The next panel or well, expanded fireside I should say, because everyone's representing the same company. I'm Yigal Nochomovitz, biotech analyst here at Citi. We have Neurocrine Biosciences as our next company. To my left is Kyle Gano, the CEO. Everyone could maybe introduce themselves.
Yeah, Matt Abernethy, CFO. I've been with the company about seven years, and really exciting times for the company, with Ingrezza, crinecerfont, and a few phase three programs we're starting. So I feel quite fortunate to be with the company. Yigal, nice to meet you as well.
Yeah, Yigal, thanks for having us. And to your far, far left, I'm Todd Tushla, Investor Relations Vice President. Grateful to be here.
Okay, and remember, for those here in the room, or if you're on the webcast, you can type your questions in, and I'll see them and be able to relay them to management. So maybe just as a high level, just kind of give us a, you know, 30-second State of the Union on Neurocrine. Where, how is the business shaping up through the rest of 2024? And, you know, what should investors look forward to for next year?
Thanks, Yigal. Maybe I'll take a moment, just a quick introduction of myself. This is my first Citi conference of being the CEO here at Neurocrine. I've been in the seat now for almost two months after our longtime CEO, Kevin Gorman, retired in early October. I've been at the company for 25 years, so a lot of the things you may hear from me today come from a historical standpoint. I've been here through a lot of the ups and downs at Neurocrine, and really brings us to this time point here, as Matt said, a really exciting time at Neurocrine, and if you want that 30-second overview, I reflect on where we were towards the end of the year in 2016 when we were talking about the potential launch of Ingrezza. It was in review at that time.
One of us probably said it felt like Neurocrine was a tightly oiled or a tightly coiled spring, ready to spring out there with all the things that we had ongoing at the company. So valbenazine, now Ingrezza, was in review. We had another program in phase three, and crinecerfont was just starting to get some interest out there in the area of CAH. Fast forward to today, valbenazine was approved. It's Ingrezza. In Q3, we reported $613 million in revenue. That's about 25% year-to-year growth, outstanding medicine there with a lot of time and opportunity left to continue to grow. crinecerfont, the medicine that was in early phases of development back in late 2016, is now in FDA review. And we look at that as being a potential blockbuster for Neurocrine and also something that will diversify our revenue profile as time moves along.
And we have not one but two programs in phase three, that being NBI-568 and NBI-845 for schizophrenia and depression, respectively, and then 10 other programs in clinical development. So in 2016, we were a tightly coiled spring. Today and in 2024, looking to 2025, we have a lot of growth opportunities across the medicines that we have at commercial with Ingrezza or near commercial with crinecerfont and all the good things that are happening in the pipeline.
Kyle, do you think the spring is tighter now or back then? Because it's amazing to think about everything we have going on inside the company.
There is a factor, those of you that are familiar with physics, called Hooke's Law.
I was literally thinking that, F equals KX.
So exactly. So the constant here now is a little bit higher in magnitude than it was in 2016. That just tells you the force that we're seeing ourselves potentially spring at, if we want to keep this analogy going, is much higher today. And that's what makes this all exciting.
I think, well, first of all, I was commenting earlier today with somebody about how dumb I feel from time to time being an MBA and not a PhD. So you just made me feel that way again, Kyle.
Not alone.
Yeah, but I also, you know, think it was interesting. And for me, in particular, just great to join a company seven years ago and be in a position like this. And I think earlier you were mentioning you've been working on CRF for, like, over 20 years at this point. And so to be at a place to take over as CEO, Kyle, I would just say it's quite an honor to be part of the company. I know Yigal probably didn't expect this type of back and forth.
That's fine.
It is quite a cool perspective. In the midst of sort of what you'd call, I'd call turmoil in the industry, there's great hope right now in terms of new patients or, sorry, new medicines that can be brought forth to help benefit patients. And fortunately, we're going to be able to do that for the first time in 70 years with the CAH medicine this coming year. So irrespective of the challenges, I guess, with the industry and some of the political dynamics, a lot is going well at Neurocrine as it relates to future innovation of medicines. Just give us a little bit of the background. What roles did you have in the company from the beginning through till now you're, you know, elected to the CEO position?
It's a great question. I'll tell you, it's a bit of a funny story. I started at Neurocrine as a summer intern, back in 2001, between my first and second year in business school. You know, rest assured, our HR group really lets us take advantage of that each year when we roll out our summer interns at Neurocrine. They say, "This could be you in 25 years if you stick around long enough, so I started off as a summer intern mainly on the marketing side of things when we struck a couple partnerships, at the time I joined in 2001, namely with Pfizer. I learned a lot about this space through our collaboration with Pfizer being a really top marketing organization, back then and today.
And that allowed me to move into other roles in the company, in particular in business development. I've served, in a role either directly in title or indirectly, just trying to help out being in a small biotech company over the years, every role within the company. And that helped me appreciate, really those things that drive value for the company, things that help things move things along, and, give me a good opportunity to succeed in this role that I am in now. And, you layer on top of that a lot of pride in what we've done over the years. Matt mentioned the time that we spend on CRF, the corticotropin-releasing factor as a target was a founding technology of the company back in the early 1990s.
And for those of you that followed our story, you know that we leveraged that knowledge, that platform through many early partnerships with a lot of the major pharmaceutical companies. And that helped bootstrap the company into its maturation to where it is today. Little did we know back then that CRF's best role was in endocrinology. A lot of the early work that was done in the space was in depression and anxiety. But that's something that you learn along the way and something that I appreciate. There's always ebbs and flows in the programs that you work on. There's rarely a linear path. There's a lot of things that you learn along the way. And the key is that you apply those learnings to future studies and future programs.
We did that initially with a medicine that's now approved through elagolix to Oriahnn , which is currently being commercialized by our partner AbbVie and then from valbenazine to Ingrezza. These are things that had multiple phase 2 setbacks that we're able to learn from and eventually get those study designs right and they've led to the medicines that we have today.
And then that sort of sets me up for my next question, which is, are you going to essentially continue to steer the ship in the same direction with the same vision, or is there a different or modified vision for the company now, now that you're the leader?
I do appreciate that we've got a lot on our plate right now. Obviously, you've seen, in the press, we've expanded our sales force for Ingrezza, this quarter. That's to recognize the significant growth that's still ahead. That requires more work and attention as we think about investing in Ingrezza over the course of the remaining patent life for Ingrezza. That's another 14 years. We're also looking at medicine that's in late-stage review right now, which in a couple weeks' time, we're hoping that we get an approval. Then we're looking at launching a new medicine. On top of that, we have two programs that are moving into phase three. For the first time in Neurocrine's history, we've tackled one program in phase three, per unit of time. Now this is the first time that we have two.
Working in the psychiatry space, we all know the importance of managing studies, managing sites. So there's a lot of oversight that's required there. I want to make sure we do those three things really, really well as a company. Coming from a business development perspective, you know, I do get a lot of questions, are you going to continue down that path of acquiring assets, acquiring technologies? Those are things that we continue to do and look at from a sense of urgency perspective. But right now, with an eye on Ingrezza, launching crinecerfont, getting our hands around, doing quality phase threes, want to make sure that we do that really well before we look at other things within business development to add to the portfolio.
Yeah, observing Kyle for the last seven years, but then also last three months, one of the things I appreciate as a CFO. It really comes down to our job is to develop medicines, but also to drive shareholder value. And I think that the components of where are we going to invest into the future, driving top-line growth in Ingrezza and crinecerfont, capital allocation priority one and two, and then investing in our pipeline. I think we recently did a share repurchase an ASR. Well, I know we did an ASR, not I think we did. And that was just purely a reflection of our stock price being dislocated from our value. And it was a efficient use of capital. But by and large, our capital is going to be redirected to investing in the business to grow a leading neuroscience company.
And that's going to come through growing revenue and then also investing in quality assets in the pipeline. So from a capital allocation perspective, because it's also since we did the ASR right around when Kyle became CEO, it's a question of, are you guys going to continue to buy back a whole lot of shares?
We might opportunistically, but that's not going to be a core component of our capital allocation philosophy. We're a growth company, and expanding our business is what we're ultimately paid for and shareholders will be rewarded for.
Yeah, I think just to add to that, you know, the key in our mind for a high-growth company is that you have an eye on near and long-term value creation. So looking at Ingrezza, looking at crinecerfont, that's your near and mid-term value drivers. In the long term, it's those programs in phase three. We can win on all those.
Okay. Well, rather than talk about the Ingrezza growth trajectory right now, let's go with the thematic question. We know what happened in the space, with Cerevel, AbbVie, Cerevel, you know, some criticisms of that study with respect, and not just them, but just in general in neuropsychiatric studies, issues with the placebo effect, issues with, quote unquote, you know, professional patients. You mentioned, you know, having very good stewardship of clinical trials. So maybe you can just talk about, you know, your thoughts on that competitive data point, but then just more generally, how you, you know, solve for minimizing some of these risks, which are obviously more present in neuropsychiatry than maybe in, you know, what I do a lot of work in is, you know, oncology, for example.
So maybe I'll start, and then I'll ask my team to add anything here that I miss. But when it comes to the emraclidine AbbVie data, you know, obviously not a great time to think about a potential new medicine that could be useful for patients. So that's why we're all in this business. But when it comes to the data in and of itself, you look at the changes that were made between, you know, more of an academic phase 1b trial to the larger phase 2/3 trials that were conducted. And there were a lot of changes there that were made, both in terms of, you know, moving from 80 subjects to 375 or five sites to 25 or however many there were, and then a U.S.-based study that included U.S. and European studies.
During the course of the program, obviously, Cerevel was acquired by AbbVie. That always adds swirl and unknowns to those that are working on the program, and then the use of CRO or CROs for the phase two trial. You can still win with all those different things that are ongoing in the background, but ideally, you wouldn't like to have all those different variables there, so whether those played a role or not, you know, I can't say. In our view, with the placebo effect being as high as it was, it's hard to make any inferences about the biology. We would say that, just because of placebo effect alone, they were failed studies in and of themselves.
And I would be not surprised to see if AbbVie continues investing in the asset, either in schizophrenia or in other indications, as they look to manage future studies on their own. And I'm sure they'll take all the learnings that they've had over the years from Vraylar as well, which is a very valuable asset that they have in the psychiatry space. So that's probably all I want to say about emraclidine, other than it's a segue for us to explain the differences between an M4 PAM, which is what emraclidine is, and our approach with NBI-568. I can't think of two different approaches to activate a receptor, that being M4, than between these two programs. emraclidine, being a positive allosteric modulator, requires acetylcholine as the endogenous ligand to activate the M4 receptor. We know acetylcholine, at least by age, is variable, potentially by disease state as well.
That's not something that we have to worry about with our program. The reason for that is that 568 is an orthosteric agonist. It selectively and directly activates M4 all by itself. It doesn't require any cooperativity of acetylcholine. Even if you want to compare it to gabapentin, we don't have to add anything to it to block side effects. It works just fine by itself. That's a very attractive differentiator in our mind. That's why we took this particular molecule and put it into a phase two trial a couple of years back. It read out in Q3. This is a phase two trial that had 210 subjects, about 15 clinical sites. We looked at four doses of active versus placebo, randomized in a two to one active to placebo ratio. This was an ambitious study that we met on face.
And the reason for that is that at the time of designing the study, we knew we were playing catch-up to KarXT, now Cobenfy, as well as emraclidine in the hands of Cerevel at the time. We didn't have the luxury of KarXT. That's a combination product. Today it's Cobenfy, xanomeline, and trospium. We didn't have 30 years of experience, working with NBI-568, as the data is out there for xanomeline. And we didn't have a PET ligand that Cerevel was able to lean on to help triangulate on doses for their early study. We were really doing that first inpatient study with our molecule. We had a number of questions that we were trying to address all in one study to set us up with the potential of moving directly into a registration program after this phase 2 trial.
The three goals, number one was to understand the risk-benefit of a selective and orthosteric agonist on M4 in a patient population, that being schizophrenia. The other one was to explore efficacy above 20 milligrams a day, which we always felt was an anchor dose for efficacy based on our preclinical and phase 1 work. Then lastly, to pick a dose or doses and dosing regimen that would be appropriate for phase 3. We're able to check all those boxes. Now, what we found was the 20-milligram dose, the dose that we had the most data on, outperformed the doses that were higher in magnitude in terms of milligrams per day.
That's where we had some noise around that, because I think individuals in the field were thinking that we should see a consistent dose linearity in terms of going from low to high dose that you would see a commensurate increase in efficacy. We didn't see that. We saw all doses were active, but the 20 milligram dose outperformed the higher doses. What we saw at the 20 milligram dose was a very nice profile. The total PANSS improvement was 18.2 points. The placebo-corrected PANSS improvement was seven and a half points. We saw an effect size of 0.61. We saw a separation of the endpoints, both primary and secondary, starting from week one and they were statistically significant from week three all the way to the end of the study, which was week six. All the data was consistent across all the sites.
We didn't have any rogue sites that performed higher or lower than other sites. They all look very similar across the board. And with a medicine that was once a day, no titration, no food effect, and a very good safety and tolerability profile, overall, that puts us in a very rare air in terms of a profile relative to other medicines in this category of the antipsychotics. And certainly, as we think about it today, relative to Cobenfy on the market today. So that's a little bit about our feel on emraclidine, the differences in the pharmacology, what we've seen with 568 in our phase two trial, the reasons why some uncertainty around the program in terms of the non-linearity of the dose response. The next steps for us are into phase two, meeting in the next couple months.
And if the FDA agrees with our plan, then we'll embark on starting a registration program in the first half of next year. And equally important, looking at pivoting into a second indication that we can take 568 into, this year, let's say, 2025 as well.
One thing, you know, I was just reminded of going through this process and observing what's happened. Neuropsych is tough. You have a lot of surprises along the way. Not all that can be rationalized, you know, scientifically. And two-thirds of approved medicines today have a non-traditional dose response. So it's not easy, you know, in terms of looking at the data and trying to understand exactly why did that happen. But when you see safety, like what we saw, with our muscarinic program, that's what we have found in engaging with clinicians. Safety matters in a significant way when treating patients with schizophrenia and a lot of the other mental health disorders that this could potentially be taken into. So we look at this as a bit of a gift.
If positive, the fact that we could be second to market, it's something that, you know, we'll only know if that gift is a great surprise in the box at the end of a three-year period. But we've interrogated our data to convince ourselves that we do see a signal there. There's other biomarkers that help, give us confidence, such as, you know, heart rate increase and everything of that nature that helps us understand whether we've engaged the target, that would align with the efficacy. So we do feel quite confident, but it's also a reminder of neuropsych is difficult. There's a reason why companies run, you know, two trials or three trials to get two positive. It does take a lot of effort.
Yeah, I mentioned at the outset here of my view on a lot of things comes from my history at Neurocrine. And it is a good reminder based on what Matt just mentioned, you know, through our studies with valbenazine, we failed the first three phase two trials for valbenazine. Each study, we learned more, in terms of the appropriate trial design before the fourth one was positive. It is the nature of the business. And, I think there are a couple of things that you take away from that. You got to be able to appreciate when you have a good outcome and know when to take advantage of that. And you also need to know when there's probably no path forward and when to give up.
I think that Neurocrine has shown over the years that it can strike the right balance on those two extremes.
And sorry, the last piece strategically for our company, Ingrezza today, you know, represents over $2 billion of sales for us. The large majority, call it 80% of our business with Ingrezza comes from psych. And so when you think about leveraging, you know, one of our greatest assets for whether it's 568 and/or 845, a major depressive disorder, you know, come the end of the decade, you know, we're looking to continue to transform what we're allowed to, what we're able to deliver, but then also leveraging, you know, our P&L profile, to be an incredibly profitable company.
Oh, wow, you mentioned Ingrezza. So how much, what's the growth expectation over the next, over the near, mid, and long term? How much more do you believe the brand could grow?
I think, you know, where we are today, and this has come out in some of our remarks over the past couple of weeks and months is, you know, we touched on the expansion of our sales force this quarter, our work on expanding, with appreciation of expanded prevalence of 800,000. Where we are ending this year is that about 85% of that 800,000 are still patient-wise not on a VMAT2 inhibitor. We're seven years into launch. We're talking about a medicine that, on a year-to-year basis, on the revenue side of things, has grown nearly 25%.
If we think about 85% of patients still have not been treated with a VMAT2 inhibitor, our guidance this year of $2.3-$2.32 billion, 14 more years of patent life, there's a lot of room left to grow in this program, this franchise that we have really with Ingrezza across TD and Huntington's, although the majority of the growth is from TD. We're very excited about the opportunity that lies ahead for us. We know that there's work to be done. It's not easy to go out and strike the right amount of awareness with patients and physicians to make sure that they get their diagnosis of TD. I think most physicians are still doing the right thing in terms of making sure that the underlying disease is being picked up and treated appropriately. TD comes after that.
That's how we have experienced our interactions with physicians over time. But the work goes into working through the new realities of what we see in this space, mainly in psychiatry: a reliance on telemedicine, for example. When physicians are not in the office, they rely on nurse practitioners. And there's a lot of turnover of that personnel within offices. They're highly sought after, and they can go to another office and do better from a salary and benefits perspective. So the education that we do takes time. And when the nurse practitioner moves on, you start all over again.
And even with that said, once you make your progress there, there is still this underlying foundation of education from physicians that the best way to treat TD is to reduce the dose of the offending agent, which is an antipsychotic, replace it with another antipsychotic, or remove it altogether. You have to work through all of these things. And the best thing that we found to do that is to increase your frequency of interaction between all the stakeholders along the way here. That decreases the white space if there's a new individual that you're trying to educate. It keeps TD top of mind when the physicians are always looking at the underlying disease first. You remind them about TD, and they do ask the patients about that in combination with their underlying disease commentary and discussions. And all those things help.
But it's not something that you'd see as, you know, kind of a hockey stick type of growth trajectory that you see with increased awareness. It's a steady flow of new patients that are coming into the system asking about their symptoms or family members and ultimately getting a diagnosis, and that's been playing out in the growth rates that we see from year- to- year. It's been steady, double-digit growth, year in and year out, so I think as we move into 2025, we mentioned the sales force expansion. That always causes some noise in the quarter that you have, and we expect that to start paying dividends around the middle of next year. We'll look and see what our growth trajectory is into 2025, and we'll look at supplying an annual guide as we typically do in the February timeframe.
What other strategies are you using to, you know, get exposure to that 85% where you don't have share right now, for example, using more sophisticated newer methods like maybe even AI or machine learning to look at electronic medical records and try to find patients that may have symptoms that are consistent with TD? It's obviously social media campaigns. Some companies that you have leveraged influencers.
Yeah, we should hire you to come in and help with the strategic marketing aspects. But, you know, a lot of that is being deployed now in terms of being able, especially on the marketing side, to look at whether it's Google searches, social media, you know, activity, who would be a potential candidate to have tardive dyskinesia. On the chart side, it's quite difficult because there's really no upside to noting a movement disorder for a psychiatrist in particular. A lot of what they're talking about is anything that the customer might be or the patient might be complaining about. And then in terms of asking if there's any side effects with their antipsychotic, most patients would have no idea that the movements are caused by the antipsychotic.
So we've tried some of that, and it's just, unfortunately, at the time of launch in 2017, this is how underdeveloped the market was. Only 2% of patients actually had any notation of tardive dyskinesia in their chart. And so a lot of the additional marketing activities we're doing now have to do with on the marketing side. We're also looking at, or we also have had a direct-to-consumer advertising campaign that's been ongoing for the last several years that continues to look to be really an effective tool because it's encouraging that patient to go in and talk to their psychiatrist about a movement disorder. That's like asking somebody to go to the dentist and asking the dentist to look at their ankle. So I think the direct-to-consumer advertising campaign is just given that frequency that these movements, they might be able to be treated by a psychiatrist.
But we're also always looking at different ways to help expedite the diagnosis of tardive dyskinesia, including, you know, facial recognition, for example, or, you know, something that could help with screening or whether even if it's with the patient doing it autonomously. So there is going to be evolution in this space that I think we're all looking at. But at the end of the day, it's going to really come down to that either advanced practice practitioner or that psychiatrist going beyond the mental health aspect of that patient and caring for the movement, which is usually a secondary or third concern, as they're going through their 20-minute visit with the patient.
And maybe just to add to that, we also know, and for those of you that track the space on the antipsychotic side of things, the use of antipsychotics continues to grow, quite meaningfully, low single digits, certainly multiples of the growth rate of the general population. And with that growth in antipsychotics comes new prescribers. So one way to help educate more is to make sure that you have the right number of personnel out there trying to educate these new prescribers of antipsychotics. So that's another advantage of having a larger sales organization out there. The other piece is appreciating that while most of the business goes through psychiatry, there is an element that's kind of an element of within psychiatry within long-term care.
Understanding the opportunity there in LTC is something that we've seen pick up a little bit over the past couple of years as well. The problem and challenge with LTC is that they're not necessarily concentrated in small geographies. They're spread out across the entire U.S. So again, having more individuals out there to look at this potential area of patients that need help is also advantageous.
One thing I wanted to come back to on 568, as far as the data that you showed there, so it's a plateau effect or it's more of an upside-down U response? Is that how to think about it? Which is more correct?
What we typically say out there is that all doses that we saw in the phase two were active. I would say if you, you know, at a high level, they all look similar across the board in terms of where they land in terms of PANSS total score. The 20-milligram dose does separate. So it's not necessarily an inverted U. Inverted U would expect to see that the highest dose performs the least. And actually, our highest dose amongst the remaining, three doses did probably second best if you look at just overall PANSS scores improvement. So it was, really an irregular dose response is how I would characterize it.
And the other thing, you know, I've sort of gleaned from talking to some of the neuro experts, this aspect of the frequency of checking, you know, questioning the patient regarding their scores, and that you don't want to do that too frequently because you can, you know, ramp up the placebo effect if you're always interrogating the patient. Do you buy into that thesis or not? And how does that impact how you design your trials?
Yeah, there's certainly an element of that. A lot of these patients in clinical trials may have not had much of any care at all during the course of their life, and they come into a clinical trial setting, and all of a sudden, they have 24-hour care. And of course, that's going to make everyone feel better about participating in the trial. So obviously, you want to strike the right balance between doing what you need for the care of the subject and the study, but not going over the top on that to help add to the placebo effect. We've seen that in other trials over the years. I wouldn't say that, you know, our trials, when it comes to interaction or frequency of interaction with subjects, is any different than what other companies may be doing or have done in the past.
I think what we just try to do is make sure that we have great oversight of what's happening overall on a site and making sure that there's no overly high placebo responses among particular sites. That's something that you can monitor for over a period of time. When you see that, you can go into those sites and try to figure out, you know, what's happening in particular with how the PANSS scores are applied and making sure that the investigator who else is applying those scales is doing so in a way that's consistent. If not, is there an opportunity to go through the education process once again to make sure that the PANSS score is applied, the PANSS scale is applied in a way that it should be at that particular site?
And then you can compare that to other sites and see how things are going. If you don't see the response that you're looking for, there's always an opportunity to close down a site, and making sure that they're not contributing negatively to the overall conduct of a trial within psychiatry. We know one or two sites that are off in terms of their placebo response, can take a trial that would have been positive and convert that to a failed study.
Yeah, it's amazing as you speak. Just thinking, like I said earlier, the complexities of neuropsych are great. Even the thought of three more meals a day for a patient, even if they're on placebo, you know, provides a benefit to those patients, and so these sites who run these trials are very good at trying to minimize the just natural placebo response because of the change in environment for these patients, so it's not easy, and that's why it's very important to ensure that, you know, inclusion-exclusion criteria are very clear, baselines are appropriately set, and then who's administering these somewhat subjective scales week to week, you know, really know what they're doing, and you can reduce variability.
So the funny history lesson here for valbenazine and Ingrezza in our first phase two trials, the reason why those failed is that we put the application of the movement scale, the AIMS scale, in the hands of the psychiatrist. As Matt mentioned, having a psychiatrist diagnose a movement disorder is like going to a dentist to look at your ankle. No matter how much training we did with the psychiatrist, they couldn't apply the scale similarly across sites. So we took that out of their hands, and we basically had them hold the camera and had them videotape patients and send those videos to movement disorder specialists that were neurologists. Only when we did that did we get the nice, clean, pristine wins that we saw that you all saw ultimately that led to the approval of valbenazine.
Okay, let's, in the last few minutes, let's just sort of expand the discussion to some macro topics. One sort of geopolitical, actually, and the other, regulatory. So starting just this might be an easy one because I don't know the details of your supply chain, but, where is your manufacturing? Where do you do your API and your fill finish? And are there any risks associated to, you know, potential tariff changes in tariffs?
Yeah, I mean, we're still going through that assessment process. A lot still has to be determined. What I can tell you from a manufacturing perspective, we have very little exposure to China. But we do have manufacturing, like many people in Europe, in the pan-European region. So I think that that's something that we'll look at from a tariff perspective. Regarding the actual cost of production, as you can see, we have a 99% gross margin on the product with Ingrezza. And we'll see what the margin ultimately is with crinecerfont, but quite high. But I would just say that it's something from a tariff perspective, we are keeping a pulse on that, trying to better understand what the financial implications of any tariffs would be.
But thankfully, sitting here today, don't see you know a whole lot of financial implications, but that's with the strong asterisks of it always comes down to the finer points within how it ultimately gets legislated.
Do you have contingency plans to build a U.S. manufacturing plant, or is that too far afield right now?
For us, none of our volume would be sufficient for our own manufacturing plant. And since most of what we do are small molecules, we do have redundant sites in the U.S., primarily on the finished product side.
Okay.
In drug product development. On the API side, I think that's where a lot of the industry probably has most exposure. We're not alone in that regard.
You're a lot in the same boat there. Yeah, for sure.
Yeah. I think the key is that, you know, with respect to Ingrezza or crinecerfont, these are small molecules. We've manufactured, whether we have commercial manufacturers today for both products, they've been manufactured by many different CDMOs over the years. And if there was a real need to have to shift things, in particular for API here in the U.S., that's something that would be, eminently doable.
Okay. And then I mentioned regulatory. So in the last minute here, the potential changes in leadership at not only HHS, but CMS, FDA, to what extent may those impact or not impact your business?
I think where we are right now is that we see a lot of nominations being made by the Trump administration and coming Trump administration. Right now, they're just nominations. Until they become real and we hear some of the language coming out of the people that are moving into these slots, it's really hard to know specifically what's in store for. The good news is that we've seen, even in the prior Trump administration moving to the Biden administration, there's always challenges that are introduced to our industry, and I fully expect there to be opportunities as well. We have a government affairs team in D.C. that keeps a pulse on this for us, and we'll keep managing this in real time, as it is.
We will make sure that we don't, you know, as a strategy for the company, get ourselves in any long-term commitments that we can unwind as we move into this new administration, see how things ultimately shake out, but ultimately, what it comes down to for us is still just controlling those things that we can control. We can control right now Ingrezza in the U.S., making sure that we continue to commercialize while there and continue to grow that medicine and treat more patients, helping the FDA move through the approval process for crinecerfont, having a good launch there for CAH, and then making sure that we execute high-quality phase three studies, and that's where we're going to focus.
All right. Well said. So I think we'll leave it there. You wanted to make another comment? All right. Thank you all so much. Appreciate it. Enjoy Miami.