Good morning, everyone. I'm Sean Laaman, Head of U.S. Mid-Cap Biotech Equity Research here at Morgan Stanley. Before we commence, to make you aware of some important disclosures, see those disclosures at the morganstanley.com/researchdisclosures website. If you do have any questions, please reach out and ask your Morgan Stanley sales representative. With that said, we have the pleasure of welcoming from Neurocrine Biosciences, their CEO, Kyle Gano, and from IR, Todd Tushla. Welcome, gentlemen. Thank you. Thank you both for your time today. Thank you. Maybe just to kick off proceedings before we get into the heart of Neurocrine, just a few general questions on the macro side of the equation for biotech. How is the rise of China-originated innovation changing, if at all, your competitive outlook, and does it influence your BD and R&D playbook? That's a great question, very timely at Neurocrine, I know industry-wide. My view of China is that they are a competitive force, but at the same time, they represent an important source of innovation. I think that those views, I think at a high level, seem to be diametrically opposed. A lot of us, I think, would share that same sentiment. Even on the competitive side of the equation, competition can be a good thing. It can bring out the best in all countries, parties involved. I've seen that at Neurocrine over the years, and particularly when it comes to things that we're developing in competitive spaces or commercially. I'm confident that the United States will do well to compete in this area. Coming back to China, what I've seen over the course of the past decade, a lot of changes in the region. The speed, the quality, the breadth of the science has really improved. I think that's something that we appreciate. The competitive bar has been risen, in particular in areas of validated biology. For us, that really expands the universe of innovation that Neurocrine and other companies can access. We have done that in the past couple of years. We have been in China and been successful bringing in mainly earlier-stage assets that are not material for the organization at a high level. We have used some of the work that they've done to help us accelerate some of our interest in research. How does that change things at Neurocrine today? I would say fundamentally, it doesn't change our view on the mix of internal R&D versus business development. It does change in one important way, and that is the importance of speed and selectivity. Selectivity, I mean by that, what you choose to invest in. For validated biology, being right about the science is no longer the most important thing. It's really developing a compelling and efficient drug development plan that allows you to be first to market, or nearly so, and also having that same plan be one that shines a light on all your points of differentiation throughout each point of development. That's something that you have to keep in mind now as China opens up access to a new source of assets and technologies for companies in the sector. The other thing I would call out that I think we'll see more and more of, perhaps even at Neurocrine, is leaning into the Chinese ecosystem to help accelerate development. This can occur in one of two ways, either directly through a more CRO type of relationship or, from what I am seeing out there, companies striking collaborations on the same assets and technologies that I just referred to, but allowing their Chinese partner to develop the asset that comes from that collaboration, say, through the end of phase I. Then the company here in the U.S. catches that program as it comes over the ocean and finishes the development plan here in the U.S. and then commercializes it. The benefits, again, speed allows the company to look at that as a multiplier in terms of programs that they can bring into the portfolio per unit of time. It usually comes at a less of a cost, which is a benefit as well, so they can do more with their R&D dollars. I think it goes back to an earlier remark. It is also done with very high quality. So for Neurocrine, that doesn't mean we are moving our R&D to China, but it does put China squarely in the global community of what we want to access to make Neurocrine better and faster for drug development. Great answer. Thank you, Kyle. The next question on AI. Are you implementing AI across your business? Can you give an example where it might have changed a decision, a cost outcome, or even a POS? Yeah, no, I think it is another great question. For AI and machine learning technologies, it has been something that we have been very deliberate and intentional incorporating through our organizations. Actually, in our corporate goals now, there is an element of that last year and this year as well. We have brought in, over a year ago, I should say, in 2025, OpenAI, and that is certainly a tool that is used broadly across the organization now. We also have Anthropic through Claude that we are using across the organization now. So both of those are available for our employees. I would separate productivity gains from claims about AI suddenly changing or transforming research and development. I would like to touch on the productivity gains piece first, and I will come back to R&D. But on the productivity gains side of the equation, there is a lot of near-term opportunity I see for Neurocrine. The employees have adopted it in several different ways, but I can see it accelerating some of their workflow. I have seen it being used in areas of the company that interrogate large datasets. They are able to move through that more quickly. There is a lot of redundant tasks that are just very tedious in nature that have been minimized. Just generally, information and knowledge the individual groups might have has been made much more accessible across the organization, and that has benefited us as well. I have seen it in medicinal chemistry, chemical development, chemistry broadly, translational science, clinical development, clinical trial execution. I would expect that to continue as we look at the next year or so. The challenge I think where most of us run into problems is how do you monetize or see if you are making improvements across your organization with the technology. For us, it is all about outcomes and KPI standards that we can attach to specific problems. In every organization, there are just repetitive decisions that come up. For us using AI, can we make those decisions faster? When it comes to repetitive tasks or activities, can we get through those more quickly or in a more cost-effective manner? When it comes to clinical trials, can we enroll our trials more quickly with AI tools? Ultimately, what it is going to come down to when we think about an organization in its entirety, can you move through more science without having to proportionately increase the size of your organization? I know we often talk about increases in headcount or decreases in headcount for AI. I think in the near term, the opportunity is can you minimize your growth using AI based on some of the outcomes I just described? Those are the areas that we will look for improvements and how we will look to measure them over the next couple of years. I do want to come back to the R&D side of the equation. I think right now it is still early days in how we think about improving probabilities of technical success across the R&D portfolio. The reason for that is the whole idea of machine learning, AI, is that you need to have data populate your project in order for it to get reasonable outputs. If you are working in novel areas of biology, it is very unreasonable to expect what you get from that project or from that programming, if you will, is going to be helpful in improving your probability of technical success. That is a more mid to longer-term view. Right now, I think there is a lot of near-term opportunities for us. Wonderful. Thank you, Kyle. Last question before we dig into the specifics of Neurocrine, but which policy variable, FDA, Medicare negotiations, MFN, tariffs, or global pricing matters most to your economics? What have you changed, if anything, because of it? Well, we just had our first one-on-one here before this meeting, and I can tell you it all goes back to INGREZZA and our Medicare negotiation. This is our version of the Inflation Reduction Act. For INGREZZA, we're exposed in a couple of different ways. Two specifically. Directly, we have our IRA moment where our MFP, our maximum fair price, is implemented in 2029. Indirectly, we're in a two-product category, and our competitor in this space has their IRA moment two years before our own. There's an unintended consequence, if you will, for MFP and MFP-adjacent products that we work through. I think that's something that is tangible to Neurocrine, unique to Neurocrine, and we spent a lot of time talking to you all about that. It's probably worth maybe another question on how that looks for us. But for me, when I think about policy, I'd like to separate policy on a singular product like INGREZZA and policy and how it might affect our long-term strategy. At Neurocrine, we're not building the company to predict what comes out of Washington. That's a slippery slope. But we are trying to make the company as strong and as resilient, and each and every day make it better across those two metrics. For us, that means diversifying the source of our growth and the durability of our growth opportunities. INGREZZA is a great medicine. We've guided $2.825 billion-$2.875 billion this year. The market continues to grow double digit each year. We have patent life out to 2038. But it's not just the growth opportunity through INGREZZA. We have now CRENESSITY, a medicine for congenital adrenal hyperplasia that's on an annual run rate of $750 million now. That's another piece of our growth story. More recently, we acquired VYKAT XR which we're about a little more than a year into launch, and we're about a $400 million run rate right now. A lot of growth across our commercial portfolio. When it comes to the- On that. Of course, messaging the data generation that we've had over time, we've shown good data on quality of life with our validated instrument. We've shown good remission data. 60% of patients on INGREZZA are symptom-free. We've also shown recently good PET data, which shows target occupancy that's superior to our competitor in the space. All that gets to get pushed through that sales force. Sure. That's a very compelling story for us out there. Awesome. I've got a couple of INGREZZA pricing questions. Net price, I believe, was expected to decline 4%-5% this year. Is that still the right framework heading into 2027? For us, the headwinds on the 4%-5% price delta this year really comes from the contracting that we did last year. Yeah. The 4%-5% is relative to last year. This year, our price per script, our revenue per script has been relatively consistent throughout the year, and we expect that to be the case as we think about the remainder of this year. Of course, in 2027, our competitor in this space is going through the first year where their MFP is implemented, and we do expect some price concessions with the plans, the payers that we're currently on contract with to maintain that same level of access for 2027. That will be pretty nominal, but I would also point out that we do have an increase in the statutory rebate that we pay for sales that go through Medicare Part D, in particular the catastrophic phase. That phase in that all companies that have the same exemption of us, the specified small manufacturer exemption, that statutory rebate will go from 2% this year to 5% next year, and that's on the WAC. Sure. Thinking longer term, you just answered my next two pricing questions, but how do you maintain a stable growth on the top and bottom line through 2029 implementation year? How much does that answer depend on CRENESSITY continuing to outperform? Well, in terms of INGREZZA, it's worth repeating that we continuously see double-digit volume growth out there each year. The market is incredibly robust. We've got about 10% of the 100,000 patients or so under the care of a VMAT2 inhibitor. So there's plenty of room to grow in this marketplace still. Even despite the price concessions that we pay next year, 2027 and 2028 are going to be revenue growth years as well as volume growth years for us, of course. So 2029, we do have our IRA moment there. Our MFP, our maximum fair price, would be implemented. We start those negotiations next year, and recall, because we had the small biotech exemption, we know that's going to be within a band of about a 25%-34% discount off of this non-FAMP number. This is the Federal Average Manufacturer Price. It's a little bit nuanced on this, but ultimately, it's a number that you're discounting from a 2026 value that comes into our negotiations. We would expect revenue to dip in 2029. So what it means for overall enterprise-wide revenue is going to be a function of how well CRENESSITY and VYKAT XR grows. I'm certainly happy and glad that we have these two medicines in our portfolio because they will be growing over this timeframe. We also have the opportunity to potentially see osavampator and direclidine pay off over this timeframe and be commercial products in that 2029 timeframe as well. They probably won't offset coming out of the launch necessarily the revenue that we'd want to see- Sure. ...for two blockbuster medicines like those two, which we believe they will be. But we have a lot of financial capacity to continue looking externally as well if we need to. Sure. Thank you. Moving on to CRENESSITY, very strong Q2 numbers, more than triple what you did in revenue like a year ago. I think you're now 15%. That's right. Yeah, 15%. Six quarters in, what do you need to see before you will be able to get some revenue guidance? Yeah. This comes up now and again in investor one-on-ones. What I would say is, like you said, we are only six quarters in, and the launch has been great, but we are still learning a lot about the marketplace. Learning a lot about the endocrinology community, the patients, where, when, and who they seek treatment from. It took us four years before we gave INGREZZA guidance. Sure. I suspect we are going to end this year with some strong momentum with CRENESSITY, and that is something we are going to have to revisit ahead of the Q4 call next year. Yeah. Thank you. I understand you probably wanted it. Yeah. We do. We want everything. Still on CRENESSITY. Is the next leg of growth like adding prescribers, or is it deepening the number of patients per prescriber? Yeah, I would say it is a little bit of both. As a reference point, there is really three sources of where patients seek treatment. There are the centers of excellence. There are about 20 of those. That covers about 15% of the 20,000 or so patients who have classic congenital adrenal hyperplasia. There are pediatric endocrinologists. There are about 1,000 of those. Then you have the community-based endocrinologist, which is about 8,000. One of the nice things about the launch that was surprising to us in a good way was we are seeing utilization across all three sources of that business. As you would expect, the centers of excellence, although we are not fully penetrated there by a long shot, have more prescriptions on a per MD basis. Whereas on the community endocrinology, they may have one or two patients. I think what is going to happen over time as CRENESSITY becomes the standard of care, there is going to be a network effect that is going to help those community endocrinologists who are not yet treating a patient to treat their one or two patients, and for the folks that are treating to go deeper. I think the answer is a little bit of both is where growth is going to come from. Sure. Thank you, Todd. You also initiated a phase II in children from three months under four years. Like- Yeah. ...how commercially meaningful is that youngest cohort? Yeah, it's super meaningful. There's about 1/3 of the patient population is pediatric, and we're approved for age four and up right now. Th e phase II that you referenced is three months to four years old. What we know is that with CRENESSITY, we have a chance to interdict and change the trajectory of especially a pediatric patient's life. Because you know steroids are bad for the brain, bad for the blood, bad for the bone. We can have an overall impact on changing the course of overall height for these pediatric kids and s o treating earlier has a more profound impact over time. We'll get that data sometime in the 2028 timeframe. Wonderful. Thank you. Last question on CRENESSITY. Looking down the path to Vertex/Crinetics side, how do you compare- -that with the was a big acquisition price? Yeah. We are already validating that there is a market there in classic CAH, but now you have Vertex further validating it. Sure. Yeah. I am with you on that one, Todd. How do you compare CRF1 inhibition with ACTH receptor antagonism, and can the market support both? Yeah. What I would say on that is we work upstream in HPA axis, and they're further downstream. Instead of diving too much into the competitive aspects here, they're still several years away from coming to market on the adult front, even further on pedes. Meanwhile, we're at 15% market share six quarters in. We're becoming the standard of a care treatment and we're making it difficult, not just for a competitor with CRENESSITY's label, which has got uncompromised efficacy, but also uncompromised safety and tolerability. So setting a high bar with CRENESSITY for others, including ourselves with our follow-on peptide that's in development, it's going to be tough to displace a standard of care kind of treatment that we're seeing evolve with CRENESSITY. Time will tell if the competitor product comes to market, but we like how we're positioned right now. Great. Thank you. Moving on to VYKAT XR. There was a joint statement in early August from the Foundation for Prader-Willi, which flagged some deaths and adverse events and there have been 800+ patients prescribed since launch. What's your read on those data and what is the process, if anything, from here with the FDA? Yeah. No, I think it's a good reminder just to level set on the Prader-Willi syndrome disease state. It's a very serious and complicated disease, and these patients have many comorbidities. At a high level, mortality is multiples above the general population. The mortality rate increases for each decade of life. Life expectancy is in the mid to late 40s, at least based on what you can find in the literature today. So I think it's a view that needs to be shared, and I think the physicians that came out and shared this letter was shining a light on the complexities of this disease state and also the benefit risk profile of VYKAT XR, in particular with patients that are very severe in terms of their symptoms. So at a high level, we largely agree with a lot of the things that were pointed out in the letter that came out during the course of our diligence and actually has been the emphasis of our educational efforts that we had planned on and are doing now post-close of the acquisition. So right now, it's really a function of making sure that we're doing all we can. With real-time data, everything that you mentioned that came out in the FAERS database or the AIMS now is really information that we solicit using our specialty pharmacy. When you are first in disease, these things do become visible for the first time in patients' physicians' lives. They have not seen this in a registry type of format. We have a lot of work ahead of us in terms of patient education, in particular on the side of physicians, helping them identify the ideal patient, and also how to manage and monitor adverse events. That is going to be done in a hands-on way with Neurocrine, with the help of our specialty pharmacy. Today, just as a reminder to help get us all on the same page, we have over 1,400 patient years of experience now with VYKAT XR. We have patients that have been on the medicine for more than seven years and benefiting quite well. I know it is hard to look at the news and get drawn into the safety pieces of the disease of VYKAT XR, but there are a lot of patients that are benefiting as well. That came out through the course of our diligence that there is a compelling benefit risk profile for VYKAT XR in the Prader-Willi syndrome population. It is really on us now to make sure that we have all the tools in place for physicians and families and patients to do well in the medicine, and I know we are up for the challenge. I think what was interesting following that letter, there were a number of KOL calls to ask about the letter, and largely all of them that I read were, the response was, "This is nothing new. We knew all about this. Sure. It is part of the awareness campaign that we are going to drive forward. Got you. Thank you, Todd. That is interesting. I guess commercially on VYKAT XR, what are you watching most closely to evaluate? I mean, I know you have already done the evaluation, but to evaluate the longer-term outlook, is it new starts, discontinuations, or persistence? Well, I am going to lean on what Todd said about crinecerfont. It is probably a function of all those things. Yeah. Mm-hmm. I will say that we are starting in a good position from the perspective that new patient starts, enrollment forms, however you want to look at it, have been relatively steady over the past couple of quarters. What we have been looking at is the discontinuation rate over time. I think initially what you would see in any orphan disease or any first-in-disease medicine is that there is a bolus of patients that come in, they are excited about having a new treatment option, and they get on the medicine and they try it for the first time. The most severe patients, and by that I mean the ones where the hyperphagia is quite severe, were the ones that coming into the real-world setting with prescription of VYKAT XR, and that is where some complications we are having in those particular patients in terms of the adverse events that were seen just in that patient population, were giving rise to the concerns that we have seen in the physician community. That is a long way of saying that what we saw were discontinuations that exceeded what we saw in the phase III setting. We have the ability to see when patients start medicine in a given month, and we can track them over time from one month to the next, to the next month, and so forth. What we can see now with about a year's worth of data is that the discontinuation rate as it turns into one year is about 20%-25%. What we see as a good steady state number for us is to have a discontinuation rate in the 25%-30% number. That includes persistence of going in one year to the next. Once you get that into a steady state position with the steady enrollments that we have seen, we do expect to have potential growth as we exit this year into 2027. It is all about that education piece that I mentioned before and making sure that we have identified the right patients, physicians know what to look for in terms of AEs, they know how to manage it, and I think we will be in a much better place. Wonderful. Thank you. Maybe to move on to some pipeline questions now. We look at direclidine. We look at the COBENFY launch, which has been slower than what most would have anticipated. What do you believe Neurocrine needs to show with direclidine to give investors confidence that you have got a good commercial story here? Well, I think for the antipsychotics in general, I will put COBENFY into that category because I think we are seeing the same thing is that everyone knows that you get your foot in the door in this therapeutic category in general by moving into schizophrenia. It is a patient population that has continuously the highest unmet need. It sets a price point for you to branch out into other indication, and it is the most straightforward development pathway to commercialization. What we have seen from COBENFY, at least in my view, in our view, is something very consistent with other antipsychotics. The trajectory is pretty much in line with what we thought we would see. But to really get to the larger numbers in terms of valuation revenue, if you will, you really have to branch out to other indications. We have seen that through. Caplyta most recently went from schizophrenia to bipolar to MDD. You can look at that same trajectory with the other antipsychotics. To really do well with muscarinics, you have to move outside of schizophrenia. I think that is something that BMS appreciates. That is why they are in ADP and bipolar. That is why we have gone into bipolar mania as a second indication nearly in parallel with our efforts in schizophrenia. We are excited about what we have, but we are also realistic in appreciating that the numbers that we are all wanting to see in terms of revenue are going to be achieved by branching out in other indications, and that is something that we will be looking at moving forward. Sure. Thank you Kyle Moving on, osavampator, maybe a very, for investors, a quick snapshot and overview of the program. When do we expect the phase III readouts? How should investors think about differentiation versus esketamine? Sure. The differentiation is quite easy. It is an oral tablet that you can take from the convenience of your own home, just like any other antidepressant. Great safety, great tolerability. There is no monitoring required. There is no device that is required to administer the product through an inhalation type of delivery mechanism. So very simple, easy to use, and very much consistent with how patients take their medicines today. I think that is the real take home there in terms of differentiation. In terms of the program itself, we have three replicate phase III trials that are ongoing. Each trial is 200 subjects in sample size. It is a 1:1 ratio of active to placebo, so 50-50. That, we believe, will be helpful in terms of minimizing the placebo response. It is testing the 1 mg dose that we saw good results in the phase II versus placebo, and we are looking at the MADRS at day 56. So that is the plan in terms of the placebo-controlled trials. Those patients roll over to an open label study. We also have a randomized withdrawal study that is running in parallel with this as well. If everything goes well in terms of recruitment, what we are talking about is phase III data the second half of next year. Then if those are positive, we would play out the open label safety data. Recall we need at least 100 patients out to one year. That is part of the ICH guidelines for submitting an NDA. All that wrapped up, we will be able to put an NDA in the hands of the FDA for review somewhere in 2028, with a launch possible somewhere in 2029. Amazing. Thank you. Still moving on, just in the interest of time, I do have more questions on that one. I want to get to the CRF2 and obesity program. 2118, a once-weekly CRF2 agonist, had ended phase I in May. Signal seeking next year. What we thought was interesting is that Roche's Genentech acquired an asset from Hanmi. I think they paid $190 million upfront, $2.3 billion in milestones, sort of doubling down and validating the area, we think. How do you interpret that transaction in the context of 2118? Does it increase your confidence in the industry that the industry is converging around CRF2 as a differentiated mechanism for preserving or improving lean mass during weight loss? Yeah, no, I think that was a pretty big deal by Roche to invest almost $200 million in phase I, and of course, all the hard milestones that come with that. That's a pretty significant deal. I'm guessing they saw something there. CRF and CRF2 is something near and dear to Neurocrine's heart, and for me personally. I in-licensed one of the very first CRF2 agonists from the Salk Institute about 25 years ago, and took that forward into some phase I and phase II trials for a very acute heart failure indication. We had signs that we were onto something very special back then. Unfortunately, for those that know the Neurocrine story, we couldn't develop everything that we wanted to back then and had to discontinue the effort. For those that were around at that time and are still at Neurocrine today, we always knew that we wanted to revisit this biology. Fortunately, we brought in some folks from Eli Lilly that worked in the same space around the time that we did, including our Chief Scientific Officer, Jude Onyia. We re-engineered peptides in this space to be longer acting. Our first molecule that we had had a half-life of about 15 minutes. Now we're out to one week. These are things that you can do now with all the tools that are available to us. Ultimately, the idea is to get to it. It comes with an appreciation that obesity is a disease of the CNS. You start there. CRF2 is in the brain. We like leveraging the things that we know about CNS drug development, about CRF biology. It seems like a perfect match for us. What we've seen after engineering some of the molecules that we have, very good weight loss data in a DIO model in the mouse that shows weight loss comparable to what we see from the incretins. To your point, and similar to what Amy and others have demonstrated, the weight loss is on the fat side of the equation, not on the muscle. We've also seen other cardiac and renal benefits, as we've seen over time with our work in R2. We also see a differential tolerability profile. It's not going through the GLP pathway. We don't expect to see nausea, vomiting, those types of things that you would see with the medicines that are available today. Other than pointing out those kind of differentiation attributes of CRF2, there's another reason why we like this type of approach. In psychiatry, we all know that we're dealing with subjective endpoints, and you don't know definitively what you have until you've completed your phase III. The only thing that's guaranteed is your expense. I'm joking here a little bit. We appreciate that there's challenges with psychiatry that you can mitigate by being in endocrinology, specifically in obesity. You get biomarkers in phase I. You're dealing with objective endpoints instead of subjective endpoints. You can actually pick winners, the molecules you want to take into phase II, as early as phase I-A. That's really refreshing for Neurocrine. Sure. We can get a nice balance in the portfolio about risk-benefit and probabilities of technical success. Of course, I give some benefit to us having a rich history in CRF to win here. I'm excited about what we have. Wonderful. We're just out of time. Thank you, gentlemen, for your time today. Pleasure to host you and- Thanks much. Appreciate it. You as well. Thank you. Thank you.