Title

Presentation

Neurocrine Biosciences, Inc. misses on earnings expectations. Reported EPS is $0.08 EPS, expectations were $0.46.

Operator: Good day, everyone, and welcome to Neurocrine Biosciences Reports First Quarter 2025 Results. At this time, all participants are in a listen only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. 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 Todd Tushla, Vice President of Investor Relations. Please go ahead.

Todd Tushla: Thank you and happy Cinco de Mayo to everyone. Welcome to Neurocrine Biosciences first quarter 2025 earnings call. With me today are Kyle Gano, Chief Executive Officer; Matt Abernethy, Chief Financial Officer; Eric Benevich, Chief Commercial Officer; and for one last time as Chief Medical Officer, Eiry Roberts. During today’s 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. Following prepared remarks, we will strive to get to everyone’s questions. Now, I will turn the call over to Kyle.

Kyle Gano: Thanks, Todd. Good afternoon, everyone. Neurocrine has never been in a stronger position as we maintain an enterprise-wide focus on execution and evolution. Even with external factors continuing to create market volatility, we remain focused on controlling what we can, executing with discipline to meaningfully deliver for both patients and shareholders. The first quarter reflected strong execution across both of our brands with record new patient starts for INGREZZA and encouraging early adoption of CRENESSITY. With reaffirmed guidance for INGREZZA and solid momentum heading into Q2, combined with an early but promising launch trajectory for CRENESSITY, we are well positioned to drive both near- and long-term revenue growth as we evolve from a single blockbuster to a multiple blockbuster neuroscience company.

Amazing to see the efforts from our commercial and medical teams this quarter. Well-done. On the R&D front, our portfolio continues to advance meaningfully. We are encouraged by the progression of osavampator and NBI-‘568 into Phase 3 registrational studies. The strong magnitude of effect demonstrated in both programs’ Phase 2 proof-of-concept studies gives us confidence in continued investment. We are on track for expanding our muscarinic portfolio into new Phase 2 studies later this year. This includes NBI-‘568 into bipolar mania and NBI-‘570, our dual M1/M4 agonist into schizophrenia. From a leadership perspective, we are thrilled to welcome Dr. Sanjay Keswani as our incoming Chief Medical Officer in June. Dr. Eiry Roberts, our current CMO, will transition into a strategic advisory role where her expertise will continue to shape key programs.

In closing and reflecting on the quarter, I’m extremely proud of our team and progress. Our growing diversified revenue base, expanding pipeline and strong balance sheet, position us well to continue building on our momentum as a leading global neuroscience company. With that, I’ll turn the call over to Matt.

Matt Abernethy: Thank you, Kyle, and good afternoon. We made tremendous progress throughout the first quarter both with the reacceleration of new patient growth for INGREZZA and with their successful CRENESSITY launch. We are executing from a position of strength with these two growing commercial products, a robust clinical pipeline in CNS disorders and a strong financial foundation that provides flexibility for continued investment to drive shareholder value. Starting with INGREZZA. We posted $545 million in first quarter product sales. As anticipated, first quarter sales were impacted by one less order week, patient reauthorization processes and gross-to-net dynamics. Although noisy, I do want to make a few very specific comments about the quarter in INGREZZA.

First, we had record new patient additions in the first quarter, which is a testament to the quality of our product, the dedication of our team and the continued unmet medical need. Second, effective April 1, 2025, we expanded our formulary coverage in Medicare Part D, which significantly increases patient access, providing a foundation to expand our customer base in the years to come. Finally, as Kyle mentioned, we are reaffirming our 2025 sales guidance range of $2.5 billion to $2.6 billion, which factors in the expected acceleration of new patient additions, offset by gross-to-net impact from contracting activities. Turning to CRENESSITY, where we just completed our first full quarter of launch. We achieved net revenue of $15 million, which includes 413 enrollment forms with 70% of dispenses receiving reimbursement.

Although, we are still early in our launch efforts, we’re encouraged by this initial success. A few financial comments. Our capital allocation priorities remain intact with our number one priority being investments to drive revenue growth; number two, priority is investments to advance our R&D pipeline; and three, investments to enable business development; and lastly, consider returning capital to our shareholders. During the first quarter, we continued to reflect these priorities to drive revenue growth with investments in our expanded INGREZZA sales force and CRENESSITY launch. In addition, we continue to make investments advancing our pipeline in R&D with the initiation of two major Phase 3 programs. Just a reminder, R&D expense for the first quarter of 2025 includes $45 million of milestone expense primarily for the initiation of our osavampator Phase 3 program in MDD, and we’ll recognize $15 million in milestone expense in the second quarter for the initiation of NBI-‘568 Phase 3 program in schizophrenia.

In addition, we’ve been able to retire 3.6 million shares over the past two quarters and have retained a strong balance sheet with approximately $1.8 billion in cash to support our commercial and clinical development strategies for continued growth. With that, I will now hand the call over to Eric Benevich, our Chief Commercial Officer. Eric?

Eric Benevich: Thanks, Matt. We’re celebrating two significant milestones for INGREZZA. First, a couple of weeks ago was the eighth anniversary of FDA approval. Remarkably, eight years into the launch, our commercial and medical teams achieved record new patient starts in the first quarter despite a challenging payer environment. I want to take a moment and thank our teams for their exceptional dedication and performance. This second week of May also marks Tardive Dyskinesia Awareness Week. Currently, we estimate that just over 40% of patients with TD have been given a diagnosis to explain their abnormal movements, and less than 10% are currently receiving standard-of-care treatment with a VMAT2 inhibitor, such as INGREZZA. So there remains a significant opportunity for growth of the VMAT2 class and INGREZZA as the VMAT2 class leader.

As part of our support for TD Awareness Week, Neurocrine continues to collaborate with the Movement Disorders Policy Coalition, mental health advocacy organizations, health care providers and policymakers nationwide to increase awareness, reduce stigma and drive diagnosis so that TD sufferers can access available treatment options. Matt provided a nice summary of INGREZZA and CRENESSITY performance in his opening remarks, and I’d like to provide additional color. First, we’re pleased to have expanded formulary coverage from less than half to approximately 2/3 of Medicare PD and HD beneficiaries. While this affects our gross to net, access will be improved for our ACP customers and the patients they care for. We view these as important investments to ensure patient access today and into the future.

Second, as noted in our last call, we believe the inflation Reduction Act, or IRA, has notably influenced payer behavior and reimbursement dynamics, particularly for specialty medicines like INGREZZA. In the second half of last year, we saw an impact on the prior authorization process for new patients. In Q1, we saw the impact on the reauthorization process for continuing patients, which was a bit more challenging versus prior years. Regardless, our field sales and field reimbursement teams were persistent in their efforts to help health care providers and patients manage through evolving payer requirements. Great job, teams. Third, we reaffirmed our 2025 INGREZZA guidance. Looking forward, our growth strategy encompasses our recently expanded sales force, investments in improved formulary access and enhanced marketing initiatives that will strengthen INGREZZA’s market-leading position as the only VMAT2 inhibitor that is highly effective, uniquely selective with therapeutic dosing from day one and proven across the widest range of patients.

With continued significant unmet need across the tardive dyskinesia and Huntington’s chorea patient communities, we anticipate sales to accelerate in Q2 and through the second half of 2025. And this momentum should position us well heading into 2026 and beyond. For CRENESSITY, while we’re still in the very early stages, I’m pleased to say that the launch is exceeding our expectations. As Matt noted, in Q1, we received 413 treatment forms, which serve as a new prescription, and we reported $15 million in net sales. We’re observing strong uptake across both pediatric and adult CAH patient populations with slightly higher initial adoption rates in pediatric and adolescent segments. The prescriber response has been particularly encouraging with good initial trial across all endocrinologist segments, including centers of excellence, pediatric endocrinologists and community adult endocrinologists.

While it’s too early to comment on longer-term outcomes, we’re pleased with the warm reception of CRENESSITY from the medical and patient communities. On the payer front, we noted that 70% of the dispensers in the quarter were reimbursed. Coverage requirements have generally aligned with our approved labeling, including diagnosis of classic CAH, patient age of four years or older and concurrent glucocorticoids therapy. As we move forward through the balance of the year, we expect more health plans to conduct formulary reviews and publish their coverage criteria. However, some plans may choose not to formally review CRENESSITY and continue to review prescription claims via their exceptions process. Overall, initial metrics are trending in the right direction across all key performance indicators.

But I do want to remind everyone that one quarter is too soon to define a trend for either adoption or reimbursement. We’re going to learn a lot over the coming quarters specific to persistency, compliance rates and overall rate of adoption. If CRENESSITY ultimately delivers significant benefit in the real world as it did in clinical trials, we fully believe it can become the new standard of care together with cortisol replacement for CAH patients. Once more, I’d like to congratulate our commercial and medical teams for getting CRENESSITY off to such a great start. So, with that, I’ll turn the call over to my colleague, Dr. Eiry Roberts, our Chief Medical Officer.

Dr. Eiry Roberts: Thanks, Eric, and good afternoon to everyone. We continue to make substantial progress advancing Neurocrine’s early- to mid-stage clinical pipeline, particularly across our muscarinic portfolio, next-generation VMAT2 inhibitors and epilepsy programs. Today, I’ll focus specifically on our late-stage registrational assets and key 2025 data milestones. I’ll start with osavampator, our AMPA-positive allosteric modulator. I’m pleased to announce the initiation of all three randomized, double-blind, placebo-controlled studies evaluating its efficacy and safety as an adjunctive treatment for major depressive disorder. These studies will measure the change in total MADRS from baseline to day 56 as their primary endpoint with top line data expected throughout 2027.

Turning to our selective M4 agonist, NBI-‘568. Just last week, we announced the initiation of the first of three Phase 3 registrational studies to evaluate the efficacy, safety and tolerability of NBI-‘568 as a potential treatment for schizophrenia. We anticipate initiating the two additional studies in the coming months. All three double-blind, placebo-controlled trials comparing the 20-milligram dose of NBI-‘568 versus placebo with reduction from baseline in the positive and negative in scale, or PANSS, at week five as the primary endpoint. We expect top line data from these studies in the 2027-2028 timeframe. This year, we will report top line data from two Phase 3 studies of valbenazine, the first in adjunctive treatment of schizophrenia, which serves as a proof-of-concept study for VMAT2 inhibition in this disease state.

While these results will guide the development of our next-generation VMAT2 inhibitors, including NBI-‘890 and ‘675, we do not plan to expand the valbenazine label for this indication. The second readout expected later this year will evaluate valbenazine’s efficacy in treating dyskinetic cerebral palsy. With no currently approved treatments for the 75,000 to 100,000 patients in the U.S. living with DCP, successful results could lead to a label expansion for this indication. For NBI-‘770, our NMDA NR2B subreceptor-negative allosteric modulator, the Phase 2 dose-finding study in major depressive disorder remains on track for top line data in the second half of 2025. This study’s primary outcome measure focuses on the MADRS change from baseline to day five, potentially demonstrating more rapid onset compared to osavampitor’s Phase 3 day 56 endpoint.

As this marks my final earnings call as Neurocrine’s Chief Medical Officer, I’d like to share some closing observations. Neurocrine stands stronger than ever, making this an optimal time for the transition. Our industry-leading pipeline continues to grow fueled by Jude Onyia’s excellent progress establishing a sustainable internal innovation engine. My seven-plus years at Neurocrine have been marked by remarkable evolution, and I’m confident in Sanjay Keswani’s capability to lead as the next Chief Medical Officer. I look forward to maintaining an active advisory role supporting both Sanjay and our late-stage program teams. Finally, I extend my gratitude to the Board, Kevin, Kyle, my Neurocrine colleagues and all our external partners, including the investment community.

Neurocrine is well positioned to help countless future patients, and I’m proud to have contributed to this journey. With that, I’ll hand the call back to Kyle. Kyle?

Kyle Gano: Thanks, Eiry. And just to pause here a moment before we move into questions. I do want to take a moment to recognize Eiry for her many contributions over the years. Eiry has played a vital role in shaping Neurocrine into what it is today and really helped many thousands of patients along the way. If I think about the future here with Eiry, she will continually be a player and help us along the way. But as we mentioned just a moment ago, this will be her final earnings call as an executive of the Company. So Eiry, once again, thank you for your dedication, your leadership and your support over the years. With that, let’s open it up to questions.

Operator: [Operator Instructions] We’ll move first to Paul Matteis with Stifel. Your line is open.

Paul Matteis: Eiry, congrats. Always good to work with you. Two quick ones. As it relates to INGREZZA, it sounds like the quarter was not as challenging as some feared. I was wondering if you could comment on what you’re seeing into 2Q and if you feel like getting back to the prior growth rate at some point is attainable. And then just on CRENESSITY, congrats on the progress. Should we be looking at this 400 number as a bolus and then it can attenuate from here? Or do you feel like it’s just the beginning?

Kyle Gano: Paul, this is Kyle. Maybe I’ll start here and then I’ll ask Eric and Matt to chime in. On INGREZZA, I think when we look at Q1, you probably heard us talking about the challenges of the quarter over the past couple of months. I think it played out exactly as we expected it. We had that low momentum coming into the year, the difficulties of reauthorization, the one less selling week the, hits on gross to net, all those were factors that came into play. But just to round out the quarter, we saw that one element that gives us great confidence going into the remainder of the year, and that is the momentum that you get from having that growth in new patient starts. And I think it goes without saying that the growth in new patient starts was the record that we’ve seen of all time in terms of a quarter, and it came in the most challenging quarter.

So, I think there’s a lot to be said there for momentum going into Q2, the remainder of the year and really just an amazing job by the team out there in the field. So, I think that we have that momentum going into the remainder of the year. We have a number of elements that we put in place late last year that will play a factor for us positively this year. We mentioned the sales force expansion, the expanded access that we have now and other marketing initiatives that we’ll be kicking off here very shortly. All these things will help us to continue the recovery of growth in Q2 and an acceleration the second half of the year. In terms of CRENESSITY, maybe I’ll let Eric speak to that and we can go from there.

Eric Benevich: Yes. No, Paul, I think your question is in terms of should we expect this number of treatment forms or new patient NRx referrals going forward. As I mentioned in my prepared remarks, we only have one quarter of experience with this launch. Obviously, we’re really pleased with the adoption that we’re seeing. But ultimately, we need a little bit more time to understand what that pattern is going to look like. And so, as we go forward, we’ll continue to share what the treatment form or referral rate is and obviously provide additional metrics like we did in this particular quarter. But I think it’s too soon to tell. But I will reiterate, it’s — we’re off to a great start. And certainly, this exceeded our expectations at this phase.

Operator: We’ll take our next question from Akash Tewari with Jefferies. Your line is open.

Unidentified Analyst: This is [Phoebe] on for Akash. Similarly, to what was just asked, could you provide any color on CRENESSITY’s sort of payer dynamics moving forward? 70% is higher than we had anticipated. So just wondering how you expect it to move forward from here.

Eric Benevich: Yes. Just like with the adoption, the reimbursement, I think, exceeded our expectations as well. As I mentioned earlier, 70% of the fills in the quarter were reimbursed. And certainly, that’s favorable for one quarter in, but I would like to caution everyone and remind them that this is still a product that, for the most part, hasn’t gone through formulary reviews. And so, for the most part, we’re talking about reimbursement via the exceptions process. And so, as we move through the year, we do expect that some of the plans, maybe most of the plans, will be doing formal reviews of CRENESSITY and determining what their coverage criteria look like. But at this stage, it’s still formulary exceptions, and we’re off to a great start in terms of securing reimbursement.

Matt Abernethy: Yes. This is Matt. Just a big shout-out to the market access team. Kudos to them for educating all the payers in terms of the disease burden and also the benefits that CRENESSITY could potentially provide. This is a high-value medicine helping a lot of patients, and it’s been fairly seamless between prescription written and ultimately getting filled. And so do want to give that kudos to the team that has been working hard on that.

Operator: We’ll move next to Tazeen Ahmad with Bank of America. Your line is open.

Tazeen Ahmad: First, Eiry, great job on everything and good luck on your next chapter. I did want to ask about the share split between what you’re seeing now on INGREZZA versus Teva for new-to-treatment TD patients. I don’t know if you could share any color on that. And then on CRENESSITY, can you give us a split of what percent of patients, and I’m sorry if I missed it, are kids versus adults in the early innings of usage?

Eric Benevich: Yes. So, we haven’t provided historically share split exactly because if you look at the syndicated prescription data, it underreports INGREZZA. And so, we’ve always cautioned to not look at the numbers as exact measures. But overall, what we have said is that we have had the majority of prescriptions in TD, and we continue to have the majority of prescriptions. That’s for both TRx and for NRx. And so, we’ll leave it at that. The other thing that you were asking about in terms of the split or the demographics of the patient population, very early on. What we were seeing was sort of an equal distribution of pediatric and adult patients and pretty equal distribution of females versus males. But as we’ve gotten more treatment forms in and the launch continues to mature, we have seen that it’s starting to trend in the direction that we expected prior to the approval, which is more pediatric and adolescent patients than adult and more female versus male.

Once again, we’ve got a long way to go in terms of understanding the launch dynamics, and one quarter does not make a trend. But ultimately, it is essentially trending in the direction that we expected it to prior to the launch.

Operator: We’ll take our next question from Phil Nadeau with TD Cowen. Your line is open.

Phil Nadeau: Let us add our congratulations to Eiry on a great career at Neurocrine. Two from us as well. First, on INGREZZA trends. INGREZZA grew 15% from Q1 to Q2 in 2024. Can you give us some sense of what’s likely to happen in Q2 of ’25? It seems like with one additional Tuesday, at least 8% growth is reasonable. But how are some of the factors that impacted Q1 transitioning into Q2? And what should that do to sales? And then second, just a follow-up — a brief follow-up question on CRENESSITY. You mentioned that CRENESSITY was relatively seamless from script to fill. Can you give us some sense of the time, which time it takes from prescription being written or an enrollment start being received to when the patient actually gets drug in hand?

Matt Abernethy: Thanks, Phil, for the questions, as always. Yes, from a Q1, Q2 dynamic, you would expect a nice step up. You do gain back on order week on the quarter. That does provide a sequential benefit. You also have the record numbers in new patients that we mentioned earlier and then the natural recovery of refill rate per patient. The one aspect that you will want to contemplate that’s different than previous years, as mentioned, we did enter into some contracting during the quarter. And from — and as a result of that, we do — we will have a sequential hit in gross to net. I’d call it slightly down from Q1 to Q2. That will push down the growth profile just a little bit. But overall, you would expect a nice step up for Q2 and it positions us well for the second half of the year.

As it relates to time, I would just say that it’s time to ultimately get a fill or get the reimbursement for CRENESSITY. It’s still too early in the cycle to give any specific number. As you have heard us say before, patients, once they have an enrollment form written, it’s typically a five- to seven-day process where the pharmacy is trying to get reimbursement. And whether the patient has had reimbursement granted or not, a patient will ultimately get a fill. And as we alluded to in the percentages we provided, 30% did get free goods during the quarter. But overall, team performed very well, and I think the feedback on our pharmacy channel has gone great so far.

Operator: We’ll move next to Brian Abrahams with RBC Capital Markets. Your line is open.

Brian Abrahams: Congrats to Eiry on a great career at Neurocrine, and congrats on the strong CRENESSITY start. Maybe just two quick ones for me on CRENESSITY. Can you provide any more specifics on the proportions of patients being treated at centers of excellence versus community centers and how these doctors are managing the glucocorticoid down titration, whether that differs at all? And then on INGREZZA, as you continue to invest in formulary access, can you give us any more specifics on how to think about contracting cadence going forward and what the pricing trends might look like beyond second quarter of this year?

Eric Benevich: Yes. So let me take a crack at the second question first and then tackle the CRENESSITY question. Eiry might want to chime in as well. Contracting cadence, so we’ve always said that our priority is to maximize access for patients. And historically, we have contracted, but we’ve been fairly prudent in terms of selecting where we want to contract and where we think it can make a difference in terms of improving access. In the prepared remarks, we talked about increasing coverage in the Medicare segment for the TD market and the HC market from less than half to approximately 2/3 with the most recent rebate agreement. And we’re going to continue to monitor the environment. I don’t think there’s anything immediate that could happen, certainly, nothing that we’re anticipating in terms of additional rebate agreements.

But certainly, if anything does happen, if we enter into any additional rebate agreements, we would flag that going forward. But ultimately, the benefit of improving access certainly accrues starting this year but carries into 2026 as well. So, I think it sets us up well for the future. With regards to your question about, I’ll call it, sources of business, volume of treatment form coming in from centers of excellence versus the community. Right now, what we’re seeing is that it’s really across the board. We have seen adoption and referrals coming in from those centers of excellence. But keep in mind, there’s not very many of them. There’s only nine accredited centers of excellence, accredited by the Cares Foundation, a similar number that have most of those services, but they’re not accredited.

So, we are seeing adoption in referrals also from community pediatric endocrinologists as well as pediatric adult endocrinologists. And it kind of ties back to the comments that we made earlier about really seeing that CRENESSITY is being embraced by the broader endocrinology community. Anything to add, Eiry?

Dr. Eiry Roberts: No, just about the steroid reduction piece of the question as well. So, the first thing, just to build on what Eric was saying, we’ve been incredibly impressed by the engagement of the endocrine community around CRENESSITY and the level of interest in gaining additional education on how to use the medicine effectively and safely. I think in general, as our medical team has engaged, there’s a few things that we’re learning. First of all, I think there is a real enthusiasm about the safety and tolerability profile that we saw with CRENESSITY in the registration studies. And so that creates a foundation for a good opportunity to start the medicine in a patient. The second thing is the label that we achieved for the medicine, which is broad in its description and doesn’t require a very specific or guided information on steroid reduction.

And what that allows us to do is engage with clinicians as they ask questions of the medical team to provide guidance where appropriate while still ensuring that on an individualized basis, the clinician and the patient can decide what’s the right regimen for the patient and how to reduce the steroids effectively.

Eric Benevich: All in all, many of these patients are just getting started on CRENESSITY and just getting started on that journey. So, I think we’ll learn more in the coming quarters.

Operator: We’ll take our next question from David Amsellem with Piper Sandler. Your line is open.

David Amsellem: Just staying with CRENESSITY, can you talk about the mix between starts in adults versus pediatric and adolescent patients? Bearing in mind that these are early days, but can you talk to which of these patient groups, if any, you’re gaining more early traction in?

Eric Benevich: Yes, David. I think I mentioned earlier that at the very beginning of the launch, in other words, the beginning of Q1, we were seeing — it was about even split between adults and the pediatric patient population. But as we went through the quarter, we saw that we were getting more treatment form referrals for those pediatric and adolescent pages — patients. So, we’re starting to see a trend towards greater uptake in the younger population, which is what we expected to see. Now we’ll have to see how things shake out over the next several quarters. As I said before, when you’ve got very little data to work with, things can swing in one direction or another. But as we get more utilization, more adoptions in the community, I think we’ll have a better sense of how the launch is going.

Operator: We’ll move next to Anupam Rama with JPMorgan. Your line is open.

Anupam Rama: Best of luck, Eiry, in everything you pursue going forward. On the INGREZZA and the record number of patient starts, what should we attribute this to in terms of thinking about your share of voice gain relative to AUSTEDO XR? I know you pointed to that as a headwind coming into the year. How do we think about — have you stabilized your share of voice? Are you — or were there other factors like TD market expansion or other factors we should be considering?

Eric Benevich: Yes. I mean, obviously, we made an investment last year to expand our sales force, and we targeted that investment towards the areas that we thought would yield the best results and specifically into psychiatry and into long-term care. So, we’re starting to see the tangible benefit of that. We had cautioned that when you expand the sales team in the near term, it can be disruptive. It can negatively impact your productivity. But as the newer representatives become more productive and they start to level to the level of their colleagues that have been in the field for some period of time, then you start to see the tangible benefits. And I think that’s really what we’re seeing as it manifests in terms of new patient starts.

So, we’re certainly pleased to see a record number of new patient starts in Q1. But we’ve also mentioned that we’ve implemented some newer marketing initiatives. And really, the idea is to be better at helping our customers to appreciate the meaningful differences between INGREZZA and the tetrabenazine products that are out there. So, between having more people in the field calling on the right accounts and doing a better job of differentiating INGREZZA, I think really, those are the two elements that probably have the biggest impact in terms of driving those new patient starts.

Operator: We’ll move next to Josh Schimmer with Cantor. Your line is open.

Josh Schimmer: A couple of quick ones. Has your contracting for INGREZZA contemplated the AUSTEDO IRA price negotiation implementation? Or will you have to renegotiate as you get closer to that kicking in, in 2027? And then just in terms of this — the record number of starts, just trying to align that — your comments, I guess, around last year and early into this year that you didn’t really expect your redeployed sales force to start to contribute meaningfully until later this year. Have they — has that contribution occurred earlier than you expected? Or are you still waiting for a significant inflection from their contributions?

Kyle Gano: Maybe I’ll — Josh, this Kyle. I’ll take on the quick question on the contracting piece. I think if you look at our history on contracting in the past, it has been really the Northstar here is to maximize patient access, and that’s always been how we viewed contracting. We’ve done that in years in the past. We’ve also walked away from contracting at certain time points when that was not the case. I think when we look at the strategy overarching is to have a parity type of situation with other products in this space to make sure patients have as many options as possible. The thing that’s different moving forward is IRA does bring a complication into the story about how we view contracting and maximizing patient access.

So, this is a variable. Now that’s part of the equation that’s growing in magnitude of its significance. And that is something that we have an eye on, in particular, for our competitors’ iPay moment in 2027. Obviously, contracting that we do now is really with an eye on 2026. And in some cases, you can pull forward into the same year. But we do look at that as something that’s important for us to continue looking at. And as things change and evolve over the coming months and year, we will certainly keep the external community up to date in case any changes in our contracting approaches of change. But right now, we’re happy where we landed with the expanded access here starting this quarter and moving into the remainder of the year. Eric, you have anything to add to that?

Eric Benevich: Yes. Just in general, especially in the Medicare space, you go year-to-year with your contracts. Several of the agreements that we have in place, however, carry us through 2025 and the entirety of 2026. And so that does provide some stability from a planning perspective and right up to the doorstep of that iPay moment, as Kyle described. The second piece was really around the contribution of the expanded sales force. Was it earlier than what we expected? I would say, no. It was pretty much in line with our expectations. Recall that the expanded sales team hit the field in Q4. And we had said that we need a few quarters for the team to kind of hit their stride. And we saw that really manifest with the record new patient starts, especially as we moved through Q1.

Keep in mind that Q1 is a quarter every year that we have to go through, somewhat of a right of passage because of the many, many patients that need reauthorization. So kind of working our way through that with our customers, with the HCPs and the pharmacies does consume a lot of our effort in Q1 every year. But we’re able to do that in tandem with driving new patient starts. And I really do think it’s the tangible benefit of the expanded team, not just more people but also the new hires becoming more proficient in driving diagnosis and treatment with INGREZZA. So, I’d say, right on schedule, feeling really good about the expanded team. And as we said earlier, we do expect to see accelerated growth for the balance of the year, as we’ve reiterated with our guidance.

Kyle Gano: Maybe just to add to that real quickly, eight years in the launch and to think we just had our greatest quarter in terms of new patient starts is phenomenal, and I do attribute that to the team and their ability to catch up quickly and work through a very challenging Q1.

Operator: We’ll take our next question from Jay Olson with Oppenheimer. Your line is open.

Jay Olson: Congrats to Eiry for all the amazing achievements that she’s accomplished on behalf of patients. We have a question about the JOURNEY study of valbenazine for adjunctive treatment of schizophrenia. ClinicalTrials.gov shows a March 2025 completion date. So, should we expect those results any day now? And then as a follow-up, can you talk about the learnings you expect to leverage from the JOURNEY study? How will you apply those learnings to next-gen VMAT2 inhibitors? And what, if any, occasions from the recent failure of Cobenfy in ATS?

Dr. Eiry Roberts: Yes. Thanks very much, [Josh]. Thanks for the kind words as well. I really appreciate that. And I think in terms of the JOURNEY study, yes, it’s a very important study for us in terms of learning for the VMAT platform. And obviously, this is a must-win area for us, the biology. And so, we’re really interested in understanding what we’ll learn from that trial. We will be reading out the study in the near future. I mean we said somewhere around the middle of the year, and I think we’re still on track from that, as you saw from ClinicalTrials.gov as well. And I think we’re going to be interested in understanding the potential efficacy as it’s measured by reduction in the PANSS total score. But we also have a lot of other functional endpoints and other subgroup analyses within that study, which are going to allow us to understand more about what type of patient within that population might respond best to the biology that’s represented within VMAT2 inhibition.

I also think — just one brief comment on the recent Cobenfy study. As you know, there are no medications approved for the adjunctive treatment of schizophrenia currently. And I think that study showed us again the difficulty in performing clinical research in this area. I mean our take on that was it was a well-run study for a medication that has already been proven to be effective in the treatment of acute psychosis in Cobenfy. And so, the inability to show an additional improvement in that setting, I think, reflects more on the nature of the clinical trials that are performed in this area and also some of the challenges there in this patient population. Just one thing to add in that regard because we have been asked. I know you didn’t ask this, but we are asked, does that have any implication for us with respect to our ‘568 program?

And it doesn’t, in any way, dampen our interest and belief in the Phase 3 program that we have for ‘568 in acute psychosis. I think we’re very confident in the Phase 2 data that we generated for the 20-milligram dose. I’m very pleased to have just started the Phase 3 program in that setting. I think I said your name wrong, Jay, I’m terribly sorry about that. But yes, and thanks again for the question.

Operator: We’ll move next to Cory Kasimov with Evercore. Your line is open.

Cory Kasimov: Let me add my congrats to Eiry on a great run at Neurocrine. So two questions on CRENESSITY for me, one really quick one. Is there any amount of — is there a material amount of inventory stocking in the first quarter? And then a second question, when could we expect to see longer-term CRENESSITY data from your ongoing Phase 3 open-label extension? And what endpoints do you believe could be positively impacted by longer-term androgen control?

Matt Abernethy: Cory, I love inventory questions. So, there was very little — there is very little stocking in the quarter from an inventory perspective. I’ll let Eiry comment on planned upcoming data.

Dr. Eiry Roberts: Yes. And just to remind everybody, the — more than 90% of the patients in the randomized trials of CRENESSITY rolled over into the open-label extensions both on the pediatric and the adult side. And the vast majority of the patients have remained in the study ever since then, over 90%. And so, we are in the process of actually shutting down the U.S. portion of the adult open-label extension study. And those individuals will be rolling on to commercial product over the next few months. The pediatric study, we are keeping going because it’s generating additional very important data for us. And obviously, we are continuing the studies outside the United States. With respect to the data from those studies, we will be releasing one-year data on both androgen control, glucocorticoid levels and clinical endpoints, such as metabolic endpoints and other reproductive hormone-related endpoints over the coming months.

The Endo meeting in July and most — in the most — the nearest future is this month at PES.

Operator: We’ll take our next question from Brian Skorney with Baird. Your line is open.

Brian Skorney: Eiry, congratulations on your pending retirement. So maybe I’d also love to ask you a question, just from your comments on the ‘568 Phase 3 plans. It sounds like you wouldn’t necessarily write off an opportunity for ‘568 in an adjunctive therapy setting. So, I’m just wondering, in over commercial light up, if you had a success Phase 3 study in that setting with Cobenfy failing. Is there a site design that you see that would be worth pursuing for ‘568? I’m not sure if you think the risperidone, some group analysis is a real factor if there’s some other unique design you would think about pursuing.

Kyle Gano: Brian, this is Kyle. Maybe I’ll start this question and then Eiry and I can tag team a bit on this. I think what we’ve seen from the early Cobenfy launch is that 78% of patients are taking the therapy from a monotherapy perspective. Maybe there’s some overlap there as patients transition from one medicine to next, and there’s some overlap of two medicines. But for the most part, it seems like it’s used in a monotherapy type of setting. So that would be kind of point number one. Number two is, I think what we’ve seen for Cobenfy from BMS and others that have worked in this space, we have our own data that we’ll be having be available around first half of this year. ATS trials are extremely difficult to run. I think there’s still a lot of learnings there that can be applied in and thought about for the future.

That’s why we’re excited about running the study and seeing the results for valbenazine in this space, so we can get a feel for that. And the learnings from that will be plowed back into our next-generation compounds. But when it comes to the muscarinic themselves, we think that there is a significantly large opportunity standalone with the acute studies that we have planned for the registrational program and then moving into other indications, in particular, later this year with ‘568 into bipolar mania. And that’s our current strategy.

Operator: We’ll move next to Marc Goodman with Leerink Partners. Your line is open.

Marc Goodman: Matt, with INGREZZA, you’ve talked about $5,800 as the ASP that we should be thinking about for this year. Obviously, that number has changed. If you could give us a sense of what the new number is. And then, Eiry, definitely, we’ll all miss you. Maybe just a question for you. Excluding ‘568, can you talk about the rest of the muscarinic portfolio and where we are?

Matt Abernethy: Yes. Marc, I think I’ve gotten away from getting into the nuances of the exact net revenue per script for a handful of quarters now. But I guess the guidance that I would give you is you typically see an improvement in gross to net going from Q1 to Q2. I would expect that to be sequentially down just slightly. And so, I think that’s the color that I would provide on net revenue per script, Marc. Go ahead, Eiry.

Dr. Eiry Roberts: Oh, thanks. And thanks, Marc. On the remainder of the muscarinic portfolio, just to remind you, we have ‘570, which is a dual M1/M4 agonist; ‘569, which is an M4-preferring agonist; and ‘567, which is an M1-preferring agonist; and then our own internally discovered ‘986, which is an M4 antagonist as a potential treatment for dystonia’s and Parkinson’s tremor. With respect to the agonists, I’m actually including the M4 antagonist as well, all of those medicines are progressing currently through Phase 1 studies. For ‘570, we will be completing Phase 1 in the very near future and starting a Phase 2 study by the end of this year in acute psychosis. And that will be the next Phase 2 start for us from that platform. And then as ‘569 and ‘567 complete their Phase 1 studies, we’ll be talking more about that and the potential next steps there, including any potential Phase 2 starts in the foreseeable future.

Operator: We’ll take our next question from Sean Laaman with Morgan Stanley. Your line is open.

Mike Riad: This is Mike Riad on for Sean Laaman. A big congrats to Eiry for all the impact you made. Thinking about INGREZZA, Teva’s set of guidance suggests a good amount of patients can come yet this year. But the data that was presented at AMCP, so how patients don’t reach that therapeutic dose on AUSTEDA XR. So, thinking about that, how do you see the AUSTEDA drop-off market evolving? And do you think that some proportion of those drop-offs can switch to INGREZZA and help the patient starts?

Dr. Eiry Roberts: We were very encouraged by the information that we recently published regarding the therapeutic dosing. And I’d just remind you that, obviously, with the 40 and 80 milligrams of INGREZZA, we start dosing at a therapeutic dose level and continues throughout the patient’s period of time on the medicine. And so, from that point of view, I think, as Eric alluded to in his prepared remarks as well, I think we have a very high confidence level in the value that INGREZZA can bring to patients. It’s, as we said, highly effective, including in the data that we recently published on long-term data in more elderly population as well, uniquely selective in terms of its VMAT2 inhibition. And we have the broader set of data that we believe in patient populations that can experience value. And so, we’re focused on that and continuing to educate around that.

Eric Benevich: The only thing I would add, just to piggyback here, is that the majority of patients that we see starting on INGREZZA have been and continue to be newly diagnosed and really treated. There isn’t a lot of switching that happens in the VMAT2 market, and we haven’t seen that dynamic really change that much over time. So, we continue to make progress with diagnosis and motivating treatment. But for the most part, the patients that are starting INGREZZA are getting started on the VMAT2 for the first time.

Operator: We’ll move next to Ash Verma with UBS. Your line is open.

Ash Verma: Congrats from my side as well. Just on INGREZZA, maybe can you talk about any pull-through on these new contracting or the Medicare Part D formulary access that you mentioned? When does that happen? Like did that benefit 1Q? Or is that more of a 2Q or later in the year? And just secondly, what was the percentage increase in the sales force footprint, if you can remind us? And when do you expect that benefit to start to accrue?

Eric Benevich: Yes. I got the first part of your question in terms of the pull-through effort. Can you repeat the second part?

Ash Verma: Yes. Like what was the percentage increase in the sales force footprint? And when do you expect that benefit to start to accrue?

Eric Benevich: Okay. Well, I’ll take on the second part first. We didn’t give exact head count numbers when we did the expansion in Q4 of last year, but it was a substantial increase of our psychiatry footprint. And as I mentioned before, we do think that it is starting to see tangible benefits here in the market primarily manifest as the record number of new patient starts we saw in Q1. With regards to pull-through, yes, certainly, our plan of action has always been when we have a formulary win, we attempt to pull it through. And the way that, that translate is certainly through personal and nonpersonal promotion. Our sales teams are aware of where there’s been an add of INGREZZA on to a formulary. They’re aware of the HCPs that are having more patients underneath that plan, and they’re sure to communicate those changes.

And with regards to this most recent formulary win, that process has already started as of the beginning of April. So, we’re going to continue to leverage when we do have increases in formulary coverage. But the way to think about it is it really benefits new patient starts. Existing patients who are already on treatment under that plan, they’re already covered. They have a certain number of authorized refills. It’s the new patient starts where there’s a little less headwinds because it’s now on formulary. Thanks.

Matt Abernethy: But just to be clear on how the financials flow on this, we will take a more immediate hit to gross to net starting in Q2. And the benefit from the new patient additions, as Eric mentioned too, will accrete over time. So, it typically takes two, three, four quarters to get to a place where you’re ROI-positive. But it’s something that, as we mentioned and as Kyle mentioned, strategically important for us to continue to be a major player in this market.

Operator: We’ll take our next question from Mohit Bansal with Wells Fargo. Your line is open.

Unidentified Analyst: This is [Serena] on for Mohit. Congrats on the great quarter. First, I wanted to ask a clarification question on INGREZZA gross to net. I think previously, you guys have said that you would expect some tailwind from the lower phasing of rebate under Part D redesign. I was wondering if that was any bit of a factor this year. And then wanted to ask on the Phase 3 program for ‘568. How are you thinking about the number of sites, any ex-U.S. sites? And then any other changes in how the studies will be run versus the Phase 2 beyond the election on just one dose?

Matt Abernethy: Yes. From the Med D design change on the mandatory rebates, that was a slight benefit, I’d call it, like 1%. And that was a tailwind entering into this year. But that will, of course, be more than absorbed by the incremental contracting, which really is what’s going to drive continued growth in value for INGREZZA and for the Company going forward. Eiry, do you want to comment on ‘568?

Dr. Eiry Roberts: Yes. We’ll obviously provide more information as we get the remaining studies within the program up and running. But just a couple of comments. The first study is a U.S.-only study for the Phase 3. And as you mentioned, it is a single dose level of 20 milligrams 1:1 randomization with placebo. So very simple in design. And we are taking all the learnings that we achieved from the Phase 2, which we can talk more about once the full program is up and running. The number of sites doesn’t increase substantially, which I think is really important. Because if you remember, our Phase 2 was a study that was run over a number of sites and a relatively complex adaptive trial design. So, we think the simplicity of the Phase 3 program that we’ve designed and are implementing will be beneficial for us moving forward.

Operator: We’ll move next to Myles Minter with William Blair. Your line is open.

Myles Minter: My congratulations to Eiry as well for a great career there at Neurocrine. Just on osavampator, the two Phase 3 studies that are listed on clinicaltrials.gov, just wondering about the powering assumptions for those trials given the 200 patients seems on the smaller end from what we’ve seen from peer studies that have obviously had mixed results. And secondly, I think on Slide 6, it says you’ve initiated four Phase 3 studies. What are the other 2?

Dr. Eiry Roberts: Yes. So, thanks, Myles. A couple of questions there. Let me get to the number of studies, first of all. Within the registration package for osavampator, there are three key studies: the two short-term randomized placebo-controlled studies; and one longer-term open-label study, which is obviously essential to enable us to look at longer-term safety. With respect to the powering and the subject number, this is a — could be quite a long conversation, but let me make it short. We — one of the things we worry most about in the context of major depressive disorder studies is a placebo effect and obviously the expectation bias. And there is also a large body of research that suggests that the larger the study gets beyond a number of around about 20, the increased likelihood of placebo response, and therefore, the increased likelihood of potentially failed studies.

So, whilst the — each of the Phase 3 studies is adequately powered and appropriately powered to measure an effect size significantly smaller than that which we saw in Phase 2, highly confident in the size of the study, we have limited the size of the studies because of our take on understanding of the research in this area about the balancing act between increased subject numbers driving increased placebo response and increased risk of failed study.

Operator: We’ll move next to Laura Chico with Wedbush. Your line is open.

Laura Chico: I just wanted to revisit real quick on the INGREZZA patient numbers, and congrats on the record adds here. I’m not sure if you could also comment a little bit more about persistency and discontinuation rates. I think, Eric, you mentioned the reauthorization was challenging. But are there differences in the duration of treatment depending on the channel from which patients are originating, say, long-term care versus psych? And then separately, I’m just curious with the R&D Day in the second half here, any highlights to share in terms of how is should be thinking about the potential focus of the event?

Eric Benevich: Yes. With regards to the question around patient persistency, generally, it’s been very steady from the early days of the launch through the most recent cut that we looked at. And we haven’t seen any real differences in persistency across the different channels, whether the patient is being treated by a psychiatrist and neurologist or more recently coming in through long-term care. I did comment that this was a challenging Q1, a little bit more challenging perhaps than we’ve seen in years past. Anecdotally, feedback from the customers was that the reauthorization process was a bit more challenging from their perspective, and we saw slightly higher drop-offs in delayed refills versus prior years. All of that was counterbalanced by the record number of new patient adds.

And so that’s really what gives us the sort of the confidence and conviction in the acceleration of our growth given the uptake that we saw with new patients in Q1. But overall, no, we’re not seeing any real differences in patient persistency by segment.

Operator: And this does conclude the question-and-answer portion of our call. I would now like to turn it back to Kyle Gano for any additional or closing remarks.

Kyle Gano: Thanks, everyone. I know we didn’t get to all of your questions. For those of you that missed, we’ll be following up with you individually. But thanks, everyone, for joining this afternoon. As you can see, we made meaningful progress across several critical priorities of the business when we think about INGREZZA, reaccelerating new patient starts, improving access for health care providers and the patients they serve, successfully launching CRENESSITY and initiating multiple Phase 3 studies. Neurocrine has never been in a stronger position, and we’ll continue to remain focused on execution and evolution of the pipeline as we move through the remainder of the year. So, looking forward to seeing all at the upcoming conferences or on your latest Zoom call. So, looking forward to speaking with you soon. Thanks so much.

Operator: This does conclude today’s program. Thank you for your participation. You may disconnect at any time, and have a wonderful rest of your day.