Neurocrine Biosciences, Inc. (NBIX) Q2 2026 Earnings Report, Transcript and Summary

Thank you for your continued patience. Your meeting will begin shortly. Star zero, and a member of our team will be happy to help you. You for your continued patience. Your meeting will begin shortly. And a member of our team will be happy to help you. Hello and welcome everyone to join today's Neurocrine Biosciences Reports Q2 26 Earnings Call. 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. To register to ask a question at any time, please press star 1 on your telephone keypad. 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.

Happy Thursday, everyone. Welcome to Neurocrine Biosciences second quarter 26 earnings call. With me today on the call are Kyle W. Gano, chief executive officer Matthew Abernathy, chief financial officer Eric S. Benevich, Chief Commercial Officer; Sanjay Keswani, Chief Medical Officer; and in his well deserved new role as chief business officer Samir Siddhanti. During today's call, we will be making forward looking statements. These statements are subject to certain risks and uncertainties and 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 US GAAP. 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 Neurocrine's website. After prepared remarks, we will jump into Q&A. Now I will hand the call off to Kyle.

Thanks, Todd. Good afternoon, everyone. Neurocrine's second quarter performance demonstrates the power of a diversified growth strategy built to compound over time. Our commercial portfolio of first in class medicines, INGREZZA, CRENESSITY, and VYKAT XR, delivered another record quarter with product sales exceeding $950 million. Enabling more patients to benefit from our innovative medicines. This durable commercial performance provides the financial strength to continue investing in innovation, advance our industry leading pipeline, and pursue strategic opportunities that further strengthen Neurocrine for long term growth. Our strategy remains clear, execute on our commercial portfolio to bring our medicines to patients, advance our innovation engine, deploy capital with discipline. This quarter demonstrated meaningful progress across all 3 of these priorities. The commercial business continues to generate durable growth, The pipeline is advancing as 1 of the industry's strongest mid to late stage portfolios. And disciplined capital deployment was demonstrated through the successful acquisition and integration of VYKAT XR. Together, these efforts further strengthen our position in rare disease while building on our leadership in endocrinology. More importantly, these results reflected the continued evolution of Neurocrine, Just a few years ago, we were largely viewed as a single product company. Today, we have multiple commercial growth drivers and expanding pipeline across all phases of development, and the financial strength to invest through innovation cycles. Together, these strengths position us to create long term value for patients, physicians, employees, and shareholders alike. Looking ahead, we remain on track to deliver multiple important clinical milestones in 2027. Including Phase 3 data readouts for osavampator in major depressive disorder, and dereclidine in schizophrenia. Together with the continued integration of VYKAT XR, these milestones represent the next chapter in Neurocrine's growth and reinforce our confidence in the opportunity ahead. Before I turn the call to Matthew, I would like to recognize Samir Siddhanti on his recent promotion to Chief Business Officer. Since joining Neurocrine in 2017, Samir has played an integral role in shaping our corporate strategy and business development efforts. As a member of our executive leadership team, he will help guide the next phase of Neurocrine's growth and evolution. Samir, congratulations. We are excited for what is ahead. With that, I will turn the call over to Matthew.

Good afternoon, everyone. For the second quarter, we delivered over $950 million of total revenue, representing nearly 40% year over year growth. This reflects full quarter contributions from INGREZZA and CRENESSITY, along with the partial-quarter contribution from VYKAT XR following the close of the Sileno acquisition. This revenue performance demonstrates accelerating top line growth delivering a financial profile with non GAAP EPS of $2.85 per share. Starting with INGREZZA, second quarter net sales were $716 million up 15% year over year. Driven by another quarter of record new patient additions and sustained underlying demand. Given this performance, we are raising our full-year INGREZZA guidance from $2.7 billion to $2.8 billion to a new range of $2.825 billion to $2.875 billion At the midpoint, this represents approximately 13% year over year growth. Chronicity's second quarter net sales were $184 million reflecting continued strong launch execution consistent new-patient starts, and expanding prescriber adoption. Approximately 15% of the estimated diagnosed patient population has now been prescribed CRENESSITY. Reinforcing our confidence in the significant runway for growth. Turning to VYKAT XR. Second quarter pro forma net sales were $94 million with $54 million recognized by Neurocrine, from May 18. The closing date of the Soleno acquisition. Integration has progressed well and expect to drive sequential quarterly growth exiting 2026. New patient demand remained fairly consistent with the first quarter. While discontinuation rates tracked in line with our expectations following the initial launch bolus in 2025. We have more work to do in developing this market and remain optimistic in the opportunity to help many more patients with PWS over the years ahead. Pro form a total revenues were $998 million for the second quarter 26 when including full quarter VYKAT XR sales. This performance underscores the strength and increasing scale of our commercial across 3 highly differentiated products. Turning to our financials. With the Soleno acquisition now complete, I would like to briefly discuss the financial impact of the transaction. Including the purchase accounting and the GAAP to non adjustments reflected in our earnings release. We acquired So for approximately $2.9 billion and financed the transaction with cash on hand. We ended the second quarter with approximately $500 million in cash, and no debt. Strategic and financially, this is a highly attractive acquisition. VYKAT XR adds another differentiated durable growth product to our portfolio and is immediately accretive to non GAAP earnings. Accordingly, we updated operating expense guidance to include the So operating expenses, transaction and integration costs, and the expected purchase accounting intangible and in inventory fair value amortization impacts for the remainder of 2026. We expect approximately $150 million of acquisition related costs of which $130 million was recognized in the second quarter. Our GAAP second quarter results also include noncash purchase accounting amortization of acquired intangible assets and inventory fair value step up of approximately $20 million. Overall, our commercial portfolio continues to perform exceptionally well, generating close to $1 billion in pro forma quarterly sales, providing substantial financial flexibility to invest consistent with our capital allocation priorities to drive revenue growth, advance our expanding pipeline, and pursue additional strategic business development opportunities. With growing sales, improving financial profile, and meaningful data catalysts ahead, we feel quite fortunate to find ourselves in a position to continue to build a leading global biotech company. With that, I will now hand the call over to Eric S. Benevich.

Our chief commercial officer. Eric. Thanks, Matthew. Just 5 years ago, Neurocrine was a single, product commercial stage company celebrating INGREZZA achieving blockbuster status. Surpassing $1 billion in annual sales. Todd, our commercial portfolio includes 3 first in class medicines with combined quarterly sales approaching $1 billion and annualizing to approximately $4 billion. This transformation reflects the successful execution of our long term growth strategy. So starting with INGREZZA, second quarter performance was outstanding. With record sales of $716 million driven by another quarter of all time highs in both new patient starts and total prescriptions. Basma on our increased full year guidance, we expect to help more patients than ever before who are living with tardive dyskinesia or chorea associated with Huntington's disease. CRENESSITY also delivered another excellent sales quarter generating a $184 million. The launch continues to follow a very consistent pattern. Steady pace of new patient starts, high persistence and compliance, and favorable reimbursement. Adoption remains balanced across both adult and pediatric patients male and female patients, and across the business segments of CAH centers of excellence pediatric endocrinologists, and community adult endocrinologists. Importantly, our prescriber base has nearly tripled compared to 1 year ago, providing a strong foundation for continued growth. Turning to VYKAT XR, while still very early in the integration of this franchise into our commercial platform, but we were encouraged by second quarter trends. New patient starts remained steady on a sequential basis, The prescriber base continued to expand and discontinuations tracked in line with expectations following the initial bolus of patients who began therapy last year. As with any acquisition, it will take a few quarters to get fully integrated, and we are excited to introduce Neurocrine's commercial, medical, and patient support capabilities to the VYKAT team and the PWS community. We remain confident in driving sequential growth as we exit 2026 and continue our conviction that VYKAT XR has the potential to become the third blockbuster in our portfolio. Before I wrap, I would like to extend a special thank you to our commercial and medical teams in neuropsychiatry and rare endocrinology, our internal cross-functional colleagues and the VYKAT XR team from Soleno. Q2 was a quarter of significant transformative change for Neurocrine, where we both expanded our existing commercial footprint to better meet the needs of health care providers and patients while we also began the integration of VYKAT XR into our company. We executed all these significant structural changes without missing a beat in terms of our mission to help more patients. My hat is literally off to our teams for pulling off such a tremendous transformation while simultaneously delivering such a strong quarter. Now I will turn the call over to our Chief Medical Officer, Dr. Sanjay Keswani.

Thanks, Eric, and good afternoon, everyone. I will begin today with highlights from ENDO 26. Where we presented important new data for both Crinesity and VYKAT XR. Starting with CRENESSITY, we presented 2-year data from the ongoing catalyst open label studies in pediatric and adult patients with classic congenital adrenal hyperplasia. These results demonstrated meaningful and durable improvements across multiple aspects of health. Including cardiometabolic outcomes, bone health, quality of life, and pediatric growth while continuing to reinforce CRENESSITY's favorable long term safety profile. For VYKAT XR, we presented 3-year H HQ-CT and Prader Willi syndrome profile data. Comparing treated patients with a natural history cohort These analyses demonstrated significant and sustained reductions in hyperphagia across all evaluated time points. Supporting the durability of treatment benefit. Additional data also showed meaningful improvements when patients who had previously discontinued therapy restarted treatment underscoring the importance of continued treatment in maintaining long term outcomes. Collectively, these data strengthen the growing body of evidence supporting both CRENESSITY and VYKAT XR and highlight the meaningful impact these medicines are having for patients and the endocrinology community. Turning to the pipeline, we continue to make steady progress. Notably, we remain on track to report phase 3 top line data for osavampator in major depressive disorder in the second half of 27. We also remain on track to report the first phase 3 readout for dereclidine in schizophrenia in the second half of 27 and for the second phase 3 study in 2028. Looking ahead, we look forward to hosting our neurology and immunology webinar in early December where we will provide an update on our strategy and highlight key programs across both therapeutic areas. With that, I will hand the call back to Todd.

Excellent. Chloe, let's jump into Q&A.

Thank you. Star 2. Take our first question from Paul Matteis with Stifel. Your line is open.

Great. Thanks a lot, guys, and congrats on the execution on the great quarter. As it relates to INGREZZA, I was wondering at this point in the year, how much visibility do you have on pricing dynamics next year And any feedback you are getting or any insight you are getting into Access Dynamics with the AUSTEDO MSP being enacted? Thank you so much.

Hey, Paul. This is Kyle. Thanks for the question. Maybe just to start where we are with 2026, great access this year with about 70% of all Medicare lives covered.

Under the contracting that we executed last year, and we expect that pricing to remain relatively consistent year to year as we think about the second half of 26. In terms of 2027, obviously, our discussions with payers are ongoing now, and we should get a read on that later this year.

But I think where we are right now is we do see a process and a path moving forward. it is not just us, but others, that there will be a place for MFP adjacent products for Medicare beneficiaries. And if you couple that with the fact that we are the market leader, in the CMAT2 category, there is gonna be ample opportunity for us to have the same access that we have here, moving forward strong access through 2027 and 2028. So right now, it is all leveraging what we can with our team. I would remiss be remiss by not calling out that this market overall continues to grow double digit year to year, so there is a lot of room left in this market. We will continue to focus there.

Kyle, any thought on how much additional costs maintaining this access might be next year or beyond?

No. I think it is too early to make a call on that, Paul. We will have more to comment on that later in the year. Right now, it is it is been a great first half and we will continue to build on the momentum that we have seen. Okay. Very much.

We will take our next question from Philip Nadeau with TD Cowen. Your line is open.

Good afternoon. Thanks for taking our question. Ours is on Crinesity. A really good quarter with revenue up 20% quarter over quarter. It sounds from the prepared remarks, like everything was steady-as-she-goes. So steady patient adds, good reimbursement, no bolus, I am curious whether that interpretation is correct. Were there any onetime issues in Q2 that made it particularly strong that we should not extrapolate into the back half of the year? Or is this pace of revenue growth reasonable for the next couple of quarters? Thanks.

Yeah. I think characterizing Q2 is really an extension of what we have seen earlier in the launch, very steady and consistent pattern of, new patient adds. You know, we continue to, see adoption across all the segments that we are focused on: the pediatric endocrinologist, the adult community endocrinologist, and those centers of excellence. You know, really pleased with the fact that, you know, we estimate now that we have got about 15% of the addressable patient population on treatment. And know, certainly expect to see continued strong momentum as we move forward. that is very helpful. Thank you.

We will move next to Tazeen Ahmad with Bank of America. Your line is open.

Hi. Thanks for taking my question. Mine is on VYKAT. So this quarter's results of $94 million it is roughly flat sequentially. You just took over this franchise. So can you maybe talk to us about some of the things that you are doing in order to accelerate the launch trajectory now that the franchise is fully under your control? And maybe just give some specifics about some of the things that you are doing now that you think could have an effect you know, in a quarter or 2. Thanks.

Yeah, hi, Tazeen. So, first of all I will say that the results that we saw in Q2 were aligned with our expectations coming out of diligence. Certainly, I think we are still learning a lot, about the hyperphagia market opportunity. but what we have learned so far it just reaffirms our convictions about the potential for this medicine to be a blockbuster. And, you know, we are still in the you know, deep in the midst of our integration process here. But, you know, ultimately, I think the fundamentals are what matters. You know, continuing to find patients, to introduce VYKAT XR to the providers that care for them primarily in endocrinology. And then, you know, provide good education and guidance around how to select appropriate patients, how to help them through the titration process, and to achieve good outcomes. So I feel very good about the opportunity with VICAT. Everything that I have heard from the physicians that have experience with it. Is very positive, and certainly look forward to continuing to drive the launch of this product that is still very early in its in its commercial ramp.

And, Tazeen, this is Kyle. I am just reminded as we talk about VYKAT XR. This is our first earnings call post close where we have had a discussion on this. So I do wanna bring up, the merits of the acquisition and the product itself. there is a great strategic and financial fit here for us. VYKAT XR is a first in class, first in disease for Prader Willi syndrome, very much of the same category that we have seen for INGREZZA and Crinesity upon their launch. So we are really excited about this strategic fit there. Obviously, we are able to expand on our endocrinology franchise moving forward. But as a product that comes under the Neurocrine umbrella earlier in its launch, not only do we get to treat many thousands of patients under Neurocrine, which is exciting, We also get to reap the financial reward of maximizing all the revenue growth that gets added to our top line as well as diversification there is a lot of financial fit there as well. Not to mention that, we believe the IP estate goes out to the mid-2040s, so it is durable as well. So overall, we are really excited about what we have here. I think Eric called out some of the points that we are looking at now, and, we are excited to bring this into the same blockbuster category that we see for Crinesity and INGREZZA moving forward.

The only thing I would add is this was very much in line with our internal expectations. Knew what we were buying. And this has a tremendous amount of opportunity to help many more patients. So we have a ton of confidence in the team, the product, and the opportunity to help many more patients with PWS. So we are encouraged as we think forward.

We will move next to Brian Skorney with Baird. Your line is open.

Congrats on a great quarter. Maybe to jump with a question on VYKAT as well. I think during the Selena days, there is lot of debate on sort of the differences between sort of new-start boluses and sort of dropouts and, you know, as you are sort of getting your head around things. Right now. Maybe you could just kind of characterize what you are seeing out there in terms of like how much of initial, bolus numbers are really kind of affecting things, the dropout rate that we see right now. And when do we, you know, you think that there is an upwards equilibrium of new starts dropout rates to think about in the coming quarters.

Yeah. No. I appreciate the question. This is Kyle. I think what we have seen on a new patient start basis is a pretty steady flow of new patient starts over the past couple quarters. So that is good. that is right along the lines of the expectation we had after, after completing diligence on the company. In terms of discontinuations, obviously, with the bolus of patients, at the launch, we do see some of those discontinuations being pulled through. As time has gone along, but we expect to see the ultimate rate settling into what we would see with other orphan medicines in the 25 to 30 percent range. So that is what we will be looking at moving forward. But, ultimately, you know, our goal here is you will see sequential growth as we exit 2026 and looking at that in future years. So we are right where we need to be right now. I think more importantly, I am really excited to see our team bring its resources and the support, to the So team now under the Neurocrine brand. And take all of our learnings collectively and, make this particular medicine be the best it can be moving forward. Great. Thanks, Kyle.

We will move next to Mohit Bansal with Wells Fargo. Your line is open.

Great. Thank you very much for taking my question and congrats on the great quarter. So just wanted to understand VYKAT a little bit better for next few quarters. So you are saying that the patient or a patient in patient new patient start, you expect it to be steady. So wondering that so are you saying that the sales could be choppy a little bit? But, again, what you are saying is that as you exit 2026, you can see you are confirming driving sequential growth. I am just wondering that how will you characterize the next few quarters? As you integrate the business into your own business? Thank you.

Yeah. So as we move from Q3 to Q4 we would anticipate seeing some sequential growth. And then as you think about going into next year, it is really about that momentum. But as we have talked about, it is that mix of new patient additions and being offset by the discontinuations, and we feel like we will be through the bolus of the discontinuations here this quarter. So we would expect to be sequential growers, as we have said. In Q4 and beyond. Helpful. Thank you.

We will take our next question from Anupam Rama with JPMorgan. Your line is open.

Just wondering what some of the physician feedback has been on some of the 2 year CRENESSITY data both adults and peds, and how these data could impact kind of uptake of the product? Thanks so much.

Thanks, Anupam. Yeah, we are really pleased about the feedback we are getting from the physicians with respect to our 2-year data. That we recently presented at ENDO. Of note, this included both adult and pediatric data and indicated long term benefits with respect to both antigen reduction and also glucocorticoid steroid reduction as well. So really, really excited by that feedback. Also, this is in the context of a really nice safety profile. So note at this point, we have well over 35 thousand patient-weeks of exposure Again, very important, bearing in mind the breadth of the population that we are treating with chronicity.

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

Hey. Good afternoon, guys. Thank you for taking the question. So given the recent acquisition of potential future competitor in CAH, can you just talk a little bit about the clinical plan and anticipated timelines for your next gen CRENESSITY assets to the extent that they are needed to help defend the franchise in the future? Thank you.

Yeah. Thanks for the question. We do have our next generation medicine going through clinical development right now. that is NBI-112 thousand. This is a protein based therapeutic of peptide that we are developing that would be a once weekly or less frequent, dosed medicine for patients wanting that particular option of not having to worry about taking a medicine on a day to day basis. It may offer additional advantages above that in addition to that because of the PK profile. So we have great phase 1 data that is come out of the program thus far. We look forward to starting a phase 2 study shortly. And bringing that to, you know, patients as quickly as we can. I will say, going back to CRENESSITY just for a moment, that it set a really high bar. it is got great efficacy, great safety, great tolerability, and what an outstanding label that we are able to get from the clinical program. We have got multiple formulations, a wide spectrum of age ranges that are applied to the medicine. And now as Sanjay just mentioned, multiple years of clinical data that we will be able to lean on in a multiple year head start. I say this because this high bar not only makes it more difficult for our competitors, but even our own programs in our clinical portfolio. So we are really excited about the position that we have right now with Crinesity. A lot of room still to grow. We got about 15% of the market currently under Crinesity's care. We are gonna continue growing that out over time. To become that standard of care for patients. Appreciate that perspective, Kyle.

We will move next to Jay Olson with Oppenheimer. Your line is open.

Hey, guys. Congrats on the quarter and congrats to Samir. Our question is related to the future of your psychiatry franchise with data readouts for osavampator and dereclidine expected next year. Do you have the commercial infrastructure that you would like to have to launch those 2 products? Or, I guess, how are you thinking about building out that organization? Thank you.

Thanks, Jay. So, the way I would characterize it is that we have a really good foundation for a future infrastructure that would be required for either osavampator or dereclidine or both. As you know, we have a substantial footprint today in psychiatry, as well as in long term care. And a very strong reputation with that provider communities. You know, if you look at the profile of either of those 2 medicines, it might require us to, bolster our teams or to, do some reorganization work. But I think that we are in a very good place in terms of being able to leverage our existing foundation. And you may recall that when we were talking about the planned expansion of our INGREZZA team last fall, We said that the value of that expansion was not only to accelerate the growth of our INGREZZA business, but also to set us up nicely for future launches of our phase 3 psychiatry assets. So I do not anticipate any near term changes to our footprint. But, certainly, I think we are well positioned, you know, to accelerate you know, those adjustments to our commercial platform. On the other side of positive Phase 3 data.

I think that would be a great day if OSA, in particular, is positive as you think about going into primary care to be able to help those with major depressive disorder. That would require a step up in overall investment within SG and A, and 2028-2020 timeframe, but I think you would agree with me that would be something we would all enjoy to have the privilege of doing. But in the near term, you know, I think we are focused on executing, as Eric said, with INGREZZA and continuing to expand the impact we are having across the psychiatry community today.

Great. Thank you.

We will take our next question from Akash Tewari with Jefferies. Your line is open.

Hey. Thanks so much. Just okay. A few questions on your obesity efforts. So for 2.12 thousand the CRF2 asset, what do you expect for monotherapy weight loss and muscle preservation in your phase 1 trial when you get into obese patients? And then for 1.97 thousand your triple g, is that already in the clinic? I am surprised you are able to start a combo trial with the CRF2 this year without any monotherapy data. And then finally, when we think about the combo, any sense on when we would be able to get the first full of cut first full cut of data there? Thank you.

Thanks so much for the questions. With respect to our CRF agonist, obviously, we are very excited about this molecule. This is our first molecule in the clinic. We are currently accumulating a phase 1 data and we are due to have a signal seeking study readout next year with respect to both weight loss and also lean mass preservation. So that is really exciting for us. I am not sure if I will comment specifically on the exact bar we are looking at, but clearly, we are looking for a robust effect. Not just in weight loss, as I said, but also muscle mass preservation. We have other molecules behind CRF2 with respect to our obesity portfolio, which will be shortly the clinic.

We will move next to Josh Schimmer with Cantor Your line is open.

Thanks for taking the question. How are you thinking about the ability to smooth top and bottom line growth through the 2029 INGREZZA IRA implementation year? And does the answer to that question depend on your Phase III readouts next year? How do you expect that play out under various pipeline scenarios? Thank you.

Thanks, Josh. This is Kyle. Obviously, we are keeping an eye on our MFP to IRA outcome Those discussions will start next year, and, certainly, we will keep everyone updated once we know our MFP that would be applied to INGREZZA in 2029. But I think overarching, what we see in the evolution of our commercial portfolio are medicines that are growing over that time frame as well. So we will think we will we will end up being in a good position there to see continued top line revenue growth, through the end of this decade and beyond On the, earnings side or I should say on the income or an expense side of the equation, we also have phase 3 trials that will be sunsetting over that same time frame as well. Our pipeline switches more to an early to mid stage pipeline, excuse me, And I think that is going to be more or less a view into our steady state portfolio as we get to the end of this decade. And it all goes back to what we shared at the beginning of this year, in terms of expectations around new phase 1, phase 2, and phase 3 starts. So I like what we have in terms of the company and how we set it up. And we will keep people informed over the next couple, of years as we get closer to 2029.

Yeah. EPS variability is really going to be based upon, as you said, the impact of the IRA implementation in 2029. But on the expense side, as said earlier, is if osavampator is positive, we will spend in advance of sales to build up that sales force in that market. So I think you will have episodic investments that, you know, may lead to some earnings variability, but our north star is to grow revenue over the long term. And I think from those investments, we will have very nice earnings growth as you look into the 20 thirties.

We will move next to Brian Abrahams with RBC Capital Markets. Your line is open.

Hey, guys. Thanks so much for taking my question. It seems like you are seeing really nice growth in the prescriber base for CRENESSITY. I guess I am curious what proportion of your target practices are still not using Crinesity at all? What are this point, what are some of the barriers for them here in at this stage of the launch? And how might you, expect to overcome them? Thanks.

Yes. it is an interesting question. Think the way I would characterize it is that, you know, we are seeing really nice expansion of new prescribers each quarter. And at this stage, you know, we are still I would call it early in the overall commercial ramp. And so there is there is a long way to go. The reason I sort of qualified my comments a little bit is that as we learn more about this market and with our patient finding opportunity, there is some movement in and out of our target list over time. But overall, the feedback's been very positive. Most of the physicians that have tried CRENESSITY have only treated 1 patient so far, and I think that is a function of 2 things. 1 is the flow of patients. Into their practices, especially in the adult setting. Patients only come in maybe once a year. So it takes time, if they have more than 1 patient to see them. And then the second thing is really this what we call the long tail of this of this market. there is really not that many practices that have more than a handful of patients, and there is a lot of lot of physician practices that have only 1 or 2. So, ultimately, you know, feel really good about the growth that we are that we are that we have seen, and we talked about this very steady and consistent pace that we are on. I think that is mostly, a testament to the patient finding efforts and, of course, the execution by our team. Thanks.

We will move to Sean Lehmann with Morgan Stanley. Your line is open.

Good afternoon, Kyle and team. Hope everyone is well. My question is on the launch trajectory of CRENESSITY. You keep handily beating our numbers. I am just wondering how the drug performs against your own internal expectations. Is it falling in line? And if so, when do you when will you be comfortable giving us guidance? If it is beating your expectations internally, what are some of the key areas that it is it is doing that?

I would say it is quite close to what our internal expectations have been. But with that said, we are learning a tremendous amount each quarter. I would say from the beginning of launch, we have been very encouraged by the feedback that we are getting by clinicians and then also the high rates of persistency have been quite strong. And we are we are seeing a lot of the benefits and hearing those back from clinicians in regards to the longer term outcomes and the benefit there. So we are still really quite early in launch, only 6 quarters in. it is premature for us to start thinking about giving a more formal guide. But I would say our internal models are getting closer to the numbers that we are delivering, but still, I would say to the team, keep over delivering. They have done an incredible job developing a new product that is in the market for the first time in over 70 years. And a lot of learning going on and a lot of excitement. So kudos to the team Well done, and we will address the guidance piece to your question as we get later in the year to next year.

Thank you, Carl.

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

Yes. On VICAT, I just want to make sure I understand, Matthew, what you are saying. Are you saying that we should expect sales to be roughly about the same in 3Q as 2Q? And then 4Q should show some incremental growth versus 3q. And the reason is because of this gating issue of timing issue, whatever you wanna call it, of patients discontinuing from the bolus that occurred you know, so called 6 months ago or so, something like that. And then just if I could, just another question. Just curious what the R and D team thinks about any learnings from the Maplight data reported earlier this week. Thanks.

Yeah. Regarding VICAT, you know, I think you said it correctly, but I would go back and just say we have only had the product for 6 weeks. And it is a market that we have, we are incredibly excited about. We are hearing great feedback from clinicians alike. As you said, this is more of a function of getting through some of the bolus of discontinuations and then implementing some of the things that Eric laid out in terms of driving additional patients to being helped with their PWS. So from an expectation perspective, I think what you said aligns with what I was trying to describe.

And I will take the, the map like question. Maybe just to start with where Matthew left off on. BICAT. Just wanna make sure everyone appreciates that we are going through an organ integration of company. And, obviously, that can be a little noisy, as you work through that just as a Salesforce expansion can be. But as you know, we are quite skilled in the art of Salesforce expansions across INGREZZA and Cranesedy, and we have all come out on the other side much stronger, and we believe that will be the case for VICAT. In terms of map light, we did see their data come out here the past couple days. I think it is a good data point for further validating the orthosteric approach for using a muscarinic agonist. Although their approach is entirely different than our own. it is worth calling out those differences here. Very similar to Cobenfy, the approved medicine that, utilizes the muscarinic mechanism, The Maplight approach also, requires an add back muscarinic antagonist to manage, side effects. Our approach with dereclidine is the only approach, a first in class approach, using a selective M4 agonist that works just alright by all fine by itself. It does not require anything to add back for mitigating side effects. But we know at the end of the day, efficacy gets your foot in the door, it is really what you do on the other factors that allow you to win. Things like safety and tolerability. Things like ease of administration, and that is where dereclidine's really gonna shine. What we saw in our phase 2 trial very clean GI profile, no weight gain, no food effect, once a day, no titration. that is how we are gonna win here just as we have seen with other antipsychotics across the spectrum. From low to high efficacy. They all went on safety, tolerability, and ease of administration. Thanks.

We will move next to David Amsellem with Piper Sandler. Your line is open.

Thanks. A VICAT question. Can you clarify how much of your discontinuations are from edema? And regarding the management of edema, what are you going to be doing to sort of help patients and practitioners manage through that so as to minimize discontinuation due to fluid retention? Thanks.

Yeah. This is Scott. I do not think we are gonna get into the nature of the discontinuations. But I will say, just like any medicine, especially 1 that you are inheriting, acquiring, is that there is always, the opportunity to improve messaging and education. I know that is gonna be a big part of what our team looks at. And the messaging education is the same, again, across all medicines that we look at for caregivers, for patients, and for physicians. And when it comes to, Bicat XR, obviously, you look at even something as simple as a dosing regimen. it is a titration schedule that is required through a weight based mechanism. that is unique. So making sure that you can educate across that appropriately also setting the right expectations in terms of efficacy. This is not like a pain medicine where you see relief the same day you take the medicine. It can take months. For the hyperphagia to improve. So these are all things that we are working through right now. And we will continue to work with the team to get in a really good spot as we look to fully bring the Soleno team onboard here to Neurocrine. And leverage the learnings on both sides to do what is best for patients here.

We will take our next question from Ashwani Varma with UBS. Your line is open.

Hey, guys. Thanks for taking my question. So maybe send the perspective of CRENESSITY, I wanted to get your thoughts on the competitor dynamic here. So for 2 minutes, would they acquired, they did note that, there were 7 LFT cases versus the prior disclosure by Kinetics, which was 2 cases. But they still end up paying a pretty hefty premium I just wanted to understand from your perspective, what do you think drove that? Is that something that ultimately signals to you that CAH can be very big market or is it possible that the LFT elevation is actually a nonissue? Thanks.

Yeah. Thanks, Josh, for the for the question. it is really hard for us to comment on the competitor or any competitors. And in the spaces that, we work in. All I can share with you is the excitement that we have around our own medicine. I will go back to the catalyst data that we have 2 year data, 35 thousand patient weeks of exposure. And accumulating over time where we are able to show 70 percent of patients, at the 2 year period were on a physiologic dose of a GC, and 70 percent of patients were at a physiological concentration of their androgens. that is a pretty good air to be in, for CH and really for any medicine. And we will continue to hopefully accumulate more data of that kind in type as time moves along to show the real benefits for patients.

We will take our next from Myles Minter with William Blair. Your line is open.

Hi. Congrats on the quarter and thanks for taking the question. I just wanted to hear your thoughts on the Chronicity sort of peak opportunity here. Are you still describing that drug as a blockbuster opportunity? I only ask because recent acquisition seems to your competitors saying that might be a $3 billion market or greater and your on an annualized basis, the best part of $750 million already. And, Eric, you said you are really, really early on in the launch. I am just wondering whether a blockbuster drug is the right way to think about this or, like, that multi dollar sort of claim that the competitive acquisition made is more relevant here? Thanks very much.

We are gonna take this to the highest number that can and help as many patients as possible, Myles. I think you said it quite well. The trajectory so far has been very, very strong, very nice, and I think it reflects the great need in the market, the great product we have, and also the great team. When you look back over time, at other rare disease launches like this, you can see peak penetration between 3.05 thousand% for chronic type medicines. So you know, when you look at what the peak opportunity is, that is the ZIP code. I know that is a pretty broad range. And we are gonna work to getting to as high up in that range as possible. But, yeah, you can get to a really nice figure quite quickly But it really comes at the end of the day a focus on helping as many patients with possible for their for their CAH. Myles sense. Thanks, Matthew.

We will move next to Rudy Lee with Wylie Research. Your line is open.

Hi, thanks for taking my question. I have a question for the pipeline, just a quick follow-up. Given the trajectory of coblimbi and the feedback I am just curious on your thoughts. On the opportunity and maybe just talk about your overall strategy during the Muscarini franchise as you have multiple products maybe targeting different indications. Thanks. Hi. Thanks, Rudy. This is Samuel here. Really appreciate the question on the muscarinic. So, you know, we have got 4 shots on goal here with our muscarinic franchise directly in 68. that is in Phase 3 right now for the treatment of schizophrenia and phase 2 bipolar, so phase 2 study right now ongoing in bipolar mania. All studies remain on track timeline wise there. Next generation NBI 75, that is an m 4 preferring m 1 m 4 dual. Right now, that is in a phase 2 study for the treatment of schizophrenia. Where we see opportunity there is the potential for a long acting injectable. This is a class of medicines that has generated significant commercial sales for other companies here, and we view this as the 1 and only potential LAI within the muscarinic space. NBI 9, that is earlier right now. it is an m 4 dual as well that we are studying in an early study in Alzheimer's disease. The view there is to take that into Alzheimer's disease psychosis, and then we have got a fourth compound, NBI 7, that will be soon starting a phase 2 study in Alzheimer's cognition. Overall, we feel like we have a best in class muscarinic franchise here. Really looking forward to getting the direct leading data next year and going from there.

The only thing I would add to that, these are all these are all, orthosteric agonists that do not require any add back to block side effects. They are selective on m 1 and m 4. They are unique in that regard and puts us in a really unique space in the muscarinic category. Very helpful. Thank you.

We will take our next question from Sumant Kulkarni with Canaccord. Your line is open.

This is a bit of strategic 1 that has long term financial implications. With each commercial product you now have, there is typically been an aspect of pioneering commercialization with the first approvals for the respective indications. But your pipeline indicates includes candidates in large markets where not only do several product exist, but the competitors are typically much larger organizations as well. So could you share any targets for what a steady state longer term operating margin target might look like for Neurocrine as it you yourself grow a lot larger?

Yeah. I will let Kyle talk about the Subir or sorry, the strategic, aspect of how we are gonna compete against larger guys in these markets, but I also would comment that Eric and team have done a heck of a job in developing markets and feel like we can compete quite well with medicines like, the muscarinic and also osavampator. Not gonna give long term operating margin guidance, but you can see we are becoming quite a profitable company. We are operating income on a non GAAP basis is over 30%. So I think our focus right now is invest on the SG&A to grow sales much as possible and then also to advance the pipeline and be able to get to these opportunities where we can compete in some of the larger markets where we believe that we can win.

And maybe just to add to that. This is Kyle From a strategic perspective, what we are doing is setting up the pipeline to have a portfolio of not only first but best in class medicines, a neurology, psychiatry, and endocrinology as well as immunology. These are areas that, we think we can compete in a number of ways, either through the merit of the molecules that we design or ultimately in ownership of particular mechanisms that are unique to Neurocrine. You know, we have talked about obesity on this call as an example. We are leading in this category, we believe, with a CRF2 agonist, which is quite novel. And, of course, we know a lot about the biology being this being or this being the founding biology of the company. So, ultimately, what we do by using this approach is diversifying risk across different therapeutic areas. We appreciate all the psychiatry programs that we have, and we believe we have all winners there. But we also know that the full profile of those assets are fully known until the other side of phase threes. We balance that by actually being in some of these larger disease states like obesity, where we have biomarkers, objective endpoints, and the ability to see data in phase 1 b studies. So overall, I think what we have done is we have really leveled out the portfolio and ability to play for some big wins on some larger opportunities as well as stay with within a wheelhouse of more traditional neuropsych programs as well. That you are used to seeing. But overall, it is gonna set the company quite well. Up over the long term.

We will take our next question from Danielle Brill with Truist. Your line is open.

Hi, guys. Good afternoon. Thanks so much for the question. A follow-up on Crinesity. So you guys highlighted really strong growth in your prescriber base, but can you comment on trends in repeat prescribing? I think you noted roughly 2 thirds of prescribers have only written a single prescription on your prior call. Are you seeing existing prescribers begin to treat more patients, or is growth still being driven primarily by adding new prescribers? And then as you look forward, where do you see the bigger opportunity: expanding prescriber breadth or penetration from the existing base. Thank you.

So the I guess the way that I would characterize that, it is a little bit of both in terms of depth versus breadth. You know, we still are adding a substantial number of new prescribers each quarter. And to date, most of the prescribers that have tried have only treated 1 or 2 patients. Now this is a market that is an inch deep and a mile wide in the sense that, you know, there is a limited number of practices that have more than a handful of classic CAH patients. And then there is a lot of CH patients that are out there. In the in the community, and a lot of the physicians that treat them might only have 1 patient. So I think that, you know, we will continue to see this dynamic of a lot of physicians having only 1 or 2 patients under treatment. But, you know, at this stage of the launch, only about a year and a half into it, essentially, we are still seeing a lot of adoption by new prescribers, and we think there is a ways to go in terms of building that prescriber base over time.

We will move next to Igole Nochomovitz with Citi. Your line is open.

Hi, great. Thank you for taking the questions and my congrats on a strong quarter. My question, I had a quick question on Crinesity. Regarding the rarer subtypes, specifically the 11 beta hydroxylase patients, what is the status in terms of progress getting the payers to cover that subtype I am curious there. And then quickly on VICAT, do you have any comments with respect to ex US strategy, and where does that fit in terms of your relative prioritization, with regard to that? The asset? Thank you.

Hi. I just wanna, reinforce that the coverage and reimbursement for Cranesity has been excellent. And has really exceeded our expectations from the very beginning of the launch. You know, from a coverage perspective, typically what is required, this is a specialty medicine, and the physician has to fill out a prior authorization, typically, they are required to attest that the patient has classic CAH, usually, not defining what particular subtype. Genetic subtype they have. That they are 4 years of age or older and that they are currently on glucocorticoids. For the vast majority of patients, those are the coverage criteria. And we have seen really high claim approval rates, but we have seen that claims tend to get approved pretty quickly. And that it is very affordable for patients with the majority of patients. Actually, over 90% paying $10 or less per month. So really good on the reimbursement side.

Yeah. In terms of, VICAD XR and ex US, our first priority right now is fully integrate the team and make sure that we are doing everything that we can, to help the patients here in The US with the approval. As you may recall, Soleno did withdraw the EMA filing for review during the closing process of the transaction. I think once we get our hands around the integration and complete that and move the medicine forward here, we will go back and revisit the in territories outside The US. In the meantime, for Europe, all patients that are currently on VYKAT XR will continue to continue on their treatment, and we will look at some named patient program types of vehicles to help other patients that may wanna have access in that region. Thank you.

We will move next to Basma Chayati with Guggenheim. Your line is open.

Hi, good afternoon. Thank you for taking my question. So on the Friedreich's ataxia program, what should we expect from the 2027 Phase I readout? More in details. Which tissue compartment will you report for taxing protein levels from buccal cells, skin, or muscle? And what would you view as a proof of mechanism? And also, will you report also clinical results together with the biomarker data? Thank you.

No, I appreciate the question. We are excited about the Friedreich's ataxia gene therapy program here at Neurocrine. We will be looking at starting clinical development later this year. Then once we get that study up and running, we will look forward for actual data in patients towards the end of next year. The nature of what we will be sharing, I think, will determine that over the next couple months into the beginning of the year. And, hopefully, we will have some more commentary around our R&D Day in December.

We will move next to David Hoang with Deutsche Bank. Your line is open.

Hi, there. Congrats on the quarter and thanks for taking my question. So I was curious to get any feedback that you guys may have or your latest thoughts on the competitive dynamic and threat from competitor in the VMAT inhibitor space. So I think your competitor also printed a very strong quarter. They have talked about $3 billion in peak sales, and continued uptake of the AUSTEDO XR product. And so as you look over the next few years, recognizing there is some pricing dynamics there, just what is your, I guess, thoughts on how the market share may play out 2 products and if the pie will continue to keep growing in TD, or will there be any share shifts between products. Thanks a lot.

Yeah. I will just start off by saying that the, you know, 10 years, almost 10 years into the launch of INGREZZA, the TD market continues to grow very rapidly. You know, we see that there is still a substantial number of untreated patients and even undiagnosed patients out there. And so our focus remains on driving awareness, driving diagnosis, and then, obviously, being able to educate providers on the unique benefits of INGREZZA. And I think that and obviously also, you know, continuing to provide strong reimbursement support. And the results speak for themselves. INGREZZA has been the most preferred and the most prescribed VMAT2 inhibitor since day 1 and continues to do so. And even looking at the most current quarter, you know, with strong market growth for VMAT2s, INGREZZA outgrew the market. And so, you know, we can expect to continue to see that momentum carry forward through the balance of this year. And as Kyle said earlier, from a coverage reimbursement perspective, you know, we expect to have good coverage in 2027 and 2028 that would enable continued strong growth in terms of adoption.

So overall, just very pleased with our performance. And we will let the results speak for themselves.

We will take our next question from Evan Seigerman with BMO Capital Markets. Your line is open.

Hi, Thank you so much for taking my question. I wanna touch on osavampator MDD is clearly a large market. You are very enthusiastic about it. Just walk us through kind of what you are solving for that the existing antidepressant strategies really do not do well. What do you need to show in a phase 3 for this truly to be viewed as differentiated rather than incremental. Thank you.

Yeah. Thanks for the question. So just for context, osavampator is an AMPA potentiator, and we think provides unique advantages from a differentiation point of view from the existing standard of care. With respect to efficacy, we are expecting greater efficacy, in individuals who have already been unresponsive or not so responsive to a whole slew of other antidepressants with different mechanisms. But secondly, and also just as important, a really nice safety and tolerability profile That was 1 of the most impressive things actually with respect to our phase 2 SAVITRI data. Was the safety and tolerability, and the implication is long term compliance with this medication.

And that does conclude the question and answer portion of today's call. I would now like to turn it back to Kyle W. Gano for any additional or closing remarks.

Thanks, everyone, for joining us today. We appreciate your time and thoughtful questions. We look forward to continuing the conversation with many of you. Certainly at the investor conferences and meetings throughout the remainder of the year. Until then, thanks again for your support and interest, and have a great afternoon and goodbye for now.

Thank you. This brings us to the end of today's meeting. Appreciate your time and participation. You may now disconnect.