Neurocrine at Morgan Stanley Conference: Strategic Growth and Innovation

On Tuesday, 09 September 2025, Neurocrine Biosciences (NASDAQ:NBIX) presented a strategic overview at the Morgan Stanley 23rd Annual Global Healthcare Conference. The company highlighted robust commercial performance and a promising R&D pipeline, while also addressing challenges such as competitive dynamics and regulatory impacts.

Key Takeaways

• Neurocrine reported a strong Q2 revenue of $624 million, marking a 15% quarter-over-quarter and 8% year-over-year growth.
• The company narrowed its full-year revenue guidance for Ingrezza to $2.5 to $2.55 billion.
• Neurocrine is actively managing the potential impacts of the Inflation Reduction Act on its pricing strategy.
• The launch of crinecerfont is exceeding expectations, particularly in the pediatric segment.
• Neurocrine aims to deliver a new product every other year, driven by a robust R&D pipeline.

Financial Results

Neurocrine Biosciences reported Q2 revenue of $624 million, reflecting a 15% increase from the previous quarter and an 8% rise compared to the same period last year. This growth was primarily driven by strong sales of Ingrezza, which recorded record new and total prescriptions in the first half of the year. The company has adjusted its full-year revenue guidance for Ingrezza to between $2.5 billion and $2.55 billion, citing factors such as prescription trends, commercial investments, and improved access.

Operational Updates

Ingrezza’s Medicare coverage has improved significantly, with coverage for tardive dyskinesia and Huntington’s disease beneficiaries increasing from 45% to 70% in Q3. Despite competitive pressures from companies like Teva, Neurocrine anticipates double-digit volume growth for Ingrezza this year, setting strong momentum for 2026.

The launch of crinecerfont has been successful, particularly in the pediatric segment, supported by high reimbursement rates and educational initiatives. The company has implemented a Quick Start program to facilitate patient access, offering a 30-day supply and free goods through a patient assistance program.

Future Outlook

Neurocrine is preparing for the impact of the Inflation Reduction Act, qualifying for the small biotech exemption. This provides some certainty regarding price negotiations in 2027, with expected discounts of 25% to 34% off the non-federal average manufacturing price by 2029. The company is focused on maintaining formulary status and driving new patient starts post-2027.

The R&D pipeline is robust, with significant developments expected in the coming years. Neurocrine is advancing several phase three programs, including osavampator for major depressive disorder and Directedine for bipolar mania. The company aims to introduce a new product every other year, supported by its internal research team.

Q&A Highlights

During the conference, Neurocrine addressed the competitive landscape, particularly the rise of biotech innovation in China and the use of artificial intelligence in drug discovery. The company also discussed the potential impact of regulatory changes, such as the Inflation Reduction Act, on its pricing strategy.

CEO Kyle Gano emphasized the company’s focus on growth and innovation, stating, "Efficacy gets your foot in the door, but safety and tolerability win the day."

In conclusion, Neurocrine Biosciences demonstrated a clear strategy for growth and innovation at the Morgan Stanley conference. For more details, readers are encouraged to refer to the full transcript.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Good morning, everyone, and welcome to Morgan Stanley’s Global Healthcare Conference. I’m Sean Lamm, Head of US Midcap Biotech Equity Research here at the firm. Before we commence, for important disclosures, go to our research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Neurocrine Biosciences with CEO Kyle Gano and Chief Medical Officer Dr. Sanjay Keswani. Welcome, Kyle and Sanjay. It’s a pleasure to host you both.

Kyle Gano, CEO, Neurocrine Biosciences: Thanks, Sean.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Maybe just to start, we’ve got some macro questions. The first question is, with China’s rise in biotech innovation, how are you thinking about the competitive position here for Neurocrine Biosciences? Does it influence your R&D and business development strategy?

Kyle Gano, CEO, Neurocrine Biosciences: No, I appreciate the question. You know, from my view, the competitive advantage that I think we have at Neurocrine Biosciences is that we’re not blind to what’s going on in China. We do have regular conversations with companies in the region to learn about how they’re thinking about drug discovery and drug development. I think we all have to admit they do some great science over there, in particular engineering and engineering at scale on validated biology. We’ve seen some molecules come out of China that have been licensed by pharmaceutical companies at a very high premium because these molecules are quite good. We want to understand that at a minimum, how they’re doing that over there. There are some things that we can learn about their approach to these types of molecules that they’ve been putting together.

I think the other side of the coin is that they haven’t really been doing a lot of work in diseases of the central nervous system. From our competitive advantage standpoint, we’re still working in that space. They’re not quite there yet. If we’re concerned or worried about them having a leg up there, I think that we’re doing quite well here in the United States. Still, us going over there regularly, we’re keeping a tab on companies that are working in this space. If they do have something that’s interesting, it’s good for us to know that. Maybe there’s something there for Neurocrine Biosciences down the road. Again, just learning from them and how they’re tackling these types of issues that we’re all facing in the drug development area.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Wonderful call. With respect to artificial intelligence, how is Neurocrine Biosciences leveraging artificial intelligence? How do you think about artificial intelligence’s disruptive potential?

Kyle Gano, CEO, Neurocrine Biosciences: Right. On artificial intelligence, we’re not an artificial intelligence company. When it comes to leveraging this technology in drug discovery, that’s largely done through partnerships. We do have a couple of those ongoing now on the side of trying to identify new chemical scaffolds and structures that might be appropriate for us to invest in additional chemistry and moving those forward further in development. There’s a drug discovery component of that. We’re not discovering those tools. We’re not developing them. We’re partnering with other companies to help us in that area. The other side of artificial intelligence that we are leveraging, and when I say leveraging both for discovery and this other piece that I’ll be mentioning, it’s really very early innings for Neurocrine Biosciences. This is not an area that, again, we’ve invested a lot of our dollars in since the beginning of our conversations about artificial intelligence.

We’re catching up a little bit. In the areas other than drug discovery, we also look to identify and utilize tools that allow us to do things more efficiently. If we have a team of clinicians that are required to come together to write a study report, that’s not necessarily the best use of their skill sets. They’re physicians. They can design trials. We can go out and meet with physicians and talk about future trials, the science that we’re developing here at Neurocrine Biosciences. I’d rather not have them spend a lot of time writing a study report. They can bring in the data to an algorithm that’s a part of an artificial intelligence tool and have the artificial intelligence tool itself help develop that initial study report. That saves our clinicians time to do those things that they’re most skilled at.

These are the things that we’re trying to do and adopt across the organization. Still early days, but I’m excited about what we’re talking about at Neurocrine Biosciences and leveraging these different aspects of the technology moving forward.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Yeah, wonderful call. Final question before we delve into more detail on Neurocrine Biosciences specifically: what’s been the most impactful for Neurocrine on the regulatory side? Is it MFN? Is it tariffs? Is it the FDA changes?

Kyle Gano, CEO, Neurocrine Biosciences: When it comes to the pieces that you brought up there, I think the overwhelming concern is just the uncertainty across all of these, right? There’s not really any policy that covers things like MFN or tariffs or these other issues that we’ve been facing from a regulatory standpoint yet today. A lot of it is kind of early days. Our general response is, because it is early days, we try to focus on those things that we can control at Neurocrine Biosciences. Make the business as strong as we can, as resilient to anything that comes down the pipeline. We think this is going to be beneficial to us and our shareholders and patients down the road. We’ll keep a close eye on all these different things.

I will say just at a high level among these three things, the piece that we didn’t necessarily mention here is the Inflation Reduction Act. That is one piece that is policy. We do get a lot of questions on that because it does read on one of our products, Ingrezza, either directly or indirectly through competition that’s in the space as well. We did get a lot in that area on tariffs and on the FDA piece. Not a lot there to talk about for Neurocrine Biosciences.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: OK, wonderful. Thank you. Maybe to jump straight into it. Ingrezza sales have been a clear area of investor focus, as they should have been this year, and the competitive dynamics with Teva and Austedo. More recently, you lowered the top end of guidance by $50 million. Can you comment on what factors led to the revision and how you feel about how sales are shaping up for this year?

Kyle Gano, CEO, Neurocrine Biosciences: My view at a high level, the first half performance was really strong at Neurocrine Biosciences. If we just take a couple of things to mention here, we had back-to-back record NRXs in Q1 and Q2. We saw a record TRX in Q2 as well. Overall, our revenue for the quarter in Q2, $624 million. That represents 15% quarter-to-quarter growth and 8% year-to-year growth. This type of performance eight years in doesn’t happen by accident. It really is a function of strength of our commercial organization, the demand that’s out there from the perspective of tardive dyskinesia. Only 10% of patients of the 800,000 patients are on a VMAT2 inhibitor. There’s still a lot of interest for patients and physicians to get on Ingrezza for the treatment of the symptoms of tardive dyskinesia. The last piece I’d mention is improvements in our access.

We started the year about 45% of all TD and HD Medicare beneficiaries were under our Covered Lives category for Ingrezza. We’ve expanded that from 45% to 70% moving into Q3 of this year. When we think about the guidance, we did narrow it to $2.5 to $2.55 billion. It really is a function of all those things that I mentioned. It’s the cadence and pace of our NRXs throughout the course of the year. It’s our TRXs, in particular, compliance and persistence as one quarter moves to the next. It’s our commercial investments, whether it’s Salesforce initiatives across messaging, DTC, and its improvements in access. All these things played a role in that. Bottom line, we’re expecting double-digit volume growth this year. The market’s very robust. It’s going to set us up to close this year strong and give us a lot of momentum for 2026.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Marvelous. You touched in the macro questions on the IRA piece. Could you comment generally on your expectations for Ingrezza entering price negotiations in 2027, potential implementation in 2029? Can you give us a flavor of maybe the price expectations if you can, Kyle.

Kyle Gano, CEO, Neurocrine Biosciences: As we’ve all talked about the IRA, the Inflation Reduction Act over the past couple of years, I think we can all agree that it’s complicated. There are multiple moving parts, whether you’re talking about limitations in how quickly or the magnitude you increase the price of your medicine that’s got to track the CPI, the Part D redesign, or your price negotiation with HHS. We’ll focus on the last piece here now since that was the question. One of the unique things about Neurocrine Biosciences is that we qualified for the small biotech exemption. We applied for that, and we do have that status. That gives us a great deal of cover when it comes to our price negotiation, which does occur in 2027. As it stands now, we’ll enter 2027 with this idea that we’ll be negotiating with HHS. We do have a collar.

We do have a band where we know that our price for Ingrezza will be discounted in the year of 2029, ultimately. That negotiation will result in a discount of about a 25% to 34% discount off of our, what they call the non-FAMP NRX or dollars per prescription price. The non-FAMP is an archaic definition, but it stands for the non-federal average manufacturing price. It’s a price of our prescription of Ingrezza in 2021 that’s increased as a CPI from 2021 to 2026. That number is the basis of a 25% to 34% discount that we’ll have. We’ll get that percentage through the course of our negotiation in 2027, and that will be the price that we ultimately observe in 2029. It’s not a good thing for our industry, in my view.

At least for us in the small biotech exemption, we know what our discount is going to be. It’s not a draconian discount. It is that 25% to 34%. It does recognize benefits of inflation between 2021 and 2026. We’ll do our best in 2027.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Sure. What sort of competitive dynamics should we be thinking about with the other VMAT2 and the potential change in prices? How do you think that might play out?

Kyle Gano, CEO, Neurocrine Biosciences: Our competitor in the space is a company out of China. They actually go through their Inflation Reduction Act (IRA) moment, if you will, negotiation this year for their price implementation in 2027. I think we’ll acknowledge out of the gate we don’t have all the answers for our situation or for any other company in our industry. What we can point to is that the tardive dyskinesia (TD) market is incredibly robust. I mentioned the double-digit volume growth that we expect this year. The 10% of patients, 800,000 patients on a VMAT2 inhibitor a day, a long runway for growth. We start there. Number two is our business is pretty well steady all the way through 2026. The outlier here is our negotiation in 2027 and what happens to our competitor in the space in 2027. Our business in 2022 and through 2026 is pretty clear in our view.

The last piece is for Ingrezza. Once patients get on Ingrezza, they tend to stay on Ingrezza. Having a movement disorder that reappears after you discontinue therapy is a great motivating tool. A lot of patients that, again, that are on Ingrezza stay on it for a long time, a long course of their treatment. What that means for us in 2027 is that we’re really focusing on and discussing what happens to the new patient starts. That’s really where the market goes to in 2027 and beyond. How do you grow the patient population in terms of what medicine they choose, in this case, Ingrezza? The couple of pieces that we look at there is that we’ll continue to have those discussions with the plans, the PBMs, the contract in 2027 to see if we can maintain our formulary status. That’s one piece.

We would be a product from Ingrezza that is non-negotiated. These plans would receive a rebate from Neurocrine Biosciences. Of course, our competitor would not have that advantage any longer. Beyond that, and over our history, we’ve always worked through an exceptions process. We’ve been disadvantaged on formularies. We can work through this exceptions process to get patients on Ingrezza. We’ll continue to do that. Lastly, in 2026, we’re going to see what the environment looks like in terms of the first 10 medicines that were negotiated. We’ll see how those companies that own those medicines react to that environment. We’ll also see, and perhaps more importantly, what the brands that are in a non-negotiated category are also doing, either from a PBM perspective or just reimbursement in general. I like where we are through 2026. Let’s see what happens in 2027. We know what the market dynamics are.

I’ll go back again, and you’ll probably hear me reiterate this. The TD market is incredibly robust. There’s a lot of runway here. With Ingrezza, our IP goes out to 2038. We’re going to be around for the long haul.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Sure. Thank you, Kyle. Good answer. I’m just thinking about volume in the neurology, psychiatry, and the long-term channels. Can you talk a little bit about that and where you see the most opportunity or the most growth?

Kyle Gano, CEO, Neurocrine Biosciences: The growth still is largely within psychiatry. It makes sense. I mean, the prescribers that we’re talking about here are those that are prescribing antipsychotics. Tardive dyskinesia is a movement disorder caused by the long-term use of antipsychotics. We still see, for the foreseeable future, psychiatry being the most productive in terms of the number of TD patients under care. That’s about 60%. The remaining 40% is split equally among neurology and LPC.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Wonderful. Thank you. Switching gears to crinecerfont, it seems like the launch is going very, very nicely. You know, significantly beat consensus expectations and certainly our number at Q2. Any comments on the impact of the Quick Start program? What % of patients are currently on paid drug? You know, why is the launch going so well?

Kyle Gano, CEO, Neurocrine Biosciences: One of the benefits that we had with crinecerfont that we did not have with Ingrezza, our two medicines that we commercialize here in the U.S., is that we’re able to do disease state education for congenital adrenal hyperplasia in advance of crinecerfont’s launch in December of 2024. That helped really lay the foundation with physicians that perhaps a new medicine was coming. It was all disease state education, of course. What that meant for us is that we’ve signaled at the time of crinecerfont’s launch that we believe the most motivated patient segment was the pediatric one. You have the families taking care of these kids, the mothers and fathers, and they’re very motivated to get a new medicine for their children. Also, long-term benefits are greater the earlier you start with crinecerfont. There are a lot of motivating reasons to have these pediatric patients start with crinecerfont.

It’s exactly what we saw. We were trending exactly where we thought those numbers would be. I think the disease state education really helped us pick up a lot of the adults that we didn’t think we would have out of the gate. A lot of the good success, early successes are acquiring all those patients that were in the pediatric segment, but also a fair number of adult patients. It still favors the pediatric side of the patient population. That was a nice surprise. The other piece is that our reimbursement rate for dispensed scripts is quite high, about 75% to 76%. That number is a little bit higher than we thought out of the gate as well because it takes some time for the various plans to work through getting a medicine like this reimbursed that’s new for disease state, a rare disease. They come up to speed.

They have to understand what congenital adrenal hyperplasia is. So far, the team’s done very well getting those prescriptions reimbursed. If you look at the program that we have for patients, it really is a patient coming into the system. They are assigned a care coordinator right out of the gate. If they’re not seeing a prescription going down the path of getting reimbursed, the patient can be put into the Quick Start program where they get a 30-day supply of crinecerfont. During that time frame, hopefully, they’ll get the prescription reimbursed. If they can’t afford the medicine, they don’t have insurance or the insurance doesn’t cover enough of the medicine, they can also be offered free goods, crinecerfont at $0 through our patient assistance program. It’s really provided a nice foundation by which we can start our commercial efforts. So far, the reimbursement rate’s been quite good.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Great, thank you. When do you expect the mix will settle between pediatrics and adults? My guess would be that the adult population is a larger data set. Maybe give us some insights or thoughts around that.

Kyle Gano, CEO, Neurocrine Biosciences: For congenital adrenal hyperplasia in the U.S., we estimate the prevalence to be around 20,000. The demographics of the age and gender represent what you would see in the general population as well. To your point, about two to one adults to pediatrics is what we see as the general size and composition of the population. In the near term, I would still expect to see the pediatric population be favored just because of the motivating factors of what they’re trying to achieve for these kids. Over time, if you capture all the CAH market, you’re going to see a flip or transition to the adult patient population at some point.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: I see. Thank you, Kyle. Can you comment more generally on your competitive position versus a potential drug from Neurocrine Biosciences coming up and maybe sort of put the pros and cons of both?

Kyle Gano, CEO, Neurocrine Biosciences: Right. It’s probably a little bit too early to comment on the competition as of yet. It really is to be fair to the competition. I’m trying to compare two different data sets and whatever is quite disparate. What I would say is that competition is not necessarily a bad thing. It gives patients options. If Neurocrine Biosciences can be a party to help shine a light on a disease state that really hasn’t had any medication for over seven years, that’s a good place for us to be. We did that with Ingrezza. It makes me feel quite satisfied leading a company that develops these first-in-class medicines. I will say that if you look at CAH, and it probably is something you can pull through other orphan diseases as well, efficacy gets your foot in the door, but safety and tolerability win the day.

I really like the approach that we’ve taken with crinecerfont and able to recapture the HPA access by working at the CRF receptor and pituitary. It allows us to reduce and control ACTH as well as downstream androgens. Layering on top of that, the ability to reduce GC doses over time and bring down the burden of using high doses of GCs over time is something that’s very, we think, is a lightweight to treat CAH.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Awesome. Thank you. Can you provide rationale for the phase one study of NBI-1435? What’s your goal for the program? When might we hear more?

Kyle Gano, CEO, Neurocrine Biosciences: NBI-1435 is our long-acting injectable of a CRF1 antagonist. It’s a next-generation medicine, if you will, to crinecerfont. It’s not crinecerfont itself. It’s a different molecule that we discovered and developed at Neurocrine. A lot of times, when you think about long-acting injectables, you think about improvements in compliance or compliance being a driving force. Certainly, that’s a variable here. Really, for me, it is the ability to achieve a steady state maximal concentration over a period of time that will allow you to maximize the efficacy of antagonizing the CRF receptor. I have a very high bar. I want to see improvements in efficacy over crinecerfont if we can. Of course, the compliance piece is there for people that have difficulty taking multiple oral medications on a daily basis. We’re just starting off the study.

I think it’s something as we get further along in the year, we’ll know and we’ll have some data. We’ll share with you when that becomes available.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Great, great. Might be a bit of advertising for you here, but you’ve got the R&D day in San Diego on December 16, I believe it is. Can you give us a feel for what we should expect?

Kyle Gano, CEO, Neurocrine Biosciences: Hey, Todd, what did Sanjay share last?

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Sure. R&D day is on December 16th. It has two major components. The first is a focus on the neuropsychiatry portfolio. As you know, we have two phase three programs, the osavampator, as well as 5-2-6, which we now call Directedine, which I think is actually kind of a cool name. We have a pretty large muscarinic portfolio behind Directedine as well. We are speaking about those programs. There are a lot of indications potentially in play. You know, AD psychosis is something that is very interesting to us. You are going to be watching COBENTI’s efforts there very closely. Many other indications, bipolar mania, bipolar depression, et cetera, et cetera. We will unveil kind of our strategy with respect to our muscarinics as well as osavampator. The second major component is really showcasing our early phase portfolio.

As you know, and I think Jude Onyia has discussed this before, who is our Chief Scientific Officer, we have a whole slew of large molecules coming into our portfolio. We just talked about NBI-1435, which is our molecule for congenital adrenal hyperplasia, but there is lots of stuff behind that. We will be talking about that as well. Lastly, going to San Diego in December is not a bad thing. It is a beautiful campus. What is not to like? It is a venue for San Diego and your campus. Sanjay, how do you think about the differences between M4 selective and M1 M4 dual selective? Yeah, traditionally, and this is certainly, I think, still our current view, we regard M4 as being really important in terms of psychotic or antipsychotic activity, while M1 agonism could be very helpful from a cognitive point of view.

We do have the opportunity to really probe and titrate how much M1 and how much M4 we want because we have a whole bunch of molecules, which again, we will talk about at R&D day. We have M4 preferring molecules. We have M1 preferring molecules. We have an M1 and M4 dual agonist as well. It does allow us to play in a number of different indications. The more M1 preferring could be more suitable for cognition, for example, cognitive impairment associated with Alzheimer’s disease or Lewy body disease. Clearly, there is lots to play in this psychotic space with respect to the M4s, with respect to bipolar mania, as well as schizophrenia. Sure. Thank you. Just to clarify, the M4 agonist 568 for bipolar disorder provides some more rationale on why you see potential for the muscarinic outside of schizophrenia. Bipolar mania is a really important indication.

In fact, we’re starting a phase two study this year with directly on 568. The sense is that it actually translates well from schizophrenia to bipolar mania. If you look at the antipsychotic space, there have been many successful translations. Also, from a preclinical point of view, we do have compelling data in an amphetamine-induced hyperactivity model, which is the model people use for bipolar mania. We’re quite bullish on efficacy in bipolar mania. Wonderful. Moving on to the MDD pipeline, looking at the history and success with the NMDA agonist ketamine, which is Provato, and then you’ve got 845 and 770, the programs have the potential for meaningful commercial opportunity. Can you help us compare and contrast between NMDA and AMPA for major depression?

Kyle Gano, CEO, Neurocrine Biosciences: Maybe I’ll start. Sanjay, please chime in if I miss anything. I think this is a good reminder on this particular question just to share with you in difficult disease states like MDD. Our approach at Neurocrine Biosciences is that we like to approach it in looking at a biological pathway that’s been validated. For us, that starts with the ketamine pathway or PCP pathway that starts with the antagonism of the NMDA receptor. At a high level, just to map out where we are playing here, if you look at the top of the pathway, it’s the NMDA receptor. Something like ketamine, what it does is it antagonizes the NMDA receptor and increases glutamate and GABAergic inhibitory in the neurons. It does so in a way that there’s a super glutamatergic state that it invokes. It causes glutamate to push through the entirety of a neuron.

It gives a rapid response. One of the benefits of ketamine is that you get this quick onset of action and relief of your symptoms. It also is associated with a lot of dissociative effects as well as other consequences and safety and tolerability issues that require it to be administered in the hospital setting. What is our approach to this? If you want to think about osavampator first and foremost, it works downstream of the NMDA receptor. It does not overactivate a neuron in terms of glutamate. It uses the glutamate that’s proximal to the channel. It acts just as we’ve talked about with positive allosteric modulators over time by opening the channel and allowing glutamate to flow through the system and activate it that way. That is a nice kind of soft-touch approach for the treating of the symptoms of MDD.

The trade-off there is it’s not a fast-acting option. It’s more of a traditional four to six to eight-week type of approach to get to maximal efficacy. That’s what we demonstrated in our first phase two trial, what we’re looking at for a phase three study. Very good safety and tolerability, very strong efficacy in terms of the MADRS scores as our primary endpoint, but not a fast onset of action. On the other hand, 770 is our NMDA NR2B NAM. It works at a subunit of the NMDA receptor. The thought and hypothesis that we have and others over time is that while it invokes a supraglutamatergic emergent state, it’s transient and not to the same extent as ketamine. We will get a fast onset of action. That’s what we’re anticipating.

That’s what we’ve designed in our phase two trial, hopefully without all the side effects and tolerability issues that we see with ketamine in and of itself. For 770, again, our NR2B NAM, we’re looking at the MADRS as the primary endpoint at day five. For osavampator, we’re looking at the MADRS, but at day 56. Different approaches within a validated biological pathway.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Cool. Yeah, very, very interesting topic. You know, how is the 845 osavampator trial proceeding? Is there any sort of way we can catch the expected phase two top line data for 770 expected in December, I believe? Yeah, so 845 osavampator is doing really well from a recruitment point of view. We’ve actually initiated all three phase three studies. These are eight-week studies in depression, and we’re expecting the top line data in 2027. With respect to the 770 or the NR2B NAM program, the phase two data is expected Q4 of this year. Actually, we’ll be looking at that data very soon. Wonderful. I’m just being sort of conscious of time. I want to get to some financial questions. You have several other programs in your pipeline, but touch on at least one more. The M4 antagonist 986. Unlike other muscarinic antipsychotics, this is an M4 blockade.

Can you briefly touch on the M4 blockade and its potential for treating movement disorders? If you could touch on the history with Artane as having the risk to target. Yeah, this is an interesting one. It’s actually a homegrown molecule, 986. Artane or trihexyphenidyl, I think I got it right, is basically a muscarinic agonist that has been traditionally used for many, many years, for decades in the neurology space, primarily in partners with tremor, but also dystonia. The problem with it are side effects which relate to cognition, dizziness, confusion. If we had essentially a better Artane, which is more tolerable, we think it could be a winner. That’s essentially 986. We believe that Artane’s efficacy is actually due to M4 blockade. We have a specific M4 blockade that’s 986.

We’ll be looking to start a phase two study in the next year or so in either PD tremor or dystonia.

Kyle Gano, CEO, Neurocrine Biosciences: Yeah, because it’s very much the opposite of the muscarinic agonist story. The muscarinics all suffer from the same, whether you’re looking at antagonists or agonists, they suffer from the same challenge, and that is selectivity. You can get hand muscarinic antagonists. The key is getting selective ones. It just so happens that if you look at our agonist or antagonist portfolio, we’ve got that built into the molecules, which is the real positive here.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Sure. Marvelous. I’m just taking a step back and looking at the investment case. You know, I’ve sort of covered your stock for not that long now. I’ve sort of been an American for one year or a pretend American for one year. You know, it’s sort of coming and looking at it with a fresh set of eyes. You’ve got two marketed products, which are both growing very nicely. You’ve got a fairly rich pipeline. Looking at consensus, it doesn’t seem that there’s a lot factored into your pipeline. The stock was mired around $100 for a while. I think most people think it’s worth in that $160 to $200 bracket, and you’re somewhere there. Just stepping back, you’ve got that top line growth. It seems that you’re just trying to get the modeling of the OpEx right.

It seems that you’re going to be generating quite a lot of cash. Just wondering, is that the case? Do you think you’ve got to get that cash to get some of those R&D programs across the line? Is it going to be a story of good top line, improving profitability, and then you’ve got a very rich pipeline on top of that?

Kyle Gano, CEO, Neurocrine Biosciences: Right. It’s a very fair question. You know, in my view, where we are standing here today as a company, we’re firing on all cylinders. That goes with what we’re doing commercially and across the R&D portfolio. My north star at Neurocrine Biosciences is to look at those investments that continue us down that path of a high-growth company. Revenue growth, revenue diversification, and showing the world that we have a sustainable pipeline. Those three pieces, I think, are ones that every company should aspire for. That gives you great long-term success. We have bits and pieces of all those that I could point to that give you some comfort that we’re moving in the right direction there. I don’t feel comfortable that we’re there across all those variables quite yet. We are a fully integrated company. We are a profitable organization.

In the near term, we’re not looking to direct our investment to maximize profit. We’re investing in growth right now to help us down those different variables of a high-growth company. On the commercial side of the business, it really is driving and maximizing the investment and opportunity value for Ingrezza and crinecerfont. I spoke to both our Q2 revenue number for Ingrezza, $624 million. Also, the guidance this year we talked on, $2.5 to $2.55 billion. On an enterprise-wide perspective, if we look at crinecerfont coming into the mix, that’s $682 million in revenue for Q2. That’s 17% year-to-year growth. Those are the things I’d like us all to be starting to get familiar with at Neurocrine Biosciences. It’s not just an Ingrezza story. It’s a crinecerfont story moving forward. Over the past couple of years, we have shown leverage on our commercial expense line of the business, though.

I think it’s important to point that out. As the products mature, as our investments play out as they have done over time, we have shown 1,000 basis points improvement in leverage. We would expect that to continue as we move through the launch of crinecerfont. We can get leverage from our investments in our products and our commercialization efforts. Those also grow the top line. Those are both working for us. On the R&D side of the equation, we usually look to invest about 35% of net sales into R&D. That’s kind of where we are this year. That number may be slightly higher or slightly lower, depending on the quality of the assets. To give you all kind of a nice benchmark for our Directedine phase three trials, these are inpatient studies, 280 subjects each, approximately. These are $75 million to $100 million phase three studies.

There are two of them that we’re doing that are placebo controlled. There is a time right now where we’re having multiple registrational studies that are up and running, and there’s a high spend there. We’re still going to meet that kind of benchmark of about 35%. In a couple of years down the road, those phase three programs will be gone, and our pipeline will be earlier stage, so they could be a little bit lower than that 35% number. All these things are playing into our calculus here. For right now, I really like what we’ve created at the company and our prospects here over the near term. We are looking to continue to invest in growth.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Wonderful. Great answer, Kyle. Do you feel like you’ve got the R&D pipeline right-sized at the moment? Like you shouldn’t be thinking about other business development opportunities necessarily outside the scope of what Neurocrine Biosciences currently has?

Kyle Gano, CEO, Neurocrine Biosciences: That’s a fair question. I think if you look at the portfolio there, you’ll see that there has been a great deal of reliance on external collaborations that we’ve struck over the years. Moving forward, you’re going to see a right mix of internally discovered programs as well. Right now, related to the DD question specifically, I don’t see a great need for us to bring something in from the outside. If anything, our research team is over-delivering on what our goals were from several years ago in terms of having a certain number of programs in clinical development. Just this year, we’ve already started three new phase one programs, and we have a line of sight to a couple of others this year.

Our goal, I think I mentioned this at prior meetings, is the productivity of our R&D team will be such that we’ll deliver at least four new phase one starts per year, two new phase two starts per year. In a given time, we’ll have three phase three programs. That will allow us to talk about having a portfolio that will deliver a product, a new product every other year. That’s where we’re headed, and that will be largely driven by our internal efforts moving forward. We’ll be able to selectively drop in things from the outside when needed.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Wonderful. In the interest of time, one final question. That is, did I not ask something that I should have?

Kyle Gano, CEO, Neurocrine Biosciences: We didn’t talk about our next-gen gene map 2 program. Perhaps we can mention that in some of our side discussions with you all. I look forward to that discussion, and thank you once again for having us here today.

Sean Lamm, Head of US Midcap Biotech Equity Research, Morgan Stanley: Oh, thank you, Kyle. Thank you, Sanjay. Greatly appreciated.

Kyle Gano, CEO, Neurocrine Biosciences: Thanks, everyone.

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