Good day everyone, welcome to the Neurocrine Biosciences Fourth Quarter and Year-end 2019 Results Call. All participants are in a listen-only mode. Later, you'll have a chance to ask questions during the Q&A session. Please note, today's call will be recorded, I will be standing by if you should need any assistance. It is now my pleasure to turn the program over to Kevin Gorman, CEO of Neurocrine Biosciences. Please go ahead.
Thank you very much, operator. Thank you, everyone, for joining us here this afternoon. Today, I have Eiry Roberts, our Chief Medical Officer; Eric Benevich, Chief Commercial Officer; Matt Abernethy, CFO; Kyle Gano, our Head of BD and Strategy; and Todd Tushla, our Head of IR, with me. Before we start out, Todd, could you read our safe harbor statement?
Yeah. Good afternoon, everyone. Certain statements made in the course of this conference call that are not historical statements may be forward-looking statements, which are subject to risks and uncertainties. Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company's SEC filings, including but not limited to the company's third quarter 2019 Form 10-Q and in today's press release. Copies may be obtained by visiting the investor relations page on the company's website. Any forward-looking statements are made only as of today's date, and we disclaim any obligation to update these forward-looking statements. Kevin.
Thank you, Todd. I'm going to keep my remarks brief so we can get to your questions. First and foremost, 2019 was a year where we continued to make progress in our primary focus of educating healthcare providers, caregivers, and patients about tardive dyskinesia. These efforts will continue in 2020 and beyond because the vast majority of tardive dyskinesia sufferers are still struggling while waiting for a diagnosis and appropriate treatment. We believe 2020 will be another year of significant growth for INGREZZA. Having said that, we're fortunate not to be a single product company. In 2019, we also took important steps to build the leading neuroscience biopharmaceutical company by nearly doubling our pipeline of important medicines. This year, we will have three compounds in pivotal clinical trials, five compounds in phase II studies, and the real possibility of having three medicines approved in four indications.
That's a powerful foundation from which we'll build. With that said, I would like to turn the call over to Matt and Eiry.
Good afternoon. Thank you for joining our fourth quarter earnings conference call. I will keep my comments brief since we provided a lot of information over the past month. Overall, INGREZZA demonstrated another strong quarter with $238 million in net product sales, putting sales over $750 million in 2019, just our second full calendar year on the market. Given our increased business development activity and non-cash P&L items, we will begin reporting our financial performance on a GAAP and non-GAAP basis. Full reconciliations are included in the tables of our press release. Our sales results translated into increasing profit with Q4 net income of $34 million and non-GAAP net income of $102 million. For the full year 2019, we finished with net income of $37 million and non-GAAP net income of $284 million. We exited the year with $970 million in cash and marketable securities.
Regarding 2020 SG&A and R&D expense guidance, we expect a range of $740 million - $770 million on a GAAP basis and $620 million - $650 million on a non-GAAP basis. This compares to $469 million of non-GAAP R&D and SG&A expenses in 2019. The increase for 2020 reflects our increased investment in R&D, including our three registrational programs and meaningful investments in our Voyager and Xenon collaboration. For SG&A, our guidance reflects continued investment in INGREZZA and marketing costs associated with the anticipated launch of opicapone. Please note that our GAAP guidance reflects approximately $100 million of share-based compensation and a $20 million expected milestone payment to BIAL connected with the expected approval of opicapone by the FDA during the second quarter. No other future potential milestones or IPR&D associated with current collaborations or future business development activities are included in our GAAP guidance.
Regarding INGREZZA, while we've made tremendous progress developing the tardive dyskinesia market, diagnosis rates for TD are still only in the mid-teen. We'll continue our educational efforts to remain confident in our ability to help many more patients struggling with TD. Healthcare providers, patients, and insurers continue to understand the value of INGREZZA, and we expect access will remain strong with similar net revenue per script in 2020 as what was realized in 2019. As we think about Q1, the first quarter of every year is challenging for any company with a specialty tiered drug due to payer-related seasonal dynamics. We are working diligently to mitigate the impact from these headwinds. Although the first quarter poses unique seasonal challenges, our long-term focus is ensuring new patients receive help with their TD and existing patients stay on INGREZZA throughout the year.
Overall, 2020 signifies an important year of increased investment into Neurocrine as we continue to grow INGREZZA, advance our existing programs, and expand our pipeline. With that, I will now hand the call over to our Chief Medical Officer, Eiry Roberts.
Thank you, Matt, and good afternoon to everyone on the call. I will also keep my comments brief today. We remain on track with all clinical program timelines across the portfolio, including the anticipated mid-year start of the registrational trial for crinecerfont in adult patients with congenital adrenal hyperplasia. Ahead of this, we will present the adult proof of concept data for crinecerfont at the ENDO meeting in San Francisco on March 30th.
By the end of this year, we plan to have a diversified portfolio of multi-stage programs in clinical development at Neurocrine, including three registration study stage studies, each in a different clinical indication, and four early to mid-phase Neurocrine clinical programs. In the near term, the most important program in the Neurocrine clinical portfolio for patients is opicapone with a PDUFA date of April 26th. Opicapone has the potential to significantly help patients impacted by motor fluctuations in Parkinson's disease who need better adjunctive treatment options.
We look forward to bringing opicapone to patients in the U.S. and to educating physicians, patients, and payers on the impact that this well-tolerated, differentiated COMT inhibitor can have in improving motor functioning for Parkinson's patients. For my remaining remarks, I'll review our two most recently announced collaborations, which highlight Neurocrine's entry into the field of precision medicine through our focus on rare pediatric epilepsies. Firstly, in December, we announced an important collaboration with Xenon Pharmaceuticals, gaining exclusive rights to NBI-921352, a promising first-in-class molecule which potently and selectively inhibits the NaV1.6 sodium channel. We believe this molecule could have great promise in the treatment for SCN8A developmental encephalopathy, or 8A for short, a rare and devastating type of pediatric epilepsy specifically related to a gain-of-function genetic mutation of the NaV1.6 sodium channel.
8A very often presents in the first few months of life and causes a chronic and complex seizure disorder with developmental delays. In addition, sudden unexpected death can occur in 10% to 20% of patients with 8A. For the first time with NBI-921352 and its selective mechanism of action, we plan to precisely target the ion channel implicated in 8A and offer the opportunity to provide a significantly improved benefit-risk profile for these patients relative to currently available treatments. Beyond 8A, NBI-921352 also has great potential in a range of seizure disorders, including adult focal epilepsy. We plan to file an IND application for this molecule with the FDA in the middle of 2020 in order to start a phase II trial in 8A patients in the second half of this year.
In January, we disclosed that we had entered into an agreement with Idorsia, which includes the option to exclusively license ACT-709478, a potent, selective, orally active, and brain penetrant T-type calcium channel blocker, which has completed phase I clinical studies as a potential treatment for rare pediatric epilepsy. Pending approval of the IND later this year, we plan to initiate a phase II study in a rare pediatric epilepsy starting in the second half of this year. In addition to the treatment of epilepsy, this mechanism has potential application across a broad range of important neurological disorders, including essential tremor and pain. Our collaborations with Idorsia and Xenon are not competitive. In fact, they are highly complementary and reinforce our commitment to addressing the needs of patients born with rare and devastating forms of epilepsy for whom currently available treatment options are largely inadequate.
It is our expectation to have these two molecules in phase II in rare pediatric epilepsies by the end of this year. Through our internal research efforts and through collaboration agreements with Xenon, Idorsia, and our gene therapy programs with Voyager, we've nearly doubled Neurocrine's pipeline over the last 12 months. Each program in our growing pipeline has the potential to make a dramatic impact on the lives of patients and their families. I'd like to close by thanking the many cross-functional teams at Neurocrine and at our partner companies for their hard work to advance these important molecules. Kevin?
Thank you, Eiry. We're ready to take your questions at this time.
If you'd like to ask a question today, please press star then one on your touch tone telephone. You may withdraw your question at any time by pressing the pound key. To ensure we get to everyone's questions today, all participants will be allowed one question and one follow-up question only. Once again, it's star then one for questions. We'll take our first question of the day from Tazeen Ahmad from Bank of America. Please go ahead. Your line is open.
Good afternoon. Thanks so much for taking my questions. Maybe Eiry, a question for you. You made it a point to say that the programs that you're partnered with, Idorsia and Xenon are not competitive with each other. When do you think you would be in a position to talk about what specific indications you would be pursuing for one or both of these programs, and also how you're thinking about the general epilepsy space? It does seem to be getting crowded with various mechanisms of action of drugs that are being investigated. Thanks.
Thanks very much for that. First of all, obviously, many of the drugs that are currently used in the epilepsy space, particularly in the broader, more generalized epilepsies, are actually very old. In fact, in terms of their benefit-risk profile, we believe there is a significant opportunity still to serve patients in that broad epilepsy environment. If we think about the two mechanisms that we're focused on here, although sodium channel blockade and calcium channel blockade have been the mainstay of treatment in epilepsy over the longstanding past, our sodium channel approach here with the Xenon collaboration gives us the opportunity to target, very specifically, one of the sodium channels through NaV1.6.
In doing that, we believe we have the opportunity to much more selectively and in a precise way address the symptoms of epilepsy, first, obviously, in the rare SCN8A pediatric epilepsy, but beyond that, more broadly in adult focal epilepsy. With respect to the other collaboration with Idorsia, obviously, we are still in the option phase of that agreement. Once we have the opportunity to talk more about that as the IND is approved, then we'll be able to say more about the potential indications for that collaboration.
Okay, thank you.
Thank you. We'll go next to Paul Matteis with Stifel. Please go ahead.
Great. Thanks so much. Take my questions. Just two on INGREZZA. I was wondering if you could comment a little bit on what you're seeing with respect to contracting, what you foresee for this year. In the past, you've talked about certain plans picking one of INGREZZA or Austedo as preferred, but that not being rate limiting for getting INGREZZA access. You could just speak to if that dynamic is continuing. Second, as it relates to with seasonality being a player this quarter and also a potential $11 million inventory headwind, is there a risk that we could actually see a sequentially down quarter? How are you thinking about that? Is that inventory going to pull out all at once or maybe over time? Thanks so much for any color.
Yeah. Hi, Paul. We'll take those questions sort of in reverse order. As we think about the first quarter, to your point, what we reported in Q4 was $238 million in net product sales. That included an $11 million inventory build. The right jump-off point for Q4 would be $227 million. Now, as you think about how that translates to Q1, there's really three dynamics at play that we would want to make sure everybody thinks about in forming a consensus and expectations for Q1. The first one being the gross to net discount. Q1 is always our largest gross to net discount period because of Medicare Part D donut hole and commercial co-pay assistance. As you think about what I said last year, many people have estimated the impact of that could be between 4% and 5% sequentially as you think about Q4 versus Q1.
I think that's probably a directional number. The second piece, which is actually the most material piece, has to do with the delays that occur at the beginning of each year as patients go through a reauthorization process with their existing plans. What occurs in that is it's just an extended cycle time for a patient to get their first fill and ultimately leads to a lower refill rate per patient. Now, the rate may be very similar this year as compared to last year, but the dollar magnitude will be significantly greater because we've actually doubled the number of patients on INGREZZA as you compare this time now to last year.
Just by way of illustration, just to frame out the quantification, is that if on average a patient had a reduction of 0.25 scripts within the first quarter, that would have a sequential headwind of between 4,000 and 5,000 TRx. It could be a meaningful impact. It's not unique to us. This happens to many that are specialty tier medicines, and it is clearly not a reflection of the underlying demand for INGREZZA. It's purely just a fulfillment challenge that you work through and the teams are working hard through right now. Then the third item is the inventory bleed that you just brought up. We have that $11 million build. It's hard to predict how that will materialize in the first quarter, but it's surely something that should be on your radar as far as setting expectations.
I'd just say, although I'm highlighting all these Q1 dynamics, the real emphasis here is just to make sure people understand and set appropriate expectations for the first quarter. It does not reflect our long-term belief in the opportunity that we have within 2020 to help many more patients with INGREZZA. We're in the mid-teens of diagnosis with a fraction of that actually receiving treatment. We have a lot of opportunity ahead of us, but very complicated. We're working through this Q1 dynamic, and we wanted to make sure we provided adequate color. Anything else, Eric?
Yeah, Paul, if I remember correctly, the first part of your question was really related to contracting activity and sort of expectations for.
Yep
Coverage in 2020. I'll start off by saying that patient access is critically important for us. Throughout the course of the launch, we've invested significantly in making sure that patients and providers have relatively open access to INGREZZA. This is a specialty medication. Virtually all the prescriptions require prior authorization through the plan before those claims are approved, and the patient can initiate treatment. We've really been very pleased with the success that we've had through the early days of the launch and all the way up to current times, with over 70% of written prescriptions being filled. From an affordability perspective, three-quarters of patients paying less than $10 per month per fill. In the more recent phase of the launch, we started to gather more attention from payers as INGREZZA has become a larger brand.
Certainly, we've said previously that we started to engage selectively with plans in terms of contracting activity. I will re-emphasize the word selectively, because over the course of the launch, we've found that regardless of whether we are on formulary or not on formulary, we've been successful in securing approval or helping to secure approval for patients in need of INGREZZA. Where we stand today is that we're approximately a month into the quarter and a month into the year. We feel good about what the coverage landscape looks like for INGREZZA. We expect the access to remain strong in 2020. As Matt said in his prepared remarks, we expect the net revenue per script in 2020 to be similar to what it was in 2019 as well.
About the only thing that I would like to add to what Matt and Eric have said is that the good news is that we start 2020 with nearly twice as many patients as we started 2019. That's great. It shows the acceptance of INGREZZA in the patient population and also by our customers, the allied health professionals. The downside of that is, as we've talked about, it leads to the challenge in Q1. You have seen in the past, and as we talked about before, that it's an ebb and flow. Q1 is the ebb. Q2 generally is the flow as we come out of it, and we have a strong year. We just wanted to be able to give as much color to this quarter and to the year as we could on this call.
Great. Hey, thank you very much. Appreciate the detail.
Next, we'll go to Brian Skorney with Baird. Please go ahead.
Hey, good afternoon, everyone. Thanks for taking my question. I guess maybe if I can ask about ACT-709478 program. Can you just kind of walk us through your thoughts on the development program, how you envision this drug being used and maybe your thoughts on clinical trial design and mechanism and how you can overcome some of the difficulties others have had in developing recent drugs and epileptic indications, specifically thinking about kind of the recent neurosteroids that are primarily GABAergic but also do block T-type calcium channels. Would you envision the phase II study being placebo-controlled or a comparator study?
Thanks for the question, Brian. I think just as an initial statement with respect to the mechanism of action of the Idorsia molecule, this is a very highly potent and very brain-penetrant calcium channel antagonist. We believe that those calcium channel antagonists that have been used in the past and quite extensively form the mainstay of epilepsy treatment really haven't been able to fulfill the promise of that mechanism because of their low potency and the relationship that has to the inability to dose to doses that can produce the required efficacy without side effect issues and in many cases off-target side effect challenges as well. In terms of that alone, we believe there is a significant opportunity to demonstrate value through this mechanism in the field of epilepsy. I can't really comment on the development plan for this molecule specifically.
As I mentioned earlier, we're still in the option phase with this collaboration. We are very excited about the opportunity to move forward in this space, and we hope that as the IND becomes approved later this year, that we'll be able to say a lot more about our intention to move this molecule forward in the space of initially rare pediatric epilepsy, but subsequently more broadly in other areas, such as those I mentioned earlier, essential tremor and potentially pain.
Great. Thank you.
Next, we'll go to Brian Abrahams with RBC Capital Markets. Please go ahead.
Hey, guys, this is Owen on for Brian. Thanks for taking the question here. Two from me. First on the CAH program, I know the data's coming in in March. Just wondering if you could give a little more color on maybe what we should expect to see there, whether you'll report sort of patient by patient or whether you'll have a responder analysis versus absolute reductions in the biomarkers? Second one actually on opicapone. Just wondering about how the familiarity is with the U.S. physician population, given that the drug's been approved in Europe and maybe there's some crosstalk there? Just general familiarity with the drug and the approach that could potentially drive the launch. Thanks.
Well, thanks, Owen. First with the CAH, we will be reporting the data from all four cohorts of the adult proof of concept study. As I think we've mentioned before, the design of that study was an adaptive study, which allowed us to look at optimizing both the dose and dosing schedule for the CAH program in molecule crinecerfont in adults. In terms of the type of data we will be presenting, obviously, that is a 14-day treatment proof of concept study. We will be presenting both summary and individual data around the biomarkers measured and several different approaches to the analysis of those data. As I think I mentioned earlier, that presentation will be an oral presentation on March 30th in San Francisco at the ENDO meeting. Beyond that, we're very pleased with where we are with the CAH program, both in adults and in pediatrics.
Clarity on the adult registrational path forward at the end of last year from agencies both in the U.S. and Europe. We're moving ahead to implement the adult registration trial, which will be a global trial starting in the middle of this year. We continue to make progress with the pediatric program as well. With respect to opicapone, our medical affairs organization in preparation for the upcoming PDUFA date in April has been working hard with the neurology community to help educate around the role of COMT. We believe that there's been little opportunity to deliver on the promise of COMT with the currently available COMT inhibitors that are available in the U.S. right now. As we interact with neurologists, we hear excitement from those prescribers about the opportunity to bring forward another potential option for their patients with motor fluctuations.
In particular, we're very encouraged by the profile that we see for opicapone. It's a very straightforward once-a-day treatment with an extensive clinical trial program that demonstrated a really favorable benefit-risk profile. We're very much looking forward to bringing that forward for patients in the United States.
Great. Thank you.
Next, we'll go to Anupam Rama with J.P. Morgan. Please go ahead.
Hi. Great. Good afternoon. This is Tessa on the call today for Anupam. Thank you for taking our questions here. Maybe one from us on the KINECT-HD study in Huntington's disease. Perhaps you might review for us any dating factors to initiating that study. I think that guidance there is the first half of this year. Maybe you might comment on overall rationale to pursue this indication given competition in the space. Thanks so much.
Thanks very much, Tessa. It's Eiry here. First of all, just for clarification, we actually did initiate the KINECT-HD study at the end of last year in November. Just as a reminder, that is a phase III placebo-controlled study of 120 subjects with chorea in Huntington's disease comparing valbenazine to placebo in that population. We anticipate that that study of 120 subjects will be enrolled over this year and that we will have data sometime in 2021. Can you remind me the second part of your question, Tessa? Sorry.
Yeah. Sorry. It may not have come through clearly. Realizing that the study has initiated, right? I'm wondering overall rationale in the indication given overall competition, and then maybe how you're thinking about differentiation relative to tetrabenazine, Austedo within the same indication.
Okay. Fine. There are 30,000 patients in the U.S. with Huntington's disease. Of that population, about 80%-90% of them have troublesome chorea. Even though the VMAT-2 mechanism has been proven in that patient population, there's still only about 20% of those patients with chorea that receive treatment with a VMAT-2 inhibitor. From that perspective, we believe there's a significant opportunity left to serve these patients. What we're particularly interested in is the profile that we have of valbenazine with its once-a-day treatment, simple titration, and favorable benefit-risk profile.
Great. Thanks so much for taking our question.
We'll take our next question from Jay Olson with Oppenheimer. Please go ahead.
Oh, hey, thanks for taking the question and congrats on all the business development activity in 2019. I was wondering if you could comment on your plans for BD in 2020. Should we expect you to do some more of the types of deals that you did last year? Separately, any comments you could make on the timeline for the collaboration with Voyager on Parkinson's disease gene therapy? What are the next data readouts there and how you see the competition shaping up? Thank you.
Hi, this is Kyle. Thanks for the question. On the BD front, right now there's a lot of great science going on outside the doors here of Neurocrine, and we appreciate that. Considering our long-term goal here is to be a leading a neuroscience company and a global one with studies and products in various markets. It's our goal here at Neurocrine to invest both internally and externally. We'll continue to look for projects that are aligned with our strategic thoughts and goals and objectives here, and if we find a good fit, we'll look at bringing the project in-house. I think that the parting word here is we continue to be active in business development and looking to bring new programs into the company if they make sense.
On the Voyager collaboration, we had interactions with the agency towards the end of last year, which gave us good clarity on the registration program for Parkinson's disease. We got clarity on the RESTORE-1 trial and how we could ensure that that was viewed as a registration quality study. That involved an amendment to that protocol, and we're moving forward with implementing the amended RESTORE-1 protocol right now. In parallel, we're also starting up RESTORE-2, the second pivotal trial. That will be a global trial and will be starting later this year. The only thing I'll add actually is we will be releasing the 36 months data from the PD1101 study, which was the dose-finding study at AAN this year.
Great. Thank you very much.
Thank you. Next we'll go to Laura Christianson with Cowen. Please go ahead.
Great. Thanks for taking my question. I guess going back to CAH, I'm curious if the ENDO data that you're planning on presenting in March will include an analysis comparable to what we can expect in the registrational trial, whether you'll be looking at the same primary endpoint planned for that trial? Secondly, in your interactions with the FDA, if you have a sense of how important it is to show that the drug allows for a reduction in steroids, and if that will be part of the alternative dosing regimen, one of the cohorts that will be presented? Thanks.
Well, initially the proof of concept study is a two-week study of dosing in adult subjects, and the outcomes looked at in that exploratory study were the hormone biomarker levels. That's what we will be presenting together with obviously the full tolerability profile at the ENDO meeting. With respect to the endpoints for the registration trial, we haven't commented to any great extent on that. As soon as the trial actually is up and running, we will post that on ClinicalTrials.gov, and obviously, that will include a full description of the study design and the sample size and also the endpoints that we're looking at. It's clear, though, that the steroid hormone levels are part of how this disease is managed and how patients could be impacted by a novel treatment, and so that will be a core part of the program moving forward.
It's also very important to us that we understand steroid dosing in the context of use of this new novel non-steroid mechanism.
Perfect. Thank you.
Thank you. Next, we'll go to Charles Duncan with Cantor Fitzgerald. Please go ahead.
Hi, Kevin and team. Thanks for taking my questions, and congratulations on a very good year of INGREZZA growth. My first question is related to continued INGREZZA growth, and not to be overly simplistic, but I'm wondering if you could point to just one key driver that you would highlight as important to you executing your business plan this year to drive INGREZZA growth. Would it be additional or increased diagnosis, additional penetration in newer or existing prescribers, or such as pricing change? What is the one thing that you want to see happen this year?
Hi, Charles. This is Eric. I'll actually give you two.
Okay.
I mentioned earlier the payer dynamics in Q1 and the fact that we've got a plan in place to mitigate the impact of all these patients that require a reauthorization or patients that are switching plans, et cetera. One of the priorities for our team is to make sure that we're executing against that plan, minimize the impact that all these beginning of the year payer dynamics can have on disrupting treatment and make sure that we're really focused on executing that as well as driving new patient starts in Q1. You may recall that last year, Q1 was really a tale of two half quarters. The first half of Q1 was a strong focus on making sure that any patients that were experiencing treatment lapses were able to get back on treatment. Second half of the quarter, we saw a real surge in new patient starts.
We want to make sure that we're executing against our plan in Q1 and setting ourselves up nicely for the rest of the year. As Matt mentioned earlier, as yet, almost three years into this launch, the vast majority of patients with tardive dyskinesia have yet to be diagnosed. We think that diagnosis rates are in the mid to high teens. That means over 80% of people out there that have TD haven't been given a diagnosis and haven't been offered treatment for it. The focus has been and will remain for quite some time to bridge that gap between the undiagnosed patient population and the prevalent population. We're going to continue to focus on disease recognition, helping to improve the diagnostic acumen of the prescribers that are out there.
We've also been investing in helping patients to recognize when they're experiencing TD symptoms or what may be TD and encouraging them to have a conversation with their doctor. As you're probably aware, one of the big-ticket items in our plan last year and into this year has been our unbranded DTC disease awareness campaign called Talk About TD. We're going to continue to execute on our plan. We're continuing to educate providers on what is TD and what isn't TD, the benefits of INGREZZA, how quickly it works, and the reductions of involuntary movements that are seen in our clinical data. Getting a good start in Q1, mitigating the impact of the payer disruption, and then continuing to raise awareness and driving diagnosis of TD are going to be key for us in 2020.
Perfect. That's helpful. Eric, I appreciate the added color. One quick question on opicapone. When you look at the opportunity set there, is it one that will be measured by initial prescriptions for opicapone in the PD community or increased mind share within the neurology community? Thanks for taking the question.
Sure. Eiry had commented a little bit earlier about the receptivity that we've seen thus far here in our preparation for a planned launch later this year. I will say that given the established treatment options, it's going to take time for us to remind people about the role of COMT in optimizing levodopa therapy. This is a little bit of an unusual dynamic in that all the clinical studies, and therefore all the clinical experience thus far, is outside of the U.S. For the average neurologist or community physician that's treating Parkinson's patients, they may not be aware or that familiar with opicapone. I will say, though, that key opinion leaders, thought leaders in movement disorders, specifically Parkinson's, are generally familiar with the data and are enthusiastic about having this new treatment option available to them on the other side of an FDA approval.
We're doing the work to prepare now for an eventual launch later this year. Certainly, as Eiry mentioned, the medical organization has started that process of reminding people about the important role of COMT in optimizing levodopa treatment. As you may recall, when we expanded our field sales team towards the end of 2018, it was with dual goals in mind: to optimize the team for the TD opportunity, but also to prepare for the eventual launch in Parkinson's disease. We've got our team in place. We cover all of the movement disorder specialists that are out there. As we progress towards a launch, we're going to be doing additional things like training our team on disease state and so on so that we can be well prepared to launch after we get FDA approval.
Thanks for the added color.
Thank you. Next we'll go to Paul Choi with Goldman Sachs. Please go ahead.
Thank you, good afternoon, everyone. I had two questions on crinecerfont for CAH. First, just on the pivotal trial design, could you maybe just clarify for us whether this trial can be used for global registrational purposes and if you'll have European sites on board? I think in the past you've talked about this being your potential foray to becoming a global company and selling it in Europe. Eiry and Kevin, if you can comment on that. The second question I have is just also on CAH with regard to the pediatric phase II that's ongoing. I didn't see it in the slides, is the plan still to top-line those results later this year? Could you maybe speak to the development path in the pediatric population and whether you intend to pursue it in younger patients as well? Thank you.
Yeah. Thanks, Paul. You are correct in your recollection that this adult phase III study we look at as a global registration study. We've been in contact with both the European regulatory agencies as well as the FDA. That is what we're doing a little later this year, is being able to do that with sites all throughout Europe and the U.S. It will be a situation that we have reached the level in the company of sophistication and resources that we can commercialize this ourselves over in Europe. We would not be seeking a partner there, and that would be our first foray into becoming a global pharmaceutical company. Eiry, you want to talk about the second half of Paul's question?
Yes. With respect to the pediatric program, the proof of concept study is obviously the first step in that regard, and we continue to make progress with that. That is an adaptive trial similar to our previous adult proof of concept study. In parallel with that ongoing study, though, we are engaging with the regulators both in the U.S. and Europe right now to determine the registration trial design for the pediatric indication, which will also be a global program. As we go through this year and we gain more clarity on that, we can certainly provide more information.
Is the plan to go into younger patients as well versus the sort of teenagers that are currently being studied in the phase II?
Yes. That's the plan.
Okay. Thank you.
Thank you. Next, we'll go to Evan Seigerman with Credit Suisse. Please go ahead.
Hi, guys. Thank you for taking the question. It was great to see you a couple of weeks ago in San Francisco. One specific question. When you think about the net or the price increase that you had mentioned, how much of that do you expect to get on a net basis? My second question is just on a high level, what opportunity or opportunities do you see in your pipeline and portfolio that could be as significant and impactful as INGREZZA?
Well, I'll take the second one, Evan. I think there are several compounds that we have there that can be as impactful and even more impactful to patients because of the devastating effects of these pediatric epilepsies that we see. These children, these babies need these medications, like right now. We have a tremendous sense of urgency in going forward with those. Within CAH, there's been nothing for these patients for decades now. Again, the impact that could be seen there. At the end of the day, I would say that it sounds trite, but we wouldn't work on a clinical program or a pre-clinical program or a research molecule or mechanism unless we thought that there was real impact that is going to be there.
With everything that we're working to bring to market right now, whether you talk about opicapone, whether you talk about Huntington's, whether you talk about uterine fibroids, and I know that that's our partner that's bringing that forward, but there's millions of women suffering from that. As I said, these rare pediatric diseases, our work with Voyager on the programs that we have going on there, this is all something we don't prioritize and rank here at Neurocrine. We think that they all deserve our attention.
Evan, this is Matt. On the net pricing front, if you recall, we took a price increase in the middle of November, and we've not disclosed exactly how much of that sticks. I would just tell you a large majority of that flows through, but it's not at 100%. You would get about a half a quarter's benefit of that price increase in the first quarter.
All right. Thanks so much, guys. Appreciate the color.
Thank you. We'll go next to David Amsellem with Piper Jaffray. Please go ahead.
Thanks. Just a couple. First on INGREZZA, this is more of a longer-term question regarding the payer landscape. As the footprint of the product grows, and given the commentary about reauthorizations and some of the things that you're working through, at least in the first quarter. As we think about INGREZZA beyond 2020, should we think about a more restrictive payer landscape? Do you expect that payers are going to put up more roadblocks as volumes for the product grows? That's number one. Then number two is on opicapone. Maybe a little bit early for you to talk about this, but can you give us a sense of where you think gross to net will shake out on that product and also your expectation regarding step edits and prior ops on that? Thanks.
Yeah, David. I'll comment on sort of how we're thinking about the future from a payer perspective for INGREZZA. We've got a little over two years in market now. Actually, we've been, as I said earlier, very pleased with the coverage that we've gotten and the high rate of filled prescriptions versus written prescriptions. We care a great deal about patient access, and we've invested heavily to make sure that patients that need INGREZZA can get access to it, and we're going to continue to do so. You stated rightly that the profile of INGREZZA has grown as the product has grown.
The reality is that we've also been very heartened by the willingness of the providers to go through the necessary steps to get access for their patients to INGREZZA to doing prior authorizations and providing the information that the health plans require in order to evaluate a request for coverage. The reality is that INGREZZA is the most preferred and the most prescribed VMAT2 inhibitor. I think that's reflected in the willingness of providers to go to the extra lengths and to go to the next step in terms of helping their patients to get access to it.
I don't want to say never, but the reality is that I think that we're in somewhat of a state of homeostasis where we are now in terms of plans that are looking at making changes to their coverage criteria. It's always going to be evolving over time. We'll continue to work with the health plans to help them understand the value that treatment with INGREZZA provides f or these patients and also to make sure that their coverage criteria remain medically appropriate for these complicated patient populations that develop TD. We've been successful.
We're going to continue to invest in making sure that there's good coverage for these patients because that's our responsibility. I think the second part of your question was really around opicapone, maybe what the coverage might look like early on, and I think you asked also about gross to net. I'm not going to comment on the gross to net piece. We certainly don't provide that kind of detail with regards to INGREZZA today. I will say that just like with INGREZZA, access for patients with Parkinson's disease to opicapone will be critically important. We recognize that there are treatments out there for patients with Parkinson's on levodopa that are experiencing motor fluctuations.
We've also said previously that we don't expect to price this as a specialty medicine. In other words, it would be a WAC price below $600 a month. That's really part of our strategy to make sure that we have the best possible access for patients. We'll be able to use some of the learnings from our INGREZZA launch and the resources that we've developed and the infrastructure such as our patient access team, which is in the field to help support customers understanding what the coverage criteria are. The reality is early in the launch, it's not going to be on any formularies, and so we're going to have to help them understand that for these patients, that there will be a formulary exceptions process to get prescriptions approved for opicapone.
We're going to make sure that we can do everything in our power to make it as convenient as possible for patients and for providers to get those prescriptions written and filled. We're going to take everything that we've learned from the INGREZZA launch and apply it here to opicapone, because we believe that there is as yet a remaining significant unmet need in this patient population. A lot of people that are not optimized with their levodopa therapy that are experiencing hours and hours per day of off time. We've got a product that we hope to bring to market in the not too distant future that can make a significant difference for those patients.
Okay, thanks again.
Next, we'll go to Marc Goodman with SVB Leerink. Please go ahead.
Yeah, Matt, I was wondering if you could talk about the spending and just the push and pulls from year to year and how to think about any more color you're willing to give us on SG&A versus R&D or just on a relative basis, even if you don't want to talk absolutes? Thanks.
Yeah, sure Marc. Appreciate the question. 2020 is going to be another investment year for Neurocrine, and in particular on the research and development front. As we mentioned earlier, doubling the pipeline puts us in a place where we're going to have a larger portion of our spend increase year-over-year going towards R&D. That really sets us up to fund the three registrational programs, the Huntington's disease program, CAH, as well as the VY-AADC trial as well. In addition to that, funding some of the earlier stage programs like Xenon and getting that program up and running. A lot of dollars going behind R&D. On the SG&A front, really focused on continuing to invest dollars behind INGREZZA as well as then the marketing costs associated with preparing for the opicapone launch.
We're looking forward to the investments that we're going to be putting in place next year. We really feel like it's going to position us to continue to evolve our pipeline and really set us up well going into the future.
Are both line items increasing year-over-year?
Yeah, both line items are increasing year-over-year. Would say both from a percentage and a dollar perspective, R&D would be going up at the faster rate.
Thanks.
Thank you. Our final question will come from Joseph Stringer with Needham & Company. Please go ahead.
Hi, this is Joey on for Alan. Thanks for taking our questions. Another one on opicapone. Can you talk just generally about total market share for COMT therapies given the generic options available? Maybe just in terms of the patients that you'll be targeting in terms of maybe a breakdown of patients that are currently on therapy who are inadequate responders versus patients who have discontinued the current standard of care therapy and then maybe treatment-naive patients. Maybe if you could comment on where you expect to see the most initial use. Thank you.
COMT utilization in the U.S. is about 8%-10% of the total adjunctive treatment market. Taking a step back, there's roughly one million patients in the U.S. with Parkinson's. Of those, about 70% are currently taking levodopa, and of those another 70% or so are on an adjunctive treatment. COMT is not broadly used in the U.S., I think because of the deficiencies of the existing treatments. Historically, the current COMT inhibitors have failed to deliver on the promise of COMT inhibition due to safety issues, tolerability issues, and frankly, inconvenient dosing regimens. You do see relatively higher utilization of drugs from other adjunctive classes, including dopamine agonists and also MAO-B inhibitors. Those medications also have their limitations, especially from a tolerability standpoint. We've certainly heard loud and clear from our advisors concerns about, for example, impulsivity often seen in patients taking dopamine agonists.
In terms of our approach to the market, obviously we expect that patients that are currently or have previously been treated with COMT inhibitors would be natural candidates for treatment with opicapone. The other thing to keep in mind is that in this particular category, patients don't usually switch from one adjunctive to another. The physicians tend to sort of stack them up sequentially, and so they may go on one adjunctive, they start to see waning results, and then they add a second agent and then potentially a third. For us to be successful over time, we expect to displace not only existing COMT inhibitors, but to also expand that COMT class and displace medications from those other classes of dopamine agonists and MAO-Bs.
Ultimately, we want to be considered the go-to adjunctive treatment when a physician and a patient are having a conversation that their levodopa regimen is no longer adequately helping to control their movements, that they're experiencing significant off time. That's sort of the moment of truth, and they're making a decision about whether to increase the dosing of levodopa or to add an adjunctive treatment. Given the mechanism of action with opicapone, it makes all the sense in the world of having that conversation around optimizing levodopa before you start to escalate the dosing, or before you use drugs from other classes that don't optimize the levodopa treatment. We're really excited about the opportunity here to make a difference for many thousands of patients once we get approval later this year.
Great. Thanks for the additional detail.
We have no further questions in queue at this time, so I'd like to return the floor back to Mr. Kevin Gorman.
Thank you very much, and I really appreciate everyone's participation in the call today. I do want to make a few closing statements, and I'll start with welcoming our two newest board members, Leslie Norwalk and Shalini Sharp. I'm going to use a bit of a sports analogy here in a moment following an exciting Super Bowl game. We have a very good board and have had this board together now for a number of years. We have brought in new members from time to time, and each time that we go out looking to expand the board, generally we're not looking for a position player. What we're looking for is the best athlete that is out there, and that has worked well for us over the years.
Welcoming Shalini and Leslie, there we have two very great athletes that we're bringing to this board, and our board certainly deserves a lot of the credit for the success that we've had over the years. What I would also like to commend here is that our commercial teams and our medical affairs organizations, because they also have a direct impact on the absolute stellar results that we've had in the fourth quarter and also for the year of 2019 with INGREZZA. They are out there on the front lines advocating for patients each and every day. Finally, the ultimate goal for all of us in this industry is to discover, develop, and bring life-changing medicines to patients. At Neurocrine, we are truly fortunate, and we know it, to have INGREZZA, ORILISSA, and potentially soon, opicapone in patients' hands.
Together with our partners, Xenon, Voyager, and Idorsia, we are driven to bring precision therapies targeting what have been previously intractable and devastating diseases and now potentially curative therapies to patients who need them right now. That's what we look forward to speaking to you in the future about. Thank you very much.
Thank you. This will conclude today's program. Thank you again for your participation. You may now disconnect and have a wonderful day.