Neurocrine Biosciences, Inc. (NBIX) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance and optimistic guidance, particularly with the anticipated growth of INGREZZA and CRENESSITY. The Q&A section provides additional positive sentiment with high adoption rates and strategic sales force expansion. While there are concerns about unclear responses to regulatory issues, these are outweighed by the positive market strategy and product development outlook. The company's focus on R&D and potential new indications further support a positive sentiment. Overall, the positive aspects are likely to result in a stock price increase of 2% to 8% over the next two weeks.
Key Financial Performance
Net Product Sales $790 million in net product sales, reflecting 28% year-over-year growth. Driven by continued progress both from CRENESSITY and INGREZZA.
CRENESSITY Sales CRENESSITY grew sequentially from $53 million in Q2 to $98 million in Q3, reflecting strong early adoption and persistency rates. 80% of dispensed prescriptions are now being reimbursed.
INGREZZA Sales Net sales of $687 million in Q3, with a third consecutive quarter of record new patient additions. Growth driven by improved access, sales force expansion, and double-digit TRx growth.
Combined Net Sales of INGREZZA and CRENESSITY Combined net sales of $785 million in Q3, reflecting strong performance and significant unmet need in their respective markets.
SG&A Expense Increase An SG&A expense increase of around $150 million in 2026 is anticipated due to expanded investment in both INGREZZA and CRENESSITY.
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Operating Highlights
INGREZZA: Achieved record quarter for new patient starts and total prescriptions due to expanded sales force and improved patient access. Net sales reached $687 million in Q3, with a 28% year-over-year growth. Plans for further sales force expansion to accelerate TD market development and maximize patient share.
CRENESSITY: Strong launch with net sales growing from $53 million in Q2 to $98 million in Q3. Early adoption and persistency rates are strong, with 80% of prescriptions reimbursed. Over 1,600 patients initiated therapy since launch, with strong insurance coverage and affordability for patients.
TD Market: Significant unmet need remains, with only 10% of the estimated 800,000 TD patients currently treated. Sales force expansion aims to accelerate market development and strengthen position.
CAH Market: Estimated 20,000 patients in the U.S. with classic CAH. CRENESSITY is the first FDA-approved treatment for this condition, with strong adoption and insurance reimbursement.
Sales Force Expansion: Plans to expand sales teams for both INGREZZA and CRENESSITY to meet growing demand and support future product launches.
R&D Productivity: On track to meet goals of 4 new Phase I and 2 new Phase II study initiations in 2025. Advancing late-stage programs and early/mid-stage innovation.
Long-term Growth: Focused on sustained growth through investments in commercial assets, R&D, and sales force expansion. Preparing for anticipated launches of investigational psychiatric medicines in 2027.
Capital Allocation: Priorities include driving revenue growth, advancing R&D, enabling business development, and returning capital to shareholders. Over $2.1 billion in cash supports these initiatives.
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Risk or Challenges
Market Expansion Challenges: Despite the growth in the prescriber base for INGREZZA, only about half of the estimated 800,000 people with tardive dyskinesia have received a diagnosis, and only 10% are being treated with a VMAT2 inhibitor. This indicates a significant gap in market penetration and awareness.
Regulatory and Policy Risks: The company is navigating potential impacts of the Inflation Reduction Act, which could affect pricing and market dynamics for INGREZZA.
Sales Force Expansion Costs: The decision to expand sales teams for both INGREZZA and CRENESSITY will result in an SG&A expense increase of around $150 million in 2026, which could pressure financials if revenue growth does not meet expectations.
Clinical Development Risks: While the company is advancing multiple clinical programs, there is inherent risk in achieving successful outcomes in late-stage trials, particularly for osavampator in major depressive disorder and direclidine in schizophrenia.
New Market Development for CRENESSITY: As CRENESSITY is the first therapy for classic congenital adrenal hyperplasia (CAH), the company faces challenges in building a new market, including understanding prescriber behavior, patient dynamics, and potential seasonality trends.
Economic and Reimbursement Risks: Although CRENESSITY has strong reimbursement rates, any changes in payer policies or economic conditions could impact patient access and affordability.
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Guidance & Outlook
Momentum for INGREZZA and CRENESSITY: Continued targeted investments in these commercial assets are expected to accelerate growth into 2026 and beyond.
Clinical Portfolio Progress: Phase III studies of osavampator in major depressive disorder and direclidine in schizophrenia are on track to meet enrollment objectives for the year. Four new Phase I study initiations and two new Phase II initiations are expected to be achieved this year.
Sales Force Expansion for INGREZZA: An additional sales force expansion is planned to accelerate the development of the tardive dyskinesia (TD) market through 2029, maximize patient share, and prepare for the anticipated launch of late-stage clinical programs in 2027.
Financial Guidance for 2026: SG&A expenses are expected to increase by approximately $150 million in 2026 due to expanded investments in INGREZZA and CRENESSITY.
CRENESSITY Market Growth: The company plans to expand the CRENESSITY sales team to support continued volume growth and capitalize on the favorable receptivity from the CAH community.
Upcoming Clinical Results: Top-line results for valbenazine in Dyskinetic Cerebral Palsy and the Phase II study of NBI-'770 in major depressive disorder are anticipated in Q4 2025.
R&D Day and Long-Term Vision: The company will provide greater detail on its long-term vision, including neuropsychiatry programs and next-generation clinical developments, during an upcoming R&D day.
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Shareholder Return Plan
Return capital to shareholders: Our capital allocation priority is to remain intact. Number one, drive revenue growth; number two, advance our R&D programs; number three, enable business development; and number four, return capital to shareholders.
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Key Q&A
Q:What were the patient dynamics and patient starts for CRENESSITY in Q3 compared to Q2?
A:Enrollment forms were slightly lower in Q3 than Q2, with 540 new treatment forms in Q3. Management attributed this to consistent weekly adoption over the summer and not to seasonality or early launch bonuses. Over 1,600 treatment forms were completed through Q3, and management remains optimistic about patient accumulation.
Q:How is the company approaching the upcoming AUSTEDO price announcement and its implications for INGREZZA?
A:The company expects to learn AUSTEDO's pricing in November and is monitoring how health plans and PBMs might react. Management emphasized that INGREZZA is a 'sticky' medicine with high patient retention. They plan to maximize patient numbers before their own IRA year (2027) and will observe learnings from other medicines undergoing IRA negotiations.
Q:Are payers requiring steroid tapering for CRENESSITY coverage, and is there a seasonal impact on sales?
A:Payers are not requiring specific steroid tapering for coverage. Reimbursement has been smooth, focusing on underlying disease and hydrocortisone treatment. Management does not anticipate significant seasonality outside of patient visit cadence during the holiday season.
Q:What changes in payer preferences have been observed for INGREZZA compared to AUSTEDO?
A:Health plans are noticing Teva's strategy of pushing higher dose strengths of AUSTEDO, leading to higher costs. Some plans cover the BID formulation but not the XR. This has allowed Neurocrine to expand formulary coverage for INGREZZA, which is expected to remain stable through 2026.
Q:What is the status of the DOJ investigation into INGREZZA's sales and marketing practices?
A:The company received a Civil Investigative Demand (CID) from the DOJ in August, requesting documents related to INGREZZA's sales, marketing, and promotion. Neurocrine is fully cooperating and emphasized its robust compliance program. No further material information was disclosed.
Q:What progress has been made in adopting CRENESSITY at centers of excellence (COEs) and in the community setting?
A:All 20 COEs have started adopting CRENESSITY, though at varying paces. Community endocrinologists treating adults have shown higher-than-expected adoption rates. The company is expanding its field sales team to reach more community practices.
Q:What is the scale and focus of the sales force expansion for INGREZZA and CRENESSITY?
A:The sales force is expanding by about 30%, with most new headcount allocated to INGREZZA. The psychiatry and neurology teams are being combined and expanded, while the LTC team remains separate but is also growing. For CRENESSITY, the smaller expansion focuses on community endocrinology practices.
Q:Is the company considering Alzheimer's psychosis as an indication for direclidine?
A:Yes, Alzheimer's psychosis is being considered for a follow-on molecule with safety advantages for the elderly. The company is also monitoring BMS' Cobenfy Phase III study for lessons applicable to the field.
Q:What are the expectations for the NBI-770 Phase II study results?
A:The study is a small signal-finding trial with 72 patients. Management hopes for esketamine-like efficacy without associated side effects. Depending on the results, the company may proceed to a confirmatory Phase IIb or directly to Phase III.
Q:What is the persistence and compliance rate for CRENESSITY, and what feedback has been received on glucocorticoid (GC) reduction?
A:Persistence and compliance have been strong, with most early-year patients still on treatment. Feedback indicates good disease control and androgen reduction, with providers tapering GCs based on individual patient situations.
Q:What are the gross-to-net trends for CRENESSITY?
A:Gross-to-net discounts are expected to remain below 20% in the foreseeable future. Reimbursement rates are strong, with 9 out of 10 patients having adjudicated claims.
Q:What is the neurology versus psychiatry split for INGREZZA, and how is the sales team addressing this?
A:Neurology accounts for about 15% of total volume, with psychiatry showing higher growth potential. The sales team is being reorganized to focus more on psychiatry while maintaining neurology coverage.
Q:What is the company's approach to capital management and share buybacks?
A:The company prioritizes top-line growth and R&D investments, with flexibility for share buybacks. The bias is toward using capital for business development activities.
Q:What is the share of new-to-class patients for INGREZZA compared to AUSTEDO?
A:INGREZZA is gaining the majority of new patient starts, contributing to increased total market share. The company aims to maintain this momentum into 2027 and beyond.
Q:What is the medium-term growth outlook for INGREZZA?
A:The VMAT2 market is experiencing double-digit growth, with INGREZZA growing faster than the market. Management expects continued robust growth into 2026 and beyond.
Q:What are the expectations for the NBI-770 study in terms of primary endpoint change and potential indications?
A:The study aims for esketamine-like efficacy without associated side effects. The company is considering both adjunctive treatment in MDD and treatment-resistant depression (TRD) as potential indications.
Q:What is the impact of the IRA on INGREZZA, and how is the expanded sales team being leveraged?
A:The company aims to maximize patient numbers before 2027, focusing on new patient starts. The expanded sales team is expected to support potential launches of late-stage pipeline products in psychiatry and neurology.
Q:What is the status of CRENESSITY's new starts and sales trajectory?
A:Weekly enrollments have been consistent across Q2 and Q3, with no major shifts in patient demographics. The launch continues to exceed expectations, and the expanded sales team is expected to drive further growth.
Q:What is the company's response to the Make America Healthy Again commission's warning letter on DTC advertisements?
A:The company is committed to responsible advertising and views it as an important opportunity for patient education. No specific corrective actions were disclosed.
Q:What is the status of valbenazine for dyskinetic cerebral palsy (DCP), and how does it align with the expanded sales team?
A:The DCP population is larger than the Huntington's chorea population but smaller than the TD population. The expanded sales team would be sufficient to cover potential prescribers if valbenazine is approved for DCP.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the DOJ investigation into INGREZZA's sales and marketing practices, citing ongoing cooperation and compliance. Additionally, they did not disclose specific corrective actions in response to the Make America Healthy Again commission's warning letter on DTC advertisements.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Benevich Chief
CAH community
CRENESSITY sale
Huntington chorea
III study
INGREZZA CRENESSITY
INGREZZA prescriber
Neurocrine chapter
Osavampator
Phase II
Phase III
TD market
afternoon
combination
day today
decision INGREZZA
demand
detail
dyskinesia Huntington
enrollment
force access
foundation
goal
insight
insurance
momentum
objective
patient CAH
patient start
people CAH
prescriber base
record
sale force
sale team
science
stage program
start prescription
therapy patient
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The earnings call summary highlights strong financial performance, with significant revenue growth and improved operating margins. Despite increased R&D expenses, the company has achieved a notable rise in net income and cash flow from operations, indicating efficient cost management. The absence of strategic updates or risk discussions does not detract from the positive financial outcomes. The lack of Q&A insights suggests no major concerns were raised, further supporting a positive sentiment. Overall, these factors suggest a positive stock price movement over the next two weeks.
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