Neurocrine Biosciences Inc (NBIX) Q2 2026 Earnings Call Transcript

Hello, and welcome everyone joining today's Neurocrin Biosciences Reports Q2-2026 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star 1 on your telephone keypad. Please note this call is being recorded, and we are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Todd Tushla, Vice President of Investor Relations. Please go ahead.

Happy Thursday, everyone. Welcome to Neurocrin Biosciences' second quarter 2026 earnings call. With me today on the call are Kyle Gano, Chief Executive Officer, Matt Abernathy, Chief Financial Officer, Eric Benevich, Chief Commercial Officer, Sanjay Kaswani, Chief Medical Officer, and in his well-deserved new role as Chief Business Officer, Samir Sadanti. During today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. In addition, some of the information discussed today includes non-GAAP financial measures that have not been calculated in accordance with U.S. GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the investor relations page of Nurekren's website. After prepared remarks, we'll jump into Q&A. Now I'll hand the call off to Kyle.

Thanks, Todd. Good afternoon, everyone. Neurocrin's second quarter performance demonstrates the power of a diversified growth strategy built to compound over time. Our commercial portfolio of first-in-class medicines, Ingraza, Crenessity, and Vicat XR, delivered another record quarter with net product sales exceeding $950 million, enabling more patients to benefit from our innovative medicines. This durable commercial performance provides the financial strength to continue investing in innovation, advance our industry-leading pipeline, and pursue strategic opportunities that further strengthen Neurocrin for long-term growth. Our strategy remains clear. Execute our commercial portfolio to bring our medicines to patients, advance our innovation engine, and deploy capital with discipline. This quarter demonstrated meaningful progress across all three of these priorities. The commercial business continues to generate durable growth. The pipeline is advancing with one of the industry's strongest mid-to-late-stage portfolios, and disciplined capital deployment was demonstrated through the successful acquisition and integration of ICAT-XR. Together, these efforts further strengthen our position in rare disease while building on our leadership in endocrinology. More importantly, these results reflected the continued evolution of Nurocrin. Just a few years ago, we were largely viewed as a single-product company. Today, we have multiple commercial growth drivers, an expanding pipeline across all phases of development, and a financial strength to invest through innovation cycles. Together, these strengths position us to create long-term value for patients, physicians, employees, and shareholders alike. Looking ahead, we remain on track to deliver multiple important clinical milestones in 2027, including Phase III data readouts for Osef Amphitore and major depressive disorder and direct leaden and schizophrenia. Together with the continued integration of ICAT-XR, these milestones represent the next chapter in Neurocrine's growth and reinforce our confidence in the opportunity ahead. Before I turn the call to Matt, I'd like to recognize Samir Sadanti on his recent promotion to Chief Business Officer. Since joining Neurocrine in 2017, Samir has played an integral role in shaping our corporate strategy and business development efforts. As a member of our executive leadership team, he will help guide the next phase of NeuroQuinn's growth and evolution. Samir, congratulations. We are excited for what's ahead. With that, I'll turn the call over to Matt.

Good afternoon, everyone. For the second quarter, we delivered over $950 million of total revenue, representing nearly 40% year-over-year growth. This reflects full-quarter contributions from Ingressa and Crenicity, along with a partial quarter contribution from Vicat XR following the close of the Soleno acquisition. This revenue performance demonstrates accelerating top-line growth, delivering a financial profile with non-GAF EPS of $2.85 per share. Starting with Ingresa, second quarter net sales were $716 million of 15% year-over-year, driven by another quarter of record new patient additions and sustained underlying demand. Given this performance, we are raising full year and graduate guidance from $2.7 to $2.8 billion to a new range of $2.825 to $2.875 billion. At the midpoint, this represents approximately 13% year-over-year growth. Cronicity's second-quarter net sales were $184 million, reflecting continued strong launch execution, consistent new patient starts, and expanding prescriber adoption. Approximately 15% of the estimated diagnosed patient population has now been prescribed Cronicity, reinforcing our confidence in the significant runway for growth. Turning to Vicat XR, second quarter pro forma net sales were $94 million, with $54 million recognized by Neurocrin from May 18, the closing date of the Solano acquisition. Integration has progressed well and expect to drive sequential quarterly growth exiting 2026. New patient demand remained fairly consistent with the first quarter, while discontinuation rates track in line with our expectations following the initial launch bolus in 2025. We have more work to do in developing this market and remain optimistic in the opportunity to help many more patients with PWS over the years ahead. Perform at total revenues for $998 million for the second quarter, 2026, when including full quarter VITATXR sales. This performance underscores the strength and increasing scale of our commercial portfolio across three highly differentiated products. Turning to our financials. With the Soleno acquisition now complete, I'd like to briefly discuss the financial impact of the transaction, including the purchase accounting and the gap and non-gap adjustments reflected in our earnings release. We acquired Soleno for approximately $2.9 billion and financed the transaction with cash on hand. We ended the second quarter with approximately $500 million in cash and no debt. Strategically and financially, this is a highly attractive acquisition. BICAT-XR adds another differentiated durable growth product to our portfolio and is immediately accretive to non-GAAP earnings. Accordingly, we updated operating expense guidance to include the Solano operating expenses, transaction and integration costs, and the expected purchase accounting and tangible and inventory fair value amortization impacts for the remainder of 2026. We expect approximately $150 million of acquisition-related costs, of which $130 million was recognized in the second quarter. Our GAAP second quarter results also include non-cash purchase accounting amortization of acquired intangible assets and inventory fair value step-up of approximately $20 million. dollars. Overall, our commercial portfolio continues to perform exceptionally well, generating close to $1 billion in pro forma quarterly sales, providing substantial financial flexibility to invest consistent with our capital allocation priorities to drive revenue growth, advance our expanding pipeline, and pursue additional strategic business development opportunities. With growing sales and improving financial profile and meaningful data catalysts ahead, we feel quite fortunate to find ourselves in a position to continue to build a leading global biotech company. With that, I will now hand the call over to Eric Benevich, our Chief Commercial Officer. Eric.

Thanks, Matt. Just five years ago, Neurocon was a single product commercial stage company celebrating Ingressa achieving blockbuster status, surpassing $1 billion in annual sales. Today, our commercial portfolio includes three first-in-class medicines with combined quarterly sales approaching $1 billion and annualizing to approximately $4 billion. This transformation reflects the successful execution of our long-term growth strategy. So, starting with Ingressa, second quarter performance was outstanding, with record sales of $716 million driven by another quarter of all-time highs in both new patient starts and total prescriptions. Based on our increased full-year guidance, we expect to help more patients than ever before who are living with tardive dyskinesia or chorea associated with Huntington's disease. Crenicity also delivered another excellent sales quarter, generating $184 million. The launch continues to follow a very consistent pattern. Steady pace of new patient starts, high persistence and compliance, and favorable reimbursement. Adoption remains balanced across both adults and pediatric patients, male and female patients, and across the business segments of CAH Centers of Excellence, Pediatric Endocrinologists, and Community Adult Endocrinologists. Importantly, our prescriber base has nearly tripled compared to one year ago, providing a strong foundation for continued growth. Turning to VicatXR, while still very early in the integration of this franchise into our commercial platform, we were encouraged by second quarter trends. New patient starts remained steady on a sequential basis, the prescriber base continued to expand, and discontinuations tracked in line with expectations following the initial bolus of patients who began therapy last year. As with any acquisition, it will take a few quarters to get fully integrated, and we're excited to introduce Neurocrin's commercial, medical, and patient support capabilities to the VICAT team and the PWS community. We remain confident in driving sequential growth as we exit 2026 and continue our conviction that VicatXR has the potential to become the third blockbuster in our portfolio. Before I wrap, I'd like to extend a special thank you to our commercial and medical teams in neuropsychiatry and rare endocrinology, our internal cross-functional colleagues, and the VicatXR team from Soleno. Q2 is a quarter of significant transformative change for Neurocrin, where we both expanded our existing commercial footprint to better meet the needs of healthcare providers and patients, while we also began the integration of VicatXR into our company. We executed all these significant structural changes without missing a beat in terms of our mission to help more patients. My hat is literally off to our teams for pulling off such a tremendous transformation while simultaneously delivering such a strong quarter. Now, I'll turn the call over to our chief medical officer, Dr. Sanjay Keswani.

Thanks, Eric, and good afternoon, everyone. I'll begin today with highlights from Endo 2026, where we presented important new data for both Crenicity and 5CAT-XR. Starting with Crenicity, we presented two-year data from the ongoing Catalyst open-label studies in pediatric and adult patients with classic congenital adrenal hyperplasia. These results demonstrated meaningful and durable improvements across multiple aspects of health, including cardiometabolic outcomes, bone health, quality of life, and pediatric growth, while continuing to reinforce chronostomy's favorable long-term safety profile. For VicatXR, we presented three-year HQCT and Prader-Willi syndrome profile data, comparing treated patients with a natural history cohort these analyses demonstrated significant and sustained reductions in hyperphagia across all evaluated time points supporting the durability of treatment benefit additional data also showed meaningful improvements when patients who have previously discontinued therapy restarted treatment underscoring the importance of continued treatment in maintaining long-term outcomes collectively these data strengthen the growing body of evidence supporting both chronicity and VicaXR and highlight the meaningful impact these medicines are having for patients and the endocrinology community. Turning to the pipeline, we continue to make steady progress. Notably, we remain on track to report Phase III top-line data for osifampertor in major depressive disorder in the second half of 2027. We also remain on track to report the first phase three readout for direclydine in schizophrenia in the second half of 2027, and for the second phase three study in 2028. Looking ahead, we look forward to hosting our Neurology and Immunology webinar in early December, where we will provide an update on our strategy and highlight key programs across both therapeutic areas. With that, I'll hand the call back to Todd.

Chloe, let's jump into Q&A.

Thank you. If you'd like to ask a question, press star 1 on your keypad. Delete the Q at any time. Press star 2. Once again, that is star 1 to ask a question. We'll take our first question from Paul Matisse with Stiefel. Your line is open.

Great. Thanks a lot, guys, and congrats on the execution on the great quarter. As it relates to Ingressa, I was wondering at this point in the year, how much visibility do you have on pricing dynamics next year and any feedback you're getting or any insight you're getting into access dynamics with the Austado MFP being enacted? Thank you so much.

Hey, Paul, this is Kyle. Thanks for the question. Maybe just to start where we are with 2026, great access this year with about 70% of all Medicare lives covered. under the contracting that we executed last year, and we expect that pricing to remain relatively consistent year to year as we think about the second half of 2026. In terms of 2027, obviously our discussions with payers are ongoing now, and we should get a read on that later this year. But I think where we are right now is we do see a process and a path moving forward. It's not just us, but others, that there will be a place for MFP-adjacent products for Medicare beneficiaries, and if you couple that with the fact that we're the market leader in the CMAT2 category, there's going to be ample opportunity for us to have the same access that we have here moving forward, strong access through 27 and 28. So, right now, it's all leveraging what we can with our team. I would be remiss by not calling out that this market overall continues to grow double-digit year to year, so there's a lot of room left in this market, and we'll continue to focus there.

Kyle, any thought on how much additional costs maintaining this access might be next year or beyond?

No, I think it's purely to make a call on that, Paul. We'll have more to comment on that later in the year. Right now, it's been a great first half, and we'll continue to build on the momentum that we've seen.

Okay. Thanks very much.

We'll take our next question from Phil Nadeau with Petey Cowan. Your line is open.

Good afternoon. June, thanks for taking our question. Ours is on chronicity, really strong quarter, with revenue up 20% quarter over quarter. It sounds from the prepared remarks like everything was steady as she goes, so steady patient ads, good reimbursement, no bolus. I'm curious whether that interpretation is correct. Were there any one-time issues in Q2 that made it particularly strong that we shouldn't extrapolate into the back half of the year, or is this pace of revenue growth reasonable for the next couple quarters?

Yeah, I think characterizing Q2 is really an extension of what we've seen earlier in the launch, a very steady and consistent pattern of new patient ads. You know, we continue to see adoption across all the segments that we're focused on, the pediatric endocrinologist, the adult community endocrinologist, and those centers of excellence. you know, really pleased with the fact that, you know, we estimate now that we've got about 15% of the addressable patient population on treatment and, you know, certainly expect to see continued strong momentum as we move forward.

That's very helpful.

We'll move next to Tazeen Ahmad with Bank of America. Your line is open.

Hi, thanks for taking my question. Mine's on BICAP. So this quarter's results of $94 million. It's roughly flat sequentially. You just took over this franchise. So can you maybe just talk to us about some of the things that you're doing in order to accelerate the launch trajectory now that the franchise is fully under your control and maybe just give some specifics about some of the things that you're doing now that you think could have an effect, you know, in a quarter or two?

Hi, Tazeem. So, first of all, I'll say that the results, you know, that we saw in Q2 were aligning with our expectations coming out of diligence. Certainly, I think we're still learning a lot about the hyperphagia market opportunity, but what we've learned so far is this reaffirms our convictions about the potential for this medicine to be a blockbuster. and, you know, we're still in the, you know, deep in the midst of our integration process here, but, you know, ultimately I think the fundamentals are what matters, you know, continuing to find patients, to introduce VicodXR to the providers that care for them primarily in endocrinology and then, you know, provide good education and guidance around how to select appropriate patients, how to help them through the titration process and to achieve good outcomes. So I feel very good about the opportunity with BICAT. Everything that I've heard, you know, from the physicians that have experience with it is very positive, and certainly I look forward to, you know, continuing to drive the launch of this product that's still very early in its commercial ramp.

And Tadeen, this is Kyle. Now, I'm just reminded as we talk about BICATXR, this is our first earnings call post-close where we've had a discussion on this. So I do want to bring up the merits of the acquisition and the product itself. There's a great strategic and financial fit here for us. BICATXR is a first-in-class, first-in-disease medicine for Prader-Willi syndrome, very much of the same category that we've seen for Ingressa and Cresti upon their launch. So we're really excited about the strategic fit there. Obviously, we're able to expand on our endocrinology franchise moving forward. But as a product that comes under the Nurocrin umbrella earlier in its launch, not only do we get to treat many thousands of patients under Nurocrin, which is exciting, we also get to reap the financial reward of maximizing all the revenue growth that gets added to our top line as well as diversification. So there's a lot of financial fit there as well, Not to mention that we believe the IP estate goes out to the mid-2040s, so it's durable as well. So, overall, we're really excited about what we have here. I think Eric called out some of the points that we're looking at now, and we're excited to bring this into the same blockbuster category that we see for Crenesky and Graza moving forward.

The only thing I'd add is this was very much in line with our internal expectations. We knew what we were buying, and this has a tremendous amount of opportunity to help many more patients. So we have a ton of confidence in the team, the product, and the opportunity to help many more patients with PWS. So we're encouraged as we think forward.

Brian Scorny with Baird. Your line is open.

Hey, afternoon, guys. Congrats on a great quarter. I may need to jump in with a question on VyCat as well. You know, I think during the Selena days, there's a lot of debate on sort of the differences between sort of new start boluses and sort of dropouts. And, you know, as you're sort of getting your head around things right now, maybe you could just kind of characterize what you're seeing out there in terms of like how much of initial bolus numbers are really kind of affecting the dropout rate that we see right now. And when do we, you know, do you think that there's an upwards equilibrium of new starts and dropout rates to think about in the coming quarters?

Yeah, no, I appreciate the question. This is Kyle. I think what we've seen on a new patient start basis is a pretty steady flow of new patient starts over the past couple quarters. So that's good. That's right along the lines of the expectation we had after completing diligence on the company. In terms of discontinuations, obviously with the bolus of patients at the launch, we do see some of those discontinuations being pulled through as time has gone along. But we expect to see the ultimate rate settling into what we would see with other orphan medicines in the 25% to 30% range. So that's what we'll be looking at moving forward. But ultimately, you know, our goal here is you'll see sequential growth as we exit 2026 and looking at that in future years. So we're right where we need to be right now. I think more importantly, I'm really excited to see our team bring its resources and the support to the Solano team now under the Nuroquine brand and take all of our learnings collectively and make this particular medicine be the best that can be moving forward.

Great. Thanks, Scott.

We'll move next to Mohit Bansal with Wells Fargo. Your line is open.

Great. Thank you very much for taking my question, and congrats on the great quarter. So just wanted to understand your why-tap commentary a little bit better for next few quarters. So you're saying that the patient, patient, patient, patient, patient, new patient start, you expect it to be steady. So wondering, wondering that, so are you saying that the sales could be choppy a little bit? But, again, what you are saying is that as you exit to 2026, you can see you are constantly driving sequential growth. I'm just wondering that how will you characterize the next few quarters as you integrate the business into your own business?

Yeah, so as we move from key three to key four, we would anticipate seeing some sequential growth. And then as you think about going into next year, it's really about that momentum. But as we've talked about, it's that mix of new patient additions and being offset by the discontinuations. And we feel like we'll be through the bolus of the discontinuations here in this quarter. So we would expect to be sequential growers, as we've said, in Q4 and beyond.

Thank you.

We'll take our next question from Anupam Rama with J.P. Morgan. Your line is open.

Hey, guys. thanks so much for taking the question um just wondering what some of the physician feedback has been on some of the two-year pernicity data in both adults and and peds and and how this how these data could impact kind of uptake of the product thanks so much uh thanks final part yeah we're really pleased about the feedback we're getting from the physician respect to our two-year data that we recently presented at endo of note uh this included both adult and pediatric data and indicated long-term benefits with respect to both angina reduction and also glucocorticoid steroid reduction as well. So really, really excited by that feedback. Also, this is in the context of a really nice safety tolerability profile. So note, at this point, we have well over 35,000 patient weeks of exposure. Again, very important, bearing in mind the breadth of the population that we're treating with cronestasy.

Hey, good afternoon, guys. Thank you for taking the question. So, given the recent acquisition of potential future competitors, ZAH, can you just talk a little bit about the clinical plan and anticipated timelines for your next-gen cronicity assets to the extent that they're needed to help defend the franchise in the future? Thank you.

Yeah, thanks for the question. We do have our next-generation medicine going through clinical development right now. That's MPIP-1435. This is a protein-based therapeutic peptide that we're developing that would be a once-weekly or less frequent-dosed medicine for patients wanting that particular option of not having to worry about taking a medicine on a day-to-day basis. It may offer additional advantages above that, in addition to that, because of the PK profile. So we have great Phase I data that's come out of the program thus far. We look forward to starting a Phase II study shortly and bringing that to, you know, patients as quickly as we can. I will say, going back to cronicity just for a moment, that it's set a really high bar. It's got great efficacy, great safety, great tolerability, and what an outstanding label that we're able to get from the clinical program. We've got multiple formulations, a wide spectrum of age ranges that are applied to the medicine, and now, as Sanjay just mentioned, multiple years of clinical data that we'll be able to lean on in a multiple-year head start. I say this because this high bar not only makes it more difficult for our competitors, but even our own programs in our clinical portfolio. So we're really excited about the position that we have right now with Cronicity. A lot of room still to grow. We've got about 15% of the market currently under Penesity's care, and we're going to continue growing that out over time to become that standard of care for patients. Appreciate that perspective, Kyle.

We'll move next to Jay Olson with Oppenheimer. Your line is open.

Oh, hey, guys. Congrats on the quarter, and congrats to Samir. Sure. Our question is related to the future of your psychiatry franchise with data readouts for OSEF Ampator and directly deemed expected next year. Do you have the commercial infrastructure that you would like to have to launch those two products? Or I guess, how are you thinking about building out that organization? Thank you.

Jay, so the way I would characterize it is that we have a really good foundation for a future infrastructure that would be required for either Osevamperture or Dereclidine or both. As you know, we have a substantial footprint today in psychiatry as well as in long-term care and a very strong reputation with those provider communities. You know, if you look at the profile of either of those two medicines, it might require us to bolster our teams or to do some reorganization work. But I think that we're in a very good place in terms of being able to leverage our existing foundation. And you may recall that when we were talking about the planned expansion of our Ingressive team last fall, we said that the value of that expansion was not only to accelerate the growth of our Ingressive business, but also to set us up nicely for future launches of our Phase III psychiatry assets. So I don't anticipate any near-term changes to our footprint, but certainly I think we're well-positioned, you know, to accelerate, you know, those adjustments to our commercial platform on the other side of positive Phase III data.

I think that would be a great day if OSA in particular is positive As you think about going into primary care to be able to help those with major depressive disorder, that would require a step up in overall investment within SG&A and, you know, 2028, 2029 timeframe. But I think you'd agree with me that would be something we'd all enjoy to have the privilege of doing. But in the near term, you know, I think we're focused on executing, as Eric said, I live in Greza and continuing to expand the impact we're having across the psychiatry community today.

Great, thank you.

Question from Akash Tehwari with Jefferies. Your line is open.

Hey, thanks so much. Just, okay, a few questions on your obesity efforts. So for 2118, the CRF2F, what do you expect for monotherapy weight loss and muscle preservation in your Phase I trial when you get into obese patients? And then for 1968, your Triple G. is that already in the clinic? I'm surprised you're able to start a combo trial with the CRF2 this year without any monotherapy data. And then finally, when we think about the combo, any sense on when we'd be able to get the first full cut of data there? Thank you.

Thanks so much for the questions. With respect to our CRF2 agonist, obviously very excited about this molecule. This is our first obesity molecule in the clinic. We're currently accumulating phase one data and with you to have a signal-seeking study readout next year with respect to both weight loss and also lean mass preservation. So that's really exciting for us. I'm not sure about comments specifically on the exact bar we're looking at, but clearly we're looking for a robust effect, not just in weight loss, as I said, but also muscle mass preservation. We have other molecules behind COFR2 with respect to our obesity portfolio, which will be shortly entering the clinic.

To Josh Shimmer with Cantor, your line is open.

Thanks for taking the question. How are you thinking about the ability to smooth top and bottom line growth through the 2029 Ingressa IRA implementation year? And does the answer to that question depend on your phase three readouts next year? How do you expect that to play out under various pipeline scenarios?

Thanks, Josh. Obviously, we're keeping an eye on our MFP diary outcome. Those discussions will start next year, and certainly we'll keep everyone updated once we know our MFP that would be applied to Ingress in 2029. But I think overarching what we see in the evolution of our commercial portfolio are medicines that are growing over that timeframe as well. So we'll think we'll end up being in a good position there to see continued top-line revenue growth through the end of this decade and beyond. On the earning side, or as to say, on the income or an expense side equation, we also have phase three trials that will be sunsetting over that same timeframe as well, and our pipeline switches more to an early to mid-stage pipeline, excuse me. And I think that's going to be more or less a view into our steady state portfolio as we get to the end of this decade. And it all goes back to what we shared at the beginning of this year in terms of expectations around new phase one, phase two and phase three starts. So I like what we have in terms of the company and how we set it up, and we'll keep people informed over the next couple of years as we get closer to 2029.

Yeah, EPS variability is really going to be based upon, as you said, the impact of the IRA implementation in 2029, but on the expense side, as I said earlier, if OSAVAMPTOR is positive, we will spend in advance of sales to build up that sales force in that market. So I think you'll have episodic investments that, you know, may lead to some earnings variability, but our North Star is to grow revenue over the long term, and I think from those investments, we'll have very nice earnings growth as you look into the 2030s.

Thanks to Brian Abrahams with RBC Capital Markets. Your line is open.

Hey, guys. Thanks so much for taking my question. It seems like you're seeing really nice growth in the prescriber base for Crenicity. I guess I'm curious, what proportion of your target practices are still not using Crenicity at all? What are, at this point, what are some of the barriers for them here at this stage of the launch, and how might you expect to overcome them?

Yeah, it's an interesting question. I think the way I'd characterize it is that, you know, we're seeing really nice expansion of new prescribers each quarter. And at this stage, you know, we're still, I'd call it early in the overall commercial ramp, and so there's a long way to go. The reason I sort of qualified my comments a little bit is that as we learn more about this market and with our patient-finding opportunity, there is some movement in and out of our target list over time. But overall, the feedback's been very positive. Most of the physicians that have tried chronicity have only treated one patient so far, and I think that's a function of two things. One is the flow of patients into their practices, especially in the adult setting. Patients only come in maybe once a year, so it takes time if they have more than one patient to see them. And then the second thing is really this, what we call the long tail of this market. There's really not that many practices that have more than a handful of patients, and there's a lot of physician practices that have only one or two. So ultimately, you know, feel really good about the growth that we've seen, and we talked about this very steady and consistent pace that we're on, and I think that's mostly a testament to the patient-finding efforts and, of course, the execution by our team.

We'll move next to Sean Lehman with Morgan Stanley. Your line is open.

Good afternoon, Kyle and team. Hope everyone's well. My question is on the launch trajectory of Crenessi. You keep handily beating our numbers. I'm just wondering how the drug performs against your own internal expectations. Is it falling in line and if so, when will you be comfortable giving this guidance if it's beating your expectations internally? What are some of the key areas that it's doing that?

I would say it's quite close to what our internal expectations have been but with That said, we're learning a tremendous amount each quarter. I'd say from the beginning of launch, we've been very encouraged by the feedback that we're getting by clinicians, and then also the high rates of persistency have been quite strong. And we're seeing a lot of the benefits in hearing those back from clinicians in regards to the longer-term outcomes and the benefit there. So we're still really quite early in launch, only six quarters in. It's premature for us to start thinking about giving a more formal guide, but I would say our internal models are getting closer to the numbers that we're delivering. But still, I'd say to the team, keep over-delivering. They've done an incredible job developing a new product that's in the market for the first time in over 70 years and a lot of learning going on and a lot of excitement. So kudos to the team. Well done. And we'll address the guidance piece to your question as we get later in the year to next year. Thank you, Kyle.

We'll move next to Mark Goodman with Lear Inc. Partners. The line is open.

Yeah, and VICAT, I just want to make sure I understand, Matt, what you're saying. Are you saying that we should expect sales to be roughly about the same in 3Q as 2Q, and then 4Q should show some incremental growth? versus 3Q, and the reason is because of this gating issue of timing issue, whatever you wanna call it, of patients discontinuing from the bolus that occurred, you know, so-called six months ago or so, something like that. And then just, if I could, just another question. Just curious what the R&D team thinks about any learnings from the MAP-LITE data that reported earlier this week.

Thanks. Yeah, regarding BICAT, you know, I think you said it correctly, But I would go back and just say we've only had the product for six weeks. And it's a market that we're incredibly excited about. We're hearing great feedback from clinicians alike. So as you said, this is more of a function of getting through some of the bullets of discontinuations and then implementing some of the things that Eric laid out in terms of driving additional patients to being helped with their PWS. So from an expectation perspective, I think what you said aligns with what I was trying to describe.

And I'll take the NAP-like question, maybe just to start with where Matt left off on BICAT. I just want to make sure everyone appreciates that we are going through an integration of the company, and obviously that can be a little noisy as you work through that, just as a Salesforce expansion can be. But as you know, we are quite skilled in the art of Salesforce expansions across Angreza and Crenicity, and we've all come out on the other side much stronger, and we believe that will be the case for Vicat. In terms of MapLite, we did see their data come out here the past couple days. I think it's a good data point for further validating the orthosteric approach for using a muscarinic agonist, although their approach is entirely different than our own, and it's worth calling out those differences here. Very similar to Kobemphi, the approved medicine that utilizes the muscarinic mechanism, the NAPLITE approach also requires an add-back muscarinic antagonist to manage side effects. Our approach with direct lidene is the only approach, a first-in-class approach, using a selective M4 agonist that works just all right, fine by itself. It doesn't require anything to add back for mitigating side effects. But we know at the end of the day, efficacy gets to your foot in the door. It's really what you do on the other factors that allow you to win, things like safety and tolerability, things like ease of administration, and that's where direct leading is really going to shine. What we saw in our Phase II trial, very clean GI profile, no weight gain, no food effect, once a day, no titration. That's how we're going to win here, just as we've seen with other antipsychotics across the spectrum, from low to high efficacy. They all went on safety, tolerability, and ease of administration. Thanks.

To David Amselm with Piper Sandler. Your line is open.

Thanks. A VICAT question. Can you clarify how much of your discontinuations are from edema? And regarding the management of edema, what are you going to be doing to sort of help patients and practitioners manage through that so as to minimize discontinuations due to fluid retention?

Yeah, this is Kyle. I don't think we're going to get into the nature of the discontinuations, but I will say just like any medicine, especially one that you're inheriting, acquiring, is that there's always the opportunity to improve messaging and education. I know that's going to be a big part of what our team looks at. And the messaging and education is the same, again, across all medicines that we look at for caregivers, for patients, and for physicians. And when it comes to BICAT-XR, obviously you look at even something as simple as a dosing regimen. It's a titracin schedule that's required through a weight-based mechanism. That's unique, so making sure that you can educate across that appropriately. Also, setting the right expectations in terms of efficacy. This is not like a pain medicine where you see relief the same day you take the medicine. It can take months for the hyperphagia to improve. So these are all things that we're working through right now, and we'll continue to work with the team to get in a really good spot as we look to fully bring the Suno team on board here to Neurocrin and leverage the learnings on both sides to do what's best for patients here.

Question from Ash Varma with UBS. Your line is open.

Hey, guys. Thanks for taking my question. So maybe just on the perspective of Cranesity, I wanted to get your thoughts on the competitive dynamic here. So for two minutes, it's what they've acquired. they did note that there were seven LFT elevation cases versus the prior disclosure by Krenetics, which was two cases. But they still ended up paying a pretty hefty premium. Just want to understand from your perspective, what do you think drove that? Is that something that ultimately signals to you that CH can be a very big market, or is it possible that the LFT elevation is actually a non-issue? Thanks.

Yeah, thanks, Ash, for the question. It's really hard for us to comment on the competitor or any competitors in the spaces that we work in. All I can share with you is the excitement that we have around our own medicine. I'll go back to the catalyst data that we have, two-year data, 35,000 patient weeks of exposure, and accumulating over time where we're able to show 70% of patients at the two-year period were on a physiological dose of a GC, and 70% of patients were at a physiological concentration of their androgens. That's a pretty good error to be in for CH and really for any medicine, and we'll continue to hopefully accumulate more data of that kind and type as time moves along to show the real benefits for patients.

From Miles Minter with William Blair, your line is open.

Hi, congrats on the call, and thanks for taking the question. I just wanted to hear your thoughts on the chronicity sort of peak opportunity here. Are you still describing that drug as a blockbuster opportunity? I only ask because recent acquisition seems to put your competitors saying that that might be a $3 billion market or greater. And you're on an annualized basis the best part of three quarters of a billion dollars already. And Eric, you said you're really, really early on in the launch. So I'm just wondering whether a blockbuster drug is the right way to think about this or like that multibillion-dollar sort of claim that the competitive acquisition made is more relevant here. Thanks very much.

We're going to take this to the highest number that we can and help as many patients as possible, Miles. I think you said it quite well. The trajectory so far has been very, very strong, very nice, and I think it reflects the great need in the market, the great product we have, and also the great team. When you look back over time at other rare disease launches like this, you can see peak penetration between 30% and 50% for chronic-type medicine. So, you know, when you look at what the peak opportunity is, that's the zip code. I know that's a pretty broad range, and we're going to work to getting to as high up in that range as possible. But, yeah, you can get to a really nice figure quite quickly, but it really comes at the end of the day, a focus on helping as many patients as possible for their CAH. Thanks, Ben.

We'll move next to Rudy Lee with Wolf Research. Your line is open.

Hey, thanks, Ben, for taking my question. I have a question for the pipeline, just a quick follow-up. Given the trajectory of CodeBanvi and the feedback, I'm just curious on your thoughts on the muskronik opportunity and maybe to talk about your overall strategy building a muskronik franchise as you have multiple products maybe targeting different indications. Thanks.

Thanks Rudy. This is Samir here. I really appreciate the question on the muskronik. So you know we've got four shots on goal here with our muskronik franchise directly in NBI 568. That's in phase three right now for the treatment of schizophrenia and phase two bipolar, a phase two study right now ongoing in bipolar mania. All studies remain on track timeline-wise there. The next generation, NBI 570, that's an M4 preferring M1-M4 dual. Right now, that's in a phase two study for the treatment of schizophrenia. Where we see opportunity there is the potential for a long-acting injectable. This is a class of medicines that has generated significant commercial sales for other companies here, and we view this as the one and only potential LAI within the muscarinic space. NBI 569, that's earlier right now. It's an M1-M4 dual as well that we're studying in an early study in Alzheimer's disease. The view there is to take that into Alzheimer's disease psychosis. And then we've got a fourth compound, NBI 567, that will be soon starting a phase two study in Alzheimer's cognition. Overall, we feel like we have a best in class muscarinic franchise here. Really looking forward to getting the direct within data next year and going from there.

The only thing I would add to that, these are all orthosteric agonists that don't require any add-back to block side effects. They are selective on M1 and M4. So they're unique in that regard and put this in a really unique space in the muscarina category. Very helpful. Thank you.

We'll take our next question from Simant Kolkarni with Canaccord. Your line is open.

Good afternoon. Thanks for taking our question. This is a bit of a strategic one that has long-term financial implications. So with each commercial product you now have, there's typically been an aspect of pioneering commercialization with the first approvals for the respective indications. But your pipeline includes candidates in large markets when not only do several products exist, but the competitors are typically much larger organizations as well. So could you share any targets for what a steady-state long-term operating margin target might look like for Neurocrin as you yourself grow a lot larger?

Yeah, I'll let Kyle talk about the strategic aspect of how we're going to compete against larger guys in these markets. But I also would comment that Eric and team have done a heck of a job in developing markets and feel like we can compete quite well with medicines like the muscarinics and also the OSAV Infantor. We're not going to give long-term operating margin guidance, but you can see we're becoming quite a profitable company where operating income on a non-GAAP basis is over 30%. So I think our focus right now is invest on SG&A to grow sales as much as possible and then also to advance the pipeline and be able to get to these opportunities where we can compete in some of the larger markets where we believe that we can win in.

And maybe just to add to that, this is Kyle from a strategic perspective. What we're doing is setting up the pipeline to have a portfolio of not only first but best-in-class medicines across virology, psychiatry, and endocrinology, as well as immunology. These are areas that we think we can compete in in a number of ways, either through the molecules that we design or ultimately in ownership of particular mechanisms that are unique to Neurogrin. We've talked about obesity on this call as an example, and we're leading in this category, we believe, with a syrup to agonists, which is quite novel. And, of course, we know a lot about the biology being this being the founding biology of the company. So ultimately, what we do by using this approach is diversifying risk across different therapeutic areas. We appreciate all the psychiatry programs that we have, and we believe we have all winners there. But we also know that the full profile of those assets aren't fully known until the other side of Phase 3s. We balance that by actually being in some of these larger disease states, like obesity, where we have biomarkers, objective endpoints, and the ability to see data in Phase I-B studies. So overall, I think what we've done is we've really leveled out the portfolio and ability to play for some big wins on some larger opportunities, as well as stay within a wheelhouse of more traditional neuropsych programs as well that you're used to seeing. But overall, it's going to set the company quite well up over the long term.

Our next question from Danielle Brill with Truist. Your line is open.

Hi, guys. Good afternoon. Thanks so much for the question. A follow-up on chronicity. So you guys highlighted really strong growth in your prescriber base, but can you comment on trends in repeat prescribing? I think you noted roughly two-thirds of prescribers have only written a single prescription on your prior call. Are you seeing existing prescribers begin to treat more patients, or is growth still being driven primarily by adding new prescribers? And then as you look forward, where do you see the bigger opportunity, expanding prescriber breadth or penetration from the existing base?

Thank you.

I guess the way that I would characterize that, it's a little bit of both in terms of depth versus breadth. You know, we still are adding a substantial number of new prescribers each quarter. And to date, most of the prescribers that have tried chronicity have only treated one or two patients. Now, this is a market that is an inch deep and a mile wide in the sense that, you know, there's a limited number of practices that have more than a handful of classic CH patients. And there's a lot of CH patients that are out there in the community, and a lot of the physicians that treat them might only have one patient. So I think that, you know, we will continue to see this dynamic of a lot of physicians having only one or two patients under treatment. But, you know, at this stage of the launch, only about a year and a half into it, essentially we're still seeing a lot of adoption by new prescribers, and we think there's a ways to go in terms of building that prescriber base over time.

Igor Nokomovic with Citi. Your line is open.

Hi. Great. Thank you for taking the questions, and I'd like to congrats on a strong quarter. My question, I had a curious question on chronicity. Regarding the rarer subtypes, specifically the 11-beta-hydroxylase patients, what's the status in terms of progress getting the payers to cover that subtype? I'd be curious there. And then quickly on VITAT, do you have any comments with respect to XUS strategy, and where does that fit in terms of your relative prioritization with regard to that, the asset?

I just want to reinforce that the coverage and reimbursement for chronicity has been excellent and has really exceeded our expectations right from the very beginning of the launch. You know, from a coverage perspective, typically what's required, this is a specialty medicine, and the physician has to fill out a prior authorization. Typically, they're required to attest that the patient has classic CAH, usually not defining what particular subtype, genetic subtype they have, that they're four years of age or older, and that they're currently on glucocorticoids. For the vast majority of patients, those are the coverage criteria, and we've seen really high claim approval rates. We've seen that claims tend to get approved pretty quickly and that it's very affordable for patients. With the majority of patients, actually over 90% paying $10 or less per month. So really good on the reimbursement side.

Yeah, in terms of BICAT-XR and ex-US, our first priority right now is to fully integrate the team and make sure that we're doing everything that we can to help the patients here in the U.S. with approval. As you may recall, SWANO did withdraw the EMA filing for review during the closing process of the transaction. So I think once we get our hands around the integration and complete that and move the medicine forward here, we'll go back and revisit the opportunity in territories outside the U.S. In the meantime, for Europe, all patients that are currently on VICAT-XR will continue to continue on their treatment, and we'll look at some name-patient program types of vehicles to help other patients that may want to have access in that region.

We'll move next to Dalma Kayati with Guggenheim. Your line is open.

Hi, good afternoon, and thank you for taking my question. So on the Frederick Ataxia program, what should we expect from the 2027 Phase 1 readout? More in detail. Which tissue compartments will you report frataxin protein levels from buccal cells, skin, or muscle? And what would you view as a proof of mechanism? And also, will you report also clinical results together with the biomarker data?

Thank you. I appreciate the question. We're excited about the predux ataxia gene therapy program here at Neurocrin. We'll be looking at starting clinical development later this year. And then once we get that study up and running, we'll look forward for actual data and patients towards the end of next year. The nature of what we'll be sharing, I think we'll determine that over the next couple months into the beginning of the year. And hopefully we'll have some more commentary around our R&D day in December.

David Fong with Deutsche Bank. Your line is open.

Hi there. Congrats on the quarter, and thanks for taking my question. So I was curious to get any, you know, feedback that you guys may have or your latest thoughts on the competitive dynamic and threat from your competitor in the VMAT inhibitor space. So I think, you know, your competitor also printed a very strong quarter. They have talked about $3 billion in peak sales and a continued uptake of the Oxeto XR product. And so as you look over the next few years, recognizing there's some pricing dynamics there, Just what's your, I guess, thoughts on how the market share may play out between two products and if the pie will continue to keep growing in TD or there will be any share shifts between products? Thanks a lot.

Yeah, I'll just start off by saying that the, you know, 10 years, almost 10 years into the launch of Ingressa, the TD market continues to grow very rapidly. You know, we see that there's still a substantial number of untreated patients and even undiagnosed patients out there, and so, you know, our focus remains on driving awareness, driving diagnosis, and then obviously being able to educate providers on the unique benefits of Ingressa, and I think that, and obviously also, you know, continuing to provide strong reimbursement support, and the results speak for themselves. Ingressa has been the most preferred and the most prescribed DMAT-2 inhibitors since day one and continues to do so. Even looking at the most current quarter, you know, with strong market growth for DMAT-2s, Ingressa outgrew the market. And so, you know, we can expect to continue to see that momentum carry forward through the balance of this year. And as Kyle said earlier, from a coverage and reimbursement perspective, you know, We expect to have good coverage in 27 and 28 that will enable continued strong growth in terms of adoption. So, overall, I'm just very pleased with our performance, and, you know, we'll let the results speak for themselves.

We'll take our next question from Evan Siegerman with BMO Capital Markets. The line is open.

Hi, guys. Thank you so much for taking my question. I want to touch on OZEVANTOR. MDG is clearly a large market. You're very enthusiastic about it. Just walk us through kind of what you're solving for that the existing antidepressant strategies really don't do well, and what do you mean to show in a phase three for this truly could be viewed as differentiated rather than incremental? Thank you.

Yeah, thanks for the question. So just for context, also Ampator is an AMPA potentiator, and we think provides unique advantages from a differentiation point of view from the existing standards of care. So with respect to efficacy, we're expecting greater efficacy, particularly in individuals who have already been unresponsive or not so responsive to a whole slew of other antidepressants with different metrics of action. But secondly, and also just as importantly, a really nice safety and tolerability profile. That was one of the most impressive things actually with respect to our Phase II Savitri data was the safety and tolerability and the implication is long-term compliance with the this medication.

Let's conclude the question and answer portion of today's call. I'd now like to turn it back to Kyle Gaino for any additional or closing remarks.

Thanks, everyone, for joining us today. We appreciate your time and thoughtful questions. We look forward to continuing the conversation with many of you, certainly at the investor conferences and meetings throughout the remainder of the year. Until then, thanks again for your support and interest, and have a great afternoon, and goodbye for now.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.