On August 1, 2024 Neurocrine Biosciences, Inc. (Nasdaq: NBIX) reported its financial results for the second quarter ended June 30, 2024 and provided an update on its 2024 financial guidance (Press release, Neurocrine Biosciences, AUG 1, 2024, View Source [SID1234645266]).
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"At Neurocrine, we are energized by the tremendous opportunity we see to help many more patients, and we are encouraged by our recent progress, including INGREZZA’s continued success in treating tardive dyskinesia and Huntington’s disease chorea and the FDA’s decision to grant Priority Review for crinecerfont to treat congenital adrenal hyperplasia," said Kevin Gorman, Ph.D., Chief Executive Officer of Neurocrine Biosciences. "We are in the process of building our endocrinology team and expanding the INGREZZA salesforce, positioning our company for continued strong growth in the years ahead."
Kevin Gorman added, "As I look ahead to my planned retirement in October, I have never been more confident in Neurocrine’s future. I am incredibly proud of all that we have achieved together and excited to see what this team will continue to accomplish for patients under Kyle Gano’s leadership."
Financial Highlights
Three Months Ended
June 30,
Six Months Ended
June 30,
(unaudited, in millions, except per share data)
2024
2023
2024
2023
Revenues:
Net Product Sales
$ 583.8
$ 446.3
$ 1,092.8
$ 861.6
Collaboration Revenue
6.4
6.4
12.7
11.5
Total Revenues
$ 590.2
$ 452.7
$ 1,105.5
$ 873.1
GAAP Research and Development (R&D)
$ 191.1
$ 145.8
$ 350.5
$ 285.3
Non-GAAP R&D
$ 175.3
$ 122.0
$ 317.7
$ 247.7
GAAP Selling, General and Administrative (SG&A)
$ 242.0
$ 221.8
$ 485.1
$ 464.5
Non-GAAP SG&A
$ 200.7
$ 177.1
$ 416.3
$ 393.7
GAAP Net Income
$ 65.0
$ 95.5
$ 108.4
$ 18.9
GAAP Earnings Per Share – Diluted
$ 0.63
$ 0.95
$ 1.04
$ 0.19
Non-GAAP Net Income
$ 168.9
$ 125.7
$ 293.7
$ 76.2
Non-GAAP Earnings Per Share – Diluted
$ 1.63
$ 1.25
$ 2.83
$ 0.76
(unaudited, in millions)
June 30,
2024
December 31,
2023
Total Cash, Cash Equivalents and Marketable Securities
$ 1,676.7
$ 1,719.1
INGREZZA Net Product Sales Highlights
INGREZZA second quarter 2024 net product sales were $580 million and grew 32% compared to the second quarter 2023
Year-over-year growth driven by strong underlying patient demand and improvement in gross-to-net dynamics
Other Key Financial Highlights
Differences in second quarter 2024 GAAP and Non-GAAP operating expenses compared with second quarter 2023 were driven by:
Increased R&D expense in support of an expanded and advancing clinical portfolio including investments in muscarinic compounds, gene therapy programs and second generation VMAT2 inhibitors. R&D expense for the second quarter 2024 includes $27 million for development milestones achieved under our collaborations with Nxera Pharma UK Limited (Nxera, formerly known as Sosei Heptares), Takeda Pharmaceutical Company Limited (Takeda) and Voyager Therapeutics, Inc. (Voyager)
Increased SG&A expense includes incremental investment in crinecerfont-related headcount, crinecerfont-related pre-launch activities, and continued investment in INGREZZA. GAAP SG&A expense also includes impairment charges of $14 million associated with leased office space that has been vacated as we continue to occupy our new campus facility
Second quarter 2024 GAAP net income and earnings per share were $65 million and $0.63, respectively, compared with $96 million and $0.95, respectively, for second quarter 2023
Second quarter 2024 Non-GAAP net income and earnings per share were $169 million and $1.63, respectively, compared with $126 million and $1.25, respectively, for second quarter 2023
Differences in second quarter 2024 GAAP and Non-GAAP net income compared with second quarter 2023 driven by:
Higher INGREZZA net sales and improved operating margin
Second quarter 2024 includes $50 million charge associated with the settlement of convertible senior notes conversions (Non-GAAP adjustment)
Second quarter 2024 includes $20 million loss from changes in fair value of equity security investments compared to $37 million gain the second quarter 2023 (Non-GAAP adjustment)
Second quarter 2024 includes $27 million of development milestones expense achieved under collaborations
Second quarter 2024 includes $14 million leased office space impairment charge (Non-GAAP adjustment)
At June 30, 2024, the Company had cash, cash equivalents and marketable securities totaling approximately $1.7 billion which reflects the $309 million payment to fully retire our convertible senior notes
A reconciliation of GAAP to Non-GAAP financial results can be found in Table 3 and Table 4 at the end of this news release.
Recent Developments
Announced Kevin Gorman, Ph.D., will retire as Chief Executive Officer on October 11, 2024. Kyle Gano, Ph.D., currently Neurocrine’s Chief Business Development and Strategy Officer, will succeed him in the CEO role. Dr. Gano will also join the Company’s Board of Directors at that time, and Dr. Gorman will continue to serve on the Company’s Board.
Announced positive topline data for the Phase 2 SAVITRI study. This randomized, double-blind, placebo-controlled dose-finding study assessed the efficacy and safety of NBI-1065845 in adult subjects with major depressive disorder (MDD). NBI-1065845 is an investigational alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM) in development as a potential treatment for patients with MDD who have not benefited from treatment with at least one antidepressant in their current episode of depression.
Announced FDA accepted New Drug Applications (NDAs) and granted Priority Review for crinecerfont for adult and pediatric patients with congenital adrenal hyperplasia (CAH). The agency set Prescription Drug User Fee (PDUFA) target actions dates of December 29, 2024 for the capsule formulation and December 30, 2024 for the oral solution formulation.
At the Endocrine Society Annual Meeting (ENDO 2024), presented new Phase 3 clinical study data from the CAHtalyst registrational studies of crinecerfont in pediatric and adult patients with classic congenital adrenal hyperplasia (CAH) due to 21-hydroxylase deficiency. In parallel, announced that the primary study results from the CAHtalyst registrational studies of crinecerfont in pediatric and adult patients with classic congenital adrenal hyperplasia (CAH) due to 21-hydroxylase deficiency have been published in The New England Journal of Medicine.
Initiated Phase 2 study of NBI-1070770 in adults with major depressive disorder. NBI-1070770 is a novel, selective and orally active, negative allosteric modulator (NAM) of the NR2B subunit-containing N-methyl-D-aspartate (NMDA NR2B) receptor.
Initiated Phase 1 study of NBI-1117567 in healthy adult participants. NBI-1117567 is an investigational, oral, M1/M4 (M1 preferring) selective muscarinic agonist for the potential treatment of neurological and neuropsychiatric conditions.
Initiated Phase 1 study of NBI-1076968 in healthy adult participants. NBI-1076968 is an investigational, oral, M4 subtype-selective muscarinic antagonist for the potential treatment of movement disorders.
Received notification from the Centers for Medicare and Medicaid Services that INGREZZA qualified for the Specified Small Manufacturer Exception pertaining to the Part D redesign of the Inflation Reduction Act.
Settled the convertible senior notes due May 15, 2024 in full in cash upon maturity.
Announced planned expansion of the INGREZZA psychiatry and long-term care sales teams to better serve patients by accelerating the number of people who are diagnosed and treated for tardive dyskinesia and chorea associated with Huntington’s disease.
Launched new sprinkle formulation of INGREZZA (valbenazine) capsules for the treatment of adults with tardive dyskinesia and chorea associated with Huntington’s disease.
Raised 2024 Net Sales Guidance and Updated Expense Guidance
Range
(in millions)
Low
High
INGREZZA Net Product Sales 1
$ 2,250
$ 2,300
GAAP R&D Expense 2
$ 665
$ 695
Non-GAAP R&D Expense 3
$ 600
$ 630
GAAP and Non-GAAP IPR&D 4
$ 9
$ 9
GAAP SG&A Expense 5
$ 955
$ 975
Non-GAAP SG&A Expense 3, 5
$ 830
$ 850
1.
INGREZZA sales guidance reflects expected net product sales of INGREZZA in tardive dyskinesia and chorea associated with Huntington’s disease.
2.
GAAP R&D guidance includes $33 million of expense for development milestones in connection with our collaborations (Nxera, Voyager and Takeda) achieved or deemed probable to achieve. These milestone expenses are associated with our advancing pre-clinical and clinical pipeline.
3.
Non-GAAP guidance adjusted to exclude estimated non-cash stock-based compensation expense of approximately $65 million in R&D and $110 million in SG&A and $14 million leased office space impairment charge in SG&A.
4.
Acquired in-process R&D (IPR&D) is included in guidance once significant collaboration and licensing arrangements have been completed.
5.
SG&A guidance range reflects expense for ongoing commercial initiatives supporting INGREZZA growth including the announced planned expansion of the psychiatry and long-term care sales teams and pre-launch commercial activities for crinecerfont.
2024 Pipeline Milestones and Key Activities
Program
Indication
Milestones / Key Activities
NBI-1065845*
(AMPA Potentiator)
Inadequate Response in Major Depressive Disorder
Reported Positive Top-Line Phase 2 Data;
Conducting End of Phase 2 Meeting with FDA; Initiating Phase 3 Studies in 2025
Crinecerfont
(CRF1 Receptor Antagonist)
Congenital Adrenal Hyperplasia
(Pediatric and Adult)
Priority Review with PDUFA Dates Set for December 29 and 30, 2024
NBI-1117568**
(M4 Agonist)
Schizophrenia
Top-Line Phase 2 Data in Q3’24
Luvadaxistat*
(DAAO Inhibitor)
Cognitive Impairment Associated with Schizophrenia
Top-Line Phase 2 Data in Q3’24
NBI-1070770*
(NMDA NR2B NAM)
Major Depressive Disorder
Phase 2 Study Ongoing;
Top-Line Data in 2025
NBI-1065890
(Selective VMAT2 Inhibitor)
CNS Indications
Phase 1 Study Ongoing
NBI-1117569**
(M4-Prefering Agonist)
CNS Indications
Phase 1 Study Ongoing
NBI-1117570**
(M1/M4 Dual Agonist)
CNS Indications
Phase 1 Study Ongoing
NBI-1117567**
(M1 Agonist)
CNS Indications
Phase 1 Study Ongoing
NBI-1076986
(M4 Antagonist)
Movement Disorders
Phase 1 Study Ongoing
Key: AMPA = alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid; CFR1 = Corticotropin-Releasing Factor Type 1; M4 = M4 Muscarinic Receptor; DAAO = d-amino acid oxidase; NMDA NR2B NAM = n-methyl-d-aspartate Receptor Subtype 2B Negative Allosteric Modulator; VMAT2 = Vesicular Monoamine Transporter 2; M1 = M1 Muscarinic Receptor
Neurocrine Biosciences Partners: * Partnered with Takeda Pharmaceutical Company Limited; ** In-Licensed from Nxera Pharma UK Limited (formerly Sosei Heptares)
Conference Call and Webcast Today at 8:00 AM Eastern Time
Neurocrine Biosciences will hold a live conference call and webcast today at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). Participants can access the live conference call by dialing 800-445-7795 (US) or 785-424-1699 (International) using the conference ID: NBIX. The webcast and accompanying slides can also be accessed at approximately 8:00 a.m. Eastern Time on Neurocrine Biosciences’ website under Investors at www.neurocrine.com. A replay of the webcast will be available on the website approximately one hour after the conclusion of the event and will be archived for approximately one month.