Biotech Equity Research Team, very pleased to introduce the management team of Neurocrine Biosciences. Kyle Gano, Chief Executive Officer-elect, so very soon. Matt Abernethy, Chief Financial Officer, and Todd Tushla, who heads up investor relations. Gentlemen, thanks so much for joining. Kyle, maybe we'll start with you. Tell us first a little bit about your own background. Yeah. As you move into the CEO role of Neurocrine, what are your priorities? Great. Thanks, Josh, for having us here. A real pleasure to be here with the Cantor team. We will be making forward-looking statements, so I'll direct everyone to our SEC documents for our risk factors. Coming back to your question, for those of you that don't know me well, you know, I've been the chief business development and strategy officer at Neurocrine for the better part of the past decade, and most of my time at Neurocrine, I've had some role in business development. I did start the company almost 25 years ago, 23 years ago, to be exact, and I started at the company as a summer intern, believe it or not, and I came into the company working in business development and marketing. Over the past 20-plus years, I've had either in title or worked separately in every role within the company. I've gotten a nice cross-section of what it's taken to be successful at Neurocrine. Appreciate all the pitfalls that can happen in an R&D organization and feel I can do a pretty good job of avoiding those and likewise, when you see an opportunity, really doubling down on those and taking the company in those avenues that are fruitful. Really exciting time here at Neurocrine. Beyond talking about me, I'd like to spend the rest of the time talking about Neurocrine. It feels like we're on the cusp of a very significant leg of growth for the company. It feels very similar to our time back in 2017 when our first commercial medicine, Ingrezza, was approved for tardive dyskinesia. I feel that way for a couple reasons, but let me just start with, I think that our past successes has really propelled us to think about the opportunities in the future. As a drug discovery and development company, commercialization entity, we have three FDA-approved medicines on the market. If we pull out one of those and just talk about Ingrezza for a moment, as I mentioned, it was approved in 2017 for tardive dyskinesia. You know, there are 600,000 patients in the U.S. today. Roughly 80% of those patients are not receiving a VMAT2 inhibitor. This is the mechanism of valbenazine. Two-thirds of patients are not diagnosed. I start there because in Q2, we reported $580 million in revenue. That's over 30% year-to-year growth, about 15% quarter-to-quarter growth, and that was all driven by increased demand for the product. Really strong demand in terms of the patients that are out there, as well as some improvements in gross-to-net. But we also saw us raise our guidance to $2.2-$2.3 billion, which is about 25% year-to-year growth at the midpoint. If you combined where we are, over $2 billion in revenue, with the significant growth that's still available out there for patients to receive treatment and elongated LOE out to 2038, you can see why we're excited about the opportunity ahead of us for Ingrezza. But it's not all about Ingrezza. We have our second leg of revenue growth coming out here very soon with a medicine that's in FDA review. That's crinecerfont for CAH. It's a rare endocrine disease, and CAH is congenital adrenal hyperplasia. It's a CRF1 antagonist, corticotropin-releasing factor one antagonist for CAH. And we've been working on this target really since the earliest days of Neurocrine, so it's nice to see us finally move a medicine over the finish line and hopefully soon in the hands of patients. But like Ingrezza before it, like our other medicines on the market with AbbVie, all these medicines are first in class, and I think that that's a common theme that we apply to our thinking in drug development at Neurocrine, really changing the standard of care of patients. Revenue growth, revenue diversity, diversification are things that are on our horizon, and then we turn to the pipeline, and the key for us is to show that we can replace the medicines that we have on the market, replace the medicines that come into the clinic, through our research organization, and these are efforts that are well on their way. We have two programs that reported out positive phase II data this year. One's NBI-845. That's our AMPA/PAM for MDD, and our other is NBI-568. This is our selective M4 agonist that we have in development for schizophrenia. With positive phase II trials, those will move into phase III next year. In a couple of years, hopefully, we'll be submitting those to the FDA for review and have the potential for new medicines by the end of this decade. So very exciting there. Our mid-stage pipeline is taking form with a number of other muscarinic agonists that we have and antagonists. We also have another approach to depression, an NBI-770. This is an NMDA NR2B NAM program that we have in an active phase II trial now, data next year. And we have really an R&D transformation that's underway right now that's gonna be delivering a number of exciting programs to the clinic starting next year, and we'll see that accelerate into the future. So I really feel a really bright future is ahead of us, led by the growth by... from Ingrezza and by Crinecerfont if approved earlier this year. Maybe then, coming to Ingrezza, what do you see as the strongest growth drivers over the next two or three years? You know, especially now that you've added Huntington's to the label, is that gonna be a top growth driver, or is that patient population a little small compared to the opportunity you see to expand in TD? Yeah, I think I'll start there, where you ended there in the Huntington's piece. You know, Huntington's disease is an area where there are a couple other medicines in the category available for patients. There are about 30,000 patients in the U.S. with Huntington's disease, about 90% with chorea, and about 70% that are moderate to severe. Those are kind of the-- That's kind of the addressable patient population, which comes down to about 20,000. We estimate about 5,000 of those patients are already on a VMAT2 inhibitor, so we like to think that we're really focusing on the 15,000 or so patients that are out there. If you compare that to the 600,000 or more patients with TD, you can see that the market between the two disease states is roughly 40 to one. We still feel that the opportunity moving forward in the future is heavily weighted on tardive dyskinesia. There for us, you know, going back to some of those facts that I started with in terms of 80% not on a VMAT2 inhibitor, two-thirds not being diagnosed with tardive dyskinesia. The opportunity there is to accelerate TD market awareness and drive diagnosis over the next couple of years. That's the origins of our sales force expansion with a focus in psychiatry and LTCs to grow those lines of the business where most of the patients are residing currently. Got it. And you recently announced plans to continue to expand the sales force. Maybe you can provide a little bit more color. How many reps do you have now? Where is that number likely to go, and what do you think the impact will be commercially? Yeah. You know, this is our third sales force expansion over the past couple of years. Really, there's no better use of our dollar on Ingrezza than to invest in the sales organization. It's such a rapid payoff in terms of driving patients to get diagnosis and ultimately being treated with a VMAT2 inhibitor. We haven't gone into the specifics of actual numbers, and I know that there are job position postings on our website, but the growth in our commercial organization really spans not only Ingrezza, but also Crinecerfont right now as we build out the infrastructure required to do well in endocrinology. But going back to your specific question on the sales force build, I think the greatest lines of investment in terms of opportunities for new patients, new patient starts, remains in psychiatry, number one, in an area that is growing and at its infancy is our work in the long-term channel, long-term care channel. You know, there are about 1,600 facilities across the U.S. that are potential areas where patients may be residing. That's a lot of territory to cover, and we know that we can do a better job there by having more folks out there calling on those centers. That'll be kind of the focus of the expansion and will be to continue to drive long-term care. That, that's correct. Diagnosis. Okay, got it. We expect the growth to primarily still come through the psychiatry- Psychiatry. Psychiatry division. That's where 80% plus of patients are likely residing. So what we've learned through the last several sales force expansions is that call frequency matters in a significant way to keep Tardive Dyskinesia on the radar of clinicians. These are psychiatrists, by and large. Their primary care is the underlying mental health condition of the patient. So what we've found is with that call frequency, tardive dyskinesia stays on the radar, and a patient is much more likely to get diagnosed with Tardive Dyskinesia. So, as Kyle said, this is by far our best dollar spent, Josh. I know a few years back, we expanded the, the channel. We also expanded into direct-to-consumer advertising. We got a lot of heat, I'd say, at that time, thinking about the level of investment, but that $200 million, you know, has really led to a very nice return, with over $1 billion in growth. So I think that, we shouldn't trust us, but I also, would say the market in and of itself is just incredibly rich for continued growth in helping more patients. I'll just pile on quickly to what Matt said. This is the third time we've increased the sales force, and one question we get is: Well, when are you going to start to see a return on that? Typically, it's been a couple quarters later. So with this one, the new force is being hired this quarter, so you would anticipate to see the returns sometime in like Q2, Q3. We've directionally said, you know, call it a third increase at this time. So it's not inconsequential, but it's, you know, between that as well as the preparation for the Crinecerfont launch, Josh, which is, you know, amazing. We get asked a whole lot of questions about our pipeline, but we're in the midst of positioning ourselves to have a second potential blockbuster product with Crinecerfont. So, the sales force expansion is ongoing for Ingrezza, and then you also have just the new sales force that has been launched more recently within the CAH community. So a lot of activity going on at Neurocrine. Maybe one last Ingrezza question. There, there's a chance that Austedo gets called up for IRA negotiation next year. How do you think Austedo IRA price may impact Ingrezza, if at all? We're gonna, of course, fight for our turf to continue to be there, and existing patients, you know, by and large, it's a sensitive patient population. This is a two-drug class. I guess just to take a step back for those who aren't as familiar, we've qualified for an exemption within the IRA, and that exemption has delayed us from being negotiated with the government until 2029. So Teva is more than likely gonna get selected for negotiation, which would have a price in effect in 2027 or in 2028. So you're talking about a one- to two-year gap, and Josh's question is getting at, during that one- to two-year gap, how much exposure do you think we have? I think on existing patients, very little. As it relates to new patients, that's something that we're of course going to work hard to ensure if a prescriber wants their patient on Ingrezza, that they're ultimately going to get Ingrezza. So that's really the key focus during that period of time. The cone of uncertainty around the IRA is quite large, but for us, a few pieces of certainty. One is on this rebate scheme. Any medicines that go into the catastrophic phase right now have to pay 20% rebate, given the exemption that we've qualified for, we have a phase-in of that rebate. It starts at 1% in 2025 and then phases up to 20% by 2031. When you fast-forward to 2029, when we do expect to be negotiated with the government, there's actually a collar of between 25% discount and 34% discount, is the maximum discount that we can ultimately walk into during that negotiation in 2029. There's also some offsets, like you don't have to pay the rebate to the government any longer. So at least for us, it does provide a level of certainty of, this is gonna be a dip in Ingrezza's revenue, but it's not gonna be a cliff event. There's gonna be a lot of durable revenue and cash flows that come following that negotiation event. Josh? Maybe turning to Crinecerfont PDUFA date, late December, have we passed the window where there might be an AdCom, or what are you expecting from that? Yeah, we're. We continue to plan for an AdCom. There hasn't been any change in the FDA's position on not having one, but in case there is, we're prepared, and we did the same type of thing for Ingrezza when we were going through the review for tardive dyskinesia. We find the exercise of actually going through it, it's very helpful, and you get to consolidate your thinking and organize your data in a way that is meaningful, so we'll continue to prep as needed, but right now, we're just keeping our eye on any questions that come in for the FDA review and planning for the PDUFA dates in late December. So there are two, I guess, commercial challenges that we've kinda picked up talking to specialists and for this indication. Number one, you know, a lot of, at least when we try to find specialists, you find a lot of endocrinologists whose practice is, like, 80-85% obesity and diabetes, and then they'll have, like, a small number of CAH patients. So it kinda feels like a very spread out patient population, you know, if you really wanna uncover all those patients. The other thing we tend to hear is a little bit of prescribing malaise from endocrinologists, who may not necessarily appreciate, you know, the shortcomings of trying to manage the disease with steroid supplement, who don't necessarily have the urgency to treat patients as one might have expected. So, you know, as you're thinking about your approach to this market, how do you think about addressing those considerations? You know, you're always gonna have a bifurcation in a prescribing population. But here, as you said, most endocrinologists care most about diabetes, obesity, other metabolic disorders, and rare endocrine is very low on the totem pole of them caring, I would say. But they do have patients with CAH, one to two in their entire life, so that is a challenge, and you just addressed that and acknowledged that. You do have about 25 centers of excellence or centers of almost excellence, and those are the KOLs that have devoted their life primarily to rare endocrine disorders, including CAH, and those KOLs are gonna be critical in understanding how Crinecerfont is being used and how it's helping patients. Those local endocrinologists who aren't gonna invest as much time, effort, energy into learning about the tinkering that's gonna have to go on with crinecerfont, those KOLs are gonna be the ones that are engaging with those local endocrinologists, and that's being done even today in caring for a CAH patient. There's a lot of dialogue that goes back and forth every single day as these specialists try to help the overall endocrinologist. So that's a big part. If you ask me, what do we expect out of the launch? We don't expect there to be a major bolus of sales that come through upfront. We expect that the KOLs are gonna trial this. They're gonna understand which patients it works best on, how they down titrate the glucocorticoids, and then after that's done, the patient access is going to expand, and those local endocrinologists are gonna get more engaged. So that's one major element of how we're trying to get through that malaise, and we would acknowledge that's a challenge. And that's part of the reason why we launched our sales force early. We actually hired our sales force, launched them six months in advance of the medicine potentially being approved by the FDA, and they're out engaging with those local endocrinologists now. And what we've heard is, "You know, I just know to treat CAH. I just give them really high doses of steroid. I see them in six months. I check their levels and see if I need to change their glucocorticoid again." But their urgency to find a new standard of care, there's just not been anything for seventy years, so they haven't invested time into truly understanding the disease and how it manifests itself. So a lot of the discussion is talking through how the disease manifests itself, the downstream implications of high-dose hydrocortisone for a patient's entire life. Those have been very productive conversations thus far, and I do think there's an appetite... Sorry, this is a long-winded answer. What we also are hearing is there's a lot of patients asking for this medicine, whether it's to the local endocrinologist or it's to the KOLs, and I think that's because it's a very motivated patient population, especially children. Any parent doesn't want their kid on high-dose steroids for their entire life. So they hear about a potential new medicine that can reduce the glucocorticoid, and I'd just say that there's a lot of patient demand, but there's also the feedback from the endocrinologist. "Well, let's wait and see. Let's see the drug when it comes out, and you might be eligible," so. I'll just add that the analogy with Ingrezza was it's gonna be an educational launch, just like Ingrezza was. So educating the endocrinologist, educating the patients and their parents about the benefits of a new, better way to treat their condition. Where we're all aligned here, and really it's just talking about getting the processes, having as few hurdles as possible, is where we all align is this is a very serious disease. The body, we have we're talking about mutations in the CYP21A2 gene that leads to the lack of, or, the inability to produce enough cortisol to survive. And that's something that we can all align on with physicians and patients, and that's a very serious outcome if they don't take their cortisol. Everyone has it on their radar when you're diagnosed with CAH. The other piece that we feel very fortunate to have is very strong data here, that's not only in adults, but also in children. It's a medicine that's very safe and well-tolerated, and we've got formulations that match the needs of the patients as they go throughout the course of their life. All of these things will help us as we think about a learning launch and rolling this out to a patient population that hasn't seen a medicine in over 70 years. How do we think about the incremental SG&A spend if you've already hired at least part of the sales force six months ago? Yeah, we gave guidance on the last call. $125 million year- over-y ear is gonna be the investment for both the sales force expansion with Ingrezza, as well as the launch of CAH. So we're trying to be pretty specific about what to expect next year, and bottom line is what we know. You have to invest early to ensure that you get the growth over the medium term, and I think our shareholders appreciate that based upon what they've seen historically from our SG&A investment. With between the SG&A investment, R&D may bump up to fund some of the programs we're about to talk about. Crinecerfont, you know, will be laying the foundation, but you kinda said it'll be a gradual, steady launch. Should we not expect a little bit of margin compression in twenty-five before we pop out of that, or not, or no? It comes down to revenue growth- Right on the top end, and you know, we feel confident in Ingrezza. We also feel confident that there'll be some contribution, of course, from CAH next year. So we don't plan to take a step backwards in terms of, you know, operating income. But we also, you know, I would say you're not gonna see a whole lot of leverage like you've seen. I think the last three years or so, we've generated a thousand basis points of SG&A leverage, going from 53% down to around 42%. And so I think we've demonstrated, once we have a bit more of a fixed cost base, that we can generate leverage. On the R&D side, yes, it is gonna be a big step up in spend next year as you think about funding two major phase III programs in psychiatry. Once we get clarity around what those trial designs may look like, and we haven't talked as much about this year yet, and I'm sure we'll get there, but initiating two major psychiatry trials in major depressive disorder and then also in schizophrenia with the muscarinic program, you know, those are gonna be major investments. Mm-hmm. Maybe we can talk about NBI-568, and the phase II data that you recently reported. You know, very strong signal at the 20-milligram dose, that wasn't necessarily carried through to the higher doses. What about that data set, you know, gives you the confidence to push aggressively into phase III? Yeah, I think that, when we saw the data, we spent a lot of time interrogating all the results across all the endpoints for some time, across all the doses. And where we landed at the 20-milligram dose was, which was the dosage, strength, and regimen at the primary endpoint, is that it wasn't just the primary endpoint, it was looking you know upstream, the total PANSS improvement, and then downstream, taking into consideration things like standard deviation and looking at effect size, looking at the secondary endpoints, like the Marder factor scores, the positive and negative symptom scores separately. All the endpoints were positive. All the important secondary endpoints, the primary endpoint, were also statistically significant. We saw separation early in the course of the six-week study. In particular, the primary endpoint was statistically significant at week three, and it was maintained statistically significant through week six. So all that helps, and then you overlay on top of that, the magnitude of effect across all those endpoints beats all the current antipsychotics that have been approved over the past 20 years. So it's a really competitive profile. I know that the investment community is really interested in compare/contrasting to the muscarinics, but I think the muscarinics as a category have really taken up the efficacy relative to antipsychotics that have been approved the past decade or so. So we're very happy to be in the same space with what we have in the 20-milligram dose. Ultimately, we know that efficacy is the table stakes. It gets your foot in the door for schizophrenia, but all the medicines that we've seen in the antipsychotic space is a good example here. They all win on safety, tolerability, dose, dosing regimen, and in the 20-milligram dose, we saw a really clean safety and tolerability profile. It's once a day, there's no titration, there's no food effect. It's gonna do well on all the different patient populations. So all that in total makes us really excited, and it's gonna be certainly a good dose for us to move forward into phase III. ... I mean, the data, Josh put it, gave us a lot to think about. Will Will it make sense to maybe have an intermediate-type trial before you embark on the very specific three to, I don't know, either you know, really convince yourself that that is the best dose or, or that the efficacy that you saw is real? I would say that for the 20 milligram dose, if we look at the exposures that are around that dose, that's the exposures that outperformed in all of our preclinical studies. Now, albeit they're preclinical animal models, but still, that exposure played out quite nicely for us. It also did well in our biomarker work in phase 1. We have to appreciate that this phase II trial, all of the muscarinic trials are done in an acute, inpatient setting. So you're going into this study, hopefully adding or offering a dose that's gonna be efficacious. And for us, that 20 milligram dose was always that dose for us. So the fact that it was the one that worked was not terribly surprising. We were wondering if the higher doses would give us some additional efficacy because we hadn't studied those higher doses in a multiple dose fashion prior to the phase II trial. Now, in terms of doing intermediate study, I think that we can look to learnings from the field and see what other companies have done in this space. You know, Cerevel did a very nice program in phase IB and got some good results there in that small study. Their lower dose, as you know, outperformed their higher dose, and they took the lower dose into phase III, and in their two phase III trials, they're studying adjacent to that lower dose, lower doses still, two separate, distinct lower doses. So those are things that we think about, but we're gonna put our plan together for phase III, and we'll be taking that to the agency, and they'll tell us their thoughts, and ultimately, we'll make sure that we move forward with their blessing. But with the safety profile and efficacy, all the feedback we get from KOLs and any clinicians says this looks like an incredibly great medicine if this were to hold through into phase III. Now, how does it compare to Cerevel? We'll see when that data comes out. But in this drug class, there's a lot of turnover in medicines that patients are taking, and we also look forward into what the future indications might be with this medicine, and the safety tolerability profile really lend itself to test it in, you know, other indications. So this is a very clean, safe drug, and so that's really what gives us confidence to not have to do an interim study. Can you review your explanation as to what happened to the higher doses? Why did they work? I would say you start by looking at the Real, real quick, just to repeat the question. Oh, sorry. The question was, do we have any explanation of what happened with the higher doses, in essence. So I would say that, if you go back and look at the antipsychotics that were approved in schizophrenia in the past 25 years, three-fourths of them, two-thirds of them did not have a true dose response. So look at Caplyta, look at Latuda. Those all had similar outcomes in phase II and phase III. That's something that we're familiar with at Neurocrine. We've seen that across our other programs over the past 20 plus years I've been at the company. So for us, it's not terribly new to us. The explanations that range for why don't you see a dose response can range from trial design, intricacies, changing in the nature of the subjects that entered the study over time. You know, it is a good reminder that during the course of our phase II trial, all of Karuna's phase III trials read out, and both companies were, Cerevel and Karuna were purchased for, you know, $15 billion, $10 billion. That's certainly something that is all out in the news, and you wonder if that changed the outcome of the higher doses. But ultimately, the study that we took on, the sticking with the trial theme, design theme, it was a really ambitious study. It was designed to optimize for safety and tolerability at higher doses, of which we didn't have data on. It was not optimized for efficacy. That's something that we can work on in phase III, you know, doing a study that's one-to-one, active to placebo is gonna benefit a study that's done with a true parallel design is gonna benefit the outcomes of the studies, and those are things that we're looking for. Things beyond trial design, you can look at desensitization, which we didn't see in this study, didn't see preclinically. Those are things that, you know, typically companies move towards, but ultimately, at the end of the day, we may have... We may never, ever have an answer, but we do have an answer on a dose and a dosing regimen today, and that's the 20 milligram dose, and that's the one that we'll, we're really excited about moving forward with. You're comfortable with the competitive Cerevel? Oh, yes. I mean, if you look at the great arbiter, the great comparator endpoint is effect size, and they all look very similar. You're gonna win on safety and tolerability, dose, how well you can be used in different patient populations. 568's the only medicine that selectively and directly drives M4 activation. All the other medicines and approaches rely on something else. Trospium to block side effects or acetylcholine to drive efficacy. Five, six, eight works just fine by itself. One quick cleanup item, just so people don't think we changed our guidance for Ingrezza revenue. Our revenue guidance stays at... It's $2.25 and $2.3. You accidentally said $2.2 to $2.3. Okay. Just wanted to clarify for people. Thanks, Matt. That's why we're all up here. That's why Matt's a CFO. Excellent. I think we're out of time. Thank you so much. All right. There's a lot of moving parts in Neurocrine. We didn't have a lot of time to cover, but that's the beauty of being a diverse company. Thank you. Thank you all. Thank-