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NEUROCRINE BIOSCIENCES INC (NBIX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered strong top-line: total revenue $627.7M (+21.9% y/y), driven by INGREZZA net sales and initial CRENESSITY orders; GAAP EPS $1.00; Non‑GAAP EPS $1.69 .
  • INGREZZA quarterly sales were $615M (+23% y/y), aided by demand and better gross‑to‑net; CRENESSITY contributed ~$2M from initial pharmacy orders post‑December FDA approval .
  • 2025 guidance: INGREZZA net sales $2.50–$2.60B; GAAP R&D $960–$1,010M; GAAP SG&A $1,110–$1,130M (non‑GAAP adjustments called out below) .
  • Management flagged payer utilization management and competitive pressures as near‑term headwinds; sales force expansion in Q4 expected to contribute more meaningfully in 2H25 (tone: confident but conservative on near‑term trajectory) .

What Went Well and What Went Wrong

  • What Went Well

    • “Record” year for INGREZZA; Q4 INGREZZA sales $615M (+23% y/y) on strong demand and better gross‑to‑net; team expanded psychiatry/LTC coverage to capture underpenetrated TD population (~800k U.S. patients, <10% on VMAT2) .
    • CRENESSITY approved (Dec 2024) and launched with positive endocrinologist/patient reception; early access via Quick/Free Start supports on‑therapy while reimbursement ramps .
    • Pipeline catalysts: Phase 3 starts for osavampator (MDD) and NBI‑568 (schizophrenia) in 1H25; CMS “small biotech exemption” for INGREZZA under Medicare negotiation program adds policy tailwind .

  • What Went Wrong

    • Heightened payer utilization management (e.g., tighter PA criteria) and increased competitive intensity weighed on growth visibility; management embedded conservatism in 2025 guide .
    • Q4 GAAP opex up y/y on R&D expansion, CRENESSITY pre‑launch, INGREZZA sales force expansion, and higher stock‑based comp (SBC) (Q4 SBC $66M vs $38M prior‑year) .
    • EPS optics impacted by non‑cash items and investment posture: GAAP EPS $1.00 vs $1.44 y/y; non‑GAAP EPS improved to $1.69 on stronger core operations .

Financial Results

Quarterly P&L progression (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024
Total Revenues ($M)$590.2 $622.1 $627.7
Net Product Sales ($M)$583.8 $616.6 $621.2
Collaboration Revenue ($M)$6.4 $5.5 $6.5
Total Operating Expenses ($M)$444.8 $438.3 $485.7
Operating Income ($M)$145.4 $183.8 $142.0
GAAP Net Income ($M)$65.0 $129.8 $103.1
GAAP Diluted EPS ($)$0.63 $1.24 $1.00
Non‑GAAP Net Income ($M)$168.9 $189.2 $173.4
Non‑GAAP Diluted EPS ($)$1.63 $1.81 $1.69

Margins (calculated from reported figures):

MarginQ2 2024Q3 2024Q4 2024
Operating Margin %24.6% (145.4/590.2) 29.6% (183.8/622.1) 22.6% (142.0/627.7)
Net Income Margin %11.0% (65.0/590.2) 20.9% (129.8/622.1) 16.4% (103.1/627.7)

Q4 product/segment detail:

MetricQ3 2024Q4 2024Q4 2023
INGREZZA Net Product Sales ($M)$613 $615 —
CRENESSITY Net Product Sales ($M)—~$2 —
Total Net Product Sales ($M)$616.6 $621.2 $507.2

KPIs and balance sheet:

KPIQ4 2024
Cash, Cash Equivalents, Marketable Securities ($B)$1.816B (current + noncurrent)
ASR Share Repurchase Progress~2.0M shares, $240.5M retired by 12/31; ASR completed early Feb’25 (~2.3M)
CRENESSITY New Patient Start Forms (late Dec)11 start forms (first ~2 weeks post‑approval)
CMS “small biotech” exemption (INGREZZA)Confirmed Jan’25
Q4 Stock‑Based Compensation (GAAP)$66M (vs $38M y/y)

Non‑GAAP adjustments (select): Q4 included SBC ($66M), changes in FV of equity investments (–$2M), facility costs adjustments, and prior FY charges for convertible notes; reconciliations provided in press release Tables 3 and 4 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
INGREZZA Net Product SalesFY2025—$2.50B–$2.60B New item
GAAP R&D ExpenseFY2025—$960M–$1,010M (incl. ~$60M dev. milestones) New item
Non‑GAAP R&D ExpenseFY2025—$890M–$940M (excl. ~$70M SBC) New item
GAAP SG&A ExpenseFY2025—$1,110M–$1,130M New item
Non‑GAAP SG&A ExpenseFY2025—$955M–$975M (excl. ~$130M SBC; facility costs) New item
INGREZZA Net Product SalesFY2024$2.30B–$2.32B (raised Q3) Actual $2.331B (full‑year net product sales) Achieved/above midpoint

Notes: 2025 R&D reflects Phase 3 initiations (osavampator MDD; NBI‑568 schizophrenia) and milestone expense assumptions; SG&A reflects ongoing INGREZZA growth initiatives and CRENESSITY launch .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Payer/Utilization Mgmt—GtN seasonality and steady access; raised 2024 guidance Tighter UM noted; prior auth changes; embedded conservatism in 2025 guide Headwinds ↑
Competitive dynamics (VMAT2)—Category growing; remains leader; sales force expansion Competitor XR aided share; NBIX expects leadership to continue Stable but more competitive
Sales force expansionPlan to expand psych/LTC; positive ROI historically Psychiatry/LTC expansion deployed in Q4 Disruption in Q4; impact expected to build 2H25 Benefit building
CRENESSITY launchPriority review; pre‑launch education Launch planning, free goods while reimbursement ramps Approval/launch; quick/free start, 11 start forms; payers beginning to cover Launch ramping (measured)
IRA/CMS policy—Confirmed “specified small manufacturer” exception Small biotech exemption reiterated for INGREZZA Supportive
Pipeline executionAMPA MDD Ph2 positive; Phase 3 plans Phase 3 to start in 1H25 (MDD, M4 schizophrenia) Phase 3 initiation announced/underway Advancing

Management Commentary

  • CEO: “With the approval and launch of CRENESSITY, we look forward to delivering the first new treatment for the congenital adrenal hyperplasia community in over 70 years… With a rapidly advancing and growing pipeline and a strong financial profile, we are well positioned to build a leading neuroscience company.”
  • CFO on guide posture: “We saw increased competitive pressure as well as utilization management by payers over the course of 2024… sales force expansion… expected to have a full impact in the second half of 2025 and beyond.”
  • CCO on launch dynamics: “In the early phase… majority of patients starting CRENESSITY will initially be dispensed non‑reimbursed prescriptions via our Quick Start program… ultimately… majority of patients will pay $12 or less per month” .

Q&A Highlights

  • Guide conservatism vs Street: Analysts flagged that consensus may be above the high end; NBIX cited payer UM, competitive dynamics, and Q4 sales force transition as near‑term factors; 2H25 expected to benefit from expansion .
  • Q1 seasonality/gross‑to‑net: Expect sequential headwind (~3%) from Q4→Q1; net revenue per script expected to be similar y/y in 2025 .
  • CRENESSITY reimbursement path: Early coverage wins emerging; expectation for 1–2 months of free goods for many patients early in launch before transitioning to reimbursed product .
  • IRA exposure: Small manufacturer/biotech exemptions confirmed; price negotiation observation event expected in 2029, giving time to prepare .
  • Ordering/quarter‑end noise: Potential calendar‑driven wholesaler order timing noise in Q1; nets out over the year .

Estimates Context

  • We attempted to retrieve S&P Global (Capital IQ) consensus for Q4 2024 revenue and EPS; data were unavailable due to API rate limits at the time of query. As a proxy, analysts on the call noted Street expectations appeared above the high end of the 2025 INGREZZA guide, framing perceived conservatism in management’s outlook .
  • Implication: Absent verified consensus, we cannot formally classify Q4 revenue/EPS as a beat/miss versus S&P Global estimates.

Key Takeaways for Investors

  • INGREZZA remains the core growth engine with durable leadership despite rising payer UM and competitive noise; sales force expansion should support reacceleration into 2H25 as coverage matures and field disruptions abate .
  • CRENESSITY is a second growth pillar; early commercialization is intentionally measured due to reimbursement lags, but clinical differentiation and expanding coverage should drive a steady ramp (watch payer policy updates and start form momentum) .
  • 2025 will be an investment year: elevated R&D for multiple Phase 3 programs (osavampator, NBI‑568) and SG&A to back two brands; non‑GAAP tracking remains solid excluding SBC and other non‑cash/non‑core items .
  • Policy tailwind: CMS small‑biotech exemption reduces near‑term Medicare negotiation overhang for INGREZZA; observation event expected in 2029, giving multi‑year runway .
  • Near‑term trading setup: Expect Q1 seasonal GtN headwinds and potential order‑timing noise; focus on 2H25 inflection from sales force expansion and CRENESSITY reimbursement wins .
  • Medium‑term thesis: Dual brand commercial platform + advancing late‑stage pipeline broadens revenue base into psychiatry and endocrinology, with multiple shots on goal in MDD/schizophrenia Phase 3 programs .

Footnotes:

  • Margins are calculated from reported GAAP operating income and GAAP total revenues; all source figures and reconciliations are cited above .
  • Non‑GAAP figures exclude items detailed in company reconciliations (SBC, convertible notes charges, facility costs, equity investment fair value changes, etc.) .