Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Neurocrine Biosciences with CEO Kevin Gorman and CFO Matt Abernethy. Welcome, Kevin and Matt. Thank you very much. Thank you. So for those who may not be familiar with Neurocrine, can you provide a brief introduction? Sure, Jeff, and before I start, I would just like to say we will be making forward-looking statements, so I'd direct you to our most recent SEC filings. Neurocrine has been around now for going on, this is going to be our 32nd year. We've always been and for the foreseeable future, we are going to be a neuroscience-focused company. And what does neuroscience mean to us? At Neurocrine, it actually encompasses a lot. It means neurology, as you might expect. It means neuropsychiatry, neuroendocrinology, which I think we're going to be talking about quite a bit here today. And then I, I do sincerely hope in the not-too-distant future it's going to be neuro, neuroimmunology also. We're based in San Diego. We have several approved products in our portfolio. Number one is obviously INGREZZA for the treatment of tardive dyskinesia, a drug that has... was the first drug ever developed to treat this disease. And tardive dyskinesia is a, by and large, a reversible movement disorder that's caused by the long-term use of antipsychotics. The drug has outpaced, I think, anyone's expectations. We're on our sixth year on the market. The drug continues to grow by double digits year-over-year. And this year, we have revised guidance upwards in our last quarterly earnings call to $1.77 billion-$1.82 billion. So it, it's a remarkable franchise. Interestingly enough, I'm going to say that today we probably won't be talking about an additional FDA approval for INGREZZA, which is in Huntington's disease, which I do have to say, we are very excited to be able to bring INGREZZA to the treatment of chorea for Huntington's patients. We think that's going to be a very important drug in that sector. We have approximately 14 programs in clinical development now, 2 in phase I, and 9 in phase II, and 3 in phase III clinical trials. So a very, very deep neuroscience portfolio of drugs. I'll finish with these opening remarks in that we are a company that we're quite fortunate to be in the position that we're in with such a deep portfolio, such a talented workforce, and then a real strong financial position with well over $1.3 billion in the bank. So with that, I'll stop. Great. Thanks, Kevin. You know, this fireside is quite timely, as you announced this morning, the top-line results from the crinecerfont phase III study in adults with congenital adrenal hyperplasia, or CAH. But before we jump into the results, can you just level set for the audience what CAH is and how crinecerfont is differentiated from other competing assets? Absolutely. So CAH, congenital adrenal hyperplasia, it's a disease that children are born with, and it is a genetic lesion such that they cannot make cortisol. Without cortisol, you die. And so all these infants died up until the mid-1960s, early 1960s, when hydrocortisone was developed. Granted, that was developed more as an anti-inflammatory, but the endocrinologist at the time realized immediately they could use it as a replacement for the missing endogenous cortisol in these children. So that is the only treatment to date. For 60-some-odd years, all that these children have had, and now adults, because we do have CAH patients that have reached their sixties, is taking hydrocortisone or glucocorticoids of one flavor or another every single day of their lives. Now, that wouldn't be so bad if all they had to do was take a physiological dose of the hydrocortisone, so that basically the hydrocortisone would exist in their plasma at approximately the same levels that all of us have cortisol. Then that would be... that, that wouldn't be so tough. But that's not the case. So let me back up for a second. When you cannot make cortisol, it's not only that, that you need cortisol to live, but let's, for the second, go back to the way patients are treated now. They're given a, a glucocorticoid every single day. Because they're not able to make their own cortisol, the precursors to cortisol all go down a different metabolic pathway, and now they are piling up and making huge amounts of the androgens, testosterone, in particular. There's very, very, deleterious effects to having extremely high levels of androgens, as you can imagine, especially, for females in that case. So it is not uncommon for them to have ambiguous genitalia. Stunted growth in both males and females, rapid bone aging. There are metabolic events. There is a real, devastating impact on fertility. There are several tumors that are involved, both in males and females, that arise from this. So how do physicians deal with it today? How have they dealt with it for the past 60 years? The endocrine system is really interesting in that it's always dealt with feedback loops. So in the normal situation, the hypothalamus releases a 41-amino acid peptide called corticotropin-releasing factor, CRF. CRF then exits the CNS and goes to the pituitary, where the CRF1 receptor is. It stimulates the CRF1 receptor, and then the pituitary releases ACTH. ACTH goes to the adrenals. The adrenals then make cortisol and make all the steroid hormones that we're familiar with, from estradiol on to testosterone. The ACTH and particularly the androgens that are produced then feed back up into the hypothalamus to calm things down, and that cycle takes place every single day, so that you get a surge of ACTH, a surge of cortisol. You get your androgens being made and your estrogens being made, and then they go back up and feed back and tamp things down. What happens in a CAH patient? In a CAH patient, they don't have cortisol. But I said you can take hydrocortisone or any of the other glucocorticoids that are out there, some of them that can be taken. But you can't just give them physiological doses. That isn't enough biologically in order to act just like cortisol to re-regulate the system. So you have to give them very large doses of hydrocortisone, supraphysiological doses every single day. That has some devastating impacts, to take glucocorticoids every day. Some of you may have been prescribed cortisone in the past, and you know it's really a seven-day regimen. The docs wanna get you one day of high dose and then taper you off as rapidly as possible because of the bad, devastating effects, metabolic effects, cardiovascular effects, and bone issues. So the physicians these days are constantly with a teeter-totter with their CAH patients in giving them very high doses of hydrocortisone in order to keep their androgens low and in check because they have this dysregulated hypothalamic-pituitary-adrenal axis, or HPA axis. And when that gets really intolerable over a period of time, then they'll lower the hydrocortisone, but then the androgens go out of control. And when that becomes intolerable, then they go back and forth. That's been the best standard of care. There are times when they are in balance, but it's not for a long period of time when a patient is in balance. What does our drug offer, crinecerfont? Crinecerfont is an antagonist to the CRF1 receptor on the pituitary. So the promise that crinecerfont had as we led into phase II some years ago was, if we hit the pituitary with this antagonist, can we lower ACTH levels and thereby stop the drive on the adrenals and lower the androgens? Sure enough, in phase II, we showed that beautifully. Crinecerfont captures that HPA system again. It fundamentally captures the disease state and lowers the androgens. That is fantastic. And as a matter of fact, we see in adults who have had this highly dysregulated HPA axis for decades, in just a matter of days on the drug, we've recaptured that HPA axis. What did we... What did we have to show in phase III? What was the next big thing that we had to do? It makes fundamental sense, but no one knew if this is possible. If crinecerfont is able to recapture the HPA axis and re-regulate it and bring the androgens down to the normal range, could you then lower the daily dose of hydrocortisone that you have to take? And ideally, a home run, could you actually bring them back into a physiological range of hydrocortisone? That takes a long study. That's what the phase III that we announced today was done, six months of placebo-controlled trial with 180 patients. And what we announced was, yes, crinecerfont did, again, exactly what you expect crinecerfont to do. It recaptured the HPA axis, took androgens down. And yes, we were able to decrease then the levels of hydrocortisone in these patients. So what we reported in it today was the primary endpoint. Can you lower, can you statistically lower hydrocortisone? The answer was absolutely. The p-value is less than 0.0001. Key secondary endpoint: Can you lower the androgens? As I said, which is exactly what crinecerfont does. Yes. P- value of less than 0.0001. Another key secondary endpoint, which actually combines those two endpoints. What percentage of patients can you, versus placebo, can you actually take down to physiological doses of hydrocortisone while keeping the androgens at normal levels? In the placebo group, it was 18% of the patients. In the drug-treated group, it was 63% of the patients. P- value of 0.0001. That beat even our high expectations for this drug. It was a fantastic study, very tightly controlled. And to be able to say that 63% of the patients now are able, for the first time in their lives, to be able to only take a physiological dose of hydrocortisone. So we take that burden of disease that hydrocortisone offers, and we take away the burden of their disease of CAH with crinecerfont in being able to keep their androgens in check. The medical community that treats CAH patients, the patient advocacy groups, I got to tell you, the feedback from them in just the few hours that we've had this data released has been amazing, and you can't imagine how excited we are for patients for this. I also do have to say that this was probably the most difficult study to run that Neurocrine has ever done in our 32 years. Because these are patients, as you can imagine, that many of them are not in good health. These are adults. We have a second phase III study that'll be reading out in Q4. That's in the pediatric population. But these patients are adults. They have a lot of health issues because of the disorder that they've been dealing with their entire lives. They're on very high doses of hydrocortisone, which can be immunosuppressive, and we started this study a few months before COVID hit. So for two and a half years, our clinical trial sites and our patients took the risk of continuing with this trial, to continue to go and put themselves at risk each and every day. Our clinicians and our clinic ops individuals at Neurocrine would take the risk during the height of COVID and go through everything that they had to do in order to travel to Europe, to travel throughout the United States, throughout all of COVID. I really have to thank them. Yes, they did all put themselves at risk. If you look at one of the major adverse events, the drug was extremely well tolerated. What's the highest AE? COVID. So they put themselves at risk. They took the risk. We can't be more thankful to these patients. So as I said, this beat all expectations for this, and I'm giving you a number of 63% hit the absolute home run to be able to drop their hydrocortisone down to physiologic levels. That doesn't mean that's the only patients that were significantly helped in this study, because there's many more that we reduced their hydrocortisone. And as experts will tell you, any reduction in hydrocortisone is beneficial. And all this in the face of controlling their disease and keeping their androgens low. So, Jeff, great job with that. No, thank you. And, you know, I guess the data, a lot of highly significant values that you mentioned, but maybe can you just talk about, and you touched upon this actually in the very end of your comments, how clinically meaningful the data are? Yeah. And it was, it was really, you know, there, from many of you over the years, wanting to try to understand this. Because where the risk was for these trials, and now it's been clearly answered, and that risk removed in, in the adult study here that we announced. We didn't know whether we could... Like I said, it made, it made intellectual sense. It makes biologic sense. If you can, if you can drop the, the androgen levels down, then you don't you shouldn't have to give the very high levels of hydrocortisone, but no one's designed the experiment to be able to actually show that. It's not, it's not trivial. It's difficult to design a, a clinical trial like that. No one's done it before. We were the first to do that. So I would always say the risk here is, did we design it correctly? Did we design the study that gave the drug its best chance at showing its efficacy? And yes, we did. One of the big questions that everyone had was, well, what is clinically meaningful? What's a clinically meaningful drop in hydrocortisone daily hydrocortisone? And I would always say that it is any. What the key opinion leaders would say is it, any reduction is a good reduction. That wasn't terribly satisfying to most, including yourself at times, but it's the truth, and it's what we were able to say. The other one that, that was asked is that, "Well, do you think that you can get people down to, physiological levels?" And I said, "Well, that's the dream, to be able to do that." I'm glad that sitting here today, that we took people to physiological levels.... takes away the first question, what's clinically meaningful? That, that's absolutely clinically meaningful, and obviously with a p-value with three zeros, after the decimal, highly statistically significant. And, no, I couldn't be happier, with this data. And we really look forward to seeing the pediatric data, that, that's gonna be coming in in the fourth quarter. Ideally, we wanted to be able to release both of these studies' results at the same time, but I had always said if one is able to close out faster than the other, we're not gonna sit on one or the other's data for too long. That's just not something we're comfortable with at Neurocrine. So, we release data generally within 48 hours-72 hours after getting it, and the adult study closed out pretty rapidly. So that's why the... we're separating these two. We do not have the data for the pediatrics yet. Then on baseline glucocorticoids, like, how did patients compare to what you would expect to see in the real world? Yeah, I think that patients compared well. We haven't talked about baseline characteristics. The data that we've released has been the three p-values on the primary and the two key secondary endpoints, and then the percentage that actually achieved physiological levels of glucocorticoid reduction. But the patient population really was quite a bit exactly what we expected to have. I guess, based on the results, like, what would you expect for duration of use in adults? Is there any reason why it might not be positioned as a chronic daily therapy? No, this would be a chronic daily therapy. It's you know, the pill would be taken each and every day. And it was really well-tolerated throughout this entire study. We've seen that in the phase I's and phase II studies. It was certainly that in the 6-month placebo-controlled, and now they're in a 6-month open label, still blinded from the fact that, although now every patient is on drug, the patient nor the physician knows were they on placebo or drug for that first 6 months. And I think the data that's going to come out of the second 6 months, that open label, it's not just going to be adding to a significant safety database, which is always important, but it's going to give us real-world usage. You know, clinical trials are very often not real world. They are for the company to scientifically understand their drug and their patient population. It is for regulators to also have a tightly controlled trial to determine whether a drug gets approved or not. And that sometimes can take things a little bit out of the realm of real world. That second six months, where we let the investigators go. You use all your best clinical judgment on how you're going to treat these patients. You use the expertise that you have, and I think that's gonna be fascinating, and I think that's only going to make for a more complete and even more exciting data set. Can you talk about the importance of meeting the secondary endpoint, and what kind of read-through might there be to the pediatric study? Yeah, so, and the reason why Jeff asked this, which I haven't gone into. There is a difference between the adult and the pediatric study as far as endpoints. In the adult study that we just announced, the primary endpoint was reduction in daily glucocorticoids. The key secondary endpoint was reduction in androgens. In the pediatric population, the primary endpoint is reduction in androgens, and a key secondary is the reduction in glucocorticoids. The reason why we switched those up was that in the pediatric population, in very, you know, this is from 2 years old to 18 years old. In the young, growing population, it's the androgens that cause the majority of their problems. Taking high glucocorticoids all your life causes those problems, those devastating problems, out in the second, third, fourth, fifth decade of life. So early on, the most important aspect for bone aging and growth and development is those androgens. So that's why we made that the primary endpoint in there. As I said, what does crinecerfont do? Crinecerfont captures control of the HPA axis and lowers the androgens. That's why I think I was more nervous about the adult study because it's the hydrocortisone reduction was the primary endpoint there. In the peds, it's going to be exactly what crinecerfont does. It's that lowering of the androgens. But make no mistake, the lowering of the hydrocortisone is still very important in the kids. This obviously gives a lot more confidence in that pediatric phase III study. But you still do have to recognize that there are differences between the two studies, not the least of which is the patients. I mean, physiology of children is different than physiology of adults. We see that in many, many drugs and diseases, and that's why we have to study kids separately from adults. All the clinical trial sites are different. Yeah, you have the pediatric endocrinologists that are working with us as our investigators on the peds, and then you have the adult endocrinologist. So there isn't an overlap of those two. But having said that, obviously, this really gives you a whole lot, even more confidence in the pediatric data that will come next quarter. One, one clarifier, just to be clear, we're 100% blinded to the pediatric data at this point. You know, and Kevin mentioned this earlier, we put out data pretty darn quickly after we're, we're exposed. We're 48 hours fresh on- Yeah ... this data. So wanna make sure that any of the confidence that we have in the pediatric isn't something that we've seen in underlying data. But as Kevin said, what we saw in phase II is what we had seen in the phase III, and adults should give us and does give us confidence in what we'll see on the pediatric side. Based on the results in adults, can you draw any inferences yet on testosterone reduction in female pediatrics? And if not, what would you like to see? Well, no, I can't draw any inferences yet, 'cause as Matt said, we don't have the data. But from this data in adults, what I would expect to see in the pediatric population, in both female and males, is that crinecerfont will be highly efficacious in lowering the androgens. And therefore, we hope in that study, as designed, we would then see the same significant lowering of their daily hydrocortisone dose. You indicated that you plan to file for U.S. approval in 2024 and EMA after. Are you able to narrow which part of 2024 you might be able to file your submission? Can you just talk about the regulatory path forward and where we go from here? Yeah. So not yet. And as Matt just said, we're literally 48 hours out from this data, and we've been in New York, not San Diego, during this period of time. So actually, I've not seen any curves or graphs or anything yet of the data. That's to come tomorrow when we're back in the office to be able to really dig into the data. All I'm told by my clinical team is: "You're really gonna love digging into the data." But so the regulatory group is all over this, as has been CMC Preclinical. They've been writing their sections of the NDA because they can leading up to this. But obviously, the sections on efficacy and safety can now be written. This one study is sufficient for filing with FDA and with EMA, and so that's, that's the path that we're on. All I can say right now is filing in 2024 and, you know, knock on wood, approval in 2025. And there's about... You know, this is a rare disease. This is an orphan disease. There's only approximately 30,000 patients in the United States with classical CAH, and approximately 40,000 in Europe. Great. Well, obviously, the data are fresh from this morning, but you've had a few investor meetings this morning. Any other questions that you've been getting from people that we hadn't talked about? Just when the entire data set is going to come out, as you can imagine. And so we will be publishing that and presenting that, and so, that'll be happening in national and international meetings that will be coming up. Okay, great. Looks like we'll have to leave it there. Thank you. Okay. Thank you very much.