2, 2026 CALL PARTICIPANTS Vice President of Investor Relations - Todd TushlaChief Executive Officer - Kyle GanoChief Financial Officer - Matthew AbernethyChief Commercial Officer - Eric BenevichChief Medical Officer - Eiry RobertsChief Business Officer - Samir Siddhanti Total Revenue -- $1.1 billion, representing 41% growth driven by strong demand across the diversified portfolio of three first-in-class medicines.INGREZZA Net Product Sales -- $801 million, increasing 17% year over year due to record new and total prescriptions.CRENESSITY Net Product Sales -- $211 million, representing 115% growth driven by steady patient additions and favorable reimbursement.VYKAT XR Net Product Sales -- $107 million, reflecting sequential growth following the acquisition of Soleno Therapeutics in May 2026.Non-GAAP Diluted EPS -- $3.29, compared to $2.17 in the third quarter of 2025, reflecting significant operating leverage.INGREZZA 2026 Net Sales Guidance -- $2.9 billion to $2.925 billion, raised from the previous range of $2.825 billion to $2.875 billion.Total Cash and Marketable Securities -- $790 million as of Sept.
30, 2026, compared to $2.54 billion at the end of 2025.Operating Cash Flow -- $400 million generated during the third quarter.INGREZZA 2027 Net Pricing -- Mid- to high single-digit headwinds anticipated, which management expects will be offset by double-digit volume growth.CRENESSITY Market Penetration -- Over 15% of the estimated diagnosed classic congenital adrenal hyperplasia population, reflecting steady adoption seven quarters after launch.VYKAT XR Average Dosage -- Approximately 250 milligrams per patient, resulting in an average annual cost of approximately $550,000.Customer Order Timing Benefit -- $20 million for INGREZZA sales in the third quarter, which management expects to reverse in the fourth quarter.GAAP SG&A Guidance -- $1.54 billion to $1.56 billion for full-year 2026, reflecting commercial organization investments.GAAP R&D Guidance -- $1.275 billion to $1.325 billion for full-year 2026, supporting Phase 3 programs in major depressive disorder and schizophrenia.Non-GAAP SG&A Guidance -- $1.29 billion to $1.31 billion, adjusted for stock-based compensation and acquisition-related expenses.Non-GAAP R&D Guidance -- $1.14 billion to $1.19 billion, supporting the advancement of the clinical portfolio.VYKAT XR Intangible Assets -- $2.2 billion recorded on the balance sheet, to be amortized over 16 years.Share Repurchases -- $100 million deployed during the quarter to offset dilution from share-based compensation.R&D Pipeline Productivity -- Six Phase 1 initiations and five Phase 2 starts planned or completed for the current year.Clinical Trial Discontinuation Rate -- 3% or less in the current direclidine schizophrenia program, compared to higher rates for existing treatments.
Need a quote from a Motley Fool analyst? Email [email protected] Matt Abernethy stated, "Looking ahead to 2027, we expect continued double-digit INGREZZA volume growth to more than offset anticipated mid- to high single-digit net pricing headwinds, supporting another year of revenue growth," identifying pricing pressure as a future challenge.Eric Benevich noted that while the company expects a return to growth, recent external events related to safety reports could delay the expected growth trajectory for VYKAT XR.
Neurocrine Biosciences, Inc.
(NBIX -0.51%) reported record total revenue for the third quarter, marking its transition into a diversified biopharmaceutical entity with three first-in-class commercial medicines.
Management indicated the company is achieving significant operating leverage and record profitability while maintaining a strong financial position for future investment.
During the call, executives highlighted the durability of the tardive dyskinesia franchise and the steady adoption of new treatments for rare endocrine and pediatric conditions.
The company is approaching a potentially transformative period in 2027 with several major clinical milestones that could further expand its pipeline and long-term growth prospects.
Chief Executive Officer Kyle Gano stated, "Never in Neurocrine's 35-year history, we have achieved this level of R&D productivity in a single year."Management reported that only about 10% of the total tardive dyskinesia prevalent population is currently treated with a VMAT2 inhibitor, leaving substantial headroom for future growth.The company plans to initiate a study in 2027 evaluating VYKAT XR in Prader-Willi syndrome patients with complex health issues to broaden real-world understanding of the treatment.Neurocrine re-engaged Dr.
Eiry Roberts as Chief Medical Officer to lead the deepest and most diversified pipeline in the company's history.The company is diversifying its portfolio into obesity with two separate mechanisms, including a CRF2 agonist focused on quality weight loss that preserves muscle mass.Management remains focused on 2027 Phase 3 data readouts for osavampator in major depressive disorder and direclidine in schizophrenia.The company initiated a Phase 2 study for NBI-567, a selective muscarinic agonist being developed as an adjunctive treatment for cognitive impairment in Alzheimer's disease.
INDUSTRY GLOSSARY Tardive Dyskinesia: A movement disorder characterized by uncontrollable, repetitive muscle movements, often caused by long-term use of certain psychiatric medications.Congenital Adrenal Hyperplasia (CAH): A rare genetic disorder affecting the adrenal glands' ability to produce essential hormones like cortisol.Prader-Willi Syndrome (PWS): A complex genetic condition that causes a constant sense of hunger and other physical and mental challenges.VMAT2 Inhibitor: A class of drugs that reduces the uptake of monoamines into synaptic vesicles, used to treat movement disorders.Hyperphagia: An abnormal, insatiable appetite and consumption of food.Muscarinic Agonist: A type of drug that activates muscarinic acetylcholine receptors, currently being explored for neurological and psychiatric conditions.CRF2 Agonist: A compound targeting corticotropin-releasing factor receptor 2, investigated for its metabolic and muscle-preserving effects.WACC: Wholesale Acquisition Cost, representing the manufacturer's list price for a drug to wholesalers.
Full Conference Call Transcript Operator: Hello, and welcome, everyone joining today's Neurocrine Biosciences Third Quarter 2026 Earnings Call.
[Operator Instructions] Please note this call is being recorded, and we are standing by if you should need any assistance.
It is now my pleasure to turn the meeting over to Todd Tushla, Vice President of Investor Relations.
Please go ahead.
Todd Tushla: Thank you.
And happy Monday, wherever it is that you may be.
Welcome to Neurocrine Biosciences Third Quarter 2026 Earnings Call.
Joining me on today's call are Kyle Gano, Chief Executive Officer; Matt Abernethy, Chief Financial Officer; Eric Benevich, Chief Commercial Officer; Eiry Roberts, Chief Medical Officer; and Samir Siddhanti, Chief Business Officer.
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.
In addition, some of the information discussed today includes non-GAAP financial measures that have not been calculated in accordance with U.S.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the Investor Relations page of the company's website.
Following prepared remarks, we'll be happy to take your questions.
With that, I'll hand the call off to Kyle.
Kyle Gano: Good afternoon, everyone.
Nearly 2 years ago, my first earnings call as CEO, I shared my optimism about Neurocrine's future and the significant opportunities ahead.
Today, that confidence has only grown stronger as I remain deeply confident in our ability to drive sustained growth and create long-term value for our shareholders.
Our strategy to build a leading biopharmaceutical company is grounded in execution and delivering meaningful results.
In the third quarter, we generated record net product sales of more than $1.1 billion and record profitability.
These results underscore the strength of our diversified portfolio of 3 first-in-class medicines and our growing ability to reach and serve more patients than ever before.
This momentum positions us well to drive continued growth across INGREZZA, CRENESSITY and VYKAT XR in 2027 and beyond.
The strength of our growing commercial business and financial position also enables us to continue investing in our industry-leading pipeline.
With several important clinical milestones anticipated in 2027, including Phase III data readouts for osavampator in major depressive disorder and direclidine in schizophrenia, we believe Neurocrine is approaching a potentially transformative period, one that could further expand our pipeline, strengthen our long-term growth prospects and extend our impact on patients.
Overall, Neurocrine's third quarter performance exemplifies the strength of our strategy, the discipline of our execution and the significant opportunity ahead to create long-term value.
As we close out the year, we look forward to hosting our 2026 R&D Day in New York City on December 15.
The event will feature a VYKAT XR panel discussion with Dr.
Jennifer Miller, Professor of Pediatric Endocrinology and Director of the Prader-Willi syndrome program at the University of Florida College of Medicine as well as an update on our pipeline.
I look forward to sharing our progress, engaging with the investment community and discussing the opportunities ahead as we enter what promises to be a catalyst-rich 2027.
With that, I'll turn the call over to Matt.
Matthew Abernethy: Thank you, Kyle, and good afternoon, everyone.
The third quarter reflects Neurocrine's continued evolution into a diversified, highly profitable biopharmaceutical company.
As Kyle mentioned, we delivered record net product sales exceeding $1.1 billion, up more than 40% year-over-year, alongside record operating profitability.
Our 3 commercial products provide a growing foundation to invest in innovation and prepare for a data-rich 2027.
Starting with INGREZZA.
Third quarter sales were $801 million, up 17% year-over-year, driven by continued volume growth with record new and total prescriptions.
Underlying INGREZZA performance continues to exceed our own internal expectations, leading to another full year INGREZZA guidance increase to $2.9 billion to $2.925 billion.
Third quarter sales included a $20 million benefit from customer order timing, which we expect to reverse in the fourth quarter and is reflected in our full year guidance.
Overall, 2026 is turning out to be a remarkable year for INGREZZA with the prescription growth expected to be in the high-teens, underscoring the strength and durability of the INGREZZA franchise in the tardive dyskinesia market.
Looking ahead to 2027, we expect continued double-digit INGREZZA volume growth to more than offset anticipated mid- to high single-digit net pricing headwinds, supporting another year of revenue growth.
As customary, we will provide formal 2027 sales guidance in February.
CRENESSITY delivered $211 million in third quarter sales, supported by steady patient additions strong persistency and favorable reimbursement.
Over 15% of the estimated diagnosed classic CAH population has now been prescribed CRENESSITY, highlighting the opportunity that we still have ahead.
For VYKAT XR, we delivered $107 million in third quarter sales, reflecting sequential growth driven by new patient demand.
We remain focused on our efforts to support appropriate patient identification, physician and caregiver education and patient support.
We believe VYKAT XR offers a meaningful opportunity for long-term growth to help many patients with this devastating condition.
Turning to the financials.
Record revenue drove non-GAAP earnings above $3 per share.
This reflects significant operating leverage while continuing to invest in commercial growth and our R&D pipeline.
We ended the quarter with approximately $800 million in cash, generating $400 million in operating cash flow and deploying approximately $100 million to repurchase shares and offset dilution from our share-based compensation.
Our capital allocation priorities remain driving commercial growth, advancing high-value pipeline programs and pursuing disciplined business development.
Overall, with 3 growing commercial products, expanding profitability and a broad pipeline, Neurocrine is well positioned for durable growth in important clinical catalysts in 2027.
With that, I'll turn the call over to Eric Benevich, our Chief Commercial Officer.
Eric? Eric Benevich: Thanks, Matt.
Our record third quarter performance reflects strong performance across all 3 of our first-in-class medicines, INGREZZA, CRENESSITY and VYKAT XR.
While each is at a different stage of commercialization, all 3 continue to address significant unmet medical needs and contribute to Neurocrine's commercial diversification and revenue growth.
Starting with INGREZZA, quarterly sales surpassed $800 million for the first time, driven by strong demand with record new and total prescriptions.
Remarkably, 9 years into launch, INGREZZA continues to deliver double-digit prescription growth with full year sales guidance raised once again, 2026 is shaping up to be another outstanding year for the brand.
CRENESSITY also reached a new milestone, exceeding $200 million in quarterly sales for the first time.
The rate of new patient starts have remained steady throughout the year, and we estimate more than 15% of U.S.
patients with classic congenital adrenal hyperplasia have now been prescribed CRENESSITY.
Just 7 quarters into the launch, we're making meaningful progress towards establishing CRENESSITY, together with low-dose GCs as the standard of care treatment for classic CAH.
Now turning to VYKAT XR.
Quarterly sales exceeded $100 million for the first time.
Since the acquisition, our commercial and medical teams have focused on HCP education, including appropriate PWS patient selection, dose titration, careful monitoring and management of potential adverse events while setting expectations for both the timing and nature of treatment response.
These efforts reflect our commitment to maximizing patient safety and treatment results.
As newcomers to the PWS community, we're listening to all stakeholders and gaining insights from clinicians, PWS scientific thought leaders and the Prader-Willi syndrome patient and family community.
We're confident in VYKAT XR's benefit and its longer-term potential in our rare endocrine franchise.
2026 will no doubt end up being the strongest commercial year in Neurocrine's history, and we look forward to carrying this momentum into 2027.
I want to thank our entire commercial and medical organizations, including our newest VYKAT XR colleagues for their unwavering dedication to patients and outstanding execution.
And with that, it's my pleasure to turn the call over to our Chief Medical Officer, Dr.
Eiry Roberts.
Eiry Roberts: Thanks, Eric, and good afternoon, everyone.
First, I want to thank Kyle and the Board of Directors for the opportunity to return as Chief Medical Officer.
During my previous tenure, I had the privilege of helping advance CRENESSITY through clinical development and approval as well as generating positive Phase II data and initiating the Phase III programs for both osavampator and direclidine.
I'm excited to build upon the team's recent progress as we advance the deepest and most diversified pipeline in Neurocrine's history.
I'd like to begin today with VYKAT XR, the first and only FDA-approved treatment for hyperphagia in patients age 4 and older with Prader-Willi syndrome.
Since Neurocrine's acquisition of this medicine in May, our clinical and medical teams have worked closely with expert clinicians, regulators and the PWS community to support the safe and appropriate use of this important new medicine.
As real-world experience grows, we remain committed to ongoing safety monitoring, collaboration with the FDA and timely communication of important new information.
To further advance our understanding, we plan to initiate a study in 2027, evaluating VYKAT XR in people with PWS and complex health issues.
Continued engagement with advocacy organizations, including FPWR and PWSA USA remains central to our efforts also.
Turning to the pipeline we recently initiated a Phase II study of NBI-'567, our M1-preferring selective muscarinic agonist as an adjunctive treatment for cognition in Alzheimer's disease.
In obesity, we initiated a Phase I study of NBIP-'1968, our investigational GGG agonist.
This program has the potential to complement our CRF2 agonist, NBIP-'2118, also in Phase I as we explore differentiated combinations to treat obesity.
Finally, NBIB-223, our Friedreich's ataxia gene therapy program in collaboration with Voyager Therapeutics is expected to enter Phase I in the coming months with initial patient-level data anticipated in 2027.
As Kyle mentioned, we will close out the year with our 2026 R&D Day in New York City on December 15.
I look forward to sharing our progress and reengaging with the investment community as we prepare for a data-rich year in 2027.
With that, I'll turn it back to Todd.
Todd? Todd Tushla: Thanks, Eiry, and welcome back to the role.
We're happy to have you here.
Apologies for the slight delay in the distribution of today's earnings release.
We appreciate your patience and look forward to your questions.
So Nicki, let's take the questions.
Operator: [Operator Instructions] We'll take our first question from Philip Nadeau with TD Cowen.
Philip Nadeau: Congrats on a really strong quarter.
Question on INGREZZA trends and guidance.
So if we back out the $20 million that you mentioned of orders this quarter, even taking that out, it does look like the top end of guidance assumes a sequentially down Q4 and so I guess we're curious why that would be? Was there something else that was lumpy in Q3 beyond just the $20 million? Or are there other headwinds you expect in the fourth quarter for INGREZZA? Matthew Abernethy: It was a really strong third quarter across the board, and we would anticipate in the fourth quarter to have similar underlying TRx growth somewhere in the mid-teens.
So the other -- the only other item is seasonally, there's always a gross-to-net dynamic in the fourth quarter.
But overall, you take a step back, and you see we started the year at $2.7 billion in guidance going all the way up to $2.9 billion in guidance, feel quite good with how we're positioned, and we're in a place to have strong momentum headed into 2027.
Operator: We will move next with Paul Matteis with Stifel.
Paul Matteis: Congrats on the quarter.
I wanted to ask a question about VYKAT.
Obviously, it's been discussed in the media and the press related to its safety profile.
I was curious from your perspective, are you comfortable that going forward in the next set of quarters that VYKAT will continue to be sort of a resilient grower? And maybe just as a sub question to that, is there any thought that at some point there could be engagement with regulators around some of the post-marketing safety reports? And maybe you could just give a little color there.
Eric Benevich: Yes.
Paul, it's Eric.
So certainly, we know that in orphan diseases, launches aren't always linear.
And I think we're about, what, 2.5 quarters now post acquisition.
So we're still getting our arms around the VYKAT business.
And we're still in the thick of the integration.
However, given the recent external events, we do anticipate a return to growth, but it might be a little bit more delayed.
Ultimately, we still have very strong conviction in the benefit of VYKAT and we're working through making sure that everyone understands both the benefits and how to safely use it.
Anything to add? Eiry Roberts: Yes.
Thanks, Paul.
I mean patients stay at Neurocrine.
And so we take every adverse event and every outcome very seriously, and we continuously monitor safety as we -- in the post-marketing environment.
That said, we are very confident in the benefit risk profile that we have for VYKAT XR.
And we believe that the current label describes very effectively use the medicine safely and effectively in the relevant patient population.
Obviously, we continue to collect ongoing information.
And in particular note, I'd draw your attention to what we mentioned in the at the end this year in our R&D Day, we will have a focus on understanding PWS and particularly hyperphagia more for the community by engaging with Dr.
Jennifer Miller and several patients from the community.
And I think that will be helpful in that regard.
In addition, we are planning to initiate study starting next year in patients with Prader-Willi who also have significant other comorbidities and other conditions that [ makes ] them obviously at higher risk generally in terms of their disease to understand how to safely and effectively use VYKAT XR in that population.
Operator: We will move next with Tazeen Ahmad with Bank of America.
Tazeen Ahmad: Just wanted to get any color on 2027 INGREZZA contracting particularly whether access and net price intact or tracking with what you would have expected? Any color would be great.
Kyle Gano: Thanks, Tazeen.
This is Kyle.
It's hard to not talk about 2027 pricing without starting with access because they are linked.
For this year, as you know, we have about 70% of Medicare lives covered under the contracting that we executed on in 2025, and that gave us great momentum here throughout the course of this year, and we think that will continue to be the case as we close out Q4 into 2027.
So when we think about 2027, we do expect that underlying momentum to lead to, again, double-digit volume growth for 2027, and that reinforces really the durability of INGREZZA as a product in TD as well as continued revenue growth.
When it comes to contracting now for 2027, we're nearly the end -- at the end of our discussions with payers.
We do have pretty good visibility in terms of our formulary status for 2027.
And what we see is a really strong year in terms of coverage and access [ to lives ], at least as good as this year.
So we're looking forward to a really strong access year for 2027.
In terms of the net price, we'll get into the details of that as we move into the new year.
But roughly speaking, we're looking at mid- to high single-digit price concession for 2027, but that will be more than offset by our double-digit revenue growth for next year.
So this will be playing out in our assessment of performance as we move through Q4 into the new year when we talk about guidance at our February meeting.
But overall, really strong year ahead for 2027.
Operator: We will move next with Brian Abrahams with RBC Capital Markets.
Kevin Meli: This is Kevin on for Brian.
Maybe just back on VYKAT.
Just considering some of the on-the-ground dynamics that you're seeing this quarter being the first full quarter with VYKAT, just maybe can you share your latest thoughts on how the potential opportunity, the peak opportunity in PWS may be, whether your thoughts now are a bit more refined and what the opportunity could look like and the time lines around that? Eric Benevich: Sure.
This is Eric.
So kind of taking a step back, thinking about the Prader-Willi population, we estimate that there's roughly 10,000 to 12,000 patients in the U.S.
The majority of them have hyperphagia, not everyone though.
Obviously, patients that are very young typically don't experience hyperphagia until they get to be 4 or 5 or 6 years old.
And certainly, there are some patients that would not be considered appropriate for treatment based on, as Eiry said, significant comorbidities.
Ultimately, though, we feel that the majority of patients with hyperphagia secondary to PWS are candidates for treatment.
And this is a medication that's still relatively early in its launch.
It's only been out there a little over 1.5 years.
And there's a lot of providers in the community that we're still reaching and educating and also within the patient and family community.
So I don't know that we've really altered our thinking around the opportunity.
We still have really strong conviction in the potential for this medication.
As you know, it's the first and only approved treatment for hyperphagia and PWS, but we do recognize that we do have a lot of work ahead of us in terms of educating and continuing to generate data to understand how to best use this medication.
Operator: We will move next with Brian Skorney with Baird.
Brian Skorney: Congrats on a great quarter.
Maybe on VYKAT, you mentioned growth coming from new patient starts, but wanted to hear anything you could say about discontinuations.
I know there's sort of this bolus effect to new patient starts at the launch running into maybe a headwind in terms of discontinuations from that initial bolus once they reach therapy.
Do you think we're through that at this point? And are you expecting more of a normal number of patients discontinuing per quarter because that roll-off is no longer coming from the initial bolus? Just want to get an idea of how to think about the balance between starts and discontinuations at this point? Eric Benevich: Yes.
I would say -- I'd start by saying we're still learning about the dynamics here.
As I mentioned, this product has only been on the market for a little over 1.5 years.
And certainly, there was a bolus of starts in the first quarter or 2 when VYKAT was launched last year.
And then we did see sort of an increase in discontinuations from that bolus of early starting patients.
Since then, we've seen pretty consistent and steady starts.
And it's hard to say whether Q3 was any different from a discontinuation standpoint because numerically, it was similar to prior quarters.
So I would say stay tuned.
Operator: We will move next with Anupam Rama with JPMorgan.
Anupam Rama: Congrats on the quarter.
Look, it was a nice beat on INGREZZA and even if you back out the $20 million onetimer, It was -- it's still going to beat consensus.
So if you see any outsized growth in the various segments, psychiatry, neurology, long-term care that you'd want to highlight? Eric Benevich: Yes.
Thanks for the question.
I think you see growth potential across all the prescriber segments.
And as we've said before, the majority of patients out there with tardive dyskinesia yet to be -- well, now we're actually approaching a point where about half of the patients out there have been diagnosed and the other half have yet to be diagnosed, but there's still substantial opportunity to drive diagnosis, recognition and treatment.
In addition, only about 10-ish percent of the total TD prevalent population is currently on either of the 2 VMAT2 inhibitors.
So lots of headroom from a growth potential perspective.
Obviously, we see the psychiatry segment as the main growth driver.
And within psychiatry, in particular, advanced practice providers are really important in terms of recognizing and treating TD with INGREZZA.
So I think that reflects sort of the deployment of our sales team.
The biggest team is focused on psychiatry.
We've also seen really strong and consistent growth in long-term care.
So we're excited about the opportunity.
As Kyle said earlier, we're going to carry the momentum into 2027.
But we expect to see continued strong volume growth across all the segments, psychiatry, neurology and long-term care.
Operator: We will move next....
