Yeah, we can get started. Thanks so much, everyone, trickling in. It's my pleasure to be with Matt and Eric from Neurocrine. Great dinner last night. It's good to see you again.
Yeah, that dinner was great, even for somebody who's been a vegan for about two months.
Unbelievable, man.
Yeah, I can't believe that, but it was a great time. I mean, it's such a unique time, Paul, in biotech. And I think this fireside chat, hopefully we can have some fun and talk about even some of those controversial topics. So I look forward to our time together today.
Yeah, that sounds great. Well, we had a really good conversation yesterday too about crinecerfont that I want to go back through because I thought that was an opportunity to dig deeper than you guys had before. But yeah, maybe to start, I mean, I think at this point, right, Neurocrine, I look at you guys as one of the leading companies in the space. And when I have a question on what's happening here or there, like you, Kyle, I mean, your opinion matters. And so in the context of that, how is Neurocrine looking at the news right now? Who might be the head of HHS and RFK Jr.? What might happen at the FDA? What does the conversation look like inside a company at yours? And how do you kind of plan strategically for this uncertainty?
Yeah, I think number one, there is a lot of uncertainty. And when you're in biotech, your uncertainty is already there just inherently. And then you add uncertainty on top of this. So I think the conversations that we have internally is don't overreact. There's going to be a lot of ups and downs over the next three to six months. So number one, don't overreact. The second piece is a blessing that we have the crinecerfont PDUFA date, which is actually at the end of December. So knock on wood, if we have wood around here, that the approval will come before any disruption were to occur. And for those who don't know what crinecerfont is, it's the first treatment in over 70 years for patients with congenital adrenal hyperplasia. And we talk a lot as a company about Ingrezza.
Ingrezza, of course, is our blockbuster franchise, $2.3 billion in sales. We just went through a sales force expansion. We still believe 8 in 10 patients with tardive dyskinesia have not been treated with the VMAT2 inhibitor today. So the market opportunity still exists in a significant way. But in terms of investor focus, crinecerfont has really been under the radar. We had great clinical data. Eric is here, our Chief Commercial Officer, and is going to be happy to talk about crinecerfont. But I think from a review perspective with the FDA, quite fortunate. But I'd say where does our next thought go to is could there be disruption in the FDA? Who's going to be the FDA commissioner?
And so I think people who may be relying on a PDUFA date next year or somebody who is in the throes of some complex area, whether modality or whether primary endpoint or trial conduct perspective, I think that those are the ones that probably have a bit more uncertainty. So we find ourselves in a fortunate spot, but it is a topic du jour. I think that everybody in our industry is going to have to think through.
You're not, I mean, not that I know of, not that you would say, but just strategically, right, you're not really looking to do a meaningful transaction in the short term. But if you were, would this kind of environment make you pause and just wait and see for three to four months?
Yeah, it would have to. It would have to make you pause. I think knowing what game you're going to be playing, especially if you're acquiring a clinical stage asset or even maybe a commercial asset, I think time helps cure some uncertainty. But I would also say on the flip side, biopharma, whenever you acquire a company, there is inherent risk involved. And so it's this inherent risk plus incremental political risk. I think that is still something that if I was a board or if I was CFO, which I am at the company, you'd really have to ask yourself, is there anything within the policy world that could impact the trial or the outcome of the medicine? And if there is, it's a risk that you would have to definitely measure.
Is there anything else outside of the FDA with all of this that could impact Neurocrine? I mean, changing policy or attitudes towards the mental health space? I mean, I don't want to get too far theoretical, right? But you can go Googling around for different quotes online and from some of these candidates and find lots of different things that could theoretically impact something here or there.
Yeah, I mean, we care about mental health at our company unapologetically, and we have a lot of medicines for whether it's major depressive disorders, schizophrenia, and we can take those in a variety of different avenues within mental healthcare. However, when you look at even the implications of how the IRA was designed, a penalty on those that are small molecule and a few other dynamics at play, it really lent itself to not incentivizing investment behind mental health, so in terms of what could happen, we also look to see who's going to be appointed to CMS. Could there be any changes to the Inflation Reduction Act? The CMS is the governing body that's responsible for executing the IRA specific to medicines, and so the CMS appointment for us is going to be one that we watch very closely.
But I don't think you're going to know is there any positive or negative change for quite some time. But there will be change. And that's a definite. And that's something you have to be comfortable with when you're operating in this space.
Yep. Okay. Great. Let's talk a bit about crinecerfont. Eric, you had some really interesting perspectives on just the care dynamics in this as it relates to COEs, the sort of Tier 2 major centers, the pediatric market versus the adult market being more fragmented. Do you want to just sort of set the stage and talk about everything you've learned about CAH to date and maybe not everything. You know what? Sorry. Set the stage and talk about some of the things you've learned about CAH to date and give me some time to ask questions. You don't have to go for 22 minutes.
Yeah. We have 22 minutes. But I'll try and keep it brief. So congenital adrenal hyperplasia, it's a genetic condition. Patients are born without the ability to produce cortisol, which is needed to live. And we estimate that the prevalent population is in the north of 20,000 in the U.S. Some of the estimates are as high as 30,000. Today, the standard of care for CAH is high-dose glucocorticoids. And they're doing two things in these patients: replacing the missing cortisol, but also suppressing excess androgen production, which is one of the byproducts of the disease. And so cortisol, excuse me, GCs keep these patients alive, but it's a really suboptimal treatment approach. And so the unfortunate fact is that people living with CAH, they're constantly trying to balance suppressing their androgens and mitigating the effects of excess androgens with the long-term consequences of high-dose glucocorticoids.
Along comes crinecerfont, which is a CRF1 antagonist. It would be, if approved, the first new treatment option for people with CAH in over 70 years since the advent of hydrocortisone. We've been doing a lot of work to prepare for what we expect to be a launch early next year, our PDUFA date. We actually have two NDAs under review. Our PDUFA dates are right at the end of the year, December 30th. We have been learning about the market opportunity. We've been developing the market, so to speak, for the past year. If you want to learn a little bit more about CAH, I suggest that you go to our educational website called What the CAH. That's a disease state education campaign that's directed towards the patient community and families as well as endocrinologists.
And so what you were getting at, Paul, is sort of the diversity of the different patient types and where they're cared for. What we see is that there's an excellent patient advocacy organization called the CARES Foundation. And the CARES Foundation, they accredit centers of excellence for CAH. There's less than 10 accredited centers of excellence across the country, bless you. Typically, they're associated with hospitals. And there's another 10 or so COEs that are not accredited by the CARES Foundation, but they have a pretty high level of sophisticated services that they offer. So less than 20 COEs around the country. And we estimate that probably 15% or less of the CARES patients, excuse me, CAH patients, get their care through a center of excellence. Now, the other segment where there's sophisticated treaters is really the pediatric endocrinologists.
Around a third or so of all CAH patients are pediatric patients. Pediatric endocrinologists are, for the most part, pretty savvy and skilled in managing these patients, pretty comfortable. Most of them have patients or have had patients with CAH. And so if you talk to pediatric endocrinologists, typically you'll hear that they're pretty comfortable treating and they're enthusiastic about a new treatment option that's coming. Once you get into the adult population, it gets much more fragmented. And what you hear is that a lot of these pediatric patients, they get their care through their pediatric endo. They have a good relationship with them. They trust them. And then they age out. They get sort of pushed out of the nest, so to speak, when they get into late teens or early 20s.
And for many of these individuals, they have a difficult time trying to find an adult endocrinologist that they believe is good at managing CAH and that they trust. So there's a dynamic, a transition of care issue. Many of these patients kind of get lost to follow up before they find someone that they can work with through their adult years. So the way that we look at the opportunity with CAH is certainly being able to communicate with those pediatric endocrinologists and the parents that are caring for these children with CAH all the way through their teenage years. And then being able to work with those centers of excellence. Those are the segments that we think there'll be relatively faster adoption of crinecerfont when it's approved.
But then you get into that long tail of adult endocrinologists that may have one or two or three patients with CAH. And that's where things get a little bit more fragmented. So I think that you may see different rates of adoption upon approval in these different care segments. But ultimately, our aspiration is to make sure that everyone with CAH is aware of a new treatment option and has access to crinecerfont. It was amazing through the clinical trials that we conducted. Dr. Auchus, who's the leader in the space, was asked what percentage of patients could benefit from crinecerfont someday. And his number was 80%. And I think that was a reflection that every patient, if they could have the reduction of glucocorticoids for the benefit of the lifetime, that's significant to those patients.
Based upon the response that we saw in our clinical trials, primarily every patient with CAH could benefit from a medicine like this.
With some of the recent rare disease launches like Daybue and Skyclarys, we've seen a pretty significant patient bolus and then this leveling off and almost kind of like a gap, right, and then we'll see where those drugs go from there. Do you think that this launch would follow those kinds of kinetics or is CAH just totally different than those analogs?
Yeah, I think we'll find out. So I mentioned that there are segments where we'll see likely faster adoption. But the one thing I also want to bring into the equation here is a gap between patients getting started on product and seeing reimbursement. And what we expect is that if you look at the payer mix for the CAH population, we're talking primarily commercially insured patients. Secondarily, the second biggest segment would be Medicaid. There's a very small population of Medicare patients. And that's primarily because up until recently, patients didn't live that long with CAH. And so why it matters is that many of these commercial plans typically have restrictions early on on coverage. So they may have new-to-market product blocks in place or they may have delayed approval for reimbursement claims. So we're putting a whole suite of patient support services in place.
One of the programs that we're going to put in place is a quick start program where upon receipt of the prescription, our partner pharmacy will pursue reimbursement. If they don't get reimbursement approved within a relatively short period of time, those patients could be eligible to get started on free product, with the idea of getting them started on treatment while we work on the reimbursement process. Some of these patients may get one month or two months or in some cases even three before the reimbursement comes through. What that leads to is sort of a shift, time shift in terms of a difference between patients getting started on treatment and when the actual reimbursement kicks in.
The other aspect that will pace the launch a little bit is just the natural patient flow into the offices where patients on average come in one to two times per year if you're an adult or late teens. Younger kids come in maybe two to three times a year. So you just have this natural flow when patients will be coming in. There's a tremendous amount of demand when we do any type of study on the patient side. This is the first approved medicine or hopefully approved medicine in 70 years. And there's a lot of motivation that we get. But I do think there's not going to be this bolus effect, as you've said or as you described from the other products, Paul. It'll be a bit more gradual.
But our perspective is when you think about time to peak relative to something like tardive dyskinesia with Ingrezza, time to peak will be much more accelerated with our crinecerfont product as compared to Ingrezza.
From a payer perspective, Eric, you've talked about doing engagement, educating payers. You feel like they appreciate the value of reducing steroids. Again, using some of these recent drugs as analogs like Daybue and Skyclarys, do you feel like we're in the right ballpark with those as it relates to the potential annual cost of crinecerfont?
I don't know what ballpark you're in, but.
Daybue and Skyclarys?
Yeah. I mean, we obviously look at a range of rare disease launches and relatively newer. Certainly, I think we're testing a range of different price points. And ultimately, what it boils down to, I think, is making sure that the price is in line with the value that's created. Luckily for us, we saw when we unblinded the registrational trials, the adult trial and the pediatric trial, that the clinical profile was excellent. A very robust treatment effect, strong reductions not only in androgens, but also the ability to reduce the glucocorticoids in many of these patients achieving physiologic dosing. So we felt very good about that. Combine that with a very clean side effect profile and good tolerability, over 90% of patients completed both of those trials and rolled over into the open label extension.
So we're blessed with a drug that has a very strong clinical profile and we think is going to create a lot of value. So I do think that we have some flexibility as it relates to pricing, but we also need to make sure that pricing is aligned with what we perceive the value to be.
Yeah.
Yeah, I think when you look across the universe and people hate this range I give as 100,000 to 500,000 is where you see small molecule symptomatic or chronic treatment.
Neurocrine usually sandbags expectations. So should we expect like 700,000 then?
Yeah. No, always overdeliver, under promise. No. So we're testing both the value and then ensuring that patients can ultimately have access to the medicine. One of the good aspects to this launch is that 60%-70% of these patients are commercial. And so with that, you can really ensure that patient out-of-pocket cost is very low. And so although the drug price might be high, the cost to patient will be low. And so that's our goal is to make sure that, number one, we price for value and number two, patients can ultimately get access to the medicine. And we'll see where the final label shake out late December. And then we'll establish a formal price probably within a handful of days after.
You thought about what metrics you might share given the potential lag in revenues versus demand?
We've thought about it, and have we defined exactly what would be instructive externally? That's something that we're still talking about. I know it's helpful to be able to share things like new start forms or patients on medicine not reimbursed and things of that sort, so we'll be thinking through what metrics we can share early on, but we're excited. When you think about us being a company, you have a growing blockbuster in Ingrezza. You have a second blockbuster likely coming in crinecerfont that's going to help a tremendous amount of patients.
And then you think about most recently when you look back over the last year, having two major phase II programs read out positively for 845 and the AMPA potentiator as well as 568, Paul. Those are tremendous when you say, "What are the building blocks you need to be a leading biopharma company?" I mean, that's essentially what you need. And so we're excited about what we have in 2025. I know the market conditions right now are a bit extreme. But as a company, we feel like we're quite well positioned at the moment.
Yeah. Yeah. Okay. Great. Let's talk maybe about Ingrezza. I asked you a question last night. How long can Ingrezza grow at 20% per year, right? Which again is a loaded question, but is a testament to your continued view that you're under-penetrated in this market. Do you want to talk a little bit about that? I mean, do you feel like what you're seeing right now in terms of this patient add rate is sustainable in the midterm?
Yeah. So I'll take a step back. And for those of you not that familiar with the history of Ingrezza, it was approved in 2017 and was the first FDA-approved treatment for tardive dyskinesia. At the time that we launched, we estimated the prevalent population at least 500,000 in the U.S. Subsequently, we increased our estimate to 600,000. And then more recently, we've upped our prevalence estimate to 800,000. And that's really a function of the fact that tardive dyskinesia occurs secondary to patients being treated chronically with dopamine-blocking drugs, mostly antipsychotics. And antipsychotics, as you know, the use of them has grown exponentially over time, primarily to treat non-psychotic conditions. But what that means is still about two-thirds of people with TD not getting any kind of treatment for their involuntary abnormal movements.
And less than 15% of people with TD are currently being treated with a VMAT2 inhibitor, which is the first-line standard of care nowadays. So the base gets bigger and bigger, of people on treatment. But we do see a lot of room for growth going forward. And seven years in, but we still have 14 more years of exclusivity going out to 2038. So we're going to continue doing what we've been doing, which is educating the segments of the market that we're in, which are outpatient psychiatry, neurology, and long-term care. And there's still a lot of people that are undiagnosed. And we're making the investments that we think are necessary to continue to do that. We're just wrapping up an expansion of two of our sales teams right now. We expanded our psychiatry team.
And those folks got hired, trained, and deployed in early Q4. So they're about a month into it. And we also expanded our long-term care team, which is a relatively newer segment for us. We've only been in long-term care for about two years, two and a half years. So lots of room for organic growth ahead. And we're really committed to continuing to serve these patients and the providers. So we'll see how things play out, but we're very bullish on the potential for Ingrezza. It's amazing to think, Paul, seven years ago, a market of zero is now $4 billion. And it seems like there's still a lot of room left for us to grow. So I think we've all benefited from a market that has developed as nicely as it has.
I think it's also. I say this to every person in our company. What Ingrezza has allowed us to do is really invest back into our company to grow the pipeline that we have today. And so as Ingrezza continues to grow and as crinecerfont continues to grow, that's affording us to build a leading neuroscience company. And it's just been amazing to watch and see that, Paul. One financial plug because I had some questions coming out of an earnings call in terms of R&D investment. I did give a guide of between 30% or the low- 30%s to mid-30% of revenue is going to be invested next year back into R&D. That's on a GAAP basis. I was asked if it was non-GAAP or GAAP. And that's really a reflection of investing in two major phase II programs with 845 and 568.
We're going to be meeting with the FDA over the next several months. That's going to help inform what those programs are going to look like, when we're going to start them. We also have a variable with one of our programs, 845, which I said last night, the AMPA potentiator is my personal favorite in our pipeline because of the clean data that it showed in major depressive disorder, the safety, the expedited path to the market, and a tremendous market opportunity from a revenue perspective. We have a partner in Takeda who did an excellent job developing the medicine. That's a 50/50 cost share. They have an opportunity to either stay in or opt out and become more of a traditional partner where you collect royalties.
So that's one variable at play as it relates to the R&D investment that we're going to have next year. But it all really comes on the back of Ingrezza.
Are you as enthusiastic as you were a couple of weeks ago about making a big multi-pivotal study investment in the M4 after what happened with emraclidine?
It's either a gift or a curse.
Right. And not in between.
Not in between. I would say, number one, whenever something like that happens, it just is a reminder of how difficult neuropsych is. There's so many surprises that come, whether in negative trial outcomes, what dose ultimately is most efficacious. Like the debate around our phase II program is just a humbling reminder of how difficult neuropsych is. So based upon what I observed or we observed, and it's going to be AbbVie to tell us what the truth is, but there's a variety of aspects that would make me feel like or us feel like this was potentially a failed study. One, in terms of design being two-to-one randomization, that increases the rate of potential placebo response. They're going from five sites in their phase I- B up to 30. They were an organization that largely outsourced everything, somewhat of a virtual company via a CRO.
They're acquired in the middle of it, they had team turnover, and I believe they even changed CROs or added a new CRO to help with enrollment, so all of that boils down to think, gosh, that would be a really hard trial to conduct flawlessly and get a clear answer on, so I think they're probably going through the results now, trying to figure out whether they push programs forward or not, but I would say on a personal level, very few times in a biotech history would you have this clean of data that we saw in a muscarinic as well as in an AMPA that we can push forward that can really provide clear, significant revenue later this decade and into 2030, so I'm very committed to making the investment.
However, we're looking at ways to make sure we're learning from what happened with Cerevel, thinking about our trial design. We've long said phase II-B or our phase II was really to find a dose and to make sure it was safe. phase III is going to be all about efficacy signal. So one-to-one randomization is going to be incredibly important, hands-on touch, internally managing the trial. So we're going to do everything we can to de-risk this and get to an answer as soon as we can on this. But exciting times, but very busy times at Neurocrine right now, Paul.
Great. I think we're out of time, but thank you guys very much. Appreciate it. It's great seeing you.
Yeah. Thanks, everyone.
Thank you.