NEUROCRINE BIOSCIENCES INC

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2025.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the six months ended June 30, 2025.

Previous wording

We estimate that TD affects approximately 800,000 people in the U.S., that approximately 90% of the 40,000 people in the U.S. affected by Huntington’s disease will develop chorea, and that CAH affects at least 20,000 people in the U.S. Key elements of our commercial strategy include maximizing the opportunities in INGREZZA and CRENESSITY through consistent and effective commercial execution, continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease. INGREZZA net product sales totaled $1.2 billion and $1.1 billion, respectively, for the first six months of 2025 and 2024 and accounted for substantially all of our total net product sales during each of these reporting periods. CRENESSITY net product sales totaled $67.7 million for the first six months of 2025.

Current wording

We estimate that TD affects approximately 800,000 people in the U.S., that approximately 90% of the 40,000 people in the U.S. affected by Huntington’s disease will develop chorea, and that CAH affects at least 20,000 people in the U.S. Key elements of our commercial strategy include maximizing the opportunities in INGREZZA and CRENESSITY through consistent and effective commercial execution, continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease. INGREZZA net product sales totaled $1.9 billion and $1.7 billion, respectively, for the first nine months of 2025 and 2024 and accounted for substantially all of our total net product sales during each of these reporting periods. CRENESSITY net product sales totaled $165.8 million for the first nine months of 2025.

Previous wording

•In February 2025, our Board of Directors authorized a new share repurchase program (the 2025 Repurchase Program) under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. The 2025 Repurchase Program is in addition to the $300.0 million accelerated repurchase program (the 2024 Repurchase Program) that was announced in October 2024 and completed in February 2025. During the first six months of 2025, we repurchased 1.5 million shares on the open market under the 2025 Repurchase Program and received an additional 0.3 million shares upon settlement of the 2024 Repurchase Program in February 2025.

Current wording

•In February 2025, our Board of Directors authorized a new share repurchase program (the 2025 Repurchase Program) under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. The 2025 Repurchase Program is in addition to the $300.0 million accelerated repurchase program (the 2024 Repurchase Program) that was announced in October 2024 and completed in February 2025. During the first nine months of 2025, we repurchased 1.5 million shares on the open market under the 2025 Repurchase Program and received an additional 0.3 million shares upon settlement of the 2024 Repurchase Program in February 2025.

Previous wording

•Initiated a Phase 3 clinical study for NBI-1117568, a potential first-in-class, orally active, highly selective investigational M4 agonist, in schizophrenia.

Current wording

•Initiated two Phase 3 clinical studies for direclidine (NBI-1117568), a potential first-in-class, orally active, highly selective investigational M4 agonist, in schizophrenia.

Previous wording

•Initiated a Phase 3 clinical study for osavampator (formerly NBI-1065845), a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM), in major depressive disorder (MDD).

Current wording

•Initiated a Phase 3 clinical study for osavampator (NBI-1065845), a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM), in major depressive disorder (MDD).

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected increased net product sales of INGREZZA, driven by total prescriptions on strong patient demand partially offset by lower net price due to new market access investments to support long-term growth, and CRENESSITY, which was launched in the U.S. as a first-in-class FDA-approved treatment of CAH in December 2024.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased net product sales of INGREZZA, driven by total prescriptions on strong patient demand partially offset by lower net price due to new market access investments to support long-term growth, and CRENESSITY, which was launched in the U.S. as a first-in-class FDA-approved treatment of CAH in December 2024.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected increased net product sales of INGREZZA and increased royalties payable on net product sales of CRENESSITY.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased net product sales of INGREZZA and increased royalties payable on net product sales of CRENESSITY.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected increased investment in the Phase 3 programs for osavampator in MDD and NBI-1117568 in schizophrenia, partially offset by lower spend related to the Phase 3 program for crinecerfont in CAH, which was successfully completed in the fourth quarter of 2024.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased investment in the Phase 3 programs for osavampator in MDD and direclidine in schizophrenia, partially offset by lower spend related to crinecerfont in CAH.

Previous wording

Compared with the comparable periods last year, the decrease for the second quarter and first six months of 2025 primarily reflected the successful progression of the Phase 2 program for NBI-1117568 in schizophrenia to late-stage in the fourth quarter of 2024 and lower spend on certain early-stage neuropsychiatry programs, partially offset by increased investment in our early-stage muscarinic agonist portfolio.

Current wording

Compared with the comparable periods last year, the decrease for the third quarter and first nine months of 2025 primarily reflected the successful progression of the Phase 2 program for direclidine in schizophrenia to late-stage in the fourth quarter of 2024 and lower spend on certain early-stage neuropsychiatry programs, partially offset by increased investment in our early-stage muscarinic portfolio.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected increased investment in gene therapy and other preclinical development programs.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased investment in gene therapy and other preclinical development programs.

Previous wording

Milestones. Milestones consists of costs incurred in connection with the achievement of development milestones under collaborative arrangements.

Current wording

Milestones. Milestones consists of costs incurred in connection with the achievement of development milestones under collaborative arrangements. The following table presents milestones expense by collaboration partner.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected higher headcount and increases of $5.8 million and $11.8 million, respectively, in non-cash stock-based compensation expense.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected higher headcount and increases of $7.2 million and $19.0 million, respectively, in non-cash stock-based compensation expense.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected increased facility-based expenses related to our new campus facility.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected increased facility-based expenses related to our new campus facility.

Previous wording

Compared with the comparable periods last year, the increase for the second quarter and first six months of 2025 primarily reflected continued investment in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities), increases of $3.9 million and $6.2 million, respectively, in non-cash stock-based compensation expense, and prior year impairment charges of $14.0 million associated with vacated legacy campus facilities.

Current wording

Compared with the comparable periods last year, the increase for the third quarter and first nine months of 2025 primarily reflected continued investment in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and increases of $5.0 million and $11.2 million, respectively, in non-cash stock-based compensation expense. In addition, the increase for the first nine months of 2025 was partially offset by decreased impairment charges associated with our vacated legacy campus facilities.

Previous wording

Compared with the comparable periods last year, the change for the second quarter and first six months of 2025 primarily reflected prior year charges associated with the convertible senior notes that matured in May 2024 and periodic fluctuations in the fair values of our equity investments.

Current wording

Compared with the comparable periods last year, the change for the third quarter and first nine months of 2025 primarily reflected prior year charges associated with the convertible senior notes that matured in May 2024 and periodic fluctuations in the fair values of our equity investments.

Previous wording

The effective tax rate for the second quarter and first six months of 2025 varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and losses in foreign and domestic jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future. For the comparable periods last year, the effective tax rate varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses including debt extinguishment, excess tax benefits related to stock-based compensation, and losses incurred in foreign jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future.

Current wording

The effective tax rate for the third quarter and first nine months of 2025 and 2024 varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and valuation allowances recorded in certain foreign and domestic state jurisdictions for tax benefits that management cannot conclude that it is more likely than not will be realized in the future. In addition, the effective tax rate for the third quarter of 2025 reflects increased tax expense related to foreign operations and the enactment of the One Big Beautiful Bill Act (OBBBA).

Previous wording

Compared with the comparable periods last year, the change for the second quarter and first six months of 2025 primarily reflected increased INGREZZA and CRENESSITY net product sales, continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio, periodic fluctuations in payments for development milestones achieved in connection with our collaborations, periodic fluctuations in the fair values of our equity investments, and prior year charges associated with the convertible senior notes that matured in May 2024.

Current wording

Compared with the comparable periods last year, the change for the third quarter and first nine months of 2025 primarily reflected increased INGREZZA and CRENESSITY net product sales, continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio, periodic fluctuations in milestones expense associated with the achievement of development milestones under collaborative arrangements, periodic fluctuations in the fair values of our equity investments, and prior year charges associated with the convertible senior notes that matured in May 2024.

Previous wording

Compared with the comparable period last year, the decrease primarily reflected continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio, partially offset by increased net product sales of INGREZZA and CRENESSITY.

Current wording

Compared with the comparable period last year, the increase primarily reflected increased net product sales of INGREZZA and CRENESSITY, partially offset by continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales team completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio. The increase in accounts receivable was driven by higher total gross product sales. The increase in accounts payable and accrued liabilities was driven by higher revenue-related reserves for discounts and allowances attributed to higher gross product sales combined with expanded formulary access for INGREZZA. In addition, the increase in income tax assets and liabilities primarily related to timing of foreign tax expense recognition, partially offset by the federal tax benefit on current income taxes payable from the enactment of the OBBBA.

Previous wording

Compared with the comparable period last year, the change reflected $167.7 million in repurchases of our common stock during the first six months of 2025 under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and $308.8 million in cash payments to settle the convertible senior notes in the second quarter of 2024.

Current wording

Compared with the comparable period last year, the change reflected $167.7 million in repurchases of our common stock during the first nine months of 2025 under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and $308.8 million in cash payments to settle the convertible senior notes in the second quarter of 2024.

Previous wording

In addition to the foregoing future capital requirements, in February 2025, our Board of Directors authorized the 2025 Repurchase Program under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. The 2025 Repurchase Program is in addition to the $300.0 million 2024 Repurchase Program that was announced in October 2024 and completed in February 2025. Under the 2025 Repurchase Program, we repurchased 1.5 million shares on the open market for a cost of $167.7 million during the first six months of 2025. As of June 30, 2025, we had $332.3 million remaining under the 2025 Repurchase Program.

Current wording

In addition to the foregoing future capital requirements, in February 2025, our Board of Directors authorized the 2025 Repurchase Program under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. The 2025 Repurchase Program is in addition to the $300.0 million 2024 Repurchase Program that was announced in October 2024 and completed in February 2025. Under the 2025 Repurchase Program, we repurchased 1.5 million shares on the open market for a cost of $167.7 million during the first nine months of 2025. As of September 30, 2025, we had $332.3 million remaining under the 2025 Repurchase Program.