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NEUROCRINE BIOSCIENCES INC (NBIX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 total revenue was $572.6M, a modest beat versus S&P Global consensus $561.0M*, driven by INGREZZA net product sales of $545.2M (+8% YoY) and initial CRENESSITY sales of $14.5M .
  • Non-GAAP diluted EPS was $0.70 vs S&P Global consensus $1.09* (miss), reflecting higher R&D and SG&A as the company initiated multiple Phase 3 programs and funded launch investments; GAAP diluted EPS was $0.08 .
  • Full‑year 2025 guidance was reaffirmed: INGREZZA net product sales $2.5–$2.6B; GAAP R&D $960–$1,010M; Non‑GAAP R&D $890–$940M; GAAP SG&A $1,110–$1,130M; Non‑GAAP SG&A $955–$975M .
  • Catalysts: record new patient starts for INGREZZA, expanded Medicare formulary coverage to ~two‑thirds of TD/HD beneficiaries, early CRENESSITY uptake with 413 enrollment forms and ~70% reimbursement; stock could react to near‑term acceleration in INGREZZA, CRENESSITY formulary decisions, and Phase 3 execution .

What Went Well and What Went Wrong

What Went Well

  • Record new patient starts for INGREZZA in a seasonally challenging Q1, underpinning momentum into Q2 and H2 2025. “We delivered a record number of new patient starts… This strong performance gives us good momentum” — CEO Kyle Gano .
  • Expanded Medicare Part D formulary coverage for INGREZZA to approximately two‑thirds of TD/HD beneficiaries, improving access despite near‑term gross‑to‑net pressure .
  • CRENESSITY launch ahead of expectations: $14.5M net sales, 413 enrollment forms, ~70% of dispenses reimbursed; management sees strong trial across pediatric/adolescent segments and broad endocrinology adoption .

What Went Wrong

  • Profitability compressed: GAAP diluted EPS fell to $0.08 (vs $0.42 in Q1’24) and Non‑GAAP diluted EPS declined to $0.70 (vs $1.20 in Q1’24), driven by higher R&D (milestones) and SG&A investments, and equity investment fair value losses .
  • Gross‑to‑net headwinds and contracting lowered near‑term net revenue per script; management expects sequential gross‑to‑net slightly down Q1→Q2 before patient additions accrue over 2–4 quarters .
  • Reauthorization challenges: prior authorization and reauthorization processes were “more challenging” in Q1, causing slightly higher drop‑offs and delayed refills vs prior years .

Financial Results

Quarterly Summary vs Prior Periods and S&P Consensus

MetricQ3 2024 (oldest)Q4 2024Q1 2025 (newest)
Total Revenues ($M)$622.1 $627.7 $572.6
GAAP Diluted EPS ($)$1.24 $1.00 $0.08
Non-GAAP Diluted EPS ($)$1.81 $1.69 $0.70
Operating Income ($M)$183.8 $142.0 $23.6
Revenue Consensus ($M)——$561.0*
EPS Consensus (Non-GAAP) ($)——$1.09*

Values marked with * retrieved from S&P Global.

Segment and Revenue Mix

MetricQ3 2024 (oldest)Q4 2024Q1 2025 (newest)
INGREZZA Net Product Sales ($M)$616.6 $621.2 $545.2
CRENESSITY Net Product Sales ($M)—$2.0 $14.5
Collaboration/Other Revenues ($M)$5.5 $6.5 $12.9
Net Product Sales Total ($M)$616.6 $621.2 $563.7

KPIs

KPIQ3 2024 (oldest)Q4 2024Q1 2025 (newest)
INGREZZA Medicare formulary coverage (TD/HD)<50% (context) <50% (context) ~66%
CRENESSITY enrollment start forms (#)—11 (late Dec) 413
CRENESSITY reimbursement rate (%)——~70% of dispenses reimbursed
Cash, cash equivalents & marketable securities ($B)$1.872 $1.816 $1.759

Guidance Changes

MetricPeriodPrevious Guidance (Feb 6, 2025)Current Guidance (May 5, 2025)Change
INGREZZA Net Product Sales ($M)FY 2025$2,500–$2,600 $2,500–$2,600 Maintained
GAAP R&D Expense ($M)FY 2025$960–$1,010 $960–$1,010 Maintained
Non‑GAAP R&D Expense ($M)FY 2025$890–$940 $890–$940 Maintained
GAAP SG&A Expense ($M)FY 2025$1,110–$1,130 $1,110–$1,130 Maintained
Non‑GAAP SG&A Expense ($M)FY 2025$955–$975 $955–$975 Maintained

Notes: Non‑GAAP stock‑based comp assumptions differ in footnotes (Q4 release: R&D $70M, SG&A $130M; Q1 release: R&D $85M, SG&A $115M) though ranges are unchanged .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
INGREZZA growth driversRaised 2024 guidance on strong demand and improved gross‑to‑net Expect moderated growth in 2025; sales force expansion in psychiatry/LTC; DTC efforts Record new starts in Q1; expanded Medicare coverage; reaffirmed 2025 guide Momentum improving; access broadened
Payer dynamics / IRA—Utilization management tightening; small‑manufacturer/biotech exemptions; cautious on contracting Contracting adds near‑term GtN pressure; sequential GtN slightly down Q1→Q2; improved access offsets over time Near‑term headwind; long‑term access benefit
CRENESSITY launch—Early approval; initial 11 start forms; Quick‑Start and reimbursement pathways outlined $14.5M net sales; 413 forms; ~70% reimbursed; slightly higher adoption in pediatrics/adolescents Early uptake strong; payer reviews pending
Pipeline execution—Plan to initiate Phase 3: osavampator (MDD) and NBI‑568 (schizophrenia); Phase 2 starts for muscarinics Phase 3 programs initiated/in progress; additional Phase 1 starts; readouts planned (valbenazine programs, NBI‑770) Advancing per plan
Share repurchases / capital allocation$300M buyback authorized ASR completed early Feb; additional $500M authorized (repurchased $150M by 3/31) $150M repurchased in Q1; $350M remaining authorization Ongoing capital return within priorities

Management Commentary

  • “Neurocrine has never been in a stronger position… record new patient starts for INGREZZA and encouraging early adoption of CRENESSITY… evolve from a single blockbuster to a multiple blockbuster neuroscience company.” — CEO Kyle Gano .
  • “We posted $545 million in first quarter product sales… expanded formulary coverage in Medicare Part D… reaffirming our 2025 sales guidance range of $2.5 billion to $2.6 billion.” — CFO Matt Abernethy .
  • “We’re pleased to have expanded formulary coverage from less than half to approximately two‑thirds of Medicare TD and HD beneficiaries… we anticipate sales to accelerate in Q2 and through the second half of 2025.” — CCO Eric Benevich .
  • “Initiation of Phase 3 registrational studies for osavampator (MDD) and NBI‑’568 (schizophrenia)… top‑line data expected in 2027–2028.” — CMO Eiry Roberts .

Q&A Highlights

  • INGREZZA momentum: record new starts should support Q2 acceleration; sequential gross‑to‑net slightly down due to contracting, but access will expand patient base over time .
  • CRENESSITY reimbursement: ~70% of dispenses reimbursed via exceptions process; more formal payer reviews expected over the year; initial adoption skewing pediatric/adolescent .
  • Contracting cadence: aim to maximize access; current agreements cover 2025–2026; IRA complicates strategies but parity positioning targeted .
  • Clinical programs: Osavampator Phase 3 design and powering calibrated to manage placebo risk; NBI‑568 Phase 3 single 20mg dose, U.S. initial study, endpoints aligned with FDA guidance .
  • Net revenue per script: typically improves Q1→Q2, but sequentially down slightly this year; benefit from formulary wins accrues over 2–4 quarters .

Estimates Context

  • Q1 2025 revenue beat: $572.6M actual vs $561.0M S&P Global consensus* .
  • Q1 2025 Non‑GAAP diluted EPS miss: $0.70 actual vs $1.09 S&P Global consensus* .
  • Consensus estimate counts: 21 for revenue; 14 for EPS in Q1 2025*.

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • INGREZZA’s record new starts plus expanded Medicare coverage should drive sequential revenue acceleration despite near‑term gross‑to‑net headwinds; 2025 guidance reaffirmed at $2.5–$2.6B .
  • CRENESSITY’s early traction (413 forms; ~70% reimbursed) supports an emerging second growth pillar; watch payer formulary decisions and persistency/compliance data over coming quarters .
  • Profitability was temporarily compressed by R&D milestones and launch investments; expect leverage to improve as access initiatives ROIs accrue and Phase 3 programs progress .
  • Contracting expands access but lowers net revenue per script sequentially; the strategic trade-off positions NBIX well for 2026 while maintaining long‑term category leadership .
  • Pipeline execution is on track across MDD and schizophrenia Phase 3s and multiple early‑stage programs, with several data readouts later in 2025 that can refresh the narrative .
  • Capital allocation balanced: continued investment in growth, pipeline advancement, BD, and measured buybacks ($150M done; $350M remaining authorization) .
  • Near‑term trading setup: watch Q2 INGREZZA sequential growth vs gross‑to‑net impact, CRENESSITY payer/formulary updates, and upcoming clinical readouts for potential sentiment shifts .

Appendix: Additional Quantitative Disclosures

  • Q1 2025 R&D and SG&A (GAAP/Non-GAAP): GAAP R&D $263.2M; Non‑GAAP R&D $240.2M; GAAP SG&A $276.5M; Non‑GAAP SG&A $245.3M .
  • Non‑GAAP reconciliation drivers included $45.4M milestone expense and $30.6M equity investment fair value loss; GAAP EPS $0.08, Non‑GAAP EPS $0.70 .
  • Liquidity: Total cash, cash equivalents and marketable securities ~$1.76B at 3/31/25; $150M repurchased under $500M program, $350M remaining .