Neurocrine Biosciences Reports Third Quarter 2020 Financial Results

SAN DIEGO, Nov. 9, 2020 /PRNewswire/ -- Neurocrine Biosciences, Inc. (Nasdaq: NBIX) today announced its financial results for the third quarter ended September 30, 2020 and provided revised full-year 2020 financial expense guidance.

"Our focus remains on helping as many patients with tardive dyskinesia as possible and we are adapting to the challenges posed by the pandemic, including the slow recovery of in-person visits with psychiatrists. We are encouraged by recent trends and remain confident in the intermediate and long-term opportunity of INGREZZA to help many more patients with tardive dyskinesia," said Kevin Gorman, Ph.D., Chief Executive Officer of Neurocrine Biosciences. "We are pleased to expand our reach with neurologists with the addition of ONGENTYS to our movement disorder portfolio and continue to advance our development programs focused on neurological, endocrine and psychiatric disorders."

Financial Highlights


                                                                                          Three Months Ended                                    Nine Months Ended
                                                                                  September 30,                                       September 30,

                                                                                                                                           ---

                              (unaudited, in
                               millions, except per
                               share data)                                   2020                          2019                   2020                                         2019

                                                                                                                                                                             ---


     Revenues:


      Product sales, net                                                             $
            254.1                                    $
            198.1                             $
      752.8  $
      515.0


      Collaboration revenue                                                   4.4                               24.0                                                          45.2        29.0



      Total revenues                                                                 $
            258.5                                    $
            222.1                             $
      798.0  $
      544.0




      GAAP Research and
       Development (R&D)                                                              $
            69.1                                     $
            45.3                             $
      208.3  $
      144.7



     Non-GAAP R&D                                                                    $
            60.3                                     $
            38.3                             $
      161.9  $
      116.3




      GAAP Selling, General
       and Administrative
       (SG&A)                                                                        $
            112.5                                     $
            84.5                             $
      326.8  $
      252.8


      Non-GAAP SG&A                                                                   $
            94.6                                     $
            71.2                             $
      274.2  $
      217.2




      GAAP net (loss)
       income                                                                       $
            (57.6)                                    $
            53.8                              $
      59.4    $
      3.0


      GAAP net (loss)
       income per share -
       diluted                                                                      $
            (0.62)                                    $
            0.56                              $
      0.61   $
      0.03




      Non-GAAP net income                                                             $
            96.0                                     $
            86.7                             $
      314.2  $
      181.6


      Non-GAAP net income
       per share - diluted                                                            $
            0.97                                     $
            0.90                              $
      3.21   $
      1.91




                              (unaudited, in millions)                                                               September 30,                                December 31,
                                                                                                                              2020                                         2019




     Total cash and cash equivalents and debt securities available-for-sale       $
            1,126.1                                    $
            970.2

Net Product Sales Highlights:

    --  INGREZZA net product sales for the third quarter of 2020 were $254
        million, representing a year-over-year increase of 28%. Inventory
        adjusted net sales for the third quarter of 2020 were approximately $248
        million.
    --  New prescriptions increased slightly in the third quarter of 2020 vs.
        the second quarter of 2020.
    --  Refill and persistency rates for existing INGREZZA patients in the third
        quarter 2020 moderated slightly vs. the second quarter of 2020 and
        remained at the higher end of historical averages.
    --  ONGENTYS launched in the United States in late September 2020 and net
        product sales for the third quarter of 2020 were approximately $0.1
        million.

Financial Highlights:

    --  Third quarter 2020 GAAP net loss and loss per share were approximately
        $58 million and $0.62, respectively, compared with net income and
        diluted earnings per share of approximately $54 million and $0.56,
        respectively, in the third quarter of 2019, primarily driven by higher
        In-Process Research and Development (IPR&D) costs and operating
        expenses, offset by higher INGREZZA sales.
    --  Third quarter 2020 non-GAAP net income and diluted earnings per share
        were approximately $96 million and $0.97, respectively, compared with
        approximately $87 million and $0.90, respectively, in the third quarter
        of 2019 driven by higher INGREZZA sales.
    --  Research and Development (R&D) expense increased in the third quarter of
        2020 versus the third quarter of 2019, primarily due to increased
        investment across our expanded pipeline programs and higher headcount
        costs.
    --  Selling, General and Administrative (SG&A) expense increased in the
        third quarter of 2020 versus the third quarter of 2019, primarily due to
        increased investment in marketing initiatives and higher headcount
        costs.
    --  At September 30, 2020, the Company had cash, cash equivalents and debt
        securities available-for-sale of $1.1 billion.

A reconciliation of GAAP to non-GAAP quarterly financial results can be found in Table 3 at the end of this earnings release.

Recent Events

    --  In September 2020, the Company launched ONGENTYS(® )(opicapone), the
        first and only once-daily COMT inhibitor, as an adjunctive treatment to
        levodopa/carbidopa in patients with Parkinson's disease experiencing
        "off" episodes - periods of time when motor symptoms such as tremor,
        slowed movement and difficulty walking occur. ONGENTYS also increases
        "on" time without troublesome dyskinesia, the time when the motor
        symptoms of a patient with Parkinson's disease are better controlled.
    --  In October 2020, the U.S. Food and Drug Administration (FDA) provided
        feedback on an Investigational New Drug (IND) application submitted by
        Neurocrine Biosciences in support of a Phase II clinical trial of
        NBI-921352 in pediatric SCN8A developmental and epileptic encephalopathy
        syndrome patients. As part of its review of the IND, the FDA is
        requesting additional non-clinical data to support dose justification in
        this pediatric study. Together with Xenon, the Company will engage with
        the FDA to address the feedback received with the goal of initiating a
        Phase II clinical trial in 2021. In parallel, the Company is advancing
        clinical plans to develop NBI-921352 for the treatment of adult focal
        epilepsy.
    --  In November 2020, the Company announced the initiation of a Phase II
        study of NBI-827104 (formerly ACT-709478) in CSWS, a rare pediatric
        epilepsy. NBI-827104 was licensed from Idorsia and is a potent,
        selective, orally-active and brain penetrating T-type calcium channel
        blocker.
    --  In November 2020, the Data Safety Monitoring Board (DSMB) for the
        RESTORE-1 Phase II clinical trial reviewed patient imaging data from the
        ongoing trial. The DSMB requested additional data and recommended the
        Company pause dosing of subjects in RESTORE-1 until the DSMB can review
        these additional data, which is expected by year-end. The DSMB informed
        the Company and Voyager Therapeutics that they could continue screening
        patients for potential enrollment into the trial. However, as previously
        announced, trial sites participating in RESTORE-1 are not currently
        screening and enrolling patients as a result of the COVID-19 pandemic.
        In response to the DSMB's recommendation, the Company and Voyager
        Therapeutics have decided to delay the planned resumption this quarter
        of patient screening in the RESTORE-1 trial until the DSMB is able to
        complete its evaluation. The Company is preparing an expedited safety
        report that will be submitted to the FDA within the 15-day reporting
        window.

Full-Year 2020 Expense Guidance


                                                         Range



                                (in millions) Low              High



     Combined GAAP R&D and SG&A
      expenses                                    $
     880            $
     900


     Combined Non-GAAP R&D and
      SG&A expenses                               $
     590            $
     610

    --  Previously, the Company expected combined GAAP R&D and SG&A expenses in
        the range of $850 million to $900 million and combined non-GAAP R&D and
        SG&A expenses in the range of $570 million to $610 million.

Conference Call and Webcast Today at 4:30 PM Eastern Time

Neurocrine Biosciences will hold a live conference call and webcast today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants can access the live conference call by dialing 877-830-2596 (US) or 785-424-1744 (International) using the conference ID: NBIX. The webcast can also be accessed on Neurocrine Biosciences' website under Investors at www.neurocrine.com. A replay of the webcast will be available on the website approximately one hour after the conclusion of the event and will be archived for approximately one month.

About Neurocrine Biosciences

Neurocrine Biosciences is a neuroscience-focused, biopharmaceutical company dedicated to discovering, developing and delivering life-changing treatments for people with serious, challenging and under-addressed neurological, endocrine and psychiatric disorders. The company's diverse portfolio includes FDA-approved treatments for tardive dyskinesia, Parkinson's disease, endometriosis*, uterine fibroids* and clinical programs in multiple therapeutic areas. For nearly three decades, Neurocrine Biosciences has specialized in targeting and interrupting disease-causing mechanisms involving the interconnected pathways of the nervous and endocrine systems. For more information, visit neurocrine.com, and follow the company on LinkedIn. (*in collaboration with AbbVie)

Non-GAAP Financial Measures

In addition to the financial results and financial guidance that are provided in accordance with accounting principles generally accepted in the United States (GAAP), this press release also contains certain non-GAAP financial measures. When preparing these supplemental non-GAAP financial results and guidance, the Company excludes certain GAAP items that management does not consider to be normal, including recurring cash operating expenses that might not meet the definition of unusual or non-recurring items. In particular, the non-GAAP measures exclude: milestones received from licenses and collaborations, milestones paid related to licenses and collaborations, non-cash collaboration revenue, acquired in-process research and development, share-based compensation expense, non-cash interest expense related to convertible debt, changes in fair value of equity security investments and certain adjustments to income tax expense. These non-GAAP measures are provided as a complement to results provided in accordance with GAAP as management believes these non-GAAP financial measures help indicate underlying trends in the Company's business, are important in comparing current results with prior period results and provide additional information regarding the Company's financial position. Management also uses these non-GAAP financial measures to establish budgets and operational goals that are communicated internally and externally and to manage the Company's business and evaluate its performance. The Company provides guidance regarding combined research and development and sales, general, and administrative expenses on both a GAAP and a non-GAAP basis. The guidance regarding GAAP research and development expenses and sales, general and administrative expenses does not include estimates for expenses associated with any potential future business development activities. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the attached financial information.

Forward-Looking Statements

In addition to historical facts, this press release contains forward-looking statements that involve a number of risks and uncertainties. These statements include, but are not limited to, statements related to: the benefits to be derived from our products and product candidates; the value our products and/or our product candidates may bring to patients; the continued success of INGREZZA; our launch of ONGENTYS; our financial and operating performance, including our future expenses; our collaborative partnerships; expectations regarding the impact of COVID-19 on our business; expectations regarding our ability to adapt our business to the evolving COVID-19 pandemic, mitigate its impact on our business and maintain business continuity, including our ability to protect the safety and well-being of our employees, to continue to support uninterrupted supply of INGREZZA, including patient and healthcare provider access to INGREZZA, to continue our ongoing clinical trials and other development activities, and to otherwise advance our business objectives; and the timing of completion of our clinical, regulatory, and other development activities and those of our collaboration partners. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: our future financial and operating performance; risks associated with the commercialization of INGREZZA and ONGENTYS; the impact of the COVID-19 pandemic on our business and the business operations of our customers; risks and uncertainties associated with the scale and duration of the COVID-19 pandemic and resulting global, national, and local economic and financial disruptions; risk and uncertainties related to any COVID-19 quarantines, shelter-in-place, social distancing and other government orders that are currently in place or that may be put in place in the future, including the impact of such orders on our business operations and the business operations of the third parties on which we rely; risks related to the development of our product candidates; risks associated with our dependence on third parties for development and manufacturing activities related to INGREZZA and our product candidates, and our ability to manage these third parties; risks that the FDA or other regulatory authorities may make adverse decisions regarding our products or product candidates; risks associated with our dependence on AbbVie for the commercialization of ORILISSA and ORIAHNN, as well as the continued development of elagolix; risks associated with our dependence on BIAL for manufacturing activities for ONGENTYS, and our ability to manage BIAL; risks that clinical development activities may not be completed on time or at all, or may be delayed for regulatory, manufacturing, COVID-19 or other reasons, may not be successful or replicate previous clinical trial results, may fail to demonstrate that our product candidates are safe and effective, or may not be predictive of real-world results or of results in subsequent clinical trials; risks that the potential benefits of the agreements with our collaboration partners may never be realized; risks that our products, and/or our product candidates may be precluded from commercialization by the proprietary or regulatory rights of third parties, or have unintended side effects, adverse reactions or incidents of misuse; and other risks described in our periodic reports filed with the SEC, including without limitation our quarterly report on Form 10-Q for the quarter ended September 30, 2020. Neurocrine disclaims any obligation to update the statements contained in this press release after the date hereof.

This press release refers to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations of non-GAAP financial results to the most directly comparable GAAP financial results are included at the end of this press release, which has been filed with the SEC in a Current Report on Form-8-K dated as of event date herewith. In addition, Neurocrine provides guidance regarding combined research and development and sales, general and administrative expenses on both a GAAP and non-GAAP basis.


                                                                               
              
                TABLE 1




                                                                     
              
                NEUROCRINE BIOSCIENCES, INC.
                                                                 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                   
                (unaudited)




                                                                     Three Months Ended                                     Nine Months Ended
                                                          September 30,                                    September 30,

                                                                                                                ---

                              (in millions, except
                               per share data)       2020                          2019                    2020                           2019

                                                                                                                                        ---


     Revenues:


      Product sales, net                                   $
              254.1                                     $
              198.1             $
        752.8  $
      515.0


      Collaboration revenue                           4.4                                    24.0                                        45.2          29.0



      Total revenues                                258.5                                   222.1                                       798.0         544.0



     Operating expenses:


      Cost of sales                                   2.7                                     2.2                                         7.2           4.9


      Research and
       development                                   69.1                                    45.3                                       208.3         144.7


      Acquired in-process
       research and
       development                                  118.5                                                                              164.5         118.1


      Selling, general and
       administrative                               112.5                                    84.5                                       326.8         252.8



      Total operating
       expenses                                     302.8                                   132.0                                       706.8         520.5



      Operating (loss)
       income                                      (44.3)                                   90.1                                        91.2          23.5



     Other (expense) income:


      Interest expense                              (8.5)                                  (8.0)                                     (25.0)       (23.8)


      Unrealized loss on
       equity securities                            (7.0)                                 (28.5)                                     (12.2)        (5.8)


      Investment income and
       other, net                                     2.7                                     4.8                                        11.0          14.0



      Total other expense,
       net                                         (12.8)                                 (31.7)                                     (26.2)       (15.6)



      (Loss) income before
       provision for income
       taxes                                       (57.1)                                   58.4                                        65.0           7.9


      Provision for income
       taxes                                          0.5                                     4.6                                         5.6           4.9



      Net (loss) income                                   $
              (57.6)                                     $
              53.8              $
        59.4    $
      3.0





      Net (loss) income per
       share, basic                                       $
              (0.62)                                     $
              0.59              $
        0.64   $
      0.03


      Net (loss) income per
       share, diluted                                     $
              (0.62)                                     $
              0.56              $
        0.61   $
      0.03




      Weighted average
       common shares
       outstanding, basic                            93.3                                    91.9                                        93.0          91.4


      Weighted average
       common shares
       outstanding, diluted                          93.3                                    96.1                                        98.0          95.2


                                        
             
                TABLE 2




                                     
       
               NEUROCRINE BIOSCIENCES, INC.
                                      
        CONDENSED CONSOLIDATED BALANCE SHEETS
                                           
                (unaudited)




                        (in millions)                    September 30,                           December 31,
                                                                  2020                    2019

                                                                                          ---

     Cash and cash
      equivalents and
      debt securities
      available-for-
      sale                                                                 $
           944.7                 $
        670.5


     Other current
      assets                                                     212.2                     160.5



     Total current
      assets                                                   1,156.9                     831.0


     Debt securities
      available-for-
      sale                                                       181.4                     299.7


     Right-of-use
      assets                                                      71.0                      74.3


     Equity securities                                            43.7                      55.9


     Property and
      equipment, net                                              43.0                      41.9


     Restricted cash
      and other long-
      term assets                                                  6.6                       3.2



     Total assets                                                        $
           1,502.6               $
        1,306.0





     Convertible senior
      notes                                                                $
           425.0                 $
        408.8


     Other current
      liabilities                                                186.0                     156.5



     Total current
      liabilities                                                611.0                     565.3


     Operating lease
      liabilities                                                 83.0                      86.7


     Other long-term
      liabilities                                                  4.3                      17.1


     Stockholders'
      equity                                                     804.3                     636.9



     Total liabilities
      and stockholders'
      equity                                                             $
           1,502.6               $
        1,306.0


                                                                                  
              
                TABLE 3




                                                                       
              
                NEUROCRINE BIOSCIENCES, INC.
                                                                 
                RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS
                                                                                     
                (unaudited)




                                                                        Three Months Ended                                      Nine Months Ended
                                                             September 30,                                        September 30,

                                                                                                                       ---

                                  (in millions, except
                                   per share data)      2020                          2019                    2020                          2019

                                                                                                                                          ---

      GAAP net (loss)
       income                                                $
              (57.6)                                    $
              53.8               $
         59.4    $
      3.0



     Adjustments:


      Milestones received
       from licenses and
       collaborations A                                    -                                 (20.0)                                    (30.0)         (20.0)


      Non-cash
       collaboration
       revenue B                                       (0.5)                                                                            (1.8)


      Acquired in-process
       research and
       development (IPR&D)
       C                                               118.5                                                                             164.5           118.1


      Milestones paid
       related to licenses
       and collaborations
       -R&D                                                -                                                                             20.0            10.0


      Share-based
       compensation
       expense - R&D                                     8.8                                     7.0                                       26.4            18.4


      Share-based
       compensation
       expense - SG&A                                   17.9                                    13.3                                       52.6            35.6


      Non-cash interest
       related to
       convertible debt                                  5.5                                     5.1                                       16.2            15.1


      Changes in fair
       value of equity
       security
       investments D                                     7.0                                    28.5                                       12.2             5.8


      Income tax effect
       related to
       reconciling items E                             (3.6)                                  (1.0)                                     (5.3)          (4.4)



      Non-GAAP net income                                      $
              96.0                                     $
              86.7              $
         314.2  $
      181.6





      Net (loss) income per diluted
       common share:



     GAAP                                                   $
              (0.62)                                    $
              0.56               $
         0.61   $
      0.03


      Non-GAAP F                                               $
              0.97                                     $
              0.90               $
         3.21   $
      1.91



                            A During the nine months ended
                             September 30, 2020, the Company
                             recognized a $30.0 million
                             event-based milestone as
                             revenue upon FDA approval for
                             ORIAHNN for uterine fibroids.
                             During the nine months ended
                             September 30, 2019, the Company
                             recognized a $20.0 million
                             event-based milestone as
                             revenue upon FDA acceptance of
                             the New Drug Application for
                             elagolix for uterine fibroids.


                            B During the nine months ended
                             September 30, 2020, the Company
                             recognized non-cash
                             collaboration revenue from
                             Mitsubishi Tanabe Pharma
                             Corporation under the
                             collaboration and license
                             agreement entered into in 2015.


                            C The Company incurred IPR&D
                             expenses of $118.5 million and
                             $164.5 million during the three
                             and nine months ended September
                             30, 2020, respectively, in
                             association with the exclusive
                             license agreement entered into
                             with Takeda and the
                             collaboration and license
                             agreement entered into with
                             Idorsia, and $118.1 million
                             during the nine months ended
                             September 30, 2019, in
                             association with the
                             collaboration and license
                             agreement entered into with
                             Voyager Therapeutics in 2019.


                            D The Company recognized an
                             unrealized loss of $7.0 million
                             and $28.5 million for the three
                             months ended September 30, 2020
                             and 2019, respectively, and
                             $12.2 million and $5.8 million
                             for the nine months ended
                             September 30, 2020 and 2019,
                             respectively, to adjust its
                             equity security investments to
                             fair value.


                            E Estimated income tax effect of
                             non-GAAP reconciling items are
                             calculated using applicable
                             statutory tax rates, taking into
                             consideration any valuation
                             allowance.


                            F Non-GAAP net income per
                             diluted common share for the
                             three months ended September 30,
                             2020, reflects diluted shares of
                             98.9 million, which were
                             calculated in accordance with
                             the guidance on earnings per
                             share in ASC 260.

View original content to download multimedia:http://www.prnewswire.com/news-releases/neurocrine-biosciences-reports-third-quarter-2020-financial-results-301168981.html

SOURCE Neurocrine Biosciences, Inc.