everyone for joining us here at the 46th William Blair annual growth stock conference I haven't been here for all 46 years but I have been here for close to 10 my name is Miles Minter I'm a senior biotech analyst here at the firm I cover the neurosciences and then genetic medicines and it is my pleasure today to introduce Matt Abernathy the CFO and also to my right Todd Tushler head of IR at Nureka and Briar Sciences fresh from the west coast so thanks very
much for attending. Miles did disclose that he just came from Scotland is that right? I did I did. And my last name is Abernathy and that's Scottish you can get some cookies if you ever go to that town but yeah really glad to be here I went to business school in Chicago and so always nice to see San Diego-esque weather in chicago uh really nice to to be able to be here with you guys today um a little bit of fun forward-looking statements i will be making some so i direct you to our sec filings for the related risk factors and uncertainties associated with our company and then also our industry we have changed quite a bit i was just talking to a gentleman before this we were a single product company, now a multi-product company, generating significant cash flow, significant data readouts coming in 27 and 28. As a biotech company that had been a single product company for quite some time, I can tell you it's very nice to be able to speak to you guys today and to be able to share with you guys the story of the great things that we have going on at Neurocrine. We're a neuroscience science company focused in endocrinology, psychiatry, neurology, immunology. We're based in San Diego, California, have over 2,500 employees at this point. Half of those are in San Diego. The other half are spread across the United States marketing our products. So we have a lot of fun, and if you ever find yourself in San Diego, we'd love to host you at our new campus. We have a lot of magic going on there, which you can see going into our early stage research and development pipeline that we'll see in just a little bit so very much looking forward to talking with you guys today so we have three pillars just like every good presentation has to have three pillars the first one is our commercial products these are generating significant cash flow at this point growing quite significantly we had 45 year-over-year growth in q1 this allows us the ability to invest in r d which is the lifeblood of any company within biotech and then lastly that's translating to very nice financial returns where we've been generating significant cash flow over 200 million dollars of non-gap net income in q1 alone and we've recently deployed our cash to acquire soleno therapeutics which was for 2.9 billion dollars it's the biggest acquisition Neurocrine's ever made but very exciting for us. On the commercial product side of the equation we have Ingreza that was approved in 2017. That was our only approved medicine until December of 2024 but it's been the lifeblood of our company. It's allowed us to reinvest build the company to where you see it today and our guidance range is 2.7 to 2.8 billion dollars this year with Ingreza and that implies mid-teens underlying volume growth in a very attractive market offset by a little bit of price pressure. The second medicine that I mentioned earlier was chronicity. That's for congenital adrenal hyperplasia. That's a rare endocrine product. We launched that last year. It's been on the market for five quarters now. The patients had no other option other than to take high-dose steroids for their condition for their entire life and this had a hundred and fifty million dollars of sales alone in the first quarter and the team has done an incredible job with chronicity last this is Vicat XR this is the one that came to us from that 2.9 billion dollar acquisition this is for a very rare devastating disease called Prader Willey syndrome it was approved in March of 2025 it's been on the market about a year at this point and similar to Chronicity off to a great start. Sales are around $100 million in Q1. So when you add all three of these products up, over $900 million in sales in the first quarter alone, for a finance guy this next part is important, 97% plus gross margins on these products. So you think about the cash flow that's coming from growing sales, the ability to reinvest back into research and development at a rate of 30 to 35 percent without sacrificing ultimate profitability is something that we've been doing and we've created a very diversified pipeline at this point, which I'm excited to share with you guys about a bit later in the presentation. And then lastly, financially, we did do that acquisition for Soleno, $2.9 billion. We pretty much funded that all cash and it will be immediately accretive on a non-GAAP basis to our shareholders on an EPS basis. So overall very fortunate to be in the position that we find ourselves in today. So let me tell you a little bit about Ingressa and I was talking to an individual here who who actually was selling an antipsychotic early in the 60s or 70s and unfortunately with antipsychotic use, you have a 10% likelihood of developing a debilitating disorder called tardive dyskinesia. It shows up in the hands, mouth, the face, the trunk, and it's just an unfortunate byproduct of taking an antipsychotic. And up until 2017, there were absolutely no treatment options for these patients. So if you think about dealing with your underlying mental health condition and then adding a movement disorder on top of that it's not unsurprising that the stigma that comes with that the isolation the low self-worth and so it's been so rewarding since 2017 to be able to start developing this this this market we estimate that there's around 800 000 patients with tardive dyskinesia but only two percent were diagnosed in 2017 because there were no reasons to make a formal diagnosis because you couldn't do anything about it. Even if you stopped the underlying antipsychotic, those movements would stay. So a lot of our effort over the last nine years has really surrounded diagnosis and that's one major challenge of I get asked all the time, why don't you have more than one out of 10 on a VMAT-2 inhibitor today. It really comes down to the basics of making the diagnosis. And why might that be difficult? These patients are being seen by psychiatrists. The psychiatrists rightfully so are caring more about the patient's underlying mental health condition, working on a computer screen, not looking intently at their patients. So it's not surprising that it's not top of list for a psychiatrist. So a lot of our call frequency with our sales force is simply to put and keep tardive dyskinesia on the radar. The second piece really has to do with the psychiatrist and getting confidence in making a movement disorder diagnosis. That's something that they're not necessarily trained on, and that's something that we help support them in getting confidence making the diagnosis. The second piece is that, the second phenomenon is that patients who have tardive dyskinesia, they have no idea who to talk to about it. You wouldn't think about going into the psychiatrist's office and talking to your psychiatrist about a movement disorder. I liken that to going into the dentist's office and asking the dentist to look at your ankle. So if you see our commercial, the Ingresa Jingle commercial on TV, just know we are trying to motivate patients to actually bring it up with a psychiatrist that can I actually get help? Because if they don't bring it up, the clinician may feel like it doesn't bother them, so they're not going to spend the time to ultimately treat. So overall, it's been quite rewarding to be able to develop the market in this way. but those two fundamental aspects still remain the same challenge in 2026 as it was in 2017 diagnosis and patient activation so how is that translated financially you can see pretty linear growth patient by patient adding them on therapy staying on therapy now we're at a place where we're at 2.7 to 2.8 billion dollars in sales and as i said at the outset this implies the mid-teens underlying growth offset by a little bit of price but it's very rare to see miles if any other product growing at this clip nine months or nine years after launch and it really comes back to i think i can go backwards yeah there we go it really goes back to the right hand of this slide But this is what gives us confidence that growth is going to continue. There's still so many patients with tardive dyskinesia that need help, and it's been a real reward for Nurocrin to be able to help this many patients. We have IP protection that goes out until 2030, so durability of these revenues is quite strong. Now as I said at the outset, Ingreza funded our company, and the first product that came as a result of this funding was cronicity this is a internally advanced compound it was called croness cronester font now it's called cronicity this absolutely changed the game for patients with a disease called classic congenital adrenal hyperplasia that's a mouthful so we say cah but essentially what it is is a patient is born without the ability to produce cortisol and with cortisol you die. And up until the 1950s, 1960s, all patients with CAH would ultimately pass away until hydrocortisone was developed. So since they can't produce the cortisol, you supplement it with synthetic cortisol, hydrocortisone, and ultimately that's been how you maintain the life of these children and then into adulthood. There's about 20,000 patients, but you can imagine androgens being out of control, plus high dose steroids for your entire life, that is not a good recipe for success. So we got approval in December of 2024, first in 70 years to give an option that's not a steroid to patients. And it's been just a tremendous launch thus far. I was at a conference a few weeks ago and was asked, tell me why has chronicity been so successful? And I would just tell you that it's three basic recipe that's a three ingredient recipe one your product has to absolutely meet in unmet need here that was quite clear second it really has to make a difference and you can see the difference quite quickly and what we've been hearing in the real world is that the results are at least as good as what you see in the clinical trials if not better on both the efficacy and safety and last a patient has to stay on therapy and what we have found both from reimbursement has been over 80% of all prescriptions are getting reimbursed so no payer pushback and also tolerability and benefit is quite clear patients are staying on therapy and it's making a difference in their life so how does this translate to revenue you can see in Q1 2025 a year ago we were pretty much an ingresso only company and that had been the case for the previous seven years you then fast forward to last quarter you can see 150 million dollars in chronicity sales about 10 of patients with classic cah have been treated at this point and really the diversification and scale in year over year growth is starting to look quite attractive and for us as a company It's amazing, but also for patients to thinking about helping a segment of patients, and in particular kids who are taking high-dose steroids. I think we all know or have had poison ivy. If you grew up in the Midwest like me, you start taking steroids, you want to taper off of them as quickly as you can. Think about if that's your lifeline for the rest of your life. This has been very nice to be able to see androgens going down and then also seeing the glucocorticoids going down last comment here which is probably the most personal comment I'd make my son has CAH and so when I talk about the value to patients this was something I was working in the medical device industry and somebody reached out to me about the neurocrime job and I said I never heard of neurocrime I probably called it neurocrime But looked at the pipeline, and then I saw they were working on a medicine for my son. And so seven years later, we got approved. He was the first commercial patient on therapy. So I wanted to share that with you, equally special for me. So moving on to the next product, Vicat XR. This came to us from the Soleno Therapeutics acquisition. This is for a devastating disorder called Prader-Willi syndrome. and I'll tell you a little bit about that syndrome here in a few minutes but before we do that we spent 2.9 billion of shareholder capital so why does that what was the strategic rationale the first piece is that this is our second rare endocrine product so chronicity was our first this gives us start of a franchise here very similar call point so strategically fits right into our wheelhouse commercially. The second is it adds to both growth and the diversification mission that we've been on to build an enterprise, not just a single product company. And then lastly, this is cashflow positive from day one and is gonna be quite a creative and value creation for shareholders given the IP landscape here. We believe it's going to last for quite some time. So there were really three key aspects that we needed to figure out in diligence. The first one was about the Prader-Willies market. What was it like? Is there a significant unmet need? And that's the easiest box to check off. Everything that we found about the PWS community was one that there's extreme need to be able to help those patients. The second question that we had to answer was the safety and efficacy aspect of Vicat XR. Was it providing benefit? that were the safety signals consistent with what's in the label and what was seen in clinical studies. We talked to parents, we talked to KOLs, we talked to patients themselves. And overall, we found this is a great product helping these patients. And then lastly, the IP. Personally, didn't want to buy something that was gonna fall off into generic landscape in the early 2030s. This is something I wanted strategic value from. And we went through and looked at both the filed and also unpublished patents, or published patents and unpublished patents. And we were able to get a lot of comfort around IP extending into the mid-2040s, which will become more known publicly, likely sometime later this year. So overall, that was the strategic rationale and some of the aspects that we went through in diligence and trying to convince ourselves of VicatXR, which is truly changing the game for patients with Prader-Willi syndrome. Prader-Willies, I had never heard of it until we started diligencing this product. It affects about 10,000 to 12,000 patients, and it's this unrelenting, obsessive, food-seeking behavior. Think about your hungriest moment that you've ever been, and that's how these patients are for their entire lives. and it's devastating and it leads to a lot of disruption at the home life and the family and with the patients individually and this was the first approved treatment in ever for these patients it's been on the market since March of 2025 so about a year now and you have around 10 percent of patients who have also been helped with with Vicat XR in the first year or so of launch So what does this do for Nurekrin? You can look at the middle pie chart. To be able to see 250 out of our $900 million coming from something non-ingresa, that's a nice picture for us. And it's not to say we don't like ingresa, we love ingresa, and we think ingresa is going to continue to grow into the future. But as we think about managing our business and investments and concentration risk, having two rare endocrine products in our commercial channel has been quite significant. And I think this is just the beginning. And then lastly, you'll start seeing it accrete into our P&L over the second half of this And I think you'll also agree with us in understanding both the scale benefit as well as the profit the profile that will come from this acquisition. So financially, this is an easy picture to interpret. Revenue growing from 570 last year to 815 this year, over 40% year-over-year growth. Quite significant with a big chunk of that incremental growth coming from chronicity. And we feel like we're just getting started with chronicity, as I said earlier. On the R&D front, reinvesting around 30% to 35% back into R&D based upon the quality of the products that we have. And that translates to a residual of $200 million of non-GAAP net income. And you can see at the bottom the $2.6 billion of cash. That's before we acquired VicatXR. This really reflects our core capital allocation priorities. The number one priority, and I think everybody in biotech would say this, who has a commercial product, top line revenue growth matters significantly. So we invest significantly to drive top line revenue growth. That then gives us to the second priority, which is to be able to afford funding the right R&D programs to build the company. And then our third is to use our capital to deploy towards business development in a smart way that will drive returns for our shareholders and i think you're seeing that play out in how we're operating our company and that allocation framework has been something we've articulated over the last three or four years we're patient in our acquisition process and and obviously with soleno i think we'll only accelerate our forward growth from here so now let's look at this pipeline it's pretty cool if you would have seen a neurocrime pipeline just five years ago we would have been looking at probably three to five products now we have close to 20 clinical programs so the scale sticks out to you and this isn't reckless this is intentional we we need scale we need smart scale that's diversified in different approaches and we need programs that give us data quickly to let us know if there's a there there or if you can that program and move on to the next and that's something that you can see showing up in our pipeline if you go left to right left is earlier that's pre-clinical to clinical we have probably 50 other programs not on here that are pre-clinical that jude and team have queued up for us but we have to be very selective on how much we want to fund and pace it appropriately but you can see the color the color diversification represents different therapeutic areas that we find ourselves going into, whether it's psychiatry, neurology, endocrinology, or immunology, and then the symbols. The symbols reflect whether it's a small molecule or a large molecule, and you can see on the far right, which is our later stage, all small molecule. On the left, being able to get into different modalities has been an important step for us, so this has been quite the journey and kudos to judonia and his team for all the value that i know are going to be created for shareholders as well as for patients if you go to the far right are two marquee phase three programs the first one listed here is direct leadine which is a muscarinic agonist if you remember the acquisition of caruna by bms and the product copemphy this is the same pathway. And this is a medicine that is in a phase three trial right now. And that will read out in 2027, one of the trials and then 2028 for the second trial. In addition to that, you have Osevampator, which is an ampipotentiator. This is being studied in major depressive disorder. And this is a trial will have three trials reading out in 2027. So if you fast forward over the next 12 to 18 months to have answers on those two programs and the transformation that could have for our company is quite significant. The one program I call out earlier stage that gets a lot of investor interest has to do with our obesity program. It's the second one to the bottom in the phase one. This is a CRF2 agonist. It's a different approach and we're really looking at trying to to reduce weight, but primarily in visceral fat as compared to lean muscle mass. And so we'll be able to get through our phase 1B trial in 2027. We'll have data later in the year that we'll be able to highlight progress on that patient population, which would be a healthy overweight or healthy obese patients. And so it does give a good directional picture as to are we seeing what we saw in animal models translating into to humans and so that will be another important milestone so i'll wrap it up here neurocrin has been on an amazing journey and for me personally being part of it going from single product to multi-product multiple cash flow generating assets and being able to invest in meaningful pipeline programs has just been very rewarding you can see as i said earlier three commercial products but i want you to think about the patients the tardive dyskinesia patient taking ingresa there was never an option for those patients to get help td similarly with cah with chronicity the only option was to take high dose steroids for their entire lives now you have chronicity to be able to help them lastly on vicat xr never an approved treatment an option to help patients with Prader-Willi syndrome. Now we have something to help those patients. So I think we can talk, I can talk in numbers that this is $900 million, great gross profit to invest in the next medicine. But we take a step back in a very proud way to think we are truly impacting the lives of patients. And that's what makes investing in life science fun, or at least operating company fun. There is high risk, but there is great reward on the other end and glad I could present Nurkren to you guys today Matt requested a standing
ovation so he got one person we've got four minutes for a beauty Q&A before a breakout we'll definitely take a question from the audience kick us off please so the question has to do with
would a GLP one help PWS patients in addition to Vicat XR and so what Vicat XR is doing is is aiding the the brain aspect to this and it's not necessarily helping on the metabolic side of the equation you're trying to give this the patients before they progress to becoming very obese or diabetic or whatnot so over time you could imagine though patients who are benefiting from vicat xr and their life is stable that they would be a potential candidate to also be on the glp1 but that would be a medical decision but that was one of the the questions that we had is Would a GLP-1 cure PWS or help people with PWS? It would allow them to potentially manage their weight a little bit more, but not the mental obsessive unrelenting behaviors that causes most of the destruction in these patients'
Maybe one on Ingresa, just IP out to 2038, still a growing franchise, I think he painted a really nice picture of the case for organic growth with that franchise as well. or investors do bring up the competitor and the potential pricing restructure that might go on in 2027 for that product. How does that sort of factor into your long-term growth potential for Ingressor?
Well, I think regardless of how you skin this, this market is all, this is gonna be driven by volume. How many more patients can you actually be treating with the VMAT2 inhibitor between ourselves and our competitors? So that's number one. And I think volume is going to continue to be strong for quite some time. There will be some price pressure as you go through the Inflation Reduction Act. And in particular for us, we will be more than likely selected for negotiation in 2027. And then that price would take effect in 2029. Fortunately for us, we know the outcome of that price because we have the small biotech exemption that's going to be between 25 and 34 percent price impact. And so there will be price pressure in 2029, but still a very durable revenue stream that would continue on from there. On the competitive front in 2027, our competitors' price kicks in from the government. They've already been negotiated. Our product is pretty closely priced to theirs after their MFP. So right now we're the lower price product in the market. And so I think we'll be much closer to parity at that point. so I think any price that we would have to give to stay on formulary and to maintain access would be expected to be very manageable and modest. And just a
very quick one on capital allocation I think you mentioned multiple times throughout the presentation 30 to 35 percent back into R&D. You're a company that's generating 750 million to a billion in free cash flow and And theoretically, that is growing substantially. What about inorganic versus, you know, organic R&D, are we expecting more Soleno-like deals or maybe hands in pocket for the time being?
Well, my hands were literally in my pocket, but I think that the good part is for Neurocrin right now, we have so much growth on the top line and so much in the pipeline, we don't feel a burning need to go and do something. With that said, we do have the capital flexibility if we wanted to do something, to do something. But we like to set up right now with three growing products, a pipeline with meaningful data catalysts over the next 12 to 18 months. But if the right opportunity did present itself, it's up to us to look at it to determine can we drive shareholder value with doing that acquisition. But, sorry, last piece. To be a successful biopharma company, you have to do both. I think if you aren't pursuing anything internally, you're going to miss out and vice versa. And that's been part of the journey of building our pipeline over the last couple of years with Judonia and team, a real investment in our early stage R&D development. Thanks.
Well said. Thanks very much for joining us today. Matt and Todd here as well. The breakout session will be in Jenny B upstairs. Thanks very much.