Neurocrine Biosciences 2026 Q2 Earnings Call

Please go ahead. Happy Thursday, everyone.

Welcome to Neurocrine Biosciences' second quarter 2026 earnings call. With me today on the call are Kyle Gano, Chief Executive Officer, Matt Abernethy, Chief Financial Officer, Eric Benevich, Chief Commercial Officer, Sanjay Keswani, Chief Medical Officer, and in his well-deserved new role as Chief Business Officer, Samir Siddhanti. During today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. In addition, some of the information discussed today includes non-GAAP financial measures that have not been calculated in accordance with U.S. GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the tables at the end of our earnings release issued earlier today, which has been posted on the investor relations page of Neurocrine's website.

After prepared remarks, we'll jump into Q&A. Now I'll hand the call off to Kyle.

Thanks, Todd. Good afternoon, everyone. Neurocrine's second quarter performance demonstrates the power of a diversified growth strategy built to compound over time. Our commercial portfolio of first-in-class medicines, INGREZZA, CRENESSITY, and VYKAT XR, delivered another record quarter with net product sales exceeding $950 million, enabling more patients to benefit from our innovative medicines. This durable commercial performance provides the financial strength to continue investing in innovation, advance our industry-leading pipeline, and pursue strategic opportunities that further strengthen Neurocrine for long-term growth. Our strategy remains clear: execute our commercial portfolio to bring our medicines to patients, advance our innovation engine, and deploy capital with discipline. This quarter demonstrated meaningful progress across all three of these priorities. The commercial business continues to generate durable growth.

The pipeline is advancing with one of the industry's strongest mid to late-stage portfolios. Disciplined capital deployment was demonstrated through the successful acquisition and integration of VYKAT XR. Together, these efforts further strengthen our position in rare disease while building on our leadership in endocrinology. More importantly, these results reflected the continued evolution of Neurocrine. Just a few years ago, we were largely viewed as a single-product company. Today, we have multiple commercial growth drivers, an expanding pipeline across all phases of development, and the financial strength to invest through innovation cycles. Together, these strengths position us to create long-term value for patients, physicians, employees, and shareholders alike. Looking ahead, we remain on track to deliver multiple important clinical milestones in 2027, including phase III data readouts for osavampator in major depressive disorder and direclidine in schizophrenia.

Together with the continuing integration of VYKAT XR, these milestones represent the next chapter in Neurocrine's growth and reinforce our confidence in the opportunity ahead. Before I turn the call to Matt, I'd like to recognize Samir Siddhanti on his recent promotion to Chief Business Officer. Since joining Neurocrine in 2017, Samir has played an integral role in shaping our corporate strategy and business development efforts. As a member of our executive leadership team, he will help guide the next phase of Neurocrine's growth and evolution. Samir, congratulations. We are excited for what's ahead. With that, I'll turn the call over to Matt.

Good afternoon, everyone. For the second quarter, we delivered over $950 million of total revenue, representing nearly 40% year-over-year growth. This reflects full quarter contributions from INGREZZA and CRENESSITY, along with a partial quarter contribution from VYKAT XR following the close of the Soleno acquisition. This revenue performance demonstrates accelerating top-line growth, delivering a financial profile with non-GAAP EPS of $2.85 per share. Starting with INGREZZA, second quarter net sales were $716 million, up 15% year-over-year, driven by another quarter of record new patient additions and sustained underlying demand. Given this performance, we are raising full year INGREZZA guidance from $2.7 billion-$2.8 billion to a new range of $2.825 billion-$2.875 billion.

At the midpoint, this represents approximately 13% year-over-year growth. CRENESSITY second quarter net sales were $184 million, reflecting continued strong launch execution, consistent new patient starts, and expanding prescriber adoption. Approximately 15% of the estimated diagnosed patient population has now been prescribed CRENESSITY, reinforcing our confidence in the significant runway for growth. Turning to VYKAT XR, second quarter pro forma net sales were $94 million, with $54 million recognized by Neurocrine from May 18th, the closing date of the Soleno acquisition. Integration has progressed well and expect to drive sequential quarterly growth exiting 2026. New patient demand remained fairly consistent with the first quarter, while discontinuation rates tracked in line with our expectations following the initial launch bolus in 2025.

We have more work to do in developing this market and remain optimistic in the opportunity to help many more patients with PWS over the years ahead. Pro forma total revenues were $998 million for the second quarter 2026, when including full quarter VYKAT XR sales. This performance underscores the strength and increasing scale of our commercial portfolio across three highly differentiated products. Turning to our financials. With the Soleno acquisition now complete, I'd like to briefly discuss the financial impact of the transaction, including the purchase accounting and the GAAP and non-GAAP adjustments reflected in our earnings release. We acquired Soleno for approximately $2.9 billion and financed the transaction with cash on hand. We ended the second quarter with approximately $500 million in cash and no debt. Strategically and financially, this is a highly attractive acquisition.

VYKAT XR adds another differentiated durable growth product to our portfolio and is immediately accretive to non-GAAP earnings. Accordingly, we updated operating expense guidance to include the Soleno operating expenses, transaction and integration costs, and the expected purchase accounting intangible and inventory fair value amortization impacts for the remainder of 2026. We expect approximately $150 million of acquisition-related costs, of which $130 million was recognized in the second quarter. Our GAAP second quarter results also include non-cash purchase accounting amortization of acquired intangible assets and inventory fair value step-up of approximately $20 million. Overall, our commercial portfolio continues to perform exceptionally well, generating close to $1 billion in pro forma quarterly sales, providing substantial financial flexibility to invest consistent with our capital allocation priorities to drive revenue growth, advance our expanding pipeline, and pursue additional strategic business development opportunities.

With growing sales, an improving financial profile, and meaningful data catalysts ahead, we feel quite fortunate to find ourselves in a position to continue to build a leading global biotech company. With that, I will now hand the call over to Eric Benevich, our chief commercial officer.

Eric. Thanks, Matt. Just five years ago, Neurocrine was a single-product commercial stage company celebrating INGREZZA achieving blockbuster status, surpassing $1 billion in annual sales.

Today, our commercial portfolio includes three first-in-class medicines with combined quarterly sales approaching $1 billion and annualizing to approximately $4 billion. This transformation reflects the successful execution of our long-term growth strategy. Starting with INGREZZA, second quarter performance was outstanding, with record sales of $716 million, driven by another quarter of all-time highs in both new patient starts and total prescriptions. Based on our increased full-year guidance, we expect to help more patients than ever before who are living with tardive dyskinesia or chorea associated with Huntington's disease. CRENESSITY also delivered another excellent sales quarter, generating $184 million. The launch continues to follow a very consistent pattern: steady pace of new patient starts, high persistence and compliance, and favorable reimbursement.