Neurocrine Biosciences, Inc. (NBIX) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A highlight several positive aspects: strong clinical progress, sales force expansion, and favorable feedback on CRENESSITY. Despite increased SG&A expenses, the anticipated growth in INGREZZA and CRENESSITY, along with positive KOL feedback, indicates a positive outlook. However, the lack of specific guidance and some management ambiguity slightly temper the sentiment, preventing a 'Strong positive' rating. Overall, the strategic investments and market expansion plans suggest a likely positive stock price movement over the next two weeks.
Key Financial Performance
Total Product Sales $2.8 billion, representing 22% year-over-year growth. This growth was driven by the continued strength and durability of INGREZZA and the successful initial launch of CRENESSITY.
INGREZZA Revenue $2.5 billion, up 9% year-over-year. The increase was driven by double-digit volume growth, partially offset by pricing concessions associated with formulary access investments to support long-term growth.
CRENESSITY Net Product Sales Over $300 million in its first full commercial year. Approximately 10% of the addressable patient population was prescribed CRENESSITY, reflecting strong early adoption.
Cash Position Increased by approximately $700 million from $1.8 billion at the end of 2024 to $2.5 billion at the end of 2025. This reflects strong operating performance and a healthy balance sheet.
Non-GAAP Operating Margin Approximately 30%, or roughly $850 million of non-GAAP operating income for 2025. This includes $83 million of R&D milestones and IP R&D expense.
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Operating Highlights
INGREZZA: Achieved over $2.5 billion in revenue in 2025, up 9% year-over-year. Double-digit volume growth was partially offset by pricing concessions. It remains a leader in the VMAT2 inhibitor category with strong new prescription momentum and expanded sales force. Expected 2026 sales are $2.7-$2.8 billion, representing 10% growth.
CRENESSITY: Generated over $300 million in net product sales in its first full year on the market. Covered over 10% of the classic and general adrenal hyperplasia patient population. It is positioned as a first-in-disease treatment with strong adoption and is expected to become Neurocrine's second blockbuster product.
Market Expansion for CRENESSITY: Sales force expansion planned for 2026 to deepen reach within endocrinology and expand to other prescribers like primary care providers and OB-GYNs. Leveraging AI tools to identify potential prescribers.
Market Expansion for INGREZZA: Expanded and reorganized sales force set to hit the field in Q2 2026 to support double-digit growth momentum and broader market penetration.
Financial Performance: Total product sales grew to over $2.8 billion in 2025, a 22% year-over-year increase. Cash position increased by $700 million to $2.5 billion by the end of 2025. Non-GAAP operating margin was approximately 30%, with $850 million in non-GAAP operating income.
R&D Investments: Achieved Phase I-III objectives in 2025, the most productive clinical year in company history. Investments in Phase III programs for osavampator and direclidine, as well as Phase II and Phase I programs, including obesity, are planned for 2026.
Pipeline Development: Focus on advancing next-generation VMAT2 inhibitors (NBI-'890 and NBI-'675) and CRF-based therapies (NBIP-'1435 and NBIP-'2118). Late-stage neuropsychiatry portfolio includes Phase III programs for osavampator and direclidine, with data expected in 2027.
Strategic Diversification: Three strategic pillars: leading the VMAT2 category, delivering on CRF-based therapies, and maximizing the pipeline. Goal to deliver one new medicine every two years at steady state.
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Risk or Challenges
Market Dynamics and Pricing Pressures: Pricing concessions associated with formulary access investments for INGREZZA have partially offset volume growth, and price declines tied to formulary access improvements are expected to continue in 2026.
Regulatory and Market Uncertainty for CRENESSITY: As a first-in-disease launch, there is still much to learn about the patient population, prescriber base, and potential seasonal dynamics for CRENESSITY, creating uncertainty in market dynamics and adoption rates.
Sales Force Expansion Costs: Significant investments in sales force expansion for both INGREZZA and CRENESSITY are expected to increase SG&A expenses in 2026, potentially impacting profitability.
Pipeline Development Costs: R&D expenses are expected to grow due to investments in Phase III programs for osavampator and direclidine, as well as multiple Phase II and Phase I programs, including obesity, which could strain financial resources.
Competitive Pressures in VMAT2 Inhibitor Market: Despite INGREZZA's strong performance, only about 10% of the tardive dyskinesia population is currently taking a VMAT2 inhibitor, indicating potential competitive pressures and challenges in market penetration.
Economic and Operational Risks: The company’s reliance on two main products, INGREZZA and CRENESSITY, for revenue growth creates vulnerability to market or operational disruptions affecting these products.
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Guidance & Outlook
INGREZZA Sales Guidance: Neurocrine is guiding to INGREZZA sales in the range of $2.7 billion to $2.8 billion in 2026, representing approximately 10% growth. This outlook reflects continued double-digit volume growth, including contributions from the expanded sales force in the second half of the year, partially offset by price declines tied to formulary access improvements implemented in 2025.
CRENESSITY Market Development: While no specific sales guidance for CRENESSITY in 2026 is provided, the company remains confident that it will become Neurocrine's second blockbuster medicine. Key initiatives include expanding the sales force, leveraging AI to identify potential prescribers, and investing in medical education to improve understanding of CAH and CRENESSITY's profile.
Pipeline Advancements: Neurocrine plans to enroll and advance more studies than ever in 2026, including Phase III programs for osavampator in major depressive disorder and direclidine in schizophrenia, with data expected in 2027. A Phase II study of NBI-'890 for tardive dyskinesia has also been initiated.
R&D and SG&A Investments: In 2026, R&D expenses will grow due to full-year investments in Phase III programs and the initiation of multiple Phase II and Phase I programs, including obesity. SG&A growth will reflect investments in the 2026 sales force expansion, expected to be completed by the end of Q1.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you provide insights into the patient add rate for CRENESSITY and its potential plateau in the near to midterm?
A:Management highlighted that CRENESSITY had a strong first year with over $300 million in revenue. They anticipate steady new patient additions every quarter, leading to significant growth. However, they avoided providing specific guidance, citing the need to learn more about the launch dynamics.
Q:How does the receptor occupancy data for INGREZZA versus AUSTEDO impact your next-gen VMAT2 inhibitors?
A:The data showed nearly double the target occupancy for INGREZZA compared to AUSTEDO XR, underlining its efficacy in tardive dyskinesia. This data is being utilized to inform the development of next-gen VMAT2 inhibitors, with a Phase II study for a follow-on in tardive dyskinesia recently initiated.
Q:What have you learned about seasonality and early launch bolus in patient demand for CRENESSITY?
A:Management stated it is too early to determine seasonality or the impact of an early launch bolus. They noted that patient dynamics often depend on office visit frequency and physician awareness, and it will take multiple quarters to draw conclusions.
Q:Can you elaborate on the expected increase in R&D expenses for 2026 and its components?
A:The increase is primarily due to the continuation of Phase III trials. The obesity program investment is minimal for 2026, with data expected in 2027. Major Phase III program expenses are expected to roll off in 2028.
Q:What metrics are needed to provide guidance for CRENESSITY, and will it take as long as it did for INGREZZA?
A:Management believes it may not take as long to provide guidance for CRENESSITY as it did for INGREZZA. They are collecting data on adoption rates, reimbursement, and persistency, which have been favorable so far. They emphasized significant growth expectations despite not providing specific guidance.
Q:How do you view the volume impact on INGREZZA with AUSTEDO becoming a negotiated product?
A:Management expects stable formulary coverage and continued growth for INGREZZA in 2026, with double-digit volume growth anticipated. They are confident in maintaining market share and revenue growth despite competitive pricing dynamics.
Q:What lessons have been learned from the ADEPT-2 study of Cobenfy for managing the 569 study in Alzheimer's psychosis?
A:Management emphasized the importance of careful site selection, placebo mitigation strategies, and hands-on monitoring to ensure trial integrity. They feel well-positioned to manage operational risks for the study.
Q:What feedback have you received from KOLs about the 2-year CRENESSITY data?
A:KOLs have provided positive feedback, particularly on the drug's ability to reduce androgens and glucocorticoids, improve insulin tolerance, and attenuate bone age advancement. The drug's safety and tolerability profile has also been well-received.
Q:Why is there an increase in SG&A expenses, and how does it relate to CRENESSITY and INGREZZA?
A:The increase is due to a sales force expansion and other initiatives for both CRENESSITY and INGREZZA. Management expects mid-teens volume growth for INGREZZA, with stable pricing contributing to overall growth.
Q:What is the purpose of the sales force expansion for CRENESSITY, and when will it impact growth?
A:The expansion aims to deepen engagement with existing prescribers and reach new patient populations. The new team will be deployed in Q2, with expected benefits in the second half of the year.
Q:What are the barriers to further adoption of CRENESSITY, and how are you addressing them?
A:The main barrier is a lack of knowledge among community endocrinologists about classic CAH and the benefits of CRENESSITY. Management is focusing on education and leveraging technology to identify and reach potential patients.
Q:What is the significance of the Phase II study for CRENESSITY in patients under 4 years old?
A:The study aims to expand the label to include patients as young as 3 months, potentially broadening the market. Data is expected next year.
Q:What are the plans for developing CRENESSITY in the U.K. and Europe following the sale of the European rare commercial business?
A:Management is focusing on the U.S. market for now but is exploring ways to bring CRENESSITY to Europe. They are not currently prioritizing international expansion.
Q:What is the strategy for the next-gen VMAT2 inhibitor 890, and how does it compare to INGREZZA?
A:The next-gen inhibitor aims to match INGREZZA's receptor occupancy while offering a long-acting profile. This could address compliance issues and expand the patient base.
Q:Why have 2/3 of CRENESSITY prescribers written only one prescription, and how are you addressing this?
A:This is attributed to the low frequency of patient visits and physicians wanting to gain clinical experience with the drug. Management is focusing on education and follow-up to encourage broader adoption.
Q:Review of Unclear Management Responses
A:Management avoided providing direct answers to questions about specific guidance for CRENESSITY, citing the need for more data and experience. They also did not provide clear details on the proportion of CAH patients managed by endocrinologists versus other specialties, stating that they are still learning about this dynamic.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACTH
CAH community
CAH year
CRENESSITY Neurocrine
CRENESSITY disease
CRENESSITY product
CRF antagonist
Neurocrine blockbuster
Neurocrine history
Phase II
Phase III
RD expense
SGA
VMAT inhibitor
control
digit volume
direclidine schizophrenia
disease launch
disorder direclidine
exposure
formulation
foundation Neurocrine
income
industry neuropsychiatry
milestone
momentum diversification
obesity
objective
outset
patient hyperplasia
prescriber base
prescribers
treatment dyskinesia
world experience
NBIX Transcript
Neurocrine Biosciences, Inc. (NBIX) Q4 2025 Earnings Call Transcript
Positive2-11
The earnings call summary and Q&A highlight several positive aspects: strong clinical progress, sales force expansion, and favorable feedback on CRENESSITY. Despite increased SG&A expenses, the anticipated growth in INGREZZA and CRENESSITY, along with positive KOL feedback, indicates a positive outlook. However, the lack of specific guidance and some management ambiguity slightly temper the sentiment, preventing a 'Strong positive' rating. Overall, the strategic investments and market expansion plans suggest a likely positive stock price movement over the next two weeks.
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