system in place to make sure that when patients get prescribed Quinicity, they can get on treatment pretty quickly. Coming out of the gate here with this launch, Quinicity is a brand new not on any formularies yet. So the process is to go through a formulary exceptions process for each and every patient. In order to get people started while reimbursement is being secured, we do have a fast start program, which after about a week, if the claim hasn't been approved yet by the health plan, we'll ship free products to them to get them started. And the expectation is that early in the launch, most patients will require a month or possibly two months of free goods before they're able to transition over to reimbursed product. In terms of feedback from the health plans, you know, it's early days yet. You know, what we're seeing is that, as expected, many of these patients are going on to the free goods program initially. But we have had some patients that have had their prescription claims reimbursed pretty quickly, and they've been able to start on commercial product right from the get-go. So so far, so good, and as I said before, we're really pleased with the feedback that we're hearing from endocrinologists and feedback from the CAH community. And we're confident in our ability to get Quinicity reimbursed and to make sure that it's accessible and affordable. We estimate that the majority of patients will pay less than $12 per month. And, Cory, just an example, we had a great win even yesterday. One of the major plans came out with the coverage policy that was very, I guess, friendly in terms of what it would require between, you know, being over the age of four and being confirmed diagnosed with CAH. And so I do think the plans understand the disease, the team is doing a really good job educating those plans, and so far, I'd say that things are positive. But we're only five weeks into launch. So a lot still to go, but early signs are very positive.

That's helpful. Thank you. We'll move next to David Amsellem with Piper Sandler. Your line is open.

Thanks. So you cited utilization management related to INGRE

Yeah. So, you know, obviously, access and affordability are really high priorities for us in Neurocrine, and historically, we've done really well with high prescription dispense rates and most patients paying less than $10 out of pocket per month. And, you know, in terms of utilization management, you know, that's something that evolves over the course of time. And what we saw, especially in the second half of last year, was that some of the plans were starting to tighten up their utilization management, changing the PA criteria periodically. And so, you know, ultimately, you know, we need to stay on top of that payer environment and how plans are managing INGRE

We'll move next to Anupam Rama with JPMorgan. Your line is open.

Hi. Thanks so much for taking the question. This is actually Malcolm Cuna on for Anupam. So with regard to the INGRE

Yeah. Malcolm, this is Kyle. I'll start the question. We generally see the greatest growth still continue to come from the psychiatry segment. I think we also see good investment or return on investment from our expansion in LTC over the past couple of years and see that being a larger portion of the business as well in combination with the work and efforts in the neurology space. But I think largely still the growth opportunity remains in psychiatry. You know, some of the headwinds there still involve telemedicine, the turnover in the offices, and the best way to tackle those is through keeping TD top of mind in those different groups that are using those different aspects of telemedicine and MPPs as well, and the way to look at breaking through that is through having greater frequency of interaction, and that's where the Salesforce comes in for us. So in terms of growth overall in psychiatry, but it will come across the board in the segments that we're looking at in psychiatry, LTC, and neurology.

Great. Thank you. We'll move next to Chris Shibutani with Goldman Sachs. Your line is open.

Thank you. Maybe if I could move to the operating expense side of the equation, particularly with the guidance. Now thinking about how we think about over the course of the several years, you did have periods where you reassessed reinvested at more extensive levels. How confident are you in terms of the current thinking about INGRE

Yeah. I think it's very clear within this space that the number one driver of shareholder value is revenue growth. And that's exactly where we've been putting our money over the last five years in those periodic reassessments of INGRE

We'll move next to Marc Goodman with Leerink Partners. Your line is open.

Yeah. Matt, with your comments on ordering patterns, are you suggesting that fourth quarter may have been helped by inventory? Did inventories change and you're expecting maybe first quarter for that to reverse? And then, I guess, my question really is for Eiry to talk about the M1/M4, the 570 molecule that you're pushing forward. Can you just describe the characteristics of that product and how you expect it to be differentiated from one that's on the market today? Thanks.

Yeah. I'll cover the ordering pattern question. You know, it really is more of a Q1 phenomenon. The nature of our business or our wholesalers largely order on a Monday, products delivered on Tuesday, and that's when revenue is recognized typically. And so when you just look at the calendar setup, for the first quarter, only have twelve Tuesdays. And then you have fourteen Tuesdays that pop up in September. So it nets itself out throughout the course of the year. We don't do anything to dictate the timing of orders. This may not become an issue, but I know it's something that I just flagged just in case there is noise around timing of orders because of the nature of just how the calendar falls. So nothing associated with Q4 that I would mention, Marc. And then, Eiry, would you like to answer the muscarinic?

Yep. I'm all. Thanks for the question. Happy to answer that. As we said in the prerecorded remarks, we are actually still completing the phase one evaluation of the 570 M1/M4 molecule in that phase one evaluation in healthy subjects. We have an opportunity to profile the pharmacology associated with both M4 pharmacology and M1. And whilst I can say that we were very confident and pleased with the results that we saw in schizophrenia in our phase two study for 568 through the M4 selective agonist, there's obviously potential for a dual agonist to add additional potential benefit in areas such as cognition through the M1 effect. And so for that reason, we're very keen to take that molecule forward in the second half of this year to test it in a phase two study of schizophrenia as well.

Are there obvious differences versus Karuna's drug?

Well, Karuna's drug is a pan muscarinic agonist. And so it not only hits M1 and M4, but also the other muscarinic subtypes from M2, M3, and M5. And that's the reason why the peripheral trophium has to be added to the cobenci molecule in order to manage the potential side effects associated with the off-target M2, M3, and M5 effects. So we do not hit M2 and M3, or M5, and so we would anticipate there'd be differences for a selective M1, M4. And as I said, when we complete the phase one and go into the study later this year, we'll be able to talk more about what we're anticipating and hoping to see.

We'll move next to Jess Hung with Morgan Stanley. Your line is open.

Thanks for taking my question. Can you talk about the feedback that you heard from the end of phase two meetings for osuvamphetor and 568? And for 568, was there any concern by the agency on the lack of dose response or the benefit was seen with the mainly the 20-milligram dose? Thanks.

Yes. Thank you. We were very happy with the end of phase two meeting for both osuvamphetor and for 568. And I think we got alignment and guidance from the agency for both of those interactions that was supportive of the registration program as we designed it and defined it. Supportive of the dose selection, and particularly as you asked around 568. Now there's complete support for moving forward with the 20-milligram dose into the phase three program. We also got alignment on the endpoints that we were using and the nature of the whole registration plan. So our focus right now is on moving to implement those programs. We already initiated the osuvamphetor first phase three acute study, and we are moving towards initiating the 568 study in the very near future as well.

Thank you. We'll move next to Brian Skorney with Baird. Your line is open.

Hi. This is Charlie Moore on for Brian. Thanks for taking our question. So we were just wondering, looking earlier in the pipeline, about your Friedreich's ataxia gene therapy collaboration with Voyager. And it would just be great to get some color on how you think it could differentiate from current clinical stage gene therapies, one dual and one targeting cardiac tissue, as well as if that's still on track to initiate first human trials this year. Thanks.

And maybe I'll take this question and I'll have Eiry fill any gaps for this. You know, we're really excited about the FA program that we have with Voyager. It's something that we've been working on for several years as a part of our collaboration. We've gone through first and second-generation capsids that allow us to deliver frataxin to targeted tissues. What we have in the approach here that's so exciting is that patients have the opportunity to have an IV-administered gene therapy that delivers frataxin to the cardiovascular. So the cornerstone symptoms of the disease, either the movement component or heart disease, cardiovascular outcomes, would be addressed by our gene therapy in a standalone treatment. So very excited about that. We are on track for graduating this program from preclinical to clinical development later this year.

Great. Thanks so much. My apologies. We'll move next to Mohit Bansal with Wells Fargo. Your line is open.

Okay. Thank you for taking my question. And I'm sorry for keeping staying on here. So if I look at the fourth quarter number and if I just straight line it, it looks like your low end of the guidance assumes just flat line using fourth quarter. So is there something massively changing in your contracting or the pricing dynamic? It does seem like that on your comments. So can you help us understand that? And then also, are you expecting or modeling any benefit of Salesforce expansion here? Because that would mean second quarter second half bump, but that doesn't seem to be part of the guidance here.

Yeah. On the contracting front, just to be clear, we did enter in some contracts that have some incremental rebates, but it pretty much offsets the annual price increase. So from a year-over-year perspective on price, pretty flattish. A little sequential down, maybe Q4 to Q1 as I mentioned earlier. So, you know, I understand that the straight line math, there's a lot of variables at play, including pace of new patient additions relative to discontinuations, for example, on a much bigger patient base. And so those are normal growing launch dynamics. And as we mentioned, with the Salesforce expansion, we do expect to have nice momentum in the second half of the year. But it's gonna take a little bit of time for them to get to full speed.

Got it. We'll move next to Ash Verma with UBS. Your line is open.

Great. Yeah. Thanks for taking my question. So just one more on INGRE

Yeah. So a quick comment. We don't expect to see any significant changes in terms of our coverage in 2025 versus 2024. You know? And certainly, we're looking and monitoring closely what's happening with the first wave of medicines that have been negotiated and the impact potentially of other drugs in those classes. But so far, we're not seeing any major shifts. And the other thing I'd point out is that because we are a designated small menu phase in benefit on the contribution to the catastrophic phase, so does our competitors. So there's no one that's advantaged in that regard within the VMAT2 class.

We'll move next to Sumant Kulkarni with Canaccord. Your line is open.

Afternoon. Thanks for taking my question. It's another one on INGRE

Yeah. It was funny. Kyle and I were talking about this earlier this week that, you know, original models for INGRE

And maybe just to add to that part of the discussion that we had is one of the really unique aspects of tardive dyskinesia is that we believe the underlying prevalence continues to grow at a rate that exceeds the growth rate of the general population. So getting your hands around market size and value is something that's dynamic. You know, the antipsychotic prescription volume was about 75 million last year, and it continues to grow in the low single digits. That's multiples above the growth rate of the general population. That's why you saw us increase our prevalence number late last year. And that's something that we'll continue to revisit on an annual basis. But we're ever more surprised as we get into the market and learn more about it as to how large it can be. And how much work there is still ahead for us. But with that work, a lot more opportunity, and we're quite thankful to be in a situation where we have thirteen more years of market activity to help build the market.

Thanks. We'll move next to Myles Minter with William Blair. Your line is open.

Hey. Maybe one for Eiry just back on 570. You haven't completed the phase one yet. But just curious as to your decision to move in an adult experiencing schizophrenia or acute psychosis and not Alzheimer's disease psychosis? Does that mean you're still contemplating that indication, or is it maybe that you're seeing something on the tolerability side for that molecule that you wanna go into adults first? Prior to the elderly population. Thanks very much.

Yeah. Happy to take that. I think, obviously, we have experience with 568 for the M4 selective in the acute psychosis setting in adults, which makes it a pretty straightforward choice to evaluate 570 in that patient population as well. With respect to other potential indications, obviously, we remain very open to that. And as we continue to generate data, you may well see us going into different indications beyond that initial psychosis study.

I think, Myles, too, this is Kyle. The interesting thing about the muscarinics, as we've discussed, is that there's still a lot to learn about this as a target class. And, fortunately, we have a number of molecules that allow us to compare and contrast the pharmacologies that we have. And one way to do that is to look at a dual pharmacology in the same patient population and see the type of outcomes you can get from a selective and direct agonist that we have in 568. So there's a lot of value, a lot of opportunities here across the molecules that we have, and knowing that we can't do everything at the same time. We like the approach that we have here with 568 going into bipolar mania and then dual going into schizophrenia.

Makes sense. Thanks. We'll take our next question from Laura Chico with Wedbush Securities. Your line is open.

Good afternoon. I'm sorry. Just one clarification for me. With respect to the field force expansion, and I guess I'm trying to relate it back to the 25 guidance here. Wondering whether you're gonna see the biggest benefit from driving new patient starts. Is this the channel expansion or increasing adherence? I guess I'm just trying to understand where the field force impact is most likely to be felt. Any commentary there? Thanks.

Yeah. A couple of things I'd point out with regards to Salesforce expansion and our experience from prior expansions. First of all, and I think we alluded to it earlier. When you hire essentially a new team or expand your existing team, and you deploy them, it takes some time for them to come up with speed and to hit their stride, so to speak. And so we do expect to see the majority of the impact from the expanded team as we go into the second half of the year. Second thing is, in terms of what's the benefit of the team, it's primarily in driving new patient starts. They do a lot of education. They're able to increase our reach and also increase our presence in existing practices, driving recognition and diagnosis, and, of course, initiation with INGRE

Thank you. We'll move next to Ami Fadia with Needham. Your line is open.

Hi. Good evening. Thanks for squeezing me in. I have two very quick questions. Firstly, just follow-up on all the questions around the INGRE

Yeah. On the INGRE

Yeah. And let me just quickly comment on, you know, the sort of what we're seeing in terms of the treatment forms coming in and the sort of the diversity of the patients. So, you know, obviously, you know, we've done work leading up to the launch. You know, our expectation is that adoption will be probably earlier or faster in the pediatric segments. We expect that it will also see more rapid adoption in the centers of excellence. However, early on with a, you know, a relatively small sample size, so to speak, what we are seeing is treatment forms are coming in from community endocrinologists, from endocrinologists that are part of teaching hospitals or CAH clinics. You know, we're seeing patients getting started that are pediatric patients. We're seeing adult patients getting started. So, really, it's very diverse and across the board. And as I said before, I'm just really excited about the momentum and the trajectory that we're on here. It's early days yet, and it's that said, there's still a lot of people that we need to reach and a lot of work that we need to do, but I think that the fact that we had invested in the signature that we had in the second half of last year, we were well prepared for an early approval has really set us up for success this year and beyond with.

Thank you. We'll move next to Uy Ear with Mizuho. Your line is open.

Hey, guys. Thanks for taking your question. So on, questions on INGRE

Go ahead.

Yeah. I think the answer to your questions are yes. We have included the Salesforce expansion in our guidance range. You know, obviously, at the high end of the range, you know, it's contributing at a quicker pace. And so I would just say that the answer to your first two questions are yes. In regards to what happens post-2027, you know, that's something, as Eric mentioned, we're keeping our eyes out looking to see what is happening in the space with other similarly situated, you know, product categories. And but at the end of the day, for us, our main focus right now is growing the TD market. Growing the presence of INGRE

Okay. Thank you. We'll take our next question from Brian Abrahams with RBC Capital Markets. Your line is open.

Hi. This is Joe on for Brian. Thank you for taking our question. So related to the earlier question on TD market share split, I believe the market share has been pretty stable over time even after competitor XR launch. I'm just wondering if there's anything more that'll drive the changes to the competitive dynamics this year. And how are you thinking about the changes in payer dynamics beyond 2025? Do you believe the complexity and the dynamics will persist? Thank you.

Yeah. So, you know, we've always said that we have a formidable competitor. And, you know, they appear to have gained a few share points in 2024 due to the rollout of their extended-release formulation of a deuterium-modified tetrabenazine, as one might expect. But INGRE

And maybe just to add to that as a reminder to everyone, I think we have it in our remarks, but we do have been given the specified small manufacturer exemption as well as a small biotech exemption. So that's confirmed, and, you know, we would expect our price negotiation observation event to be in 2029. So to Eric's point, we have the opportunity to learn, prepare, and adjust to the new world that we'll all be in over the next couple of years as products are negotiated at CMS and seeing how that affects potential other products in similar categories.

We'll move next to Evan Seigerman with BMO Capital Markets. Your line is open.

Hi. On for Evan Seigerman. Thanks for taking our question. Wanted to ask if you could talk about the decision to amend the agreement with Takeda and get worldwide development and commercial rights ex-Japan for osuvamphetor. This decision driven by increased confidence in pursuing additional indications beyond MDD, or was this decision more based on just the profile and MDD alone? Thank you.

I'll start this. This is Kyle. You know, I think that so we're very excited about the data that we have that came out of the phase two program, and quite frankly, so was Takeda. As we've seen from Takeda over the past several years, they've been making a number of strategic decisions that moved them away from kind of class called psychiatric disease, and, you know, MDD, osuvamphetor, fit squarely in there. And the nature of our collaboration really affected their P&L in terms of their expense profile on a year-to-year basis. So knowing that they appreciated the data that we have and still like to be involved in this, we both work towards an arrangement where they are able to continue developing this asset in their territory, which is Japan. This particular compound came out of efforts from their Japanese R&D facility, and there's quite a bit of pride there in the to take this forward in their country. And we'll continue to work together to develop osuvamphetor outside of Japan with Neurocrine and the lion's share of the rights. So it's a win-win for both companies. We're able to move forward more quickly, being a smaller, more nimble company, and we think that that will ultimately allow us to have the best opportunity to bring this medicine to patients as quickly as we possibly can. So we're excited. We continue to work with our team there, and we'll look to move this into phase three this year.

Appreciate the color. Thanks, guys.

And it does appear that there are no further questions at this time. I would now like to turn it back to Kyle for any additional or closing remarks.

Thank you, and thanks, everyone, for joining the call this afternoon. As you can see, we've got a lot going on here at the company, and we've hit on a number of different points throughout our conversation through opening remarks about 2025 being a year of execution, a year of evolution, and it really is. And it does start with our efforts on our commercial products, INGRE