Good day, everyone, and welcome to today's Neurocrine Biosciences Second Quarter 2025 Results Conference. [Operator Instructions] Please note, this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Vice President of Investor Relations, Todd Tushla. Please go ahead, sir.

Thank you, and happy Wednesday, everyone. Welcome to Neurocrine Biosciences Second Quarter 2025 Earnings Call. With me today are Kyle Gano, Chief Executive Officer; Matt Abernethy, Chief Financial Officer; Eric Benevich, Chief Commercial Officer; Eiry Roberts; and for one first time as Chief Medical Officer, Sanjay Keswani. During today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. After prepared remarks, we will jump into Q&A. I'll now turn the call over to Kyle.

Thank you, Todd. Good afternoon, everyone. We were especially pleased with our standout second quarter that delivered high double-digit growth which showcased our diversified revenue profile and highlighted the organization's ongoing evolution. From a commercial perspective, our INGREZZA base business continues to post solid growth, and we are excited by the strong early performance of CRENESSITY. For INGREZZA, our strategic investments to enhance payer access led to another record of new patient starts in TRx for the quarter, further strengthening our leadership in the VMAT2 class. We remain confident that these market access initiatives will continue to drive long-term growth for the INGREZZA franchise. For CRENESSITY, we once again outperformed internal expectations. To date, CRENESSITY has been well received by both patients and prescribers, underscoring the significant unmet needs within the classical congenital adrenal hyperplasia community. With a strong product profile across efficacy, safety and tolerability, we believe CRENESSITY is well positioned to become the standard of care for patients with classical CAH and has all the attributes to be Neurocrine's second commercial blockbuster. Coming off a successful ENDO conference this month, I'm reminded how far we've come. In fact, it was back in March of 2015 at ENDO that we first presented proof-of-concept data in CAH with a CRF receptor antagonist. This year, over a decade later, I had the opportunity to meet directly with clinicians in the field, which gave me an even deeper appreciation for the impact we are making for CAH patients and for the importance of the work we do every day at Neurocrine. Putting patients at the center isn't just a guiding principle, it's what drives meaningful progress. It goes without saying we're deeply grateful to the patients, their caregivers and families and investigators who made this progress possible in partnership with the Neurocrine…

Thank you, Kyle, and good afternoon, everyone. Neurocrine's evolution into a multiproduct growth company was underscored by $682 million in net product sales during the second quarter, representing 17% year-over-year growth. We expect the profile of both CRENESSITY and INGREZZA to drive meaningful revenue growth and generate significant cash flow over the coming years, positioning Neurocrine to become a leading CNS company. CRENESSITY grew sequentially from $15 million in Q1 2025 to $53 million in Q2 2025, reflecting strong early adoption by CAH patients and clinicians eager for better treatment options. Although only 6 months into launch, we are quite encouraged by what we're seeing in terms of steady new patient starts, greater than 75% of all dispensed prescriptions being reimbursed and overall positive anecdotal feedback on product performance. As Eric says, so far, so great and kudos to everyone involved in this launch. Shifting to INGREZZA. We delivered $624 million in second quarter sales, including another record number of new patient starts, reflecting the fruits of the sales force expansion, our DTC campaign and early positive signs from our investment in expanded access. Importantly, on both NRx and TRx front, we are seeing prescription market share gains in the first half of 2025. While we expect to gain volume share for the remainder of 2025, dollar share will be impacted in the near term due to contracting. These are intentional investments that position INGREZZA for continued volume and sales growth as well as market share gains over the coming years. Given current performance and considering market access investments for the remainder of the year, we've refined the INGREZZA net sales guidance range to $2.5 billion to $2.55 billion, which accounts for anticipated double-digit volume gains, partially offset by higher near-term gross to net impact. Overall, INGREZZA is well positioned for continued growth heading into 2026. A few financial comments. Our capital allocation priorities remained intact, drive revenue growth, advance our R&D programs, enable business development and return capital to shareholders. Our progress in the first half of 2025 reflect these priorities with the strong launch of CRENESSITY, continued INGREZZA growth and the initiation of our two Phase III programs for osavampator in MDD, and muscarinic schizophrenia trials. We have increased SG&A GAAP and non-GAAP operating expense guidance by $25 million to support continued CRENESSITY and INGREZZA sales growth, and we expect SG&A leverage throughout the second half of 2025. With $1.8 billion in cash and a strong balance sheet, we are well positioned to support our commercial and clinical development strategies for continued growth. With that, I'll now hand the call over to Eric Benevich, our Chief Commercial Officer. Eric?

Thanks, Matt. Q2 was a quarter of continued strong execution of our INGREZZA growth strategy. Our strategic investments in the INGREZZA franchise over the past year are yielding tangible results. These investments such as last year's sales force expansion, enhanced marketing initiatives and increased contracting for Medicare formulary coverage, combined with strong efforts from our commercial and medical teams, led to a record number of new patient starts and total prescriptions for the quarter. In fact, this was the second quarter in a row of all-time high new patient starts. Q2 sales of $624 million represented 15% sequential growth and year-over-year sales growth of 8%. In addition, we saw continued prescription VMAT2 market share gains in Q2. In Q2 and again in early Q3, as Matt noted, we contracted to further expand the Medicare formulary coverage for INGREZZA. We now have formulary coverage for approximately 70% of Medicare beneficiary lives in the TD market. These incremental rebate agreements were midyear adds to keep formularies outside of the regular bid cycle. They substantially improve our coverage and will make it easier for patients and providers to start or reinitiate INGREZZA therapy going forward. The formulary adds in Q2 and Q3 represent approximately a 25-point increase in coverage in just 2 quarters and embody the stellar work done by our market access team. We acknowledge that these rebate agreements encompass prescriptions for all current INGREZZA patients insured under those plans, not just the new incremental patients. So we saw an impact on our gross to net, which somewhat offset our strong volume growth. However, we believe that over time, these Medicare formulary investments will allow us to grow our volume and share faster than we otherwise would. With less than half of the estimated 800,000 TD patients as yet diagnosed and approximately…

Thanks, Eric, and good afternoon, everyone. Before I begin, I want to express how enthusiastic I am to join Kyle, the Neurocrine team as Chief Medical Officer. I would also like to acknowledge my predecessor, Dr. Eiry Roberts for her remarkable leadership and the significant clinical advancements accomplished during her tenure. I'm grateful that Eiry will continue to support us as a strategic adviser through the end of next year. Now on to the clinical update. The registrational studies for both osavampator in major depressive disorder and NBI-'568 in schizophrenia are progressing well. Indeed, we have just screened the first patient in our second Phase III study in schizophrenia for '568. Hence, all the Phase III studies as well as the open-label studies for '568 and osavampator are up and running, and we anticipate top line data readouts for osavampator in 2027 and a bit later for '568 in the 2027-2028 time frame. Regarding data readouts this year, we disclosed in May that for the adjunctive treatment of schizophrenia, valbenazine did not meet the primary endpoint of improvement in the Positive and Negative Syndrome Scale or PANSS. Recall, this study was designed as a learning opportunity for our next-generation VMAT2 follow-on programs and has indeed provided valuable insights. Notably, we observed numerical separation and improvements in the valbenazine arm compared to placebo as well as statistically significant improvement in positive symptoms. We look forward to sharing the full study results at an upcoming scientific meeting. Continuing with valbenazine, top line results from our Phase III study for the treatment of dyskinetic cerebral palsy will read out in Q4 of this year. In addition, the Phase II proof-of-concept and dose-finding study for NBI-'770, our NMDA NR2B negative allosteric modulator will also read out top line data in Q4. With a positive readout, these data could pave the way for a confirmatory Phase II study or the initiation of a Phase III trial. Turning to our new programs. Last month, we announced the initiation of the Phase I study for NBIP-1435, a long-acting corticotropin-releasing factor 1 receptor antagonist administered subcutaneously for the potential treatment of congenital adrenal hyperplasia. This program marks the first investigational peptide from our internal pipeline to advance into the clinic. It's also the first of what we anticipate to be many biological compounds advancing from Chief Scientific Officer, Jude Onyia's Research division. Regarding our early-stage muscarinic programs, we remain on track to initiate the Phase II study of NBI-’'570, our dual M1/M4 selective agonist for the treatment of schizophrenia. We also expect to report Phase I results later this year for both NBI-'567, our M1- preferring dual agonist, and NBI-'569, our M4-preferring dual agonist. I look forward to engaging with many of you over the coming months ahead in advance of our R&D Day at Neurocrine's Campus in San Diego on December 16. With that, I'll hand the call back to Kyle.

Thanks, Sanjay. I think we're ready for questions now.

[Operator Instructions] Our first question comes from Tazeen Ahmad with Bank of America.

Matt, we know that you're super detail oriented. But taking that into account, you're narrowing the top end of guidance by $50 million, and we've still got half of the year left. And I fully appreciate the comments that you made about having midyear adds and improving access on Medicare. But I guess, how are you triangulating that level of certainty? And is that number potentially up for future adjustment as the year progresses?

Yes. Thanks, Tazeen. It really comes down to the contracting and where net price was coming into the year. As you mentioned, I am detail oriented. And so I never like to have anything change throughout the year, but that's not the case of our business, it's very dynamic. And on the pricing front, we had assumed a flat pricing coming into the year based upon the contracting in place. But throughout this year, we've been able to pull forward actually some major programs from -- in contracting from 2026 into 2025. So from a pricing perspective, we went from flattish pricing expectations to, call it, negative 5% price decline for the year. And so I think that, that should help triangulate where the guidance range is at. From a volume perspective, kudos to the team, record numbers of TRx, record numbers of new patients, double-digit volume growth. So on the volume side, everything is going well for us as well as in the marketplace. This adjustment down on the top end really comes back to a change in assumption around pricing.

We'll move to our next question from Phil Nadeau with TD Cowen.

Congrats on the CRENESSITY number. It does seem to be launching much more quickly than most of us had anticipated. Can you talk about the dynamics you're encountering at the clinics? In particular, were there any boluses of patients added to CRENESSITY during the quarter? Any reason why we shouldn't extrapolate the growth we saw in Q2 to future quarters? Or any other dynamics that we should consider as we try to digest the big number you just put up and what that portends for future quarters?

Phil, so I'll comment and maybe Eiry has some additional commentary here. But before the launch and after Q1, we had sort of guided towards what we call the measured launch. And the reasons for that were primarily around patient flow through the practices. We know that adult patients usually only see their endocrinologists once, maybe twice a year, pediatric patients 2 or 3x a year. And endocrinologists had indicated to us that they intended to offer CRENESSITY treatment as patients flow through. Those dynamics haven't really changed. We're still seeing that patients are being initiated subsequent to an in-person visit. That being said, we have seen strong adoption, obviously. We feel really good about the pace of patient starts and it's building over time. Certainly, I think it's a function of our ability to reach the endocrinologists and to get the word out within the patient and family communities. So kind of getting back to this concept of a bolus, no, it's not really a bolus or patients that were necessarily waiting for CRENESSITY because for the most part, people weren't aware of it prior to its approval. But we have seen what I would describe as very steady and a consistent adoption. And certainly, we view the activity that we had at ENDO as sort of another booster for us in terms of being able to accelerate that awareness within the endocrinology community.

Phil, the only thing I'd add there is, I mean, I do think we have a lot of interest and excitement out there in the community, and we certainly felt that during our participation in ENDO. And that comes from both the clinicians and also the patients. We heard from several of the clinicians that we work with on the medical side that they were receiving a lot of questions from patients and requests from patients to get in and get the opportunity to talk about CRENESSITY. Certainly, the other place you think of a bolus is if there was one coming from the clinical trial environment. And as you know, we signaled that we were shutting down the adult open-label trial, and those patients are steadily moving on to commercial CRENESSITY. So it isn't a bolus effect there either. And obviously, we still have our pediatric open-label extension trial going, which is going to provide us with longer-term clinical data that we think will be very important.

We will move next to Paul Matteis with Stifel.

Congrats on the great progress with CRENESSITY. I was wondering if you could share any data or metrics or at least qualitative color on how concentrated prescribing has been at this point. If we look at some other rare disease launches that have had a great start, but maybe tapered off after a bit, it feels like there can be this sort of COE academic dynamic and then the patient acquisition effort increases over time as you have to go to the community. So how do you think CAH stacks up with these sort of treatment dynamics and what you're seeing with CRENESSITY?

Yes, Paul. So certainly, we're very excited about the adoption that we're seeing. And prior to the launch and subsequently, our estimate has been that if you think about sort of three segments of endocrinology prescribers, we've got our centers of excellence that are accredited, and then there are others that are not accredited by the CARES Foundation. Overall, we estimate that around 15% or so of the total CAH patient population flows through a small number of those centers, let's call it, 20 or less. And then an important segment is also the pediatric endocrinologists. There's a little over 1,000 of them out there. They care for all these pediatric patients and even some of the young adults. And then there's the community endocrinologists. And that's where, as we say, that the tail gets long. Ultimately, though, this isn't a super concentrated patient population. Somewhere north of 20,000, we estimate in the U.S. And most of the adult community endocrinologists, if they have CAH in their practice, they have one or two patients. And so in my prepared remarks, I commented that most of the prescribers so far have written for one or two patients. And in some instances, that's all they have. But certainly, we see a lot of HCPs that have yet to prescribe. And in those centers of excellence, there's still a lot of room for growth in terms of adoption. So it's still early days yet. We're 2 quarters in. We're pleased with the trajectory of the launch. But for the most part, this isn't a super concentrated patient population.

Paul, the only thing I'd add there is that I think we are hearing that given the breadth of the label and the efficacy and tolerability data that was generated for CRENESSITY that the ease of starting the therapy is helping ensure that it isn't something that is requiring that center of excellence presence in order to be able to get patients on to the medication.

Sorry, this is an exciting launch, so the last add here from the team. When you look at how steady the new patient additions were throughout the quarter, I mean, it was very consistent within a pretty tight range week by week. So I think if we would have had some inflection or some bolus effect, I don't think you'd see the steadiness in terms of overall adoption and new scripts written each week. So kudos to the team for finding these patients and getting them help, and then also for the reimbursement team to be able to have above 75% of scripts reimbursed at this point, just quite an accomplishment.

We'll go next to Cory Kasimov with Evercore.

I wanted to follow up on Eiry's earlier comment on the adult OLE program and patients rolling from that over to commercial product. Are you able to provide any more granularity there in terms of percentage of patients that have moved over and whether you would expect the rest to follow suit? Are there any nuances in this process that would perhaps prevent them from doing so?

Cory, so we're talking about less than 40 patients here. And you're going to see some of those. We saw some fall into Q2 and some fall into Q3. So in the context of over 600 patient starts in the quarter, pretty de minimis in terms of the overall landscape of what we're seeing with CRENESSITY.

We'll go next to Jay Olson with Oppenheimer.

Congrats on the CRENESSITY launch success, and thank you for providing this update. I wanted to thank Eiry for her substantial contributions and wish her all the best. And I also wanted to welcome Sanjay. So congratulations on joining the team. And could you please share with us some of the key findings that you learned from your due diligence that attracted you to Neurocrine?

Nice to meet you, Jay. Yes, I'm super excited to join Kyle and the Neurocrine team. And yes, I'd also like to acknowledge Eiry, who's sitting just beside me, for her terrific leadership. Yes, in terms of some of the reasons I joined, I thought the company was really at a transformational stage, evolving from primarily a small molecule two-product company to potentially a multiple modality company targeting multiple therapeutic areas with multiple products. So the potential here to positively impact the lives of many patients and their families who are suffering with unmet need is a major source of motivation for me. With respect to the portfolio, my perspective is that the late-phase psychiatry portfolio has a high probability of success because they are essentially validated targets. And I'm also really excited by our large early phase portfolio, which largely comprises large molecules such as bispecifics, antibody drug conjugates and peptides with many of these programs having transformational potential. And as Kyle mentioned, we'll discuss some of this at our R&D Day later this year. So I think that Neurocrine has walked the talk with respect to substantial R&D investment. So thank you for the question.

We'll go next to Brian Abrahams with RBC Capital Markets.

I'm curious if you could talk about what steered your decision to contract INGREZZA midyear. How long these contracts -- we should think about these contracts generally being in place for? And should we not expect now additional contracting shortly after the new IRA price is established for your competitor?

Brian, this is Kyle. You probably heard from me when I stepped into the role, a lot more conversation about looking at maximizing access for patients. I think it's something that's important to me and the company, and it's always been a North Star for us to do that for patients. We think that's in their best interest in terms of offering options for their care. I also think it provides a great deal of flexibility for us moving into the new era of IRA that starts next year with the first round of 10 that go through their price negotiation. So as you know, with the contracting process, this starts well advance of the year that you're looking to actually observe your new price, if you will. And our contracting efforts that we've outlined here were actually started -- initiated with the mindset that we begin in 2026. And obviously, when you start the year in these discussions, you don't know where they're going to go, but we got them to a good place for '26 and the opportunity to accelerate or pull them forward into 2025. So you saw some of the efforts there result into an advantage for us starting in Q2 and then another one that has played out for the start here in Q3. So that's where we are today on this. I think that's part and parcel of where we landed on narrowing the band of our guidance to $2.5 billion to $2.55 billion. But I do want to go back to a point that Matt started earlier in the call. What we saw here in Q2 was a second quarter of new record, new prescriptions as well as total prescriptions, and that led to a market share increase in new-to-brand prescriptions as well as total prescriptions. That doesn't happen by chance 8 years into commercialization. It really is a function of sound business fundamentals, and this is across our sales force expansion that started late last year through the marketing initiatives that we outlined for this year and the market access advantages that we now have. So you pair those together with a very strong demand in the patient segment within TD, and we're seeing the uptick in the volume that we think is very important for our business this year in terms of new patient starts but even more important in 2026. We're going to start off on day 1 on a good foot and really have a strong year. So I think that gives you a nice feel for our contracting process and thoughts here for this year in '26.

I think, Brian, you were also wanting some clarification around any additional contracting that we would expect to take place, and just do want to build on what Kyle said in that we believe this sets us up really well for 2026. So sitting here right now, I do not expect or believe there's going to be any major contracts signed that would aggregate pricing further from how we're exiting 2025. So sitting here right now, we would expect very similar pricing into 2026 based upon the amount of coverage that we have. But we'll, of course, update everybody if that were to change.

We'll go next to Anupam Rama with JP Morgan.

Congrats on the CRENESSITY launch. Quickly on the valbenazine schizophrenia update. What are you learning from that study on VMAT2 mechanism in schizophrenia, target population considerations or trial design considerations as you look to the next-gen VMAT2?

Yes. I think it's, as you mentioned, important to understand that, that study in ATS was a learning opportunity for us, specifically for our VMAT2 follow-on programs. So what we saw was essentially some positive efficacy signal in the positive scale within the PANSS score. And so I think that will be very helpful in terms of understanding the target patient population for the other programs that are following valbenazine. But I don't know, Eiry, if you want to mention some more of it?

No, happy to. I think the first thing to say was it was a well-designed, well-controlled large study. So actually, I think we were very pleased with the level of the data and information we were able to get out of the study. So that was a good thing. Secondly, I think it's really helpful that it confirmed in a larger population of 400 patients the safety and tolerability profile that we knew was there for valbenazine, but it's good to see it in these more acutely unwell individuals. We obviously, beyond the PANSS positive score and the PANSS total score, we're able to look at a whole series of the subscores and additional quality of life functional measures and other things of that sort. And what I'll say is that there were some interesting signals in there across the subscores that we will intend to publish on in due course over the next few months. And we'll obviously use that knowledge as well to inform the next generation of VMAT2 inhibitors in terms of choice of patient population, indications and other elements.

We'll move next to Brian Skorney with Baird.

Also on CRENESSITY, congrats on a really strong quarter. I was hoping you could maybe give us a little more detail on the derivation of that figure. Is there any inventory dynamic in this quarter? And can you disclose the number of filled prescriptions represented here? It just seems hard to calculate more than like 2,000 TRx in the quarter given the patient start forms and reimbursement numbers you gave us, which puts the net TRx somewhere in the high 20,000 range. I guess, are we in the right ballpark with those numbers? And how do you think about pricing going forward, both on sort of gross to net and mix of adult and pediatrics?

Yes, Brian. On the inventory front, because I've seen some notes on this. But on the inventory front, what we had in the quarter was a build of around $5 million. So that's just reflective of growth in the channel as the scripts continue to grow. As we've said before, very consistent demand throughout the quarter, very good job from our pharmacy getting patients ultimately on therapy in gross to net so far has largely been on the heels of co-pay assistance as well as some distribution fees and costs. And like we've said, haven't been at a place of contracting yet. So good job to the team so far.

We'll go next to Yatin Suneja with Guggenheim Partners.

I have a question regarding the IRA implication. If you can just maybe talk about what -- how do you envision the access to shake out? I mean what would be the end goal? Will you seek access at parity once we know the negotiated price? Just curious if you can outline that dynamic for us the best you can and also your expectations on how -- whether one drug will be mandated versus the other?

Yes. This is Kyle. I'll start a response here, and I'll ask Eric to fill in any holes in my answer here. I think for IRA, I mean there's a couple of pieces here that I would point you to. There's our own IRA moment in 2029. That's when our negotiated price is enacted, and then there's our competitor in this space with deuterated tetrabenazine in 2027. And if you want to just speak to the near term event with our competitor. I think we start with -- we acknowledge we don't have all the answers, what's going to happen during an IRA. I don't think anyone does. So I think we all acknowledge that piece. It's a good place to land on. In 2025, we're going to see what happens with other brands in the same categories where medicines are negotiated. So I think we'll have some learnings there. And then the third piece I'd point out is our goal here is to maximize the number of patients on INGREZZA, that's part of our maximizing our access strategy here. And I think that's important to point out because INGREZZA is incredibly sticky. Patients when they start INGREZZA, they tend to stay on it. So when it comes to 2027 in the years between that and our own IP moment in 2029, we are talking about the new patients primarily. And we think that we're on a good footing here with the differentiation that we offer for INGREZZA relative to our competitor in this space when they go through their IP moments. So maybe I'll stop there, Eric, anything to add?

Yes. I just want to reinforce that I think we're all going to learn together in 2026 in terms of how health plans are managing various classes where there's one or more negotiated products. And certainly, our overall strategy from an access perspective is to have broad access and parity. And over time, we've been very successful with that. Obviously, we commented that in 2024 we started to see some tightening of access in terms of health plans starting to reject more claims and so on. This wasn't specific to INGREZZA. This was more of a broader industry trend, and that's carried forward into 2025. Frankly, that's one of the reasons that we've invested in access because we believe it's very important to make it as easy as possible for providers and patients to get on product. And certainly, these increased investments that have led to a higher proportion of covered lives in Medicare sets us up well for 2026 and beyond. So we're going to very carefully monitor the environment. But ultimately, the goals don't change. We want to help patients, we want to make it available. And how we go about doing that is probably going to evolve over time.

[Technical Difficulty]

A question on CRENESSITY. Can you give us a sense of the penetration across the different segments of the market from a physician perspective that you've talked about? And you mentioned that at present, mostly physicians have one or two patients on treatment and that is likely to evolve over time. How long do you anticipate physicians sort of limit to maybe a handful of patients before they feel like they have enough experience with the treatment to start to expand that?

Yes. So I'll kind of go back to some of my prepared remarks. We recently crossed an important threshold of having over 1,000 NRxs submitted, treatment forms submitted into our patient hub. And most endocrinologists have only -- that have treated have only treated one or two patients so far. And the reality is, as I mentioned earlier, this is sort of a thinly spread population. Most of the adult endocrinologists, if they have any classic CAH patients in their practice, they might have one or two. So in some instances, they've treated all the patients that they have. However, especially within pediatric endocrinology and in the centers of excellence, there's still a lot of untreated patients. And so we have a long way to go, frankly, in terms of adoption. It's still 2 quarters into a launch. And there's certainly endocrinologists that we have yet to meet with and to walk through the clinical data and the labeling. So I would say if you want to try and back calculate how many prescribers there are, certainly looking at the number of treatment forms coming in and sort of that ratio where most of only one or two, you can get a sense that it's less than that total number. But ultimately, I think that we'll see how things evolve as we move further into the launch and we continue to raise the awareness of not only the availability but of the benefits of CRENESSITY.

We'll go next to Corinne Johnson with Goldman Sachs.

I wanted to ask on the reimbursement process from here. When do you anticipate transitioning to more of a formulary-driven process? And how do you anticipate that could impact net pricing on CRENESSITY?

Yes. Let me tackle that. So at launch, CRENESSITY was a nonformulary drug everywhere. And our expectation is that in some instances, health plans will decide to do a formulary review and often, they'll add it to formulary. But given that it's a class of one, it's more likely that in many instances, they won't bother to do a formulary review and it will remain as a nonformulary product. That doesn't mean that it's not covered. And certainly, we're very pleased with the rate of reimbursement that we're seeing. Our expectation coming out of the gate with the approval was that in most instances, patients would need to go on to our free goods program for a month or possibly longer before getting their prescription claim approved and then transitioning over to commercially reimbursed product. The reality is that we've been pleasantly surprised at the fast rate of approvals for these claims. Most patients don't need to go on free goods. And thus, the statistic that over 3/4 of all the dispenses, both in Q1 and in Q2 have been reimbursed product. So just to set expectations, I don't know that we're ever going to be in a place where we'll provide formulary coverage statistics because in many instances, health plans will continue to reimburse as a nonformulary product given the size and scope of this category.

We'll go next to Danielle Brill with Truist.

Truist Securities, Inc., Research Division You mentioned some of the data that you presented at ENDO. And I was just curious about some of the feedback that you received there from the prescribing community, specifically as it relates to like the change in glucocorticoid dose at 1 year remaining relatively flat versus 24 weeks and how we should think about that? And then same thing on the insulin resistance data that you presented. It seems like we don't see further benefits beyond 12 months. Is there anything to read into there? Why might that be? And then at any point in time, will we see any additional clinical data such as bone age data or other benefits from lowering steroid doses?

It's Eiry here. I'll address the last bit first. Yes, we do have ongoing open-label trials for CRENESSITY, both in adults and pediatrics. The adult patients being outside the United States, pediatrics being worldwide. And our intent is to continue to publish over the long haul from those studies because we do believe that those longer-term clinical data are absolutely critical. Just as a reminder, this was the first time that we had presented 1-year data from our registrational program. And the first time we've really been able to concentrate on those clinical outcomes that are so important to patients and to clinicians. And just again, by means of kind of reminding everyone, the impact of crinecerfont, directly CRENESSITY is to have a direct impact in lowering androgens. And so we're interested in understanding the long-term impact of controlling those androgens over a 12-month period and even beyond. And then secondly, as a result of that reduction in 17-OHP, ACTH and androgen levels that we're able to achieve directly with CRENESSITY, we are able to reduce the steroid dosing in these patients from the super physiologic doses that are required to control the disease in the absence of CRENESSITY. Going into the release of data from this program, he had said, and this was supportive broadly that any reduction in steroid dose was beneficial to patients over a lifetime. And I think that is, in fact, what is playing out. What we saw in the 1-year data was a consistent small modest effect, but a consistent effect across many metabolic parameters, including weight, HOMA-IR, the insulin resistance that you referred to. And that is a clinically beneficial change that we saw there that results in a potential for improved outcomes over a lifetime for those patients. So it's extremely important. We also saw changes in scores such as hirsutism scores in females, which are important in terms of looking at the direct androgen effect. So with the release of all of those data, I will say that the response from the community was actually very positive. Clinicians were very interested and excited in the data, looking forward to obviously continuing to follow those data over time, but it's a really good start from our point of view in terms of how we're able to serve patients.

We'll go next to Mohit Bansal with Wells Fargo.

I guess we'll catch Mohit on the flip side. Can we go to the next one, Jess?

We will go next to Ash Verma with UBS.

Just a quick one on CRENESSITY formulary commentary that you made. So are a lot of these reimbursement for a 6-month or 1-year basis? And then when CRENESSITY is up for reauthorization for these patients, would that require steroid dose reduction based on what you can tell right now?

Yes. So if I understand your question correctly, it's related to reauthorization. What are we seeing in terms of the authorized number of fills and timing for reauthorization and what kind of criteria are required. For the most part, what we're seeing is patients either getting 6 prescriptions fills authorized initially or 12. That seems to be the pattern generally. And for the most part, plans have -- if they have published their approval criteria, they haven't necessarily published reauthorization criteria. But typically, what we're seeing now is sort of that first early cohort of patients that might have gotten on to commercial product early in the launch that are getting reauthorized. Generally, it's the provider affirming that they're benefiting from treatment. So we're not seeing any hard and fast thresholds of GC dose or GC dose change or needing to provide labs related to the ACTH or the androgens. So for the most part, the reauthorization process has been going about as smoothly as the initial authorization process.

We'll go next to David Amsellem with Piper Sandler.

So I had a question on the muscarinics in the pipeline, particularly the M1/M4 agonist '570. So I'm sure you're watching Bristol's work with COBENFY with significant interest. And what I wanted to ask is, to the extent that the ADEPT-2 study in Alzheimer's psychosis reads out favorably later this year. How does that play into your development plans potentially to get more aggressive with the advancement of '570, say, in AD psychosis or potentially other indications? I know you have the schizophrenia study enrolling, but how are you thinking about that more expansively just given its mechanism and that it's precedented by another M1/M4 that's on the market?

Great. Yes. So we are watching COBENFY's data with interest. Of note, we have quite a robust muscarinic portfolio. So we have a number of M1-preferring as well as M4-preferring agonists, and as you mentioned, a dual M1/M4, '570. So we have a number of choices in terms of which ones we take to various indications. Indeed, AD psychosis is a really important indication for the field, and we are interested in that. It may be with '570, but we have other muscarinic agonists, which actually may be better suited for that rather elderly population, because potentially there is a superior safety profile associated with it. Eiry, any more questions?

No, I think that was well said. And just to pick up on what Sanjay said at the end there, I think one of the things that obviously, we're watching the COBENFY data very closely, but we do believe that the direct agonist approach here without the need for an add-back, particularly in that older population, could provide an opportunity for differentiation if we were to go forward.

We'll go next to Marc Goodman with Leerink Partners.

Yes, Matt, just to confirm this negative 5% INGREZZA ASP comment for the year, is this a full year impact? Because I'm kind of assuming that the second half is lower than the first half for ASP. So when you say there's no change for ASP in 2026, are you referring to the full year ASP? Or are you referring to where you actually are kind of ending the year, which is lower than kind of the average for the year, if you understand my question?

Yes. Regarding the 2026, it's a trajectory comment. How we're exiting the year in 2025 would be what you would expect to continue into 2026. So I appreciate that clarification. In addition to that, on the net price comment for the year for 2025, the negative 5% price, as you mentioned, it's more concentrated in the second half of the year. So that was a full year commentary. So it is safe to assume that the price headwind is a bit more in the second half as compared to the first half. But with that said, I think you take a step back and you look at the volume gains that we expect to have. And it's just an incredible market and feel like we're really well positioned with these formularies to continue to grow and build the market.

We'll go next to Myles Minter with William Blair.

Can you just remind us of the discontinuation rates for CRENESSITY in the 1-year open-label extensions for the pediatric and the adult studies? And is that still probably the best proxy you have for the annualized retention rates on CRENESSITY in the real world? Or are there other key factors we have to consider for cancer [indiscernible]?

Yes. Myles, I think the first thing to say is that we were very favorably surprised, I guess, at how well tolerated and how safe CRENESSITY was across the adult and pediatric populations. That's the first thing to say. We had just a very small number of patients discontinued during the course of the program, and more than 95% of the patients roll over from both the pediatric and the adult program into the open-label extension. Many of those patients have now been on study for greater than 3 years, and we still continue to see very low discontinuation rates and the continued improvement in the outcome for those patients.

So it's still early in the launch cycle for CRENESSITY, and we're watching that, of course, over these first 6 months, but that's a key variable as we think about what's the long-term potential of CRENESSITY. And that's something I think we're going to know a lot more here in the second half of this year as well as then into the first half of next year as you see patients getting the blood draws and understanding glucocorticoid titration. But from a safety and tolerability perspective, as Eiry said, 3 years of patients on therapy, we have a lot to believe in, in terms of high levels of adherence.

Yes. One last point to make in terms of the difference between real world and clinical trial experience is, typically in the real world with a medicine, affordability and coverage can impact persistency. We're seeing really, really good coverage, and we believe that CRENESSITY is very affordable for patients between the co-pay buydown and the other programs that we have. So we don't expect insurance to be a barrier to persistency.

We'll go next to David Hoang with Deutsche Bank.

Congrats on the quarter. So first, I just wanted to ask in terms of INGREZZA. So a competitor -- so Teva reported this morning, I believe they raised their guidance for their product, AUSTEDO for the year. Is there anything to maybe read into that as it pertains to the relative growth of INGREZZA versus your competitor this past quarter and market share in terms of dollars? And then just quickly on CAH, I think you talked about 20,000 prevalent patients in the U.S. Do we have a sense of what percentage is regularly followed in clinics maybe from things like medical claims data?

This is Kyle. I'll take your first question. When it comes to our competitor in the space, we don't really speak to the dynamics of their marketplace and what they're looking at. I think from the perspective of INGREZZA, I'm extremely encouraged by the volume growth that we saw this quarter. And I do want to reiterate, we increased our market share on both new-to-brand as well as total prescriptions. And so I think that we're really happy with the performance in the first half of this year. You combine that with our initiatives that we put in place starting the year with our additional market access, and we are looking forward to a strong second half as well. So I think I'll leave that there for the time being. And then on the CRENESSITY side of things, Eric, do you want to comment on that?

Yes. I just want to reiterate that our estimate is greater than 20,000 patients in the U.S. And the reason that it's an estimate and not a firm number is that some of these patients -- first of all, there is no specific ICD-10 diagnosis code for classic CAH. There is a CAH diagnosis code, but that encompasses both classic and nonclassic patients. And if you look at the medical literature, for every classic CAH patients, there's three or possibly four nonclassic patients. So we have had to triangulate doing a thorough medical literature review looking at claims data and so on to get at that number. Some of these patients don't have the CAH diagnosis code at all for various reasons. And so we feel like that 20,000 number in the U.S. is a good estimate for the overall prevalent population. A subset of them that are more easily findable, I guess, is the way I would put it. And certainly, there are -- that are under the care of an endocrinologist, for example. But there are certainly a cohort of classic CAH patients that are not under the care of an endocrinologist and they're probably being seen by internal medicine, family medicine or even OB/GYN. So we will learn more about this market as we get deeper into the launch.

We'll go next to Sumant Kulkarni with Canaccord.

Thanks for taking my question which is science-based, but could have significant strategic and stock implications. You have several years of internal experience in CRF1 receptor antagonists. Corticotropin is involved in stress response, and there's some intriguing external preclinical data on binge eating and this approach. Now that you've presented 1-year data on weight-related effects of CRENESSITY at ENDO, what are your thoughts on using this approach specifically for weight loss, especially as you have a longer- acting version in the works, which could help in compliance in that setting?

Yes, we're clearly very encouraged by the data that we saw from the 1-year readout recently at ENDO for CRENESSITY. And as you can probably imagine, we have a wealth of knowledge about CRF1 antagonism and CRF biology here at Neurocrine. So as we go forward, we've been considering a broad range of potential indications. And also, obviously, we have a breadth of other research projects in our pipeline that may well seek to address some of those challenging disease areas moving forward.

We'll go next to Sean Laaman with Morgan Stanley.

This is Michael Riad on for Sean Laaman. For INGREZZA, could you comment on the current volume split between the neurology, psychiatry and long-term care channel? And regarding the double-digit volume growth you expect this year, could you provide any more color on respective contributions to that volume growth from the respective channels?

Yes. I mean what we saw was strong growth really across all three of the business segments. Overall, psychiatry accounts for about 60-or-so percent of our volume and 65% maybe, and then the balance is split between the other two segments pretty evenly, but all of them are growing at approximately the same rate. So we're really pleased with the overall growth trajectory for the franchise.

We'll go next to Laura Chico with Wedbush Securities.

On CRENESSITY, I wanted to dive into a little bit more about the cadence of prescribing. And kind of just clarifying, one, have the majority of patients transitioned from studies to paid script status at this point? And two, as we're thinking about increasing breadth of prescribing, I guess, is there kind of an upper limit as to how many patients physicians are going to be able to manage on CRENESSITY? I guess is there any capacity constraints that you can share?

Yes. We don't see any capacity constraints in terms of managing patients on CRENESSITY. It fits right into how they're already being cared for, and we have a really good pharmacy partner to help with that. And so I'll leave it there. Sorry, Laura, I forgot to mention. In regards to clinical trial patients, as I said earlier on the call, it's less than 40 patients, and you could assume half of them came on board in Q2 and the other half are going to come on board in Q3. So it's pretty de minimis in terms of overall new patients that are being added to therapy.

And we'll move to our final question from Evan Seigerman with BMO Capital Markets.

I wanted to touch on some of the thinking behind moving '568, into Phase III. I know the Phase II trial did see a dose response. Maybe walk me through what you were able to get in the data to give you confidence in moving to this larger Phase III program?

Well, I think we've discussed the merits of moving '568 into Phase III. I will mention here, we do have an INN name. So I want to do a shout out to the team for putting that together for us for this meeting as direclidine. So stay tuned on that. We'll be able to put that in future correspondence and releases out there. I think, again, I'll refer back to our Phase II commentary around the totality of the data that we have. All doses worked in our Phase II and for the dose that we selected for Phase III, we hit the primary endpoint, all the secondary endpoints as well, a very attractive profile overall from an efficacy, safety and tolerability profile. We think that will differentiate quite nicely if we're able to reproduce those results in Phase III relative to COBENFY out there today.

And that will conclude the Q&A session for today. I'll turn the program back to Kyle Gano for any additional or closing remarks.

Thanks, Jess. Thank you all for your thoughtful questions and engaging discussion this afternoon. We covered a lot of ground, in particular, across our commercial portfolio and our pipeline. And I hope you're seeing a transition of the company to one defined by both revenue growth and diversity, I should say, revenue diversity moving forward with both INGREZZA and CRENESSITY. Look forward to connecting at upcoming health care conferences and certainly in our R&D Day on December 16. So thanks again for joining. Talk to you soon.

Thank you. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.