Good morning, welcome once again to TD Cowen's 46th Annual Healthcare Conference. I'm Phil Nadeau, one of the biotech analysts here at Cowen, and it's my pleasure to moderate a fireside chat with Neurocrine Biosciences. Those of you who follow our research know that Neurocrine is one of our top picks for this year based on its growth prospects. We're happy to push the team on that today. We have with us Kyle Gano, CEO, Jude Onyia, the CSO, and Todd Tushla, Vice President of IR. Guys, I'll kick it to you to start. Can you give us a brief state of the company overview, biggest strengths, biggest challenges, and what does Neurocrine need to achieve to drive out performan ce over the next one or two?
Well, thanks, Phil. Thanks to Cowen for having us out here and being able to share our story on Neurocrine. There's a lot of things in that first question there.
Yeah.
I'll do my best. Maybe I'll start with the bookends there on the state of the company and thoughts on drivers of overperformance. I think you capture, in doing so, some of those things in between. When it comes to state of the company, I think it's important to recognize where we are at present, and in my view, I think we'd all agree here on the stage, Jude and Todd, that the company's operating in a position of strength. I think that's an important place to start. It really does begin with appreciation that we have two commercial value drivers now with INGREZZA and CRENESSITY. Both of these medicines have a long runway in terms of intellectual property.
Both of them are indicated for disease states of significant high net medical need, and that gives a lot of opportunity in terms of future growth. When we think about INGREZZA, after eight years of commercialization, we saw double-digit volume growth in 2025, and we're expecting that again this year. We also see a medicine that has the best clinical performance of VMAT2 inhibitors that are in the commercial setting. It's also the lowest priced medicine as well. Having those two features differentiates us in the minds of the healthcare providers and the payers. This is exactly the types of things you want to see in your best-in-class medicine. CRENESSITY is our medicine approved for a rare endocrine disease called congenital adrenal hyperplasia. It was approved December of 2024, 2025 was the first full year of commercialization.
It's in a really good trajectory right now with over $300 million in sales after your first year with great underlying demand. With this early stage, early profile that we have, we believe we're well on our way for a blockbuster, which I think is a very important point to make and pause on as well because reminder that with that blockbuster status comes increased confidence in double-digit revenue growth year after year, as well as revenue diversification on top of INGREZZA. Those are the hallmarks of what I've been trying to achieve since I've stepped into the CEO role. Behind these two medicines, we've got our industry-leading neuropsychiatry portfolio with data that will begin in 2027.
I say begin because this portfolio consists of multiple mid and late-stage assets that is not only gonna share or provide data in 2027 but for multiple years beyond this. I think that's important. When you can give confidence around the timelines, I think that differentiates us over companies in our space. The other item that I'd point out is that, and one that I think is underappreciated, is our R&D engine. I don't think we're given any credit on that today. It's a fully operational, sustainable R&D engine that is gonna allow us to not be dependent upon one program or one data set in the future. It's gonna be able to produce reliably multiple high-quality programs. Initially, you'll see that leading into areas of our expertise in neurology and psychiatry and in CRF biology.
Hopefully, we'll be able to talk about some of those programs as we move through the Q&A here. The last piece I'd call out is that we're also sitting in a position of financial strength. You know, I would characterize our business as being high, high margin and cash generative, and that gives us resiliency and optionality. Those are both, I would say, strengths and add to our competitive advantage versus other companies in our space and something that we'll be able to lean on as well as our financial discipline when we think about capital allocation, being able to take advantage either of our internal pipeline or things externally from an opportunistic standpoint is something that we view as very valuable. Another strength, just to round out the discussion here, is our team.
We have a proven ability to launch medicines, scale our commercial infrastructure, execute clinical studies, and get medicines over the finish line in terms of the FDA. That really paints a really good, strong company. Now, I do feel you touched on, you know, challenges, weaknesses, strengths, weaknesses. I do want to acknowledge that externally, there are questions around certain areas of the business. One of those that comes up most frequently is the IRA. That's a headwind for our industry and a headwind for INGREZZA, and we take the IRA quite seriously. We've been wargaming, we've been planning over the past couple of years for our moment when INGREZZA receives its MFP and when that's implemented in 2029.
We've also been preparing for our competitor in this space, when their medicine has its MFP implemented in 2027. We feel these situations are quite manageable, because we plan for it. We don't see any change in our business fundamentally in terms of the trajectory of where the business is going, let alone, INGREZZA. On CRENESSITY, we've heard, there's a focus around the new patient start optics. You know, I've had the opportunity to review a lot of orphan medicine launches over the years, and very rarely have ever seen a launch go perfectly linear, on a quarterly basis. There's always ebbs and flows in new patient starts, and that's what we've seen, in our launch thus far with CRENESSITY. Overall, as I mentioned in my opening remarks here, the underlying demand is quite good.
We're on a rare blockbuster trajectory here in terms of sales, we feel that it's better to look long term. The goal here is to change the standard of care for patients. When that's your North Star, you're gonna end in a good spot on there regardless of what might happen on a shorter period of time. The last thing I would say on the challenges side of the business, we know that there's also some questions around our investments on the SG&A and R&D side of the business. We're one of those few businesses that's profitable, but we're not looking to maximize profit on a given quarter. We're really looking at investing in growth now in a fashion that's consistent with what we can do and achieve at Neurocrine.
Driving long-term shareholder is our North Star at Neurocrine, which means investing in the pipeline, expanding indications in the programs that we do have, and certainly the capabilities that allow us to deliver that is something that's very important. Regardless of our spend, you know, one of the things that we look at to benchmark is our peer group. We feel that we'll always be within a range of what our peers are spending across both SG&A and in R&D. Ultimately, we look to deliver that shareholder value for you all. To sum all that up, it really does simplify down to just a few key priorities for us for this year. I think these will speak to areas where we can outperform. Double-digit volume growth for INGREZZA, outperforming on sales and performance with INGREZZA.
It's successfully completing our scaling of the CRENESSITY launch. You know, we have a sales force expansion that's ongoing now. We wanna pull through the momentum from 2025 into 2026, expand addressable patient population, and continue executing out in the field. That will ensure continued sales growth throughout the year. Of course, mentioned the pipeline. It's executing on our mid to late-stage pipeline to deliver the data next year as we've described. The simple story for Neurocrine, two commercial drivers. We have a differentiated portfolio that will start delivering data next year and years beyond. We've got a sustainable R&D engine. We are coming at this in a position of financial strength. There's a lot of things to be excited about. Working hard to keep your top pick rating.
Well said. Well said.
We appreciate that.
Maybe to drill down on some of the pillars that you mentioned. First, on INGREZZA, the double-digit revenue growth this year. Your guidance calls for year-over-year growth of 8%-12% versus 26% in 2024 and 9% in 2025. What are the pulls, pushes and pulls incorporated into the guidance? What could drive revenue growth and excessive guidance? Are there any key risks that could make it fall short?
Yeah. I think on the growth numbers you described, though, those are on net sales on volume. We've always experienced a pretty steady double-digit volume growth year after year after year. I think that speaks to the robustness of the TD market. Where we've experienced larger growth years in terms of net sales, it's often been in a moment where we've had less coverage in terms of access, and we've seen some improvements there on gross to net. Overall, what's been stable, what's been consistent, what we've leaned on year after year is that consistent double-digit volume growth, and that's what we anticipate this year. In terms of pushes, we've got a market that continues to grow as a VMAT2 category.
We know that the prevalence of TD is still outpacing the growth rate of the general population. You've seen us and our competitor over the past couple of years increase the actual prevalence of TD, and that's something that we'll still see as a dynamic moving forward. Related to that, the number of prescribers that are prescribing antipsychotics, which are the underlying cause of TD, continue to expand. We'll also be able to lean into all these different things, good access and a sales force expansion that will be complete in Q2, that we'll see the benefits as the year goes on. Those are all things that will help us this year. The headwinds that we often talk about for INGREZZA is there's this IRA still overhang.
We feel it's manageable, but it's simply a topic that we often face externally when we meet with you all. It's there. I think we'll see the uncertainty around that wane as we move into 2027 and we see what the dynamics are of the payers. At that point, we have our own contract negotiations ongoing for 2027 now that we'll be able to share with you all by the end of this year. Then our own IRA moment comes in 2029. We appreciate that that's there, and again, we do take that seriously, but we're in a good spot today.
The other piece as we enter 2026, there is going to be a small single-digit headwind on the price per script relative to where we were this time last year, and that's something that we'll face in Q1 as we move through reauthorization as well. Those are the kind of the pushes and pulls we have in the marketplace right now. Overall, I think we see very healthy market out there and the opportunity is there for us to go out and get it.
On IRA in particular, your competitor, Teva, guides to consistent growth through their IRA negotiated price. Does Neurocrine share that view for INGREZZA?
Yes. I think that the way the market's set up right now, it's very promotionally sensitive. You have us and our competitor in this space, doing a lot out in the field in terms of education, either through different types of media like DTC or through our sales force, and that's gonna continue driving diagnosis in the patient population. With diagnosis becomes that results ultimately in a treatment. We see the market being very robust over the next couple of years.
We estimate that there's approximately 40,000 patients on therapy today out of a total addressable market of 250,000. Does that sound consistent with your own internal estimates, and what could peak penetration be?
Well, I think you're probably in the ballpark, maybe a little bit light on that. It's an interesting question in terms of peak market share. There's really no good comps or comparables out there for you all in TD, and we appreciate that's being. That's always been one challenge of trying to get your hands around what the true market opportunity is. Again, I'll lean in, the market continues to grow quite robustly, and that's with the denominator prevalence number that continues to rise. I think that'd be a good question to revisit maybe a year or two down the road, as we continue to grow the market. But right now, it doesn't seem like it's slowing at all.
Turning to CRENESSITY, investors are closely tracking that launch. How has the patient awareness, physician awareness, and initial utilization compared to Neurocrine's own expectations?
Certainly when we started out at the beginning of 2025 in the first four full year of commercialization, had we known we'd ended where we were, we would have been doing a happy dance so much earlier. We exceeded all of our expectations, and that's across any commercial metric you'd wanna talk about, whether it's enrollment forms, net sales, reach in terms of physicians, etc. We beat that at the end of the year and really any time point in between. We're really excited about what being able to create in just that first year. Just a reminder, we exited 2025 with about 10% of the total prevalent pool, patient pool under the care of CRENESSITY.
That's just a really nice milestone to think about when we're helping so many patients after a very short period of time. We're looking to continue building on that momentum for this year with the idea that we can treat many more thousands of patients. We're in a good spot, good momentum. There's been good receptivity across the key stakeholders. In this case, we're talking about the healthcare providers, the patients that are using medicines, advocacy and even payers see the value of what we're bringing to the table.
I think as you referenced before, the biggest debate among investors on CRENESSITY is the trajectory of the launch from here. What is Neurocrine's understanding of whether there's initial patient bolus and how consistent uptake should be from here on out?
Yeah. I'll take a comment 'cause I feel a lot of those questions after the Q4 earnings call was this hand-wringing about the new patient start forms from Q2 to Q3 to Q4. Our feeling is this is common for an orphan disease launch. We expected ebbs and flow s. We were beating our own internal expectations with each quarter, but you're gonna have ups and downs. What's important here, out the gate is we got 10% of the patient population, which is signaling the unmet need. It's gonna continue to grow. If you have steady what we're calling steady adds, and by that I mean looking back, we've never had a week where you had zero or a single digit and then you had a 50. It's in the double-digit range.
As long as you have steady new patient adds, which we fully expect to have, and you have a heavily compliant, and persistent patient population, which we've seen through year one, it's consistent with what we see in the open label extension, and you have solid reimbursement, what you're gonna see going forward, instead of over-indexing on new patient starts, you're gonna see an upwards trajectory in net sales, which is what I feel the investment community is gonna be paying most attention here coming in Q1 and the rest of the year.
Speaking of that, TD Cowen projects $301 million in revenue this year.
Is this a how do you feel?
Yeah. How do you feel about our $301 million this year?
Like a rolling stone.
$1.4 billion in 2030. Did either of those numbers elicit any-
We haven't given forward-looking guidance, but, we firmly believe this is going to be Neurocrine's second blockbuster product. I think we debate internally how big can it be.
I think that that's the, that's the more interesting question internally is it's similar to INGREZZA, right?
That's right.
How big can it go?
That's right.
What type of peak penetration would be possible and how do you look at the competitive environment? There are some other agents that are in late-stage development.
Well, on the, you know, market share type of question, you know, I'd start with when you go out and you survey physicians, what you hear from them is that only about 15%-20% of their patients get reasonable control of their androgens on a physiological dose of their GC. If you ask them a different question, but related, "What percentage of your patients could benefit by using CRENESSITY?" You triangulate to this 80% number of the addressable patient population. We all know that sometimes you can get increased views of utilization of physicians in market research, but I think it speaks to the unmet need that's out there.
If you look at the orphan drug launches out there, you can see a range of market shares that these medicines have achieved, you know, as high as 50%. Certainly we keep an eye on that 50%-80% number that we have from our market research, and we think those are achievable. Ultimately, I do think we'll see peak market share or utilization at a time period that's faster than INGREZZA tends to be a steady product in terms of number of patients each year. It feels like for orphan diseases, you often see kind of a threshold or tipping point where physicians understand how to use your medicine and it's turned over to patients pretty quickly and rapidly. I don't think we're like...
We're quite there yet with CRENESSITY, but when that happens, that's when you've really adopted your medicine in the standard of care for patients, and that's the goal here.
Great. Jude, thanks for making the trip. Maybe we'll turn to you in R&D. Can you enunciate Neurocrine's R&D strategy? What therapeutic areas are of interest? What modalities and what risk profile?
Yeah. Thank you. So to speak about the strategy, let me frame the vision, first and foremost. I think we have this vision of a future state where Neurocrine emerges as a top leader in the CNS space. With that framing, the way we see leadership is really around the ability to advance really good innovative molecules consistently to the clinic, through the clinic, all the way to commercialization. We set a goal that at the long term, we will be that company that will advance new molecule launch every other year. Okay? Working backwards, we built a strategy around what will it take to get there, okay? We built a strategy to ensure the breadth and the depth. And the flow that is needed. We focused the elements of the strategy on a couple of components.
First and foremost is really around diversifying our therapeutic areas. As you know, historically, we were heavily overweighted in neuropsychiatry while maintaining that footprint, we are growing investments in neurology, we are growing investments in endocrinology, as well as building a new franchise in neuroimmunology and immunology applicable to all of the therapeutic areas. We believe that this balance really reflects our strength in our core areas, but brings in new growth vectors. Okay. The second piece of that is really going into not just these symptomatic treatment to disease-modifying therapy. That's the components of the therapeutic areas. On the modalities, of course, to enable the strategies for the therapeutic areas and the delivery for the therapeutic areas, we modernized our capability to become a multi-modality, innovative organization.
Specifically, while in the past, we were largely a small molecule company, we've maintained a strong footprint in small molecule, but we've dialed in peptides, proteins, antibodies, antibody conjugates, and gene therapy. What this, of course, allows us to do is to match modality to proven biology. Okay? It gives you flexibility, optionality to quickly go into specific targets and build the competitive molecules and differentiated molecules of the future. The third component of that strategy is then with the therapeutic areas in place, with the modalities in place, where do you point that engine? Okay, what is our innovation philosophy and where do you point the engine? Our innovation philosophy is really around pragmatic innovation, pointing that engine on proven biology. This is that balance of exploration of new places and exploitation of already validated spaces. Okay?
Novel mechanisms validated with looking with fresh eyes in old areas. We quickly pragmatically balanced our portfolio, 75% to proven biology, and these are high value, high confidence, genetically and clinically validated targets, that we believe we can quickly design, molecules. A key component of that strategy is making molecule design and engineering a key competitive advantage for Neurocrine. I can tell you unequivocally that today, our molecule design and engineering is probably one of the most sophisticated in our industry today. This is allowing us to quickly go after the molecules, the targets we like, and quickly advance the pipeline, the competitive pipeline. The last component of strategy worth noting is the role of external innovation.
We have seamlessly integrated internal and external innovation and using external innovation as an accelerant to drive the growth of the strategy and the growth of the pipeline. Today, when you look at our pipeline, one thing that stands out, 50% of our early phase is enabled by external innovation. Okay? This is an intentional strategy to punch above our weight. Going forward, we continue to see this integration of internal and external as a way to quickly get to the future that we seek. When you put all this together, you heard Kyle talk about the pipeline. I joined Neurocrine to be part of this transformation in the making. I love the pipeline. I see incredible pipeline. The engine is built. It's delivering on the pipeline.
If you look today, four molecules in phase II, or phase III or phase IV, eight molecules in phase I, another six shots that have a shot at getting into phase I this year. Behind that, we have a lot of molecules ready to continue to reload. I can see two years, I can see three years in the continuity of the pipeline. What impresses me the most is not the number, it's the quality inherent in the pipeline. Also the quality inherent in the people who've built the pipeline, their expertise, their capabilities, which we call the engine that is in place to continue to do this year-over-year.
I would guess that as 2026 moves on, we'll start to get a lot of questions about the phase III programs. Here today, the number one question we get on the pipeline, it can be summarized as basically, what is Neurocrine doing in obesity? Can you talk about why Neurocrine is moving into obesity and the science behind the candidate?
It's an excellent question, and, I tend to say, "Why not obesity?" And, I think at our last R&D Day in December, and I think also in January at JP Morgan, both Kyle and I re-emphasized, our emerging obesity strategy, the mechanics of that strategy, our emerging pipeline. We unfolded, we shared four molecules at this point, as well as also, some of our ambitions in this space. Let me reiterate why we believe this is really, really important and why we believe we're so well-positioned in the next phase of the obesity market. I wanna underline the next phase because the current phase is already in play, and we're positioning for the next phase. Let's look at obesity. The data suggests that this is probably one of the biggest commercial opportunities our industry's ever seen. Okay?
The second component is that obesity is a CNS disease. For a CNS company, okay, with ambitions to be a leader in the CNS space. It will be a disservice to the investors and the shareholders to not play in this space, especially when you believe, and we believe that we have truly differentiated competitive molecules that we can advance in this space. Let's talk about the next phase of the obesity market, okay? The epicenter of the current market are the GLP-1s, okay? The GLP-1s have proven beyond reasonable doubt that significant weight loss is indeed possible, but hasn't cured the disease. Where does the opportunities lie? The next phase isn't gonna be about more incremental weight loss. It's really gonna be defined by quality weight loss, okay? What do I refer to as quality weight loss?
Multiple components: tolerability, durability, fat-specific weight loss, lean mass preservation or muscle maintenance or gain, better delivery or even more efficient delivery options, and disease comorbidities. These are where the opportunities. Consistently, I wanna clarify, that's where our strategy is focused. That's where we believe we can compete and win. Our strategy focuses deliberately on building that 2030-plus obesity pipeline and franchise, first and foremost, anchored around CRF2. Again, as you remember, Neurocrine was founded in part on the science of CRF. This is a mechanism we know. This is a mechanism we're uniquely positioned, and the molecule we have, a Q weekly potent CRF2 agonist, covers much of the gaps in this space, okay? Fat selective weight loss with lean mass preservation, and frankly, in some lower doses, a gain in lean mass.
We believe this mechanism is more tolerable. We believe, given the muscle component, that this is gonna be more durable. Another component is that this mechanism also has positive effects on cardiovascular, positive effects on kidney. We believe will address some of the disease comorbidities in some disease populations. That's the, our first entry into the market. This goes in by the end of the first half of the year. IND, first demand by the end of the first half of the year. We're not, we're not making a binary bet. We've built to win in this space. We've built a moat around CRF2 with potential combination opportunities. While we are confident you can do a monotherapy, okay? We're preparing for opportunities for potential add-on, follow-on, maintenance, as the case may be.
We have a Q weekly triple agonist, all right? That again is gonna go into man this year. We have a univalent molecule that combines... It's one molecule, triple agonist, CRF2 agonist, GLP, GIP agonist, all in one molecule, that drive fat-specific weight loss and maintenance of muscle with many of the benefits that we've already talked about. The last molecule we shared is the Q monthly, okay? We believe this is a leading, industry-leading Q monthly. Frankly, probably Q three monthly, based on the half-life of this molecule and how we have tuned this triple G agonist to be a industry leader, okay? The last point I wanna make, if we sound so confident, it's really based grounded in the capability and the talent we have in the organization.
Some of us participated, it may not all be obvious, some of us participated in creation of the much celebrated incretins, the likes of Mounjaro, Zepbound, tirzepatide. I led the biologics organization at Lilly for many years prior to joining Neurocrine. Our head of peptide therapeutics led that team when I was at Lilly. We have one of the inventors of Mounjaro and Zepbound, a lead scientist at Lilly. We have many of the expertise we need to really build and deliver. Which brings me to the second component, how we design molecule. Our ability to design and tune molecules, again, as point I made earlier, is probably one of the most sophisticated in the industry.
The last point I make, if as Chief Medical Officer we hear Sanjay Chanda will quickly make the point that we're a robust and growing clinical organization well-positioned to execute on this strategy. We believe we can quickly get to proof of concept, very quickly to the proof of concept and really get to the performance of these molecules cheaply and very fast.
We're looking forward to having data on our CRF2 program in obesity second half of next year. To Jude's point, one of the positives of working in this space, obviously, we know a lot about CRF and CRF biology through CRENESSITY and prior programs in my time at Neurocrine. You've got objective endpoints which compares nicely to the subjective endpoints that we deal with in psychiatry. You get to pick winners in phase I versus phase III, and you have biomarkers along the way. These are all things that you can lean into and take advantage of if you're a company like Neurocrine.
Perfect. With that, I think we're out of time. Thank you guys for making the trip out to us.
Thank you. Appreciate it.
Thank you.
Thank you, Phil. Thank you all.