Executive Summary / Key Takeaways

• Neurocrine Biosciences is demonstrating robust commercial execution, with its flagship product INGREZZA continuing to achieve record new patient starts and its newly launched CRENESITY exceeding early expectations, establishing the company as a multi-product growth enterprise.
• Strategic investments in expanding sales forces for both INGREZZA and CRENESITY, coupled with enhanced market access initiatives, are designed to accelerate market development and maximize patient share, even as they impact near-term gross-to-net dynamics.
• The company's R&D transformation is yielding a deep and diversifying pipeline, with multiple Phase 3 programs in major depressive disorder and schizophrenia, alongside emerging biologics, aiming to deliver a new commercial launch every two years.
• A strong financial position, highlighted by over $2.1 billion in cash and investments, provides the flexibility to fund aggressive internal pipeline development and pursue strategic business development opportunities.
• Despite facing competitive pressures and regulatory challenges, Neurocrine's differentiated product profiles and targeted innovation strategy in neuroscience create a compelling competitive advantage.

A Neuroscience Powerhouse in Evolution

Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is a neuroscience-focused biopharmaceutical company dedicated to developing life-changing treatments for patients with under-addressed neuropsychiatric, neurological, and neuroendocrine disorders. Incorporated in 1992, Neurocrine has evolved from a research-driven entity into a fully integrated biopharmaceutical company, marked by strategic collaborations and the successful commercialization of its own products. This journey has culminated in a diversified revenue base and a robust pipeline, positioning the company for sustained long-term growth.

The company's core technological differentiation lies in its ability to develop targeted therapies for complex neurological conditions. For instance, INGREZZA, a vesicular monoamine transporter 2 (VMAT2) inhibitor, stands out for its "therapeutic dosing from day one without required titration," offering a distinct advantage over competitors that may necessitate complex dose adjustments. Furthermore, the availability of a novel sprinkle formulation for patients with swallowing difficulties enhances its utility across a broader patient population. CRENESITY, a first-in-class corticotropin-releasing factor type 1 (CRF-1) receptor antagonist, represents a significant technological leap in congenital adrenal hyperplasia (CAH) treatment by enabling "independent control of ACTH and androgen," a mechanism previously unavailable to patients. These technological advantages are foundational to Neurocrine's competitive moat, driving strong patient adoption and supporting premium pricing in niche markets.

INGREZZA: Sustained Leadership in a Growing Market

INGREZZA (valbenazine), Neurocrine's flagship product, continues to be a primary growth driver, approved for tardive dyskinesia (TD) and chorea associated with Huntington's disease. The product's performance remains exceptional, with net product sales reaching $686.60 million in Q3 2025, representing a 12.0% year-over-year increase. For the first nine months of 2025, INGREZZA generated $1,856.20 million in revenue, a 9.3% increase over the same period in 2024. This growth is fueled by strong patient demand, leading to a third consecutive quarter of record new patient additions in Q3 2025.

The market opportunity for INGREZZA remains substantial. An estimated 800,000 people in the U.S. suffer from TD, yet only about 10% are currently treated with a VMAT2 inhibitor, indicating significant untapped potential. The prevalence of TD is also increasing, growing at 3% to 4% annually, outpacing the general population. Neurocrine is strategically investing to capitalize on this opportunity, including an expansion and restructuring of its INGREZZA sales force into dedicated neuropsych and Long-Term Care teams, to be completed by Q1 2026. This expansion aims to accelerate TD market development, maximize patient share, and lay the groundwork for future psychiatric medicine launches.

Despite these strengths, INGREZZA faces competitive pressures, notably from Teva Pharmaceuticals 's AUSTEDO (deutetrabenazine), including its once-daily extended-release formulation. Neurocrine's Chief Commercial Officer, Eric Benevich, noted that health plans are recognizing the higher costs associated with Teva's strategy of pushing patients to higher doses or the XR formulation, which has made them more willing to engage with Neurocrine on formulary coverage. In Q1 2025, Neurocrine expanded its Medicare Part D formulary coverage to approximately two-thirds of beneficiaries in the TD and Huntington's disease markets. While this involved "intentional investments" impacting near-term gross-to-net, it is expected to drive continued volume and sales growth. The Inflation Reduction Act (IRA) also introduces complexities, but INGREZZA qualifies for the small biotech exception, exempting it from price negotiation until 2027 for initial price applicability in 2029.

CRENESITY: Redefining Care in CAH and Emerging as a Second Blockbuster

CRENESITY (crinecerfont) represents Neurocrine's second major commercial launch, approved in December 2024 as a first-in-class adjunctive treatment for classic congenital adrenal hyperplasia (CAH). This medicine is the first new treatment option in over 70 years for CAH, a condition affecting at least 20,000 people in the U.S. The launch has "exceeded internal expectations," with Q3 2025 net sales reaching $98.10 million, a substantial sequential increase from $53 million in Q2 2025. Since launch, over 1,600 classic CAH patients have initiated therapy, with 540 new patients in Q3 2025 alone.

Reimbursement for CRENESITY has been strong, with 80% of dispensed prescriptions reimbursed in Q3 2025, and most patients paying $10 or less per month out of pocket. This favorable access is critical, as real-world data indicate that approximately 95% of CAH patients are exposed to supraphysiologic glucocorticoid doses and/or elevated androstenedione levels, highlighting a significant unmet need for therapies that can reduce androgen excess without high glucocorticoid doses. The company is expanding its CRENESITY sales team to further penetrate community endocrinology practices and accelerate adoption. While early revenues were anticipated to be "measured" due to reimbursement timing and patient flow, the initial success underscores CRENESITY's potential to become Neurocrine's second blockbuster therapy.

A Robust and Diversifying Pipeline: Fueling Future Growth

Neurocrine's commitment to innovation extends beyond its commercial products, with a robust and diversifying pipeline aimed at addressing a broad range of neurological, neuroendocrine, and neuropsychiatric disorders. The company's R&D transformation includes a strategic shift towards biologics, encompassing peptides, proteins, antibodies, conjugates, and gene therapies. This initiative, requiring substantial investment in personnel and facilities, is expected to deliver, on average, a new commercial launch every two years at steady state. The clinical stage pipeline is projected to grow from 12 to 18 programs by the end of 2025.

Key late-stage programs include osavampator, an AMPA positive allosteric modulator, which has initiated three Phase 3 registrational studies for major depressive disorder (MDD), with top-line data anticipated in 2027. NBI-568 (direclidine), a selective M4 agonist, has also commenced Phase 3 registrational studies for schizophrenia, with results expected in 2027-2028. Additionally, top-line results for valbenazine in dyskinetic cerebral palsy and for the Phase 2 study of NBI-770 (NR2B NAM) in MDD are expected in Q4 2025. Positive results from NBI-770 could lead to a confirmatory Phase 2 or direct Phase 3 initiation. The initiation of a Phase 1 study for NBIP-1435, a long-acting CRF-1 receptor antagonist for CAH, marks the first investigational peptide from Neurocrine's internal pipeline to enter the clinic, showcasing the progress in biologics development.

Financial Strength and Strategic Capital Allocation

Neurocrine Biosciences maintains a strong financial foundation, providing significant flexibility for its growth initiatives. As of September 30, 2025, the company reported total cash, cash equivalents, and marketable securities of $2,113.30 million, an increase from $1,815.60 million at December 31, 2024. Working capital also saw a healthy increase to $1,520.40 million.

For the nine months ended September 30, 2025, cash flows from operating activities rose to $394.30 million, driven by increased net product sales.

The company's capital allocation priorities are clear: first, to drive revenue growth; second, to advance R&D programs; third, to enable business development; and fourth, to return capital to shareholders. The expanded investment in INGREZZA and CRENESITY is projected to result in an SG&A expense increase of approximately $150 million in 2026, reflecting a commitment to commercial expansion. R&D expenses for the first nine months of 2025 increased due to significant investments in Phase 3 programs and preclinical development, including milestone payments. Neurocrine's robust cash position and strong operating income, which increased from $183.8 million to $239.0 million for Q3 2025, underscore efficient management despite rising operating expenses. The company also repurchased $167.70 million of common stock during the first nine months of 2025, with $332.30 million remaining under its 2025 repurchase program.

Competitive Dynamics and Strategic Positioning

Neurocrine operates in a highly competitive biopharmaceutical landscape, facing both large pharmaceutical companies and specialized biotech firms. Its primary direct competitor for INGREZZA is Teva Pharmaceuticals 's AUSTEDO. While Teva's extended-release formulation has allowed it to gain some market share, INGREZZA maintains its leadership position due to its differentiated profile, including immediate therapeutic dosing and a broader range of proven efficacy across patient populations. Neurocrine's strategy of expanding its sales force and improving formulary access is a direct response to these competitive dynamics, aiming to solidify its market share.

In the emerging CAH market, CRENESITY competes against the long-standing standard of care, high-dose corticosteroid monotherapy. CRENESITY's first-in-class mechanism offers a significant advantage by directly addressing the underlying hormonal imbalance, a technological differentiator that positions it to redefine treatment paradigms. For its pipeline assets, such as osavampator and direclidine, Neurocrine will compete with numerous approved products and development-stage programs from companies like Eli Lilly (LLY) and Pfizer in major depressive disorder and schizophrenia. Neurocrine's selective M4 agonist, NBI-568, is noted as the "first and only investigational oral muscarinic M4 selective orthosteric agonist in clinical development as a potential treatment for schizophrenia," offering a differentiated approach compared to pan-muscarinic agonists like Karuna (KRTX)'s drug, which requires an add-back to manage off-target side effects.

Neurocrine's overall market positioning is that of a specialized innovator, focusing on underserved neurological and endocrine disorders. This targeted approach allows for agility and potentially faster innovation cycles compared to larger, more diversified competitors like AbbVie (ABBV) or Pfizer (PFE), which have broader portfolios and greater scale. While these larger players may exhibit stronger overall profitability and cash flow due to their extensive operations, Neurocrine's focused R&D and commercial execution in its core segments can lead to efficient capital deployment and strong product performance in its niches. The company's partnerships, such as those with Nxera Pharma and Voyager Therapeutics (VYGR), further enhance its R&D capabilities and pipeline diversity.

Risks and Challenges on the Horizon

Despite its strong position, Neurocrine faces several risks and challenges. Regulatory scrutiny is a persistent factor, as evidenced by the FDA's untitled letter in September 2025 regarding INGREZZA promotional material, alleging misleading claims. Additionally, the company received a Civil Investigative Demand from the U.S. Department of Justice (DOJ) in August 2025 concerning INGREZZA sales and marketing. While Neurocrine is cooperating, these actions could impact advertising effectiveness, increase compliance costs, and potentially reduce demand.

The evolving healthcare landscape, particularly the Inflation Reduction Act (IRA), poses ongoing challenges related to drug pricing and reimbursement. Although INGREZZA has a small biotech exemption until 2029, the impact of negotiated prices for competitors like Teva (TEVA)'s AUSTEDO in 2027 will be closely monitored. Furthermore, the company's transformation into biologics development introduces new risks, as it lacks prior experience in successfully commercializing such therapies, requiring substantial investment and potentially facing complex manufacturing and regulatory hurdles. Broader industry trends, such as the increasing use of generative AI, present both opportunities and risks, including potential impacts on intellectual property rights and heightened cybersecurity threats.

Conclusion

Neurocrine Biosciences stands at a pivotal juncture, successfully transforming into a multi-product growth company with two robust commercial engines in INGREZZA and CRENESITY. The company's strategic investments in commercial expansion and market access, coupled with a deep and diversifying pipeline, underscore a clear path for sustained revenue growth and value creation. Its technological differentiation in targeted neuroscience therapies provides a strong competitive edge against larger rivals, enabling it to address significant unmet medical needs. While navigating regulatory challenges, competitive pressures, and the complexities of pipeline development, Neurocrine's strong financial position and disciplined capital allocation strategy provide a solid foundation for future success. The company's commitment to innovation, particularly in emerging biologics, positions it as a compelling investment opportunity poised for long-term growth in the dynamic biopharmaceutical landscape.