Welcome to the- Welcome to the Goldman Sachs. At Adam. Welcome to Adam Green at the Goldman Sachs healthcare conference. You don't have any questions yet? Very good. Awesome. Well, thanks everyone for joining us here. We're thrilled to have the team from Neurocrine and Adam Green in the audience for our conversation here today. Maybe just to start, you guys have recently done a transaction, but maybe if you could just talk about the core competencies of Neurocrine as a business and how you think then strategically about which products you bring in-house and speak to the VYKAT piece. Yeah. Yeah, you can do whatever you want. Can I ask you a question? Sure. Along the way, too? Yeah. Okay. I don't promise to answer. We will be making forward-looking statements, and part of that will be whether you want the Spurs or the Knicks to win. We will have an FLS for that. We have a lot going on at Neurocrine. I was just talking to a gentleman in the back, not Adam, and we were talking about how we went from INGREZZA only to a multi-product company, and that's been just amazing. You and I talked about that briefly yesterday. Right. We're actually a real thriving company now, generating cash flows, investing in our pipeline, 20 or so commercial assets at this point. We have a lot of great things going on at the company. INGREZZA guidance range this year, $2.7 billion-$2.8 billion. It's amazing, nine years after launch, that it's still growing double digits. We get asked that question all the time. Wow, how can you continue to grow INGREZZA? It really comes down to the fundamentals of the market. Many patients with tardive dyskinesia didn't have any help until 2017, and now we're helping those patients and continue to have great growth. Crenessity was the game changer for us, obviously coming after INGREZZA. Crenessity was approved in a rare endocrine product, or disease called congenital adrenal hyperplasia. We've been able to help about 10% of patients in the first year of launch. We have $150 million of quarterly revenue this past quarter. Last, you mentioned this, VYKAT XR. It was a great acquisition, I think, for us, and I'll ask your perspective in a moment. It brought to us another rare endocrine product. We have three now, two rare endocrines or rare endocrine franchise, and that was approved in Prader-Willi syndrome. They had around $100 million of sales last quarter. When you stack all three of those products up, over $900 million of revenue at this point and 97% plus gross margin. You think about the cash flow that is generated from these three products, it's quite significant. That allows us to reinvest back into R&D at a rate of 30%-35%. As I said earlier, we have 20 clinical programs. The three headline programs are osavampator, which is in a phase III study that's being studied in major depressive disorder. It's an AMPA potentiator. The second is a phase III program with dureclidine in schizophrenia. It's a muscarinic agonist. Both of those programs will have data in 2027, and the second study for dureclidine will read out in 2028, so a transformative year on the psych side next year. The third program I'd highlight is actually a phase I study. I remember we talked about this at R&D Day. I was sitting right next to you, Corinne. It's in obesity, and it's a 5-HT2A agonist, and we're going to actually have healthy patient, obese patient data in late 2027. A lot going on on the pipeline front. With our capital, you can see we're generating non-GAAP net income of around $200 million at this point and only growing. We deployed our capital towards buying Soleno, all in cash for $2.9 billion, and that acquisition will be immediately accretive to us. A lot of great things going on at Neurocrine. I think you asked about the Soleno transaction. How did that check the box for Neurocrine? I think it's quite clear. From a strategy perspective, a second rare endocrine product for us and adds to the diversification and scale that we would a leading neuroscience company. There were three fundamental variables that we had to get comfortable with to underwrite the deal. Yeah. The first one was peak penetration. Peak penetration in rare disease, you can see, is between 30%-50% of the population ultimately gets on therapy. We would expect that this would be at the higher end of the 30%-50% because there is no other approved treatment option for Prader-Willi. This was literally the first treatment option ever available to patients, and our expectation is that this will have very nice penetration. The second piece was discontinuation, and this was a question that had been coming up to them as a company. We had to do our own diligence in looking at their patient data as well as looking at what other rare disease launches have done on the discontinuation rate. We underwrote it at around 25% or so on discontinuation. Lastly, we had to get comfortable with the intellectual property. We found in reviewing their patent applications as well as their issued patents, we feel comfortable that the IP should extend out into the mid-2040s. That's something that will be clear to the street as we get later this year. I think if we hit any of those variables, we're going to be at a spot where we drive shareholder value well in excess of that $2.9 billion. What was your take on the transaction? I'm not on stage right now being questioned, but I think generally speaking, talking to investors, the view is that you're already annualizing at $400 million in sales. It's already profitable from even just a financial picture. You don't have to think a whole lot of growth from here in order to be comfortable with the deal. I do want to talk about the growth from here, which is, as you think about it, and you did, it sounds like, a good amount of diligence on your own before underwriting this asset. What are you anticipating pace to get to that? How do you think about the puts and takes that could inform that path? The pace, as quickly as possible. I think when you look back at rare disease launches, you typically get to a path to peak of between three and five years, and so that's our base expectation. There will be some noise in the early stages. First of all, let me back up. I can't take any credit for how the launch has gone so far because this was not underneath our wings, and the team did a really excellent job. Number one, getting it approved. That was a big feat. Second, getting it to market. As I said earlier, you think about these patients with hyperphagia, they have this unrelenting, obsessive seeking of food. Think about the hungriest moment you've ever had, and that hunger never goes away, even if you're eating. So think about the devastation that that's having on families. I know you have a family yourself, I could only imagine the disruption that has to the patient, to the family, and over the long run, some very serious health implications. Getting this approved was an amazing feat for the company. At the time of launch, you had a bolus of patients that rushed to getting treated. Of course, it was on our radar and trying to understand the dynamics there. You had a bolus of patients in the first two quarters, you've gotten now into more of a steady state of patient additions, where Q1 was very similar to what they saw in Q4. From a modeling perspective, I know it gets nuanced and a bit complicated quarter to quarter because you have that natural discontinuation rate from the bolus of patients that were added early in the launch. Ultimately, what you'll find is steady patient adds will stack and compound on top of each other. Over the next, call it 12-18 months, I think we'll be on a good trajectory to become a blockbuster medicine. There will be some nuances in the near term just because of the bolus effect and as it goes through the natural rate of discontinuation. We're still early. We've owned this for three weeks. Yeah. I can't claim to be an expert, we're excited to have this be part of our franchise within rare endocrine. You mentioned thinking you could get to the 50% range in terms of penetration. I guess, what does that translate to in terms of revenue potential? Yeah, we see this as clearly a blockbuster medicine. There's 10,000 patients with PWS, and if you think about 5,000 patients on therapy or net that down for those who discontinue, it doesn't take a lot to become a blockbuster medicine at the price points that are here, and it's very similar in terms of pricing relative to CRENESSITY I think the team that we've inherited are very motivated to help these patients. They've been there from the beginning. There's a lot we're learning. This is a very complex patient universe. The feedback that we're getting from the field has been quite strong. The feedback that we looked through when we were underwriting the deal, it sounds like the medicine works. I was on a KOL call yesterday talking about CAH. This doctor also treated, or was part of the VYKAT trials, and I asked him, does it work? He said, absolutely, it works. Yeah. That was always gratifying to hear the benefit that it's having on patients. I think it's just a matter of time and getting through some of the learnings on how to titrate the medicine, and getting education out there. After that, I think we're going to have some nice growth. From an investor perspective, it feels a lot like the CRENESSITY story, I think, where we said CRENESSITY is going to be a blockbuster. We believe it's going to be a great product. Then this past quarter, Q1, I think the street's starting to feel that way as well. For VYKAT XR, we said it's going to be a blockbuster, and it's a show-me story, I think. Right. Similar to CRENESSITY. Right. Recognizing it was already profitable even in the first couple quarters of launch at a much smaller company, I guess, could you talk about the potential synergies you see between VYKAT XR, both in terms of competencies and then in terms of OpEx? Yeah. The synergies for this work clearly strategic and commercial, not necessarily an OpEx synergy. It was already a profitable company. To be able to grow sales and leverage that infrastructure as well as our infrastructure, I think it's naturally going to flow through and be quite an accretive business to us. The deal wasn't done for cost synergies alone. There, of course, will be some level of redundancy that we'll work through over time. The strategic lens is that we'll, for a long while, have a standalone VYKAT XR sales force focused on helping people with PWS, and we'll have a standalone CRENESSITY s ales force that is focused on CAH. I think for both of those products, the price, the unmet need, the first time ever launching a product in those markets, it deserves full attention, and that's our focus with some best behind growing sales, and I think the profit flow through is going to be quite significant. Maybe that's a good segue to CRENESSITY i tself, which has obviously been a huge focus over the past year and a half post-launch. Recognizing you're no longer sharing patient start metrics, I guess, what could you share about what you're seeing in the launch year to date? I know you just saw some doctors yesterday, so maybe you could tie those conversations into that answer. Well, let me give a quick anecdote story. I was in Chicago last week at a different conference. I met with a major KOL there, and she used a really interesting word. She used the word fun when describing using CRENESSITY I was sharing with her, as many of you guys know, my son has congenital adrenal hyperplasia, and that's the reason why I joined Neurocrine. We were talking about treating patients. She was giving me a little bit of advice, and we were talking about her use of CRENESSITY. She mentioned how fun it was. She said that she was talking to another colleague who prescribed CRENESSITY for the first time. Six weeks later, that doctor called her and said, you're right, t his is really fun. When they looked at the lab values. I think that this is something that as we continue to develop the market, as people are seeing the results, and as we're able to publish longer-term data, which you'll see later this week at ENDO, I think the confidence is only growing in terms of the potential for CRENESSITY to benefit many patients. There are some natural limiters on the pace of adoption. Patients only go and see their clinician one to two times per year. They're infrequent in nature in terms of visiting. The second piece is it's a really fragmented patient population. You have about 85% of the patients spread across many prescribers that maybe only see one to three patients in a year. You have CRENESSITY, or sorry, CAH, for the most part, being a very nominal part of a practice of an endocrinologist, a local one, and then the patients are only going in one to two times per year. It sets itself up for the need for continued education, the need for continued momentum on the patient side and them actually asking for the therapy. We're seeing good progress, but I'd call it steady. Yeah. That's been the operative word. Very steady and consistent new patient start forms as you think about Q4 and Q1. You have shared that a majority of physicians who started to prescribe CRENESSITY have done it for one or a selective number of patients. Can you talk about this versus the number of patients those doctors might be seeing in a year? How are you thinking about unlocking greater depth for the product? I think that there's an opportunity here on breadth and depth. We recently expanded our sales force, and the main reason is to, number one, ensure that we touch every clinician that we can that potentially has a classic congenital adrenal hyperplasia patient. The sales force activity is going to be an important aspect here. These clinicians, as I mentioned earlier, maybe only see one to three patients in an entire year. There is an opportunity to go deeper with those as they get more experience in seeing how did the first patient do on therapy. It's usually about a six-month cycle of getting androgen levels, reducing or modifying glucocorticoids, seeing how those are going. I think there is a little bit of learning that's going on in trying to identify how is it working and then ultimately what patients could benefit from the medicine. In our clinical trials and in our two-year data, we've been able to show that this works for 70%-80% of patients who try it. I think that ultimately that's the goal in the marketplace is that we would get to a really significant peak penetration level, similar to what I mentioned on VYKAT XR. Can we get to 50% or so? That's our goal, and that's the hope here. Really, in terms of where does the next patient come from, we have opportunities that are left still at our centers of excellence. Significant opportunity there. Beyond that, it really is fragmented across many prescribers across the United States. Matt gave a good example of the story about Chicago, where the physician had spoken to the other physician who's just trying it now. Endocrinologists are kind of classic thinkers. I think internally what we feel, those kind of stories are going to continue to replicate. You're going to have this network effect over time, which gets you to peak sales pretty quick. Okay. Versus INGREZZA, which is still trying to find its peak. Sure. How are you thinking about the competitive clinical landscape in CAH, recognizing there's other development stage programs? What do you think the differentiating features will be of CRENESSITY over time? Well, number one, being first to market is a great place to be. Especially when you have an efficacious product that's safe and that we're going to have significant data over time here. The primary market, the number one most motivated market is in pediatrics. In pediatrics, the doctor I was with yesterday, the question was: Does it work? What are the side effects? The side effect profile of CRENESSITY, I think, is quite strong. In the longer-term data that we have, it'd be hard to imagine that you could displace an entrenched product like CRENESSITY that's working and that's safe. We're going to do everything we can to defend our turf. We're committed to helping CAH patients, and we're going to continue to do so over the long run. Yeah. We've set the bar really high for the classic CAH patient population with CRENESSITY. Competition, including our own internal molecules, we have a tough standard to beat. We have next-generation CAH products that are coming out. When you look at the totality across efficacy, safety, and tolerability that CRENESSITY has, it's going to be a tough one to beat for anybody. Maybe we could switch gears a little bit and go to INGREZZA. You're coming off a couple of quarters of record patient growth, even this many years into launch, and you mentioned still trying to find peak. What do you attribute that success to in terms of driving record patient growth? How sustainable do you think that will continue to be? It's been a tremendous market for us. I think at the time of launch, we expected peak revenue to be $600 million. That just shows you how good people are at forecasting. Now we're at $2.7 billion-$2.8 billion of sales, and it's just a reflection of- It's better for numbers to go that direction. That's right. That's better for the stock. You want to make sure you make the right investment behind it if it's going to be higher. You do have tardive dyskinesia, a movement disorder that's caused by prolonged exposure to antipsychotics, as you know. Up until 2017, there was absolutely no treatment option, so there was no reason to make a diagnosis of tardive dyskinesia. Over the last nine years now, we've slowly but surely inched up diagnosis, which is now about 50% of patients have been diagnosed with tardive dyskinesia. When you think about what does it take to continue to grow these record patients each quarter, it's diagnosis, which is aided by our sales force expansion. Second is keeping tardive dyskinesia on the radar of those clinicians. Clinicians, rightfully so, are driving and thinking about the underlying mental health condition of the patient. They're not necessarily thinking about tardive dyskinesia. A sales rep calls, tardive dyskinesia is now on the radar. The third piece I would mention is just patients. Patients have these movements. They have no idea it's caused by their antipsychotic. The likelihood of them asking a psychiatrist about those movements is like thinking about going to the dentist and asking the dentist to look at your ankle. It's just not a natural thing to do. Direct-to-consumer advertising is something that we've been heavily investing in. You'll probably see some during the World Cup, if you watch it. We have a great opportunity to help many more patients. It really comes down to this being a naive market that continues to grow and grow mightily. There's two other tailwinds that on here, though, in terms of the prevalence. We initially thought there were probably 500,000 patients in the U.S. with this. That has grown to 800,000. The reason why is because antipsychotic use continues to outpace the growth of the U.S. population. The prevalence number continues to grow. The second piece is the prescriber community, particularly in psych. We have a whole new class of folks called advanced practice providers. These are nurse practitioners and what's now called physician associates who have prescriptive authority. That has grown by about 30% over the last two years. You have those two factors that are also contributing to this ongoing growth that we're seeing in the market. Because of the volume headwinds, you were able to deliver relatively flat quarter-over-quarter revenue in the first quarter, despite pricing headwinds. As we start to lap those, how should we think about revenue growth through the balance of the year? Maybe tie that to the guidance that you've already provided. Yeah. Quarterly year-on-year growth rates are going to be sort of distorted this year for a few reasons. If you recall, there were a couple quarters last year where you had one less and one more billing week or order week. Then you had year-on-year, the price that you mentioned. We invested in expanding our access last year. We had one major formulary addition in the second quarter, then we had another one in the third quarter. I think for an investor, I would just take a step back and look at our annual guide of $2.7 billion-$2.8 billion. It implies about in the mid-teens volume growth offset by an annual 4%-5% year-on-year price headwind. That price headwind is more pronounced year-on-year in the first half, like you said. Over the second half of the year, it will be pretty flat-ish in terms of year-on-year price. This product, the growth is going to be driven by continued diagnosis for continued new patients being put on therapy. And we had record numbers of new patients in Q1. Q1 was a great quarter. That was a surprise for us. We didn't expect to have that level of new patients. I think it's a testament to the team, testament to the product, testament to the market. Of course, we'll go through the normal process that we have and review our guidance range once we get through the first half of the year. Just out of policy, we don't think one quarter is enough to call early in the year. We've been asked that question a lot. Why didn't you change your guidance with such a good quarter? Let's get through the first half of the year, and then we'll reassess consistent with what our internal policy is for reviewing guidance. As you've approached the entrance of IRA negotiated prices in the category next year, how does the volume growth that you've now set up kind of inform what you anticipate with respect to competitive dynamics as we move into that period? Yeah. I think the biggest aspect to volume growth is access and ensuring that if a patient is prescribed INGREZZA, that they get INGREZZA. Access is something that we invested in last year. We now have coverage at around 70% or so of patients who are on Medicare Part D formularies. We would expect that to be pretty similar when we go into next year. From a financial perspective, how does that translate to revenue dollars? More than likely, we're in the early stages of negotiations, obviously, but we'll have some level of price concession, but between it being a great market and good, strong volume, we would expect it to be a quite manageable period of time for us next year. One of the things you guys have invested in across the commercial business is sales force. Do you anticipate making any further investments in sales force infrastructure across these products? Well, I would say every time you make a sales force expansion, you expect it to be your last. Okay. I think that for now, we feel quite good with our sales force. Call frequency is a significant driver to sales growth. When you look at the tiering of clinicians and the number of times you can reach those clinicians with the size of our sales force, we feel quite good with where we're at. However, if dureclidine or osavampator were positive and we wanted to start laying a greater foundation for launching future psych products, that's probably when we'd reassess, should we add more reps now and maybe hit TD a bit harder and then be in a position to jump quickly into the new products once they launch. A lot of strategic things that we'll be thinking through over the long term. Right now, based upon the call activity and the new patients, feel quite good with where we're at. Well, you said before, from a capital allocation perspective, there's been no better investment than putting it into INGREZZA, which has been the fuel behind feeding the rest of the pipeline. Right. That's a reasonably good segue to the development program. Maybe we can start with osavampator you highlighted as one of the headline agents, and you anticipate phase III data next year. Could you just remind us the conviction that you can derive from phase II results into those phase III? You have a validated pathway with what you see with esketamine. We know the pathway has been validated there. The phase II results were really compelling. As a reminder, there were two doses, a 1 mg and a 3 mg. They both performed. They both worked. The 1 mg worked a little bit better than the 3 mg. On day 28 of the MADRS, the 1 mg was a little bit over four change from baseline with an effect size of over 0.5, super compelling. It continued to be better at day 56 with over seven change in MADRS and an effect size of more than 0.7. We've got already a validated pathway. We got really compelling, strong phase II data. It's safe, well-tolerated. In fact, in phase I, MADRS, SAD studies, we studied it out, or Takeda did. Credit Takeda for developing this. It had been studied up to 18 mg. We're going forward with the 1 mg dose in five studies. Three are the main ones for MDD. There's a randomized withdrawal study, and there's an open label extension study. As you said, we're expecting data for those three studies to come next year. Without a doubt, if I had to weight the impact of the pipeline readouts next year, of which there are 10, the [osa] one's clear number one. Okay. Assuming success on that program, I guess, what role do you see osavampator playing in the MDD market, and how should we size the opportunity? This is a brand new mechanism of action. Everything's SNRIs and SSRIs right now. We have a chance to have a big impact here of the 20 million people who have MDD. This would be an adjunctive treatment, so you have a subset of that. Assuming we can get close to replicating what we saw in phase II, we got a really great opportunity to help a lot more people. I think the goal, if it's efficacious and safe, is that it would be second-line treatment. As Todd said, you want somebody who had a little bit of a response from an underlying first product, this would be the second line. It has all the attributes Todd said in the phase II, it really comes into executing phase III, and that's the main focus of our clinical team right now is to make sure that we're enrolling the trial, enrolling it with quality patients, and enrolling it and monitoring those patients and those sites in a really controlled way. Our goal to not have a runaway study here. We want to be able to get a clean read as does this drug work or not work? To have a failed study isn't going to be acceptable. We'd rather see a failed drug. Our hope, based upon what we saw in a phase II, is a new agent that can really help so many people who struggle with depression and need better treatment options. We kind of have an ace in the hole with Jaskaran Singh, who is managing that program, who previously had been at Johnson & Johnson and ran the esketamine trial. He knows what it takes to run high-quality trials. Okay. You also have a broad muscarinic portfolio. Could you just talk about how you think the opportunity for that category will play out, particularly in the context of commercial results so far for the more advanced drugs in the class? Well, we're rooting for COBENFY, to be clear. That pathway has also been validated. Our lead program is a little bit different than COBENFY, where COBENFY is a pan-muscarinic agonist given with a peripheral antagonist. It has some GI tolerability issues, food effect, multiple doses. With our lead program, dureclidine, which is in phase III studies in schizophrenia, it is a direct agonist of M4. Hopefully we won't see the tolerability issues that COBENFY has. It can be taken with or without food. It's one dose. We'll have that data for the first of two studies next year. The second study right now is going to read out sometime in 2028. We're also studying dureclidine in bipolar mania. That phase II study just started this year. Yeah. We get asked this question a lot. We always say go well. I think anybody who's going into an antipsychotic market like this. Schizophrenia is sort of the foot in the door, but really in terms of value creation, it goes to what's the next indication going to be that's added on top of this. I do think there's clearly a differentiation that we'll have on the tolerability and ease of use side of the equation. Ultimately, whether it's them or us or other companies in the space, it's really taking it beyond schizophrenia. Our first entry is bipolar mania, that we have a study going on right now. Then we'll be looking at both our M4 as well as our M1/M4. That I think the thesis is that it also plays a role in cognition, that we would be able to study that compound in a few other indications. I think if you fast-forward to probably 18 months from now, beyond the schizophrenia data, the whole of the data coming together and what's the further indication strategy for Neurocrine would become quite clear. Right now, we do have a heavy investment in the muscarinic. We do think they play a clear role in psychiatry and also in cognition. We're going to continue to invest behind it, get the data. Then we'll decide where we go from there. How are you thinking about the value of having the breadth of portfolio versus investing behind a single product, assuming dureclidine works, for example? Yeah. Psychiatry is interesting. You've spent so many years trying to understand why certain things work, and I think if you only have one shot, you may not make it. We'd be happy with the lead program solving all disease states. You also want to take as many different types of shots on goal, and you might be surprised to see the benefits that somebody may have within broader psychiatric or cognitive conditions. We'll continue to run those tests, run those experiments, because we are committed to psych. From a broader pipeline perspective, if you look at our pipeline chart, we talked a lot about the psych program. Psych is high risk. In a phase III trial, you have a 50/50 likelihood typically of, is the medicine going to actually work in phase III? That's the lowest of any other therapeutic area. One of the strategies as a company is we have moved towards diversification in therapeutic areas. As I mentioned earlier, we do have a lot going on in obesity. We also have other elements in immunology that we'll be touching on at R&D Day later this year. The diversification, not that we don't care about psych, we love psych, but we would like to also be talking about other programs across neurology, endocrinology, and immunology. I really truly feel like when you take a step back and think about Neurocrine, we're just getting started. Going from a single product to a multi-product company in just two years with last quarter over $900 million of sales, including VYKAT XR. A lot of data readouts coming over the next 18 months with a lot more coming behind that. We feel quite fortunate to be in the position that we're in today, Corinne. I think that's a great place to end, unless you do want to opine on the Knicks versus Spurs. With that, thanks, everyone. He's a Pacers fan. Yeah. Oh, well, I don't know what to do with that. Thank you, Corinne. I appreciate it. Thanks.