Neurocrine Biosciences, Inc. 2024 10-K Review

Introduction

Neurocrine Biosciences, Inc. is a neuroscience-focused biopharmaceutical company dedicated to discovering and developing life-changing treatments for patients with under-addressed neuropsychiatric, neurological, and neuroendocrine disorders. The company has a diversified portfolio of products, including FDA-approved treatments for tardive dyskinesia, chorea associated with Huntington's disease, classic congenital adrenal hyperplasia (CAH), and endometriosis and uterine fibroids in collaboration with AbbVie Inc.

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Business Overview

Neurocrine launched INGREZZA® (valbenazine) in the U.S. as the first FDA-approved drug for the treatment of tardive dyskinesia in May 2017 and for the treatment of chorea associated with Huntington's disease in August 2023. In December 2024, they launched CRENESSITY™ (crinecerfont) in the U.S. as a first-in-class FDA-approved treatment of CAH. The company estimates that tardive dyskinesia 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 approximately 30,000 people in the U.S.

Financial Performance

Revenue

Neurocrine reported net product sales of $2.3 billion for 2024, a 26% increase from 2023, primarily driven by strong demand for INGREZZA. The company also reported collaboration revenues of $24.7 million, primarily from royalties on sales of elagolix and valbenazine.

Operating Expenses

The company’s operating expenses increased to $1.78 billion in 2024, up from $1.64 billion in 2023. This increase was primarily due to higher research and development expenses, which totaled $731.1 million, reflecting investments in clinical programs and milestone payments.

Net Income

Neurocrine reported a net income of $341.3 million for 2024, up from $249.7 million in 2023. This increase was driven by higher product sales and improved gross-to-net dynamics.

Cash Flow and Liquidity

Neurocrine generated $595.4 million in cash from operating activities in 2024, reflecting strong product sales and effective management of working capital. The company ended the year with $1.82 billion in cash, cash equivalents, and marketable securities, providing a strong liquidity position to support future growth initiatives.

Risk Factors

Neurocrine faces several risks, including:

• Intense competition in the biopharmaceutical industry.
• Dependence on a limited number of third-party suppliers.
• Potential side effects or adverse events associated with their products.
• Regulatory and compliance risks, including changes in healthcare laws and regulations.

Conclusion

Neurocrine Biosciences has demonstrated strong financial performance in 2024, driven by the success of INGREZZA and the launch of CRENESSITY. The company’s robust pipeline and strategic collaborations position it well for future growth. However, investors should be mindful of the inherent risks in the biopharmaceutical industry, including regulatory challenges and competition.

Overall, Neurocrine Biosciences presents a compelling investment opportunity with a promising outlook, supported by a strong financial foundation and a commitment to innovation in addressing unmet medical needs.