Welcome everyone to the 42nd annual J.P. Morgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at J.P. Morgan. I'm joined by my squad, Laraya Hall, Malcolm Kuno, and Priyanka Grover. Our next presenting company is Neurocrine, and presenting on behalf of the company, we have CEO Kevin Gorman. Kevin?
Thank you, Anupam, and welcome everyone. I wanna say a big thanks to Anupam and the J.P. Morgan team for the opportunity to be here today. We will be making forward-looking statements, so I direct you to our most recent SEC guidelines. Neurocrine is a company that has traditionally taken on drug development in areas that have never had drug development before. I think that when I show you our pipeline, our commercial activities, you'll see that to be true. That is something that we feel passionately about. It's not that we... All of our programs, there's never been drug development in, but in our most advanced in our commercial programs, that's exactly the case, and we're very proud of that. We're a neuroscience company.
We've always been a neuroscience company, but neuroscience is more broad than what you may have thought of it in the past. That means it's not only neurology, but it's neuropsychiatry, it's neuroendocrinology, and I think in the very, near future, we'll be talking about programs that we have in neuroimmunology also. So we've been in business for 32 years now, Neurocrine. For about 26 years, we were a pure R&D company. It's only been in the last six years that we've been a fully integrated commercial company, and our lead product being INGREZZA, for tardive dyskinesia and for the treatment of, movements, the choreiform movements in Huntington's disease. Again, a indication, tardive dyskinesia or TD, that never had drug development, ever. We were the first drug ever developed into this, into this indication, and it's worked out quite well.
We've also been in neuroendocrinology and, with our partner, AbbVie, again, a compound that was discovered and developed at Neurocrine, elagolix, now known as Orilissa and Oriahnn in women's health disorders, is on the market. And then we have a couple of other compounds that we've brought in through an acquisition that are gonna be a great complement to what I think is one of the most exciting things I'm gonna talk about today, which is our drug crinecerfont, which we, presented two phase III readouts late last year that beat even our expectations. And these are going to be a, a wonderful, tag-along, as we, knock on wood, get that drug approved and then brought to market. Here are the numbers. They're, they're great numbers. I'm exceptionally proud, of these numbers.
You know, it's not that long ago I could never have imagined that Neurocrine was gonna be in this kind of position, to have a multibillion-dollar franchise that is growing by, you know, 20% or more every single year, even after six years on the market. And yet, we've only touched the surface of this. We've basically we're treating you know, 10% of the addressable population out there. So it has got a lot of legs to it. You know, at the end of last year, we got the approval for Huntington's disease, and also, I think very importantly, we settled our four ANDA litigations to take us out to March of 2038 with exclusivity there.
So not only do we still have a huge opportunity in the marketplace in front of us to be able to help these patients, but we have an amazing runway in order to do that. And we have a very, very nice portfolio to back it up, and that's what I'd like to spend most of my time today, 'cause the numbers don't tell even the most exciting part of our business. We have this large pipeline. We have mainly dedicated with small molecules. What we're not going to talk about here today, but we talked about it just last month at an R&D day in great depth, was the transition that Neurocrine has been taking over the last five years.
But you're going to see come into fruition next year is the biologics and the gene therapies that we have been developing with partners and solely alone in-house. And that's what you're going to see. We're always going to be dedicated to our bread and butter, which is going to be small molecules, but you're going to see this pipeline that we have transition over into mainly a large molecule. And we made that decision about 5 years ago because we truly believe that neuroscience, its time has come. What we've learned from neuro-oncology is that we can actually change the course of disease, and we believe that with CNS diseases, we can be curative by the end of this decade. And our goal is to build the leading neuroscience company in the world, and to do that, you need to cure diseases.
So as I said, we have this large, pipeline that we have. We have 14 compounds, in clinical development right now in 17 different indications. I'm not expecting you to try to read all this, especially from, from that distance, but if just a few things I would like to highlight, out of this pipeline. Number one is, what can you expect from us this year in phase II readouts? Well, there's going to be five phase II readouts that are going to be taking place, and it does, run the gamut between, neuropsychiatry and also neuroendocrinology here. I would say one of the most exciting, readouts that we're looking forward to is our M4 agonist. That's in phase II clinical trials.
I think two companies, Karuna and Cerevel, I guess we can call them now BMS and AbbVie. But Karuna and Cerevel did a marvelous job in really showing the industry that there is the M4 agonism, that receptor system has a real role to play in psychiatric conditions. What I'm very happy about at Neurocrine is that we have the broadest and deepest muscarinic pipeline of any company in the world. So as I just said, we have the phase II data in M4 and schizophrenia that's coming out. But the muscarinic system is a number of receptors, and we are going to explore every different type of an M1 agonist, M4 agonist, and even antagonism here. So what you see that we have in our pipeline is behind the M4 specific agonist. We have M1 specific agonist.
We have balanced M1, M4 agonists. We have an M4 preferring agonist that has M1 activity and an M1 preferring agonist with M4 activity. This is an important system in CNS diseases, and we have the tools now in humans to rapidly and simultaneously explore these different pharmacologies in a number of different diseases, both neurological and neuropsychiatric diseases. We also have an M4 antagonist, so playing both sides of it and the antagonist for movement disorders. So in the next two to three years, this is going to form, I think, a huge part of Neurocrine's late-stage portfolio that's gonna be in there. But what I'd like to spend a lot of time today is on crinecerfont for a rare genetic disorder called congenital adrenal hyperplasia.
As I said last year, late last year, we read out two phase III clinical trials, one in pediatrics, one in adults on this. The results were spectacular. I'm not going to go over the results today, because that is all over our website. We've done multiple presentations, and importantly, later this year, we look for presenting at a large medical conference, the results in a lot more detail than what we have thus far, and then in a premier publication. But what I do want to do is because I think many of you might be new to what is CAH. So as again, I said, it's a genetic mutation that takes place in a fundamental multi-organ system for life, not only in humans, but in all vertebrates, have this what's called the hypothalamic-pituitary-adrenal axis. This is fundamental to life.
It's complicated, but we don't need to know all the complications of it. There's a factor that's released by the hypothalamus that stimulates the pituitary. The pituitary, then in response, releases ACTH, which then acts on the adrenal glands, and the adrenal glands, for today's presentation, do two really important things: They make all of the androgens in our body, and number two, they make cortisol. Absolutely necessary for a human to live. Like all endocrine systems, they have feedback regulations, so cortisol isn't there just to do its primary purpose throughout the body. Cortisol is also then feeds back to the pituitary in a negative way, feeds back into the hypothalamus and says, "Okay, stop. Stop this release of ACTH." So that way, you have balanced androgens, balanced cortisol, and so it's a diurnal rhythm that takes place in this system.
Unfortunately, in CAH patients, they are born without the ability to make cortisol. So all these babies died until the mid-1960s, like 1963, 1964, when hydrocortisone was brought to the market. Hydrocortisone was brought as an anti-inflammatory. The endocrinologist immediately recognized, "We can save these, these children now. We can start giving them hydrocortisone." First thoughts were, "Well, all we need to do is give them replacement doses of hydrocortisone, and we're good to go. They'll be fine." Yeah, forgot about that negative feedback regulation that cortisol does, that hydrocortisone isn't really good at. So physicians are really left in a very, very bad spot. Fundamental for all, for all medical professionals is do no harm. Endocrinologists treating CAH patients have no choice but to do harm. They've got one drug, that's it.
Developed in the 1960s, and it's hydrocortisone. So there's this balancing act from birth all the way through end of life that they have to do with these patients. Do I try to keep the hydrocortisone levels that they take every single day? Do I try to keep them really low, but let their androgens run wild in the body? That's one choice. You do that, you're going to have infertility in women, ambiguous genitalia that takes place. You're going to have testicular tumors in males. You're going to have bone disease. You're going to have very short stature for patients as they develop. There's a number of problems, and I won't even go into the psychiatric problems of having very high dose, very high levels of androgens in the body. Or you give very high levels of hydrocortisone every day, super therapeutic levels of hydrocortisone.
Oh, well, now what are you left with? You're left with obesity, diabetes, bone demineralization. You have profound effects and fractures on these patients, and you have short stature then again. So what do you do? You have this balance, and they're just as throughout the patient's life, they just try to let one go out of control for whatever period of time is tolerable, and then let the other one go out of control. That's a horrible place for the physician to be in. That's a lot of suffering for the patient to be in. What does crinecerfont do? For the very first time, these patients, and as our phase III clinical trial showed, crinecerfont takes care of the androgen excess. We've shown it absolutely that you take crinecerfont, orally active pill, and now you can bring androgens down to normal levels.
Forget about hydrocortisone for the time being. So you can bring the androgens down. They still need to take hydrocortisone because they still can't make cortisol. But now the goal always was the dream that we had. With the androgens under control, you don't need the supraphysiologic doses of hydrocortisone to get them under control. Can you bring those steroid levels down dramatically? Perhaps. Bless you. Perhaps even bring them down to physiologic. That was the dream, and that's what the phase III data allowed us to see. And as impressive as that phase III data was, that you can bring the androgens down to normal and then bring exogenous hydrocortisone, just replacement levels, the safety data in crinecerfont is equally as impressive, safety and tolerability. I think you can see that my enthusiasm is palpable.
I never thought that at one company, we're going to see another drug, which was INGREZZA and tardive dyskinesia. The phase II and phase III program, there was tremendous control of abnormal involuntary movements, great safety profile. I would say that this compound now exceeds that in CAH. We're really fortunate. It's good enough for me to talk about this, but I really think what is most important is let's see what the treating physicians have to say about it. So again, in that R&D day last month, we were able to bring a panel up of CAH patients, CAH caregiver, a mother of a child with CAH, and treating physicians, and that was the highlight of the whole day. For everyone that was there, that was the first time they've ever seen, met, heard from a CAH patient.
Can't do that here, but I'll try the next best thing. So let's look first at three endocrinologists who treat actually quite a number of CAH patients.
A newborn screen result comes back, and we're meeting with families to give the diagnosis. Obviously, we need to convey that this is a critical diagnosis that will require lifelong care.
Definitely, it's a lifelong challenge for the patient. It is not an acute condition. It's a chronic condition for the rest of their life.
A main goal of therapy, as I mentioned, is to normalize androgens. However, it becomes problematic if in order to do that, one has to use significantly high doses of glucocorticoid, and you're getting stuck between a rock and a hard place.
When we are working with families with CAH, and we're deliberately trying to lower the androgen levels by raising the hydrocortisone dose, what we risk are the side effects of elevated steroids. On the other hand, when we try to lower the glucocorticoid dose and potentially allow the androgens to rise to an excessive level, we deal with a different set of problems.
Very excited about the possibility of a new class of medication to independently lower androgen production, thus allowing a lower dose of the glucocorticoid and as a result of that, minimizing side effects from the glucocorticoid medication, which is a big part of this. You have lower androgens and hence the need for a lower, more physiological dose of glucocorticoid. I envision that that is the way of the future. If that works, then they will have less side effects from the glucocorticoids, the osteoporosis, the diabetes, obesity, and less risks from high androgen levels related to fertility, early puberty, short stature, and the like. I think the life of a CAH patient is going to be much better.
And now from two parents of CAH patients and then a young woman who has CAH.
You know, all the family wanna come in and visit and meet her, and one of the things that my father said to me was: "I'm so sorry, but I'm never gonna be able to watch her for you alone because I can't give this baby a shot." While I appreciate his honesty, it was also something that I was just never prepared to have to hear.
My pediatric endocrinologist would have us get X-rays every six months or a year just to make sure that everything looked all right. I am five feet tall and 25 years old. I am a lot shorter than my peers. I have a younger sister who does not have classic CAH, and she grew about nine inches taller than I did.
We also do a bone age scan twice a year now. We have to keep a close watch on his levels. The risk of over-treatment or under-treatment would impact his growth. There's a struggle with weight because of the constant use of steroids.
My main symptoms of CAH would be my energy levels. I feel like I have a lot of energy fluctuations throughout the day. There are really big emotional costs that come with worrying about your health all the time.
The doctor always just tells us to look for signs of, like, early puberty. There's a lot about CAH in women and females, that's different from males with CAH. Lucy had to have surgery when she was six months old in order to correct a urogenital sinus. Had to have her vaginal opening corrected. She may have to go for additional surgeries as she gets older. Menstruation may be an issue. There's going to be a psychological piece to this as well.
Steroids have often come up as a potential thing to be aware of. What are the costs going to be for 40 years of use of this?
I think children with CAH and adults with CAH just need more medical providers and more choices for types of medications and types of treatments that they can choose from as they get older.
This is a really difficult disease for everyone that's involved in it, the parents, the kids, all through life. There are transitions that they have to make when you're talking to parents, when they're dropping their child off at college, and the child is terrified now. It's the first time they have to try to manage this disease on their own. And as I said, the endocrinologists are in a lose-lose situation. Some of them just really hate if a CAH patient comes through the door. It's too damn difficult. It is hard. It is complicated. But what crinecerfont does is it makes it very simple. Crinecerfont can take care of non-steroid, takes care of the androgen excess, and therefore allows the glucocorticoids to be normalized that you take each day.
It will be a life-changing medicine for these patients, and we look so forward to bringing this to market. As I said, we'll be filing the NDA later this year. We got breakthrough designation from the FDA late last year, which is really nice. As soon as they saw the data, they gave us breakthrough. Currently, on this drug, I can feel confident, which is new information today, that says that we will have intellectual property protection at this point in time, at least until 2035. Much as we did with INGREZZA, we have lots of active efforts where there is going to be more and more patents going into the Orange Book over the next two years, so I would see us as improving even on that, quite a bit. So very important to us.
A lot of work that we're doing here, and even now, we're working on the second generation of crinecerfont. So we have a lot of things that we're going to do in 2024. We're advancing five phase I programs. That's the largest number of phase I programs that we've ever done, putting it in. As I said, we have five phase II data readouts that are taking place, and you're going to start to see that we have developed internally a sustainable R&D engine. It's one thing to make that big leap that very few biotech companies are able to do, to be a commercial company with important blockbuster, multibillion-dollar products. Got another one coming out behind now with crinecerfont. But can you show that you can generate that internally?
That's what you'll be seeing from us because we do believe we have that internal engine now. What about longer term? Longer term, the approval of crinecerfont next year in both the U.S. and in Europe, and we plan on commercializing this ourselves in Europe, so this is going to be the drug that globalizes us. As I said, we're going to be a large molecule company where we're going to be agnostic to what the therapeutic modality is in all of these neuroscience areas that we're going into. And so that means that we look that in 2025, we'll have two gene therapy programs in the clinic. We are advancing. Our goal is to advance 20 development candidates between now and 2027.
It's an ambitious goal, but it's one that I think that we can actually meet and potentially beat. The clinical pipeline right now is weighted towards psychiatry. You're going to see that weighting go more to neuroendocrinology, neurology, and neuroimmunology. Better balances between the biologics and the small molecules. And we're going to go after diseases that are still very much underserved, but have been validated. That have been validated genetically to a great extent, so that should increase the rate of success that we have. And if we're, programs die, compounds don't work. That's the name of our business. That's just the way it is, actually, most things. We, like every one of my colleagues that you've heard, you wanna, you wanna, you want that to happen, those failures to happen earlier rather than later.
And then with INGREZZA, as I said, we have a long runway. We have so many thousands of patients still yet to treat. So that is the one thing that is going to be an engine for us for years to come. The employees at Neurocrine are really proud of what they have accomplished, but they're much more excited about what they're going to accomplish. With that, would like to bring my squad up here, who actually does all the work, and-
My squad, too.
Yeah. Yeah, I know, but we all know that. And then we'd be more than happy to take your questions.
While they're coming up, I just wanna remind everybody that, and many of you have heard this, there are three ways to ask a question. Old school, raise your hand, I'll call on you. Kind of a new school way, which is, if you have access to the portal, submit your question, I'll read it off, from the iPad, or you can just email me. But I wanted to-
Could I just really quickly-
Oh, yeah.
Before you start, could each one of you-
Sure.
Just introduce yourselves, please?
Oh, hello. Can you hear me?
Yes.
Okay. Yeah, Matt Abernethy, CFO. Been with the company the last six years and just thankful to have this opportunity and excited about everything that Kevin highlighted here today.
Thanks, Matt. Kyle Gano, Chief Business Development and Strategy Officer. Been at the company for over 20 years.
Jude Onyia, Chief Science Officer, and I've been at Neurocrine now two years. That's good.
Hi, everyone, I'm Eric Benevich, Chief Commercial Officer.
Eiry Roberts, Chief Medical Officer. I've been with the company six years.
Okay, jump right in then.
All righty. So, what would you say are the biggest challenges that you see in terms of building the CAH market?
Rather than listen to me talk anymore, Eric?
Yeah, I think that, you know, obviously, we're really excited about the opportunity. You know, we see a patient population, both in the U.S. and in Europe, that are in dire need of new treatment options. You know, I think the videos help to frame that up nicely. But that doesn't mean that introducing a new treatment automatically people are gonna get on therapy just organically. And so, you know, we have a fair bit of education to do. You know, this is a market, I use that term loosely because it doesn't exist yet. But where there's been no innovation for decades, and there's an entrenched and flawed standard of care.
And so 2024, we're gonna be doing a number of things to really prepare the CAH community for a real paradigm shift, a better way to treat the disease, and that's the introduction of a new treatment with crinecerfont. So you'll see from us a fair bit of educational effort directed towards endocrinologists, but also towards patients and parents, helping them to understand better understand the nature of their disease with the absence of cortisol and the excess of the androgens, and the challenges of striking that balance. And you know, certainly introducing the idea of a new way of treating and doing it all compliantly. So we're excited about the opportunity. And you know, we think that as Kevin said, when introduced crinecerfont is gonna make a huge difference for these patients.
Anything to add?
No, I think you said it well. I mean, I do think it'll be very much a combined effort between the medical organization and the growing commercial organization here to, to get out, to help educate both the patient and the physician community. And also, help those individuals understand that there is a potentially better outcome that can be achieved than what they're really used to in the space of the current poor choices.
I'm sorry, just one last thing to quickly add. This is similar and dissimilar to when we brought INGREZZA onto the market for tardive dyskinesia. At the time that we introduced INGREZZA, only about 3% of all TD patients were diagnosed with TD. We now have 35% of them diagnosed. A lot of work still, but even in a multi-billion-dollar product, only half of those 35% of patients are being treated with a VMAT2 inhibitor. So we're used to this education aspect. We're used to changing an entire paradigm of how patients are treated.
Do you think there needs to be a patient education on, like, the flaws of GC and like, or is the market just so sticky that it will require a lot more effort than maybe? But, you know, you're like: "Wow, first new therapy, like, this is awesome" type of scenario.
Yeah, you know, I think that, you know, one of the things that we've learned about the CAH community is that it's very heterogeneous patient population. You've got everything from infants to older adults. The way that the disease affects these individuals evolves over time, depending on stage of life and gender. And certainly, you know, we are learning that the way that we present the benefits of treatment with crinecerfont is gonna be a little bit different. For example, when you're speaking to parents versus to a teenager or a younger adult, versus someone that's middle-aged.
And, you know, we saw from the presentation that, you know, that rock and a hard place kind of dynamic, where you've got a set of either side effects or complications arising from treatment, depending on if you're being overtreated or undertreated. One of the things that we've learned is that there's varying stages of understanding within the patient community around this, you know, what I think a fundamental concept, that not only are these people living with CAH missing cortisol and unable to produce it themselves, the whole understanding that high-dose glucocorticoids are being used to suppress androgen excess.
Mm-hmm.
So some people don't really understand, that, you know, that they're on supraphysiologic doses. All they know is that they've been taking hydrocortisone all their lives. And so, you know, we have to help the community better understand that dynamic and the trade-offs that they've been making. And then understand that, you know, with this new approach, lowering the androgens can also enable lowering of the GCs, and it's essentially a two-for-one benefit. So education is critically important across all the stakeholder groups. And then, you know, what we have to do, obviously, is educate, motivate, and then activate upon launch.
Yeah, I mean, and just to build on what Eric said, I think the one thing that we really were very, very encouraged with the crinecerfont data around was whether this now provides the opportunity to simplify the discussion with patients and with clinicians about the management of this disorder. Because I think the majority, I would say, of patients don't really understand what their disease is. They do not understand that they have anything beyond adrenal insufficiency, and that that's the thing they worry about. And so if we can say crinecerfont can control those androgens, which are such a critical part of your disorder, then you can just worry about the adrenal insufficiency, and you don't have to worry about the steroids and the being overweight, and developing diabetes and osteoporosis and all of those things.
I think the message for us is really around simplification, and that's also important for the clinicians, because this is a difficult disease to manage with the current options. Endocrinologists don't really want to do it in the main unless they're real experts in the field. We really believe that we can simplify that.
Oh, sure. Question. Yeah.
Yeah, thanks. Are all patients in the study or depending on the severity, they were responding to the treatment?
Do you want me to start with that?
Yeah.
I think what was very encouraging to us from the clinical trial data that we read out, both in adults and pediatrics, was that the vast majority of patients... First of all, crinecerfont on the background of stable steroid dose was able to control androgens in almost everybody. So it's giving benefit in terms of the direct control of androgens in almost everybody. There were very, very few people that didn't get the significant and clinically relevant change in their androgens. In addition to that, though, we were obviously very interested in driving down the steroid dose. And what we saw, if you take the adult data, was that in about 20%-18%, it was in the trial, of patients, those patients, even on placebo, could get to a physiologic level of steroid.
So there's probably about 15%-20% of patients that can manage their disease with adults, with the current options. But the remaining 80% are all potentially people that can benefit from crinecerfont. So it's a very large proportion of the adult population. In the pediatric study, no one, none of those pediatric patients could get to a normal level of steroid dosing in the absence of crinecerfont. And so there, I think you have a much less well-controlled and much more variable population, where we believe a very broad proportion of that population can benefit from crinecerfont.
Okay. Thank you.
Other questions from the audience? What's gonna be the size and scope of the CAH sales force?
Yeah. So, you know, obviously, we're still doing some of that work right now. But, you know, we're looking at a endocrinology audience of a few thousand prescribers in the U.S. There's a total of around 78,000 board-certified endocrinologists, but not all of them see or treat CAH, and so it'll be a subset of those individuals. We expect to have a dedicated sales force of less than 100 FTEs in the U.S. market and, you know, potentially substantially smaller than that. We are in the process of doing that work and building out the team as well as the brand team right now.
But we are able to leverage some of the infrastructure that we've built up for INGREZZA, including, you know, for example, patient services and our distribution capabilities. So, we will have some leverage from the infrastructure that we've already built. So you can think of this as a relatively compact target audience of HCPs, and a relatively small sales force to be able to access the majority of these patients.
So from a financial perspective, the investment required to launch this, this is obviously not as large as, you know, the launch of INGREZZA and tardive dyskinesia. And even with this investment in 2024, question we get is: are you gonna generate SG&A leverage? And yes, we are gonna generate more SG&A leverage. You're gonna see that come through in 2024, in years ahead. And then with the investment relative to the size of the opportunity, it's gonna be very nice from a financial perspective. You talked about the few thousand HCPs that you're gonna be targeting.
Mm-hmm.
Are these mostly at centers of excellence or academic or community practices?
Yeah, I think that you can essentially bucket the future prescribers into three groups. There's a small number of accredited centers of excellence, and when I say accredited, it's through the CARES Foundation, which is the patient advocacy organization in CAH. So that's less than a dozen of those out there. There's a similar number of what I would consider to be centers of excellence, but they're not accredited through Cares. They have most but not all of the meet the criteria of the CARES Foundation. So you've got less than 20, essentially, centers of excellence, and we're still trying to better understand what proportion of the CAH population gets their treatment there. We'll also be focused on pediatric endocrinologists. There's less than 1,000 of them in the U.S.
These are individuals that are likely to have a CAH patient in their practice and certainly more likely to feel comfortable and confident in managing CAH. So that'll be a high priority for us. And then, you know, we're gonna be employing various patient-finding approaches to identify those community endocrinologists that have a handful or a couple of patients in their practice. And so a lot of that work is gonna be happening throughout the course of 2024 to prepare for an approval in 2025.
We're about out of time. Thanks, everyone.