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Outside chat.
Let's kick things off. This is David Amsellem from the Piper Sandler Biopharma Research Team. We're delighted to have Neurocrine here. We have Matt Abernethy, CFO. We have Eric Benevich, Chief Commercial Officer. We have Todd Tushla, Director of Investor Relations. Thanks, gentlemen, for joining us. It's been quite the year. I would love to turn it over to Matt for just a few opening remarks on, I guess a reflection on what's been, to say the least, an interesting year, both for Neurocrine and for the biotech space writ large.
I like how you said "delighted" to have us here. You know, I think this year anybody who thinks it's been a delight, I think is fooling themselves. I was talking to an investor before this, and, you know, they were reflecting on, you know, we're sitting here in a really good space, spot from a stock performance, but getting here, man, it's been a slog, I think, for the entire industry. You know, I think that there's a lot going on, in the industry and in the sector. For us as a company, we're actually executing quite well. I think you'd agree with that.
Mm-hmm.
It is early. It is 6:30 A.M. back in California. You know, I thought maybe I'd share a little bit about what motivated me to get out of bed this morning and what motivates us to get out of bed every single morning. You know, the three things that come top of mind, and colleagues, please, jump in here. You know, number one is the patients, that we're in a sector to help patients. Number two is just the fact that we work with some great people. Number three, I love the challenge of biotech. I'll get to all three of these here in a minute. If you think about the patients, you think about somebody with tardive dyskinesia. Eric was the man who launched this medicine eight or nine years ago.
Somebody with tardive dyskinesia is dealing with an underlying mental health condition. They have depression. They have bipolar. They have schizophrenia. They develop these movements. Their mental health may be in check, but these movements won't go away in their face or in their hands or in their trunk. Up until 2017, there were no approved medicines. Eric and team have now taken that medicine, Ingrezza, to now being around $2.5 billion alone this year. Only 10% of patients with tardive dyskinesia are being helped with the VMAT2 inhibitors.
Okay.
Significant room ahead. In addition, in December of last year, a year ago, we received approval for Crinecerfont, which is for patients with congenital adrenal hyperplasia. They have not had any approved treatment option in over 70 years, with the only option for them to take is very high doses of steroids every single day of their life. As Eric and others like to say, "Steroids, we all know. They're bad for your bones, bad for your brain, and bad for your heart.
Mm-hmm.
One year into launch, we've helped 10% of those patients. We're not satisfied with where we're at. We're gonna accelerate that path to peak. On a personal level, it's just been a blessing. I think many of you guys might know, but I'll just say it just for some, holiday spirit.
Mm-hmm.
My son has CAH, and he, we dealt with CAH his entire life. It's what brought me to Neurocrine, eight years ago. Seven years after I joined, it was approved. He and my son have been on that medicine for the last 12 months, and it's exceeded all of our expectations and really changed the trajectory of his life. You know, when I think about the slog of the year, at the same time, I have this blessing of my son being healthy and aided, and, you know, that can help so many more patients. Thanks for listening to that personal story.
Mm-hmm.
The second piece, really the people. Eric has a field sales team, and the medical teams go up community mental health centers every single day, trying to help patients with tardive dyskinesia and then also going into endocrinologist offices. We have a great team, that is, that is kicking some butt in the field. We also have 1,000 people back in San Diego working on whatever the next new medicine is going to be, to help patients within neuro. And we're gonna share more about what they're working on at our R&D day, here in a few weeks. Lastly, let's talk about a challenge. I'm competitive. I play Division I athletics, and challenges are something that's part of biotech.
Yeah.
Medicines fail, drugs read out, in ways that you wouldn't expect. Competition pops up. Most recently, we've been having the challenge of the IRA.
Yeah.
The implications of what the Inflation Reduction Act is going to have on our company. I had an investor. She said to me five years ago, she said, "Matt, okay, IRA is hitting you in the face right now. You got punched. What are you gonna do about it?
Right.
You know, what we did was we did what we could control, maximize the value of Ingrezza. We now have a second, going to be blockbuster in Crinecerfont. We have built a real company with an extensive pipeline. That challenge, I think that we've met that quite well. Over the last couple of weeks, you've heard the data that's been read out from the government and then also our competitors' commentary. We feel like it's gonna be very manageable from an Ingrezza perspective from 2027 to 2029. We have the substrate, I think, to take this beyond $20 billion in market cap. That's our aim.
Mm-hmm.
To get out of this $10-$20 billion market cap zone. We have the financial resources. We have $2 billion in cash, no debt. We will be looking at business development activities or opportunities, if the right ones pop up. We'll, of course, act. It is not something we need to do to be successful, but we can do it if the right opportunity presents itself. That is a bit of a long-winded way of giving a recap on where we are at as a company. What is your view, David, in terms of how the year has shaken out for Neurocrine and for the industry at large?
I would say, to paraphrase a great writer, it was the best of times. It was the worst of times. I think it right now looks like more the former than the latter. Let's hope that continues into 2026. You touched on a number of questions I was going to ask, but first, thank you very much for sharing your story about your son, and I'm thrilled for him. That's awesome, for lack of a better term. That is awesome.
It really does put in perspective. We work to help patients.
Yes.
When you can personalize it, and I think a lot of the diseases we've worked with, even, I'm sure we'll talk about the pipeline, treating, you know, working on new medicines for patients with major depressive disorders, for example, a dose of Osavampator.
Mm-hmm.
I think people in this room might struggle with it. You also have, you know, definitely, family members struggling with it. It is very rewarding to think about the patient on the other end of all of our activities.
I wanted to pick your brain, Matt, on M&A. We were talking in the hallway about M&A activity picking up. You get asked the question all the time, and it's an appropriate one, particularly as the cash balance continues to grow. I guess my question here is, you've built a pretty large commercial infrastructure in neuropsychiatry. One question that I always think about is the extent to which you can leverage that, not just with your internal pipeline, but externally. I guess my question here is, how do you think about that, and how are you thinking about what I like to call larger scale M&A well beyond what you've done historically?
Yeah. I mean, sky's somewhat the limit, or I guess it's a blank canvas for us.
Mm-hmm.
In terms of how we use our balance sheet, how we use our cash position, you know, for right now, we're very focused on maximizing the opportunity of Ingrezza as well as Crinecerfont. I would look at this man on my left, what he's created in our commercial infrastructure. You're on my left, Eric Benevich. You know, the commercial infrastructure that he's created, our ability to engage with psychiatrists, long-term care facilities, neuro, and then now with Endo, we do have a significant strategic asset that, as he would say, "Keep feeding me.
Keep feeding me with more or new, products. I do think when we look and screen the canvas or screen the universe for potential targets, you know, that's really where we're focused on what medicines over the next five years could come into the commercial infrastructure that Eric and team could maximize. There aren't a lot of assets out there.
Right.
and so you know that your strategy can't solely rely on business development.
Yep.
You have to have a combination of both business development and internal, innovation. Of course, as we look externally, it's really thinking about a commercial product that can come to market over the next, you know, three to five years as we navigate both the IRA window, and then also, you know, the readouts of our phase three trials in, in, major depressive disorder and schizophrenia in 2027. You know, I think we're gonna be set up for quite the transformation over the next handful of years.
Certainly to the extent that, directly, Dean and also the Ambitor bear fruit, you have a readily leverageable sales organization for that. I guess my question was more on external candidates, and I know that's.
Yeah.
That's a harder question to answer.
In psych, it is.
Yeah.
You know, much, much more difficult to think about those assets outside. But you can see, from an M&A perspective.
Yeah.
You see the likes of, of Intra-Cellular.
Sure.
you know, being acquired. You had Cerevel acquired. You had Karuna acquired.
Mm-hmm.
All in the muscarinic categories. I think that for us, based upon the results that we saw in our phase two trial and also the muscarinic portfolio that we have, you know, we feel like we're pretty heavily loaded up in psych.
Mm-hmm.
from a internal development perspective and likely not a category that we'd be looking at externally to potentially in license, we'd be more focused in the neuro, endocrine, and, you know, adjacent spaces.
Got it. You alluded to IRA, and obviously we got more clarity from your competitor. A lot of different pushes and pulls here. I mean, you've talked to commercial contracting earlier this year. Now we have clarity on what your competitor pricing will be in Part D in 2027. I wanted to get your thoughts on how are you thinking about what it all means for Ingrezza, both nearer term? You've contracted with commercial plans. What does that mean for directionality of pricing, both nearer term, 2026, and as you think to 2027, 2028, and 2029, and as you think about your own negotiation and, you know, being, having the benefit of the small biotech exemption?
Yeah. I think in a nutshell, excuse me, we, you know, we appreciate that the market doesn't like uncertainty and that now that the second wave of negotiated products, they've, the government announced the MFP prices last week, that, you know, essentially it's lifted a little bit of the fog in terms of what the, at least the competitive dynamics will be in 2027 and beyond, in the VMAT2 category. I do think that in general, the IRA doesn't change our strategy. What I mean by that is, you know, we're gonna continue to help as many patients as possible that have either tardive dyskinesia or HD chorea. As Matt said earlier, only about 10% of people today living with TD are being treated with a VMAT2 inhibitor.
Ingrezza has exclusivity out to 2038, so about 13 more years. There is a long runway and a lot of headroom in terms of, you know, continuing to build the market. You know, today we estimate about 10% of people living with TD are currently being treated. We asked ourselves the question, you know, how do we get to 15% treatment rate? How do we get to 20% or even 30% treatment rate? You know, we are going to continue to drive awareness, recognition, diagnosis, and treatment with Ingrezza. Specifically, you asked about contracting. I can say we are very comfortable with the position that we are in right now from a formulary coverage perspective. Over 70% of lives in Medicare, Ingrezza is on formulary. In Medicaid and commercial, it is over 90% coverage. We have locked in those contracts for 2026.
You can expect that the coverage situation next year will be very similar to what it is today.
Mm-hmm.
You know, we're starting the process now of engaging in conversations with the Medicare plans for 2027. Now that the MFP price for deuterated tetrabenazine has been announced, I think that, you know, it'll remove some of the uncertainty around what those negotiations are going to be like. Ultimately, though, as Matt said, we feel like it's a very manageable situation.
Mm-hmm.
We expect to maintain coverage in 2027 and 2028 to be able to continue to grow our business. In 2027, we'll be entering into negotiations ourselves for 2029 or an MFP implementation in 2029. We expect to be able to negotiate with CMS an MFP price that reflects the superior value of Ingrezza.
You made, Eric, some interesting comments on the third quarter call about the per milligram pricing for your competitor. In other words, certain strengths of your competitor being more expensive and that payers are, quote, "catching on to that." I'm wondering what that means for Ingrezza in terms of access relative to your competition.
Yeah. I think that is a part of our competitor strategy to push doses higher. They do have a per milligram pricing structure. The higher the dose, the more revenue per patient. It is certainly something that we point out to payers.
Mm-hmm.
You may note that some of the big health plans and PBMs, for example, are covering only the BID formulation of deuterated tetrabenazine and not the newer, more expensive XR formulation. I do think it is one of the factors that allowed us to significantly increase our formulary coverage this year in 2025. We had a couple of plans that came to us earlier in the year and said they'd like to add us for 2026 and, if possible, even pull that forward into 2025 because they could see that their costs were escalating for the competitor. You know, certainly, one of the things that they value about Ingrezza, besides the clinical profile, is the cost certainty. You know, we have relatively flat pricing.
Yep.
Regardless of what dose, and by the way, all three doses are clinically effective doses. No matter what dose the patient's on, the health plan or the PBM, you know, understands that they're not going to experience dose freeze and cost escalation.
Yep.
But in.
Yeah. Go ahead.
In general, you know, our contracting strategy is to ensure that patients have access.
Mm-hmm.
We believe in patient choice and clinician choice. As we're engaging with these plans, it's not in a spirit of trying to become a preferred physician.
Sure.
Product. We truly want just parity, and that's what we've had. We'll allow the plans and the clinicians to pick which medicine works best. I think that our team has done a tremendous job between access as well as our expanded sales force. We've seen this year the share of new-to-brand patients shift in a positive way towards Ingrezza.
Mm-hmm.
Which is ultimately the lifeblood of what we're hoping to achieve in maximizing the value of Ingrezza.
How would you contextualize the latest sales force expansion? I guess what I'm trying to better understand is, you know, the audience. I mean, you've, you've been calling on psychiatrists, but is this latest expansion with an eye towards APPs, PAs, nurse practitioners, or even, or even primary care practitioners? I mean, just help us understand, you know, what you're trying who you're trying to reach with the latest expansion.
Yeah. Just taking a step back, on our Q3 earnings call, we announced that we'll be expanding our, actually both our Ingrezza and Crinecerfont teams.
Mm-hmm.
In 2026. We expect those expansions to be completed and implemented, by early Q2. We are in the process right now of executing on that plan. What's the rationale for it? Essentially, it's investing in growth, and it's really investing in the momentum that we're seeing in the marketplace. The VMAT2 category, you know, we're talking about Ingrezza here. The VMAT2 category is eight years in, for both ourselves and for our competitors, from Teva. We're seeing double-digit growth, volume growth in the VMAT2 category, which is amazing for a category that's eight years in. Ingrezza is growing faster than the VMAT2 category. We implemented an expansion in 2024, and we saw pretty quickly that it was paying off. In the meantime, the number of VMAT2 writers continues to grow.
I mentioned on the Q3 earnings call that today, the number, the size of the VMAT2 base of prescribers is 30% larger than it was just two years ago at the same time. This is a rapidly expanding category and a rapidly expanding base of prescribers. You hit the nail on the head when you said a lot of them, the majority of them are advanced practice providers. We're talking about psychiatric nurse practitioners and physician associates. They really are filling the gap in behavioral health, and they're providing today the majority of behavioral health services.
Yep.
For both ourselves and for our competitors, advanced practice providers are now the largest group of prescribers of VMAT2. You know, we're gonna continue to, you know, make the investments where we see that it's gonna make sense. This is, once again, investing in growth and investing in momentum.
Let's switch gears to Crinecerfont. In the few minutes we have left, I mean, there's lots to touch on. In terms of Crinecerfont, you know, obviously a strong early ramp. One thing I did notice and wasn't lost on anyone is that patient enrollment forms were down sequentially in 3Q versus 2Q. Just help us contextualize that and help us understand if you think there's any pent-up demand effects. I mean, certainly when you have a drug where nothing has been approved historically and enters the market, there's going to be some pent-up demand. How should we think about that?
Yeah. First of all, I'll say that we're really very pleased with the pace of the launch of Crinecerfont. This is the first year. It got approved late in 2024, effectively launched right around the turn of the year. As Matt said, this is a learning launch. You know, congenital adrenal hyperplasia, there's never been a specific approved medicine for it. Standard of care for 70-plus years has been glucocorticoids. You know, certainly as we go, I think we're gonna learn a lot about the dynamics of this CAH category.
I think there was, a little bit maybe of, I wouldn't call it pent-up demand, but certainly there were patients and there were providers that were aware of Crinecerfont at the time that it was approved and were, you know, hand raisers is what I call them, people that were excited to, to get started on therapy. You know, certainly, the pace of enrollment, and new patient starts exceeded our early expectations. There has been a little bit of a lower rate of weekly adds in Q3. I would say, it's not that different really than Q2. It's been very steady and consistent from week to week. Not a lot of volatility or variability. We did wind down the open-label extension study in adults in Q2. The adults that were on study drug transitioned over onto commercial products late in Q2.
That did bump up the numbers a little bit.
Yep.
Other than that, you know, we're seeing just continued very steady and strong adoption. We're certainly very excited about the opportunity to help this patient population. You know, Matt said that, you know, we think that we've reached now about 10% of the overall CAH population. That means that we have a long way to go in terms of helping the majority of people with CAH get better control of their disease and also reduce their exposure to glucocorticoids. I think, you know, a couple of comments is because you get, we get questions about the nuances of quarter-to-quarter.
Mm-hmm.
You know, patient enrollments. You know, I would just say, is the drug working? I think the feedback that we get, and I would be curious if you hear this from your KOL checks, but the drug seems to work.
Yep.
Is it safe?
Mm-hmm.
Yes. I think the feedback that we've gotten, and I think that KOL said yes, it's safe. Ultimately, if it benefits patients and it's safe and patients are staying on therapy, that's the piece that is compounding. The persistency is quite high, very consistent with what we saw in the open-label extension rollover. Over 90% of patients stayed on therapy.
Yep.
You have a great drug that's helping patients and the patients are staying on therapy. This is gonna be a significant launch.
Everything you're saying is dovetailing with what we are hearing from KOL checks. A longer-term question, though, is the competitive landscape. I mean, I'm sure you get asked about Crinecerfont and a tumor lent or ACTH antagonist. Big picture, how do you think about a space where it's not just Crinecerfont is the only game in town?
It's a big enough market to have multiple products. How I would just frame it, show me a drug that works for patients that's very safe, that's been displaced. You really would have to work hard to think about a better drug that would cause you to shift off of Crinecerfont. We operate in a way to maximize and accelerate the path to peak. You know, we'll deal with competition over the long run. We really like the results that we're seeing so far.
Okay. We are out of time. Looking forward, very much looking forward to your R&D day in San Diego, on the 16th.
Two weeks.
We'll certainly have a lot of opportunity to ask about the psychiatry pipeline, but we'll leave it here. Thanks, Matt. Thanks, Eric, and thanks, Todd.
That and the R&D transformation that's been underway at Neurocrine for the past five or six years. We're gonna be happy to host you.
Terrific. Looking forward to it.
Thank you.
All right. Thanks, everyone.