What changed in this filing

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Item 1. Business

2023-02-09 compared with 2022-02-11 · 154 added, 228 removed, 271 unchanged (58% of the section changed)

At Neurocrine Biosciences, our purpose is simple:

Neurocrine Biosciences is a neuroscience-focused, biopharmaceutical company with a simple purpose:

to relieve suffering for people with great needs, but few options.

For three decades, we have applied our unique insight into neuroscience to advance medicines for neurology, neuroendocrinology and neuropsychiatry-related disorders and diseases.

Our efforts have resulted in United States Food and Drug Administration, or FDA, approved treatments for tardive dyskinesia, Parkinson’s disease, endometriosis* and uterine fibroids* and a diversified portfolio of investigational therapies with the potential to address unmet clinical needs of patients worldwide living with neurological, endocrine and psychiatric disorders.

We are dedicated to discovering and developing life-changing treatments for patients with under-addressed neurological, neuroendocrine and neuropsychiatric disorders.

The Company’s diverse portfolio includes United States Food and Drug Administration, or FDA, approved treatments for tardive dyskinesia, Parkinson’s disease, endometriosis* and uterine fibroids* and a diversified portfolio of advanced clinical-stage programs in multiple therapeutic areas.

For three decades, we have applied our unique insight into neuroscience and the interconnections between brain and body systems to treat complex conditions and we will continue to relentlessly pursue medicines to ease the burden of debilitating diseases and disorders.

(*in collaboration with AbbVie Inc., or AbbVie)

Impact of COVID-19

The COVID-19 pandemic has dramatically changed the ways in which we live and interact with one another.

While we adapt to this new shared reality, our purpose remains unchanged:

to relieve suffering for people with great needs, but few options.

Although the initial impact of the pandemic has subsided, we are uncertain as to how more transmissible variants may impact our business.

We remain committed to (1) prioritizing the safety, health and well-being of patients and their caregivers, healthcare providers, and our employees;

(2) ensuring patients with tardive dyskinesia are well supported and have continued uninterrupted access to INGREZZA, for which we have not experienced and currently do not expect any supply disruption;

and (3) advancing clinical studies.

Most of our field-based employees have resumed in-person interactions in accordance with location-specific guidance.

Our office-based employees have returned to the office under flexible work arrangement guidelines to help balance business needs, employee health, well-being and safety and the evolving work environment.

However, as the effects of the pandemic continue to rapidly evolve with the emergence of new COVID-19 variants, a remote work model may nevertheless need to be reinstated at some point in the future.

We continue to evaluate the impact of global spikes or surges in COVID-19 infection and hospitalization rates, as well as the impact of emerging COVID-19 variants on the efficacy of vaccines.

Most hospitals, community mental health facilities, physicians’ offices, pharmacies and other healthcare facilities have relaxed their policies that limited access of patients and our employees to such facilities and limited the ability of patients, pharmacies and prescribers to interact with each other.

However, we anticipate these policies may change from time to time as communities or regions grapple with outbreaks.

The ultimate impact of the COVID-19 pandemic, including any lasting effects on our revenue and the way we conduct our business, is highly uncertain and subject to continued change.

We recognize that this pandemic will continue to present unique challenges for us throughout 2022.

Product Pipeline

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INGREZZA ® (valbenazine).

We launched INGREZZA in the United States in May 2017 as the first FDA-approved drug for the treatment of tardive dyskinesia.

INGREZZA net product sales totaled $1.1 billion for 2021, $993.1 million for 2020 and $752.9 million for 2019 and represent the significant majority of our total net product sales.

We launched INGREZZA in the United States in May 2017 as the first FDA-approved product for the treatment of tardive dyskinesia.

INGREZZA net product sales totaled $1.4 billion for 2022, $1.1 billion for 2021 and $993.1 million for 2020 and represent nearly all of our total net product sales.

INGREZZA provides a once-daily dosing treatment option for tardive dyskinesia and has three dosing options (40 mg, 60 mg and 80 mg capsules), with a recommended dose of 40 mg taken for the first seven days of treatment and an option to take 40 mg, 60 mg or 80 mg thereafter, depending on the patient’s dosing needs.

We out-licensed the rights to valbenazine in Japan and other select Asian markets to Mitsubishi Tanabe Pharmaceutical Company, or MTPC, in 2015, in which markets valbenazine is a royalty-bearing product for us.

In 2021, MTPC received approvals for marketing authorization for valbenazine for the treatment of tardive dyskinesia in Indonesia, Singapore, South Korea and Thailand.

In addition, MTPC has submitted filings for marketing authorization, which are currently under review, in Japan and Malaysia.

DYSVAL ® (valbenazine).

Mitsubishi Tanabe Pharma Corporation, or MTPC, launched DYSVAL in Japan in June 2022 for the treatment of tardive dyskinesia.

In 2021, MTPC received approvals for marketing authorization for valbenazine for the treatment of tardive dyskinesia in Indonesia, Singapore, South Korea and Thailand and has submitted a filing for marketing authorization, which is currently under review, in Malaysia.

We out-licensed the rights to valbenazine in Japan and other select Asian markets to MTPC in 2015, in which markets valbenazine is a royalty-bearing product for us.

Tardive dyskinesia is a movement disorder that is characterized by uncontrollable, abnormal and repetitive movements of the face, torso and/or other body parts, which may be disruptive and negatively impact patients.

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We acquired the United States and Canada rights to ONGENTYS in February 2017.

ONGENTYS is a once-daily, peripheral, selective and reversible catechol-O-methyltransferase, or COMT, inhibitor.

COMT inhibitors are utilized to prolong the duration of effect of levodopa, the primary treatment option for Parkinson’s disease patients, during periods of the day where the effects of levodopa wear off and motor symptoms worsen, also known as “off” time.

Parkinson’s disease is a chronic, progressive and debilitating neurodegenerative disorder that is caused by low dopamine levels produced in the brain.

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Uterine fibroids are benign hormonally responsive tumors that form in the wall of the uterus with a prevalence rate of at least 25% and are a leading indication for hysterectomy, resulting in the performance of more than 200,000 hysterectomies per year in the United States alone.

ALKINDI ® / ALKINDI SPRINKLE ® (hydrocortisone).

Alkindi was launched in its core markets (the United Kingdom, Germany, Austria and Italy) in 2018 as replacement therapy of adrenal insufficiency in infants, children and adolescents (aged 18 years and younger) and subsequently outside of its core markets through a network of distribution partners, including in the United States, where Alkindi is marketed as Alkindi Sprinkle by our partner, Eton Pharmaceuticals, Inc., or Eton Pharmaceuticals.

Alkindi Sprinkle has been granted orphan drug designation for the treatment of pediatric adrenal insufficiency in the United States, where it is a royalty-bearing product for us.

Adrenal insufficiency is a rare condition caused by inadequate production of steroid hormones in the cortex of the adrenal glands.

Adrenal insufficiency can result in severe fatigue and, if left untreated, adrenal crisis that may be life threatening.

EFMODY ® (hydrocortisone modified-release hard capsules).

Efmody was launched in the United Kingdom, Germany and Austria in 2021 for the treatment of classic congenital adrenal hyperplasia, or CAH, in adolescents and adults (aged 12 years and older) and subsequently in the Netherlands through a distribution partner.

CAH is a rare condition usually caused by deficiency of the enzyme 21-hydroxylase, which is required to produce the adrenal steroid hormone, cortisol.

The block in the cortisol production pathway causes the over-production of male steroid hormones (androgens), which are precursors to cortisol.

CAH is congenital (inherited at birth), affects both sexes and can lead to increased mortality, infertility and severe development defects, including ambiguous genitalia, premature sexual development and short stature.

CAH affects an estimated 30,000 people in the United States and 50,000 people in Europe.

Our Pipeline of Investigational Therapies

Chorea in Huntington Disease (valbenazine – VMAT2 Inhibitor (1) ).

We have announced positive top-line data from the KINECT-HD study, a Phase III randomized, double-blind, placebo-controlled clinical study evaluating the efficacy, safety, and tolerability of valbenazine in 120 adult patients with chorea in Huntington disease.

The study met the primary endpoint of reduction in severity of chorea, the cardinal motor feature in Huntington disease, as measured by the change in the Unified Huntington’s Disease Rating Scale, or UHDRS ® , total maximal chorea, or TMC, score from baseline to the average score at weeks 10 and 12.

Treatment with valbenazine resulted in a placebo-adjusted mean reduction in the TMC score of 3.2 units (p < 0.0001), indicating a highly statistically significant improvement in chorea.

The TMC score is part of the motor assessment of the UHDRS and measures chorea in seven different body parts, including the face, oral-buccal-lingual region, trunk, and each limb independently.

The TMC score is the sum of the individual scores and ranges from 0 to 28.

The secondary endpoints of Clinical Global Impression of Change (CGI-C) Response Status and Patient Global Impression of Change (PGI-C) Response Status were also statistically significant in favor of treatment with valbenazine.

We plan to submit a supplemental new drug application for valbenazine for the treatment of Huntington chorea with the FDA in the second half of 2022.

VMAT2 is a protein concentrated in the human brain that is essential for the transmission of nerve impulses between neurons.

VMAT2 is primarily responsible for packaging and transporting monoamines (dopamine, norepinephrine, serotonin and histamine) in neurons.

Specifically, dopamine enables neurotransmission among nerve cells that are involved in voluntary and involuntary motor control.

In neurology, disease states such as tardive dyskinesia, Huntington chorea and tardive dystonia are characterized in part by a hyperdopaminergic state in the brain and modulation of neuronal dopamine levels may provide symptomatic benefits for patients with these conditions, among others.

In April 2022, we presented data from the KINECT-HD study, a Phase III randomized, double-blind, placebo-controlled clinical study that evaluated the efficacy, safety and tolerability of valbenazine in 120 adult patients with chorea associated with Huntington disease.

In the study, valbenazine met the primary endpoint of significant (p < 0.0001) improvement in chorea severity versus placebo, as measured by the Unified Huntington’s Disease Rating Scale Total Maximal Chorea Score, with improvements beginning in Week 2.

Clinically meaningful results, demonstrated by greater response rates, were seen by clinicians (CGI-C) and patients (PGI-C) for valbenazine versus placebo.

In addition, the safety profile was consistent with the known safety profile of valbenazine.

In December 2022, the FDA accepted our supplemental new drug application, or sNDA, for valbenazine for the treatment of chorea associated with Huntington disease.

The agency set a Prescription Drug User Fee Act target action date of August 20, 2023.

Huntington disease is a hereditary progressive neurodegenerative disorder, in which destruction of neuronal cells within the brain results in motor, cognitive, and psychiatric symptoms.

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Approximately 90% of the estimated 30,000 people affected by Huntington disease in the United Sates will develop chorea over the course of the disease.

Valbenazine has been granted orphan drug designation for the treatment of chorea associated with Huntington disease in the United States.

Dyskinetic Cerebral Palsy (valbenazine – VMAT2 Inhibitor (1) ).

We have initiated a Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of valbenazine for the treatment of dyskinetic cerebral palsy in 144 pediatric and adult patients (aged 6 and older).

We have initiated a Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of valbenazine for the treatment of dyskinetic cerebral palsy in 80 pediatric and adult patients (aged 6 to 70 years).

We anticipate having top-line data for this clinical study in 2024.

VMAT2 is a protein concentrated in the human brain that is essential for the transmission of nerve impulses between neurons.

VMAT2 is primarily responsible for packaging and transporting monoamines (dopamine, norepinephrine, serotonin and histamine) in neurons.

Specifically, dopamine enables neurotransmission among nerve cells that are involved in voluntary and involuntary motor control.

Dyskinetic cerebral palsy is a non-progressive, permanent disorder marked by involuntary movement and is a result of damage to the fetal or infant brain’s basal ganglia.

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Dyskinetic cerebral palsy affects up to 15% of the estimated 500,000 to 1 million people affected by cerebral palsy in the United States.

Essential Tremor (NBI-827104 – T-Type Calcium Channel Blocker).

We have initiated a Phase II randomized, double-blind, placebo-controlled, crossover clinical study to evaluate the efficacy, safety, tolerability and pharmacokinetics of NBI-827104 in 28 adult patients with essential tremor.

We anticipate having top-line data from this clinical study during the middle of 2022.

NBI-827104 is a potent, selective, orally active and brain penetrating T-type calcium channel blocker.

We acquired the global rights to NBI-827104 in May 2020.

Essential tremor is one of the most common neurological disorders in adults.

The disorder is characterized by involuntary, rhythmic, oscillatory movements that most often affect the upper limbs.

As the disease progresses, tremor severity often increases and spreads to other parts of the body.

Essential tremor has a significant impact on the activities of daily living often resulting in functional disability as the disease progresses and is associated with a high comorbidity rate of social phobia, depression and anxiety.

Essential tremor affects an estimated 10 million people in the United States.

Epilepsy is one of the most common neurological disorders and is characterized by abnormal electrical activity in the brain that leads to unpredictable seizures that can vary in frequency, from less than one per year to several per day A description of our investigational treatments for potential use in epilepsy follow.

Epileptic Encephalopathy with Continuous Spike and Wave During Sleep, or EE-CSWS (NBI-827104 – T-Type Calcium Channel Blocker).

We have initiated the STEAMBOAT TM study, a Phase II multi-center, randomized, double-blind, placebo-controlled, parallel-group clinical study to evaluate the efficacy, safety, tolerability and pharmacokinetics of NBI-827104 in 24 pediatric patients (aged 4 to 12 years) with EE-CSWS, a rare pediatric form of epilepsy.

We anticipate having top-line data from this clinical study during the second half of 2022.

NBI-827104 is a potent, selective, orally active and brain penetrating T-type calcium channel blocker.

Due to the differentiated mechanism of action of this molecule, when compared to non-selective calcium channel inhibitors, treatment with NBI-827104 could lead to an enhanced benefit risk profile for patients with this rare pediatric form of epilepsy.

We acquired the global rights to NBI-827104 in May 2020.

EE-CSWS is a rare pediatric form of epilepsy.

The typical onset of EE-CSWS occurs in children (aged 2 to 4 years) with a variety of seizure types, including atypical absence seizures, generalized tonic-clonic seizures and focal seizures, that occur primarily during sleep.

Seizures associated with EE-CSWS, which often resolve around puberty, interfere with processes critical to learning and memory.

Children with EE-CSWS often present with neurocognitive regression that can remain even after the seizures associated with EE-CSWS have resolved.

It is estimated that EE-CSWS affects less than 2% of the estimated 470,000 children with active epilepsy in the United States.

A description of our investigational treatments for potential use in epilepsy follows.

SCN8A-DEE (NBI-921352 – Nav1.6 Sodium Channel Inhibitor (2) ).

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In January 2022, the study protocol was amended to include pediatric patients (aged 2 to 11 years) with SCN8A-DEE.

The FDA has granted us orphan drug and rare pediatric disease designations for NBI-921352 in SCN8A-DEE.

NBI-921352 is a potent, highly selective Nav1.6 sodium channel inhibitor being developed to treat pediatric patients with SCN8A-DEE and other potential indications, including adult focal epilepsy.

We acquired the global rights to NBI-921352 in December 2019.

SCN8A-DEE is a rare, extremely severe, single-gene epilepsy caused by mutations in the SCN8A gene that activates Nav1.6, the most highly expressed sodium channel in the excitatory pathways of the central nervous system.

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As SCN8a mutations were discovered only recently, prevalence estimates will be determined in the future as awareness of and access to genetic surveillance increases.

NBI-921352 has been granted orphan drug and rare pediatric disease designations for the treatment of SCN8A-DEE in the United States.

Focal Onset Seizures (NBI-921352 – Nav1.6 Sodium Channel Inhibitor (2) ).

We have initiated a Phase II randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and pharmacokinetics of NBI-921352 as adjunctive therapy in 100 adult patients with focal onset seizures.

We anticipate having top-line data for this clinical study in 2023.

NBI-921352 is a potent, highly selective Nav1.6 sodium channel inhibitor being developed to treat pediatric patients with SCN8A-DEE and other potential indications, including adult focal epilepsy.

We acquired the global rights to NBI-921352 in December 2019.

We anticipate having top-line data for this clinical study in the second half of 2023.

Focal epilepsy is a neurological condition in which the predominant symptom is recurring seizures that affect one hemisphere of the brain.

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Neuroendocrinology

Congenital Adrenal Hyperplasia, or CAH.

Classic CAH in Adults (crinecerfont – CRF1 Antagonist).

We have initiated the CAHtalyst study, a global, registrational Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy and safety of crinecerfont in 165 adult patients with classic CAH, followed by an open-label treatment period.

We anticipate having top-line data for this clinical study in 2023.

Classic CAH in Pediatrics (crinecerfont – CRF1 Antagonist).

We have initiated a global, registrational Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy and safety of crinecerfont in 81 pediatric patients (aged 2 to 17 years) with classic CAH.

We anticipate having top-line data for this clinical study in 2023.

We have been granted orphan drug designation for crinecerfont in the treatment of classic CAH in the United States and the European Union.

Crinecerfont is a potent, selective, orally active, corticotropin-releasing factor1, or CRF1, receptor antagonist as demonstrated in a range of in vitro and in vivo assays.

CRF1 is a hypothalamic hormone released directly into the hypophyseal portal vasculature which acts on the CRF1 receptor, a G protein-coupled receptor, or GPCR, in the anterior pituitary to stimulate the release of the adrenocorticotropin hormone, or ACTH.

The primary role of ACTH is the stimulation of the synthesis and release of adrenal steroids, including cortisol.

Cortisol from the adrenals have a negative feedback role at the level of the hypothalamus that decreases CRF1 release as well as at the level of the pituitary to inhibit the release of ACTH.

This tight control loop is known as the hypothalamic-pituitary-adrenal axis.

Blockade of CRF1 receptors at the pituitary has been shown to decrease the release of ACTH, which in turn decreases the production of adrenal steroids including androgens, and potentially the symptoms associated with classic CAH.

Lower ACTH levels would also reduce the amount of exogenous corticosteroid necessary for classic CAH patients to thrive avoiding the side-effects currently associated with excessive steroid therapy.

Corticosteroids are the current standard of care for classic CAH and are used chronically to both correct the endogenous cortisol deficiency and to reduce the excessive ACTH levels and androgen excess.

However, the dose and duration of steroid use required to suppress ACTH is well above the normal physiological level of cortisol;

resulting in metabolic syndrome, bone loss, growth impairment and Cushing’s syndrome as common and serious side effects.

Classic CAH refers to a group of autosomal recessive genetic conditions that result in an enzyme deficiency that alters the production of adrenal hormones.

If left untreated, classic CAH can result in salt wasting, dehydration and eventually death.

Even with cortisol replacement, persistent elevation of ACTH from the pituitary gland results in excessive androgen levels, leading to virilization of females including precocious puberty, menstrual irregularity, short stature, hirsutism, acne and fertility problems.

Classic CAH affects an estimated 30,000 people in the United States and 50,000 people in the European Union.

Classic Congenital Adrenal Hyperplasia, or CAH.

CAH is a rare condition usually caused by deficiency of the enzyme 21-hydroxylase, which is required to produce the adrenal steroid hormone, cortisol.

The block in the cortisol production pathway causes the over-production of male steroid hormones (androgens), which are precursors to cortisol.

CAH affects an estimated 30,000 people in the United States and 50,000 people in Europe.

CAH in Adults (crinecerfont – CRF1 Antagonist (3) ).

We have completed enrollment of the CAHtalyst study, a global, registrational Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy and safety of crinecerfont in 165 adult patients with CAH, followed by an open-label treatment period.

We anticipate having top-line data for this clinical study in the second half of 2023.

CAH in Pediatrics (crinecerfont – CRF1 Antagonist (3) ).

We have completed enrollment of a global, registrational Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy and safety of crinecerfont in 81 pediatric patients (aged 2 to 17 years) with CAH.

Crinecerfont has been granted orphan drug designation for the treatment of CAH in the United States and the European Union.

We anticipate having top-line data for this clinical study in the second half of 2023.

Adrenal Insufficiency (DNL-0200 – hydrocortisone modified-release hard capsules (4) ).

We have initiated the CHAMPAIN study, a Phase II randomized, double-blind, double-dummy, two-way crossover clinical study to evaluate the efficacy, safety and tolerability of twice-daily DNL-0200 compared with once-daily Plenadren ® (modified-release hydrocortisone) in 67 adult patients with primary adrenal insufficiency.

Adrenal insufficiency is a rare condition caused by inadequate production of steroid hormones in the cortex of the adrenal glands.

Adrenal insufficiency can result in severe fatigue and, if left untreated, adrenal crisis that may be life threatening.

Neuropsychiatry

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Schizophrenia affects an estimated 3.5 million people in the United States.

A description of our investigational treatments for potential use in schizophrenia follow.

A description of our investigational treatments for potential use in schizophrenia follows.

Adjunctive Treatment of Schizophrenia (valbenazine – VMAT2 Inhibitor (1) ).

We have initiated a Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of valbenazine when administered orally once daily as adjunctive treatment in 400 adolescent and adult patients (aged 13 years and older) with schizophrenia who have had an inadequate response to antipsychotics.

In November 2021, we initiated a Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of valbenazine when administered orally once daily as adjunctive treatment in 400 adolescent and adult patients (aged 13 years and older) with schizophrenia who have had an inadequate response to antipsychotics.

We anticipate having top-line data for this clinical study in 2024.

VMAT2 is a protein concentrated in the human brain that is essential for the transmission of nerve impulses between neurons.

VMAT2 is primarily responsible for packaging and transporting monoamines (dopamine, norepinephrine, serotonin and histamine) in neurons.

Specifically, dopamine enables neurotransmission among nerve cells that are involved in voluntary and involuntary motor control.

In psychiatry, disease states such as schizophrenia are characterized in part by a hyperdopaminergic state in the brain and modulation of neuronal dopamine levels may provide symptomatic benefits for patients with this condition, among others.

In December 2022, we initiated a second Phase III randomized, double-blind, placebo-controlled clinical study to evaluate the efficacy, safety and tolerability of valbenazine when administered orally once daily as adjunctive treatment in 400 adolescent and adult patients (aged 13 years and older) with schizophrenia who have had an inadequate response to antipsychotics.

Approximately 30% of the estimated 3.5 million people affected by schizophrenia in the United States fail to respond to current antipsychotic therapy.

Schizophrenia (NBI-1117568 – Muscarinic M4 Agonist (5) ).

We plan to submit an investigational new drug application and initiate a placebo-controlled Phase II clinical study of NBI-1117568 as a potential treatment for schizophrenia in 2022.

NBI-1117568 is a potential first-in-class muscarinic M4 receptor agonist with the potential to be developed for the treatment of schizophrenia.

As a selective M4 orthosteric agonist, NBI-1117568 offers the potential for an improved safety profile without the need for combination therapy to ameliorate off-target effects or for cooperativity with acetylcholine.

Muscarinic receptors are central to brain function and validated as drug targets in psychosis and cognitive disorders.

We acquired the global rights to NBI-1117568 in December 2021.

We have initiated a Phase II multi-center, randomized, double-blind, placebo-controlled, multi-arm, multi-stage clinical study to evaluate the efficacy, safety and tolerability of NBI-1117568 in 213 adult patients with schizophrenia who are experiencing an acute exacerbation or relapse of symptoms.

All currently approved antipsychotic medications are believed to work through direct action on monoaminergic receptors, with approximately 40% of patients reporting negative side effects and approximately 30% not benefiting adequately from these medications.

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We have initiated a Phase II randomized, double-blind, parallel, placebo-controlled clinical study to evaluate the efficacy, safety, tolerability and pharmacokinetics of luvadaxistat when administered orally once daily as adjunctive treatment in 308 adult patients with CIAS.

Luvadaxistat is a potential first-in-class D-Amino Acid Oxidase, or DAAO, inhibitor with the potential to be developed for the treatment of cognitive impairment associated with schizophrenia.

We acquired the global rights to luvadaxistat in June 2020.

CIAS, which may include deficits in attention, working memory and executive function, has a negative impact on patients’ quality of life and ability to function.

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Major Depressive Disorder.

Major depressive disorder is characterized by a persistently depressed mood or loss of interest in daily activities that is present most of the day in addition to other symptoms that can impact normal daily functioning, relationships and overall quality of life.

Major depressive disorder is one of the leading causes of disability and is characterized by a persistently depressed mood or loss of interest in daily activities that is present most of the day in addition to other symptoms that can impact normal daily functioning, relationships and overall quality of life.

Treatments range from selective serotonin reuptake inhibitors, serotonin norepinephrine reuptake inhibitors, atypical antipsychotics, tricyclic antidepressants and psychotherapies, among others.

Major depressive disorder affects more than 16 million people in the United States.

A description of our investigational treatments for potential use in major depressive disorder follow.

A description of our investigational treatments for potential use in major depressive disorder follows.

Inadequate Response to Treatment in Major Depressive Disorder (NBI-1065845 – AMPA Potentiator (7) ).

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We anticipate having top-line data for this clinical study in 2024.

NBI-1065845 is a potential first-in-class Alpha-Amino-3-Hydroxy-5-Methyl-4-Isoxazole Propionic Acid, or AMPA, potentiator with the potential to be developed for the treatment of inadequate response to treatment in major depressive disorder, also known as treatment-resistant depression.

We acquired the global rights to NBI-1065845 in June 2020.

NBI-1065845 is currently designated as a 50:50 profit-share product with Takeda Pharmaceutical Company Limited, which retains a one-time opt-out right to convert the designation to a royalty-bearing product.

Major depressive disorder is one of the leading causes of disability.

While there are a number of marketed treatments for major depressive disorder, approximately 30% of the more than 16 million people affected by the disorder in the United States do not adequately respond to treatment.

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We have initiated a Phase II randomized, double-blind, placebo-controlled, two-period cross-over, Proof of Activity clinical study to evaluate the effects of NBI-1065846 as adjunctive treatment in 88 adult patients with major depressive disorder experiencing anhedonia.

We anticipate having top-line data for this clinical study in 2023.

We anticipate having top-line data for this clinical study in the second half of 2023.

Anhedonia is characterized by the inability to experience pleasure and has been associated with changes in neurotransmitter levels involved in the brain’s reward system.

Anhedonia is a core symptom of major depressive disorder and also frequently presents in people with bipolar depression, schizophrenia, substance-abuse disorders, Parkinson’s disease, diabetes and coronary artery disease.

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(1) VMAT2 is a protein concentrated in the human brain that is essential for the transmission of nerve impulses between neurons.

VMAT2 is primarily responsible for packaging and transporting monoamines (dopamine, norepinephrine, serotonin and histamine) in neurons.

Specifically, dopamine enables neurotransmission among nerve cells that are involved in voluntary and involuntary motor control.

(2) NBI-921352 is a potent, highly selective Nav1.6 sodium channel inhibitor being developed to treat pediatric patients with SCN8A-DEE and other potential indications, including adult focal epilepsy.

We acquired the global rights to NBI-921352 in December 2019.

(3) Crinecerfont is a potent, selective, orally active, corticotropin-releasing factor1, or CRF1, receptor antagonist as demonstrated in a range of in vitro and in vivo assays.

The primary role of ACTH is the stimulation of the synthesis and release of adrenal steroids, including cortisol.

Cortisol from the adrenals have a negative feedback role at the level of the hypothalamus that decreases CRF1 release as well as at the level of the pituitary to inhibit the release of ACTH.

This tight control loop is known as the hypothalamic-pituitary-adrenal axis.

Lower ACTH levels would also reduce the amount of exogenous corticosteroid necessary for CAH patients to thrive avoiding the side-effects currently associated with excessive steroid therapy.

(4) DNL-0200 is a modified-release preparation of hydrocortisone that mimics the physiological circadian rhythm of cortisol and has been specifically designed for patients with diseases of cortisol deficiency, such as adrenal insufficiency and CAH.

(5) NBI-1117568 is a potential first-in-class muscarinic M4 receptor agonist with the potential to be developed for the treatment of schizophrenia.

Muscarinic receptors are central to brain function and validated as drug targets in psychosis and cognitive disorders.

We acquired the global rights to NBI-1117568 in December 2021.

(6) Luvadaxistat is a potential first-in-class D-Amino Acid Oxidase, or DAAO, inhibitor with the potential to be developed for the treatment of cognitive impairment associated with schizophrenia.

We acquired the global rights to luvadaxistat in June 2020.

(7) NBI-1065845 is a potential first-in-class Alpha-Amino-3-Hydroxy-5-Methyl-4-Isoxazole Propionic Acid, or AMPA, potentiator with the potential to be developed for the treatment of inadequate response to treatment in major depressive disorder.

We acquired the global rights to NBI-1065845 in June 2020.

(8) NBI-1065846 is a potential first-in-class G Protein-Coupled Receptor 139, or GPR139, agonist with the potential to be developed for the treatment of anhedonia in major depressive disorder.

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NBI-1065846 is currently designated as a 50:50 profit-share product with Takeda Pharmaceutical Company Limited, which retains a one-time opt-out right to convert the designation to a royalty-bearing product.

Anhedonia is characterized by the inability to experience pleasure and has been associated with changes in neurotransmitter levels involved in the brain’s reward system.

Business Strategy

Commercializing Our Product Portfolio.

We launched INGREZZA in the United States in May 2017 as the first FDA-approved drug for the treatment of tardive dyskinesia.

In September 2020, we launched ONGENTYS in the United States as an FDA-approved add-on treatment to levodopa/carbidopa in patients with Parkinson's disease experiencing motor fluctuations.

Our experience in marketing and selling pharmaceutical products began with INGREZZA’s approval in 2017, when we hired our salesforce and established our distribution and reimbursement capabilities, all of which are necessary to successfully commercialize our marketed products and products candidates.

Our specialty salesforce in the United States consists of approximately 250 experienced sales professionals focused on educating healthcare professionals, including psychiatrists and neurologists, who treat patients with tardive dyskinesia and Parkinson’s disease.

In the third quarter of 2021, we announced an expansion of our specialty salesforce, which is expected to be completed in the second quarter of 2022, to approximately 350 experienced sales professionals that will establish three dedicated sales teams focused on psychiatry, neurology and providers in long-term care, respectively.

Our commercial team is comprised of experienced professionals in marketing, access and reimbursement, managed markets, market research, commercial operations and salesforce planning and management.

In addition, our commercial infrastructure includes capabilities in manufacturing, medical affairs, quality control and compliance.

We intend to retain commercial rights to certain products, including INGREZZA, that we can effectively and efficiently develop, secure regulatory approval and commercialize, which includes products with a concentrated prescriber base and well-defined patient population that can be accessed with an efficient patient and prescriber outreach program.

Advancing Life-Changing Discoveries in Neurology, Neuroendocrinology and Neuropsychiatry.

We believe that by continuing to advance and expand our product pipeline, we can mitigate some of the risks associated with drug development.

We currently have multiple programs in various stages of research and development, including symptomatic disease modifying treatments.

We take a portfolio approach to managing our pipeline that balances the size of market opportunities with clear and defined clinical and regulatory paths to approval.

By doing so, we focus our internal development resources on innovative therapies with improved probabilities of technical and commercial success.

Discovering Novel Medicines to Address Unmet Patient Needs.

We seek to identify and validate new medicines on novel targets for internal development or collaboration.

We believe the creativity and productivity of our discovery research group will continue to be a critical component for our ongoing success.

Acquiring Rights to Commercial Products and Drug Development Candidates.

We aim to continue to selectively acquire rights to commercial products and programs in all stages of clinical development to capitalize on our commercial and drug development capabilities.

Our core business strategy is to continue applying our unique insight into neuroscience to advance medicines for the treatment of under-addressed neurological, neuroendocrine and neuropsychiatric disorders to relieve suffering for people with great needs, but few options.

We focus our internal research and development efforts on innovative therapies with improved probabilities of technical and commercial success by taking a portfolio approach to managing our pipeline that balances the size of market opportunities with clear and defined clinical and regulatory paths to approval.

In addition, from time to time we supplement our internal efforts by acquiring businesses or in-licensing certain rights to commercial products or clinical programs to enhance and capitalize on our commercial and development capabilities.

In 2022, we were able to help more people affected by tardive dyskinesia than ever before, reflecting sustained growth for INGREZZA as we continued to invest in our branded direct-to-consumer INGREZZA advertising campaign launched in May 2021 and completed the reorganization and expansion of our sales force in April 2022, transitioning from a single team structure to three distinct teams dedicated to psychiatry, neurology and long-term care, respectively.

Going forward, key elements of our commercial strategy include maximizing the opportunity in INGREZZA through consistent and effective commercial execution, continued development of valbenazine as the best-in-class treatment for new patient populations, including for the potential treatment of chorea associated with Huntington disease, dyskinetic cerebral palsy and schizophrenia, and to lead the evolving understanding of VMAT2 biology and its role in disease.

Collaboration and License Agreements

In addition to our independent efforts to develop and market products, we may enter into collaboration and license agreements from time to time to enhance our drug development and commercial capabilities.

Refer to Note 2 to the consolidated financial statements for more information on our significant collaboration and license agreements.

Intellectual Property

We actively seek to protect our products and product candidates and related inventions and improvements that we consider important to our business.

We own a portfolio of United States and ex-United States patents and patent applications and have licensed rights to a number of United States and ex-United States patents and patent applications.

Our owned and licensed patents and patent applications cover or relate to our products and product candidates, including certain formulations, used to treat particular conditions and methods of administration, drug delivery technologies and delivery profiles and methods of manufacturing.

We own or have licensed rights to the following United States patents relating to INGREZZA and our other products and product candidates in our pipeline (in addition to non-United States patents and certain patents covering our early-stage product candidates):

• INGREZZA, our highly selective VMAT2 inhibitor for the treatment of tardive dyskinesia, is covered by 19 issued United States patents that are listed in the FDA’s Orange Book and are set to expire between 2027 and 2040.

There is also a potential patent term extension of up to an additional 2 years for United States Patent No.

8,039,627, which is currently set to expire in 2029 and is the earliest patent covering valbenazine, the active pharmaceutical ingredient contained in INGREZZA.

In Japan and certain other East Asian markets, we are actively pursuing most of the patents corresponding to those listed in the FDA’s Orange Book entry for INGREZZA.

• ONGENTYS, a highly selective COMT inhibitor for Parkinson’s disease, is covered by 9 issued United States patents that are listed in the FDA’s Orange Book and set to expire between 2026 to 2035 (not including a potential patent term extension of up to an additional 4 years for one of these patents).

• ORILISSA, our small molecule GnRH antagonist for the treatment of endometriosis pain, is covered by 5 issued United States patents that are listed in the FDA’s Orange Book (the number of patents being dependent on dosage amount) and are set to expire between 2024 to 2036 (not including patent term extension of up to 5 years for patents listed in the Orange Book expiring in 2024).

• ORIAHNN, containing our small molecule GnRH antagonist for the treatment of menstrual bleeding associated with uterine fibroids, is covered by 4issued United States patents that are listed in the FDA’s Orange Book and are set to expire between 2024 to 2034 (not including a potential patent term extension of up to an additional 5 years for one of the patents).

• Valbenazine, our highly selective VMAT2 inhibitor under further clinical development for the treatment of chorea in Huntington’s disease, is covered by at least 12 of the issued United States patents that are listed in the FDA’s Orange Book entry for INGREZZA and are set to expire between 2027 and 2038 .

There is also a potential patent term extension of up to an additional 2 years for United States Patent No.

8,039,627, which is currently set to expire in 2029.

• Crinecerfont, a CRF1 antagonist for the treatment of congenital adrenal hyperplasia (CAH), is covered by United States Patent No.

10,905,690, which expires in 2035 (not including a potential patent term extension of up to an additional 5 years).

• Luvadaxistat, a DAAO inhibitor for the treatment of cognitive impairment associated with Schizophrenia (CIAS), is covered by United States Patent No.

9,290,456, among others, which expires in 2032 (not including a potential patent term extension of up to an additional 5 years).

• NBI-827104, an inhibitor of T-type calcium channels for the treatment of CSWS epilepsy, is covered by United States Patent No.

US 9,932,314, among others, which expires in 2035 (not including a potential patent term extension of up to an additional 5 years).

• NBI-921352, an inhibitor of the Nav1.6 voltage-gated sodium channel for the treatment of SCN8A-DEE epilepsy, is covered by United States Patent No.

US 10,246,453, among others, which expires in 2037 (not including a potential patent term extension of up to an additional 5 years).

• NBI-1065845, a positive allosteric modulator of AMPA for the treatment of inadequate response to treatment in major depressive disorder is covered by United States Patent No.

8,778,934, among others, which expires in 2031 (not including a potential patent term extension of up to an additional 5 years).

• NBI-1065846, a GPR139 agonist for the treatment of anhedonia in major depressive disorder, is covered by United States Patent No.

9,556,130, among others, which expires in 2035 (not including a potential patent term extension of up to an additional 5 years).

• NBI-1117568, a selective M4 agonist for the treatment of schizophrenia, is covered by United States Patent No.

10,961,225, among others, which expire in 2035 (not including a potential patent term extension of up to an additional 5 years).

We actively seek to protect our products, product candidates, and related inventions and improvements that we consider important to our business.

We own a portfolio of United States and ex-United States patents and patent applications, and have also licensed rights to a number of United States and ex-United States patents and patent applications.

Our owned and licensed patents and patent applications cover or relate to our products and product candidates, including certain formulations, uses to treat particular conditions, methods of administration, drug delivery technologies and delivery profiles, and methods of manufacturing.

Below is a description of the United States and ex-United States patents to INGREZZA and the following product candidates:

• INGREZZA, our highly selective VMAT2 inhibitor approved in the United States (and other countries) for the treatment of tardive dyskinesia, is covered by 20 issued, FDA Orange Book-listed United States patents which are set to expire between 2027 and 2040.

Patent term extension corresponding to regulatory approval delay of 552 days has been received for United States Patent No.

8,039,627, which now expires in 2031 and covers valbenazine, the active pharmaceutical ingredient contained in INGREZZA.

In Japan and in certain other East Asian markets, we are actively pursuing most of the patents corresponding to those listed in the FDA’s Orange Book entry for INGREZZA.

• Valbenazine, our highly selective VMAT2 inhibitor under clinical development for the treatment of chorea associated with Huntington disease, is covered by at least 12 of the issued United States patents currently listed in the FDA’s Orange Book entry for INGREZZA.

Issued patents and pending patent applications that also cover the treatment of chorea associated with Huntington disease are set to expire between 2027 and 2043.

• Valbenazine, additionally under clinical development for dyskinetic cerebral palsy (DCP) and for adjunctive treatment of schizophrenia (ATS), is covered by issued patents and pending patent applications set to expire between 2027 and 2042, including several issued, Orange Book-listed United States patents.

• Crinecerfont, a CRF1 receptor antagonist under clinical development for the treatment of congenital adrenal hyperplasia (CAH) in adults and children, is covered by United States Patent Nos.

10,905,690 and 11,311,544, among other patents and pending patent applications, set to expire between 2035 and 2041 (not including any potential patent term extensions).

We also own, or have licensed rights to, patents covering our other products and earlier stage product candidates.

In addition to the potential patent term extensions referenced above, the products and product candidates in our pipeline may be subject to additional terms of exclusivity that we may obtain by future patent issuances.

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If this protection is available, no competitor may use the original applicant’s data as the basis of a generic marketing application during the period of data and marketing exclusivity, which is measured from the date of marketing approval by the FDA or corresponding foreign regulatory authority.

This period of exclusivity is generally 5 years in the United States, 6 years in Japan and 10 years in the European Union, except that for biologics, the period of exclusivity in the United States is 12 years under the Biologics Price Competition and Innovation Act.

In addition, if granted orphan drug designation, certain of our product candidates, including crinecerfont, may also be eligible for marketing exclusivity in the United States for 7 years and European Union for 10 years.

Refer to Item 1A.

This period of exclusivity is generally five years in the United States, six years in Japan and 10 years in the European Union, except that for biologics, the period of exclusivity in the United States is 12 years under the Biologics Price Competition and Innovation Act.

In addition, if granted orphan drug designation, certain of our product candidates, including, for example, crinecerfont, may also be eligible for marketing exclusivity in the United States for seven years and in the European Union for 10 years.

Refer to Part I Item 1A.

Risk Factors for a discussion of the challenges we may face in obtaining or maintaining patent and/or trade secret protection and Item 3.

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Marketing, Sales and Distribution

Our expanded specialty salesforce in the United States will consist of approximately 350 experienced sales professionals divided into three dedicated sales teams focused on psychiatry, neurology and long-term care.

We anticipate completing our salesforce expansion during the second quarter of 2022.

Our specialty sales force consists of approximately 350 experienced sales professionals located in the United States and is divided into three dedicated sales teams focused on psychiatry, neurology and long-term care.

For INGREZZA, our customers in the United States consist of a limited network of specialty pharmacy providers that deliver INGREZZA to patients by mail, wholesale distributors that distribute INGREZZA primarily to certain specialty pharmacies, and specialty distributors that distribute INGREZZA primarily to closed-door pharmacies and government facilities.

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The Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

In addition, we may be subject to HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their privacy and security regulations, which impose certain obligations, including the adoption of administrative, physical and technical safeguards to protect individually identifiable health information on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers) and their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information as well as their covered subcontractors.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare and Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.

We may be subject to HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their privacy and security regulations, which impose certain obligations, including the adoption of administrative, physical and technical safeguards to protect individually identifiable health information on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers) and their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information as well as their covered subcontractors.

If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable HIPAA obligations, we could face significant consequences, including but not limited to:

government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

litigation (including class-action claims);

additional reporting requirements and/or oversight;

bans on processing personal data;

orders to destroy or not use personal data;

and imprisonment of company officials.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.

Also, many states have similar healthcare statutes or regulations that may be broader in scope and may apply regardless of payor.

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Foreign approvals may not be granted on a timely basis, or at all.

In addition, regulatory approval of prices is required in most countries other than the United States The resulting prices may not be sufficient to generate an acceptable return to us or our corporate collaborators.

In addition, regulatory approval of prices is required in most countries other than the United States, except for a certain limited number of drugs sold to certain Medicare beneficiaries beginning in 2023.

The resulting prices may not be sufficient to generate an acceptable return to us or our corporate collaborators.

In the European Union, there are currently two potential tracks for seeking marketing approval for a product not authorized in any European Union member state:

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In the centralized procedure, which is required of all products derived from biotechnology, a company submits a single marketing authorization application to the European Medicines Agency, or EMA, which conducts an evaluation of the dossier, drawing upon its scientific resources across Europe.

If the drug product is proven to fulfill the requirements for quality, safety and efficacy, the EMA’s Committee for Medicinal Products of Human Use, or CHMP, adopts a positive opinion, which is transmitted to the European Commission for final decision on grant of the marketing authorization.

If the drug product is proven to fulfill the requirements for quality, safety and efficacy, the EMA’s Committee for Medicinal Products for Human Use, or CHMP, adopts a positive opinion, which is transmitted to the European Commission for final decision on grant of the marketing authorization.

While the EC generally follows the CHMP’s opinion, it is not bound to do so.

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During a sponsor’s orphan drug exclusivity period, competitors, however, may receive approval for drugs with different active moieties for the same indication as the approved orphan drug, or for drugs with the same active moiety as the approved orphan drug, but for different indications.

Orphan drug exclusivity could block the approval of one of our products for 7 years if a competitor obtains approval for a drug with the same active moiety intended for the same indication before we do, unless we are able to demonstrate that grounds for withdrawal of the orphan drug exclusivity exist, or that our product is clinically superior.

Orphan drug exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for a drug with the same active moiety intended for the same indication before we do, unless we are able to demonstrate that grounds for withdrawal of the orphan drug exclusivity exist, or that our product is clinically superior.

Further, if a designated orphan drug receives marketing approval for an indication broader than the rare disease or condition for which it received orphan drug designation, it may not be entitled to exclusivity.

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The orphan legislation in the European Union is available for therapies addressing conditions that affect five or fewer out of 10,000 persons, are life‑threatening or chronically debilitating conditions and for which no satisfactory treatment is authorized.

The market exclusivity period is for 10 years, although that period can be reduced to 6 years if, at the end of the fifth year, available evidence establishes that the product does not justify maintenance of market exclusivity.

The market exclusivity period is for 10 years, although that period can be reduced to six years if, at the end of the fifth year, available evidence establishes that the product does not justify maintenance of market exclusivity.

Post-Approval Requirements.

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imposition of post-market studies or clinical trials to assess new safety risks;

or imposition of distribution or other restrictions under a risk evaluation and mitigation strategy program.

or imposition of distribution or other restrictions.

Other potential consequences include, among other things:

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The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.

Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label.

Drugs may be promoted only for the approved indication(s) and in accordance with the provisions of the approved label.

However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.

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Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval.

In the United States and markets in other countries, sales of any products for which we receive regulatory approval will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.

In the United States and other countries, sales of any products for which we receive regulatory approval will depend, in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such drug products.

In the United States, third-party payors include federal and state healthcare programs, government authorities, private managed care providers, private health insurers and other organizations.

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Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our drug products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical drug products and medical services, in addition to questioning their safety and efficacy.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our drug products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained in the first instance or applied consistently.

Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of drug products and medical services, in addition to questioning their safety, efficacy and clinical appropriateness.

Such payors may limit coverage to specific drug products on an approved list, also known as a formulary, which might not include all of the FDA-approved drugs for a particular indication.

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Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Healthcare Reform

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.

Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively the ACA, was signed into law, which intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the health industry and impose additional health policy reforms.

We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private third-party payor.

There have been legal and political challenges to certain aspects of the ACA.

Since January 2017, the Trump administration signed several executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by the ACA.

Concurrently, Congress considered legislation that would repeal or repeal and replace all or part of the ACA.

For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, includes a provision that repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”.

On June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Thus, the ACA will remain in effect in its current form.

Prior to the U.S.

Supreme Court ruling, on January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

It is possible that the ACA will be subject to judicial or Congressional challenges in the future.

It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA.

Other legislative changes have been proposed and adopted since the ACA was enacted.

These changes include, among others, aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and, due to subsequent legislative amendments, including the Investment and Jobs Act, will remain in effect through 2031, except for a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic, unless additional Congressional action is taken.

Enacted Healthcare Reform Measures

The United States and some foreign jurisdictions have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.

In the United States, the pharmaceutical industry and the cost of prescription drugs has been a continuous focus of these efforts and has been significantly affected by major legislative initiatives.

Most recently, in August 2022, President Biden signed into law the Inflation Reduction Act of 2022, or the IRA, which, among other things, (1) directs the Secretary of the U.S.

Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, (2) redesigns the Medicare Part D prescription drug benefit to lower patient out-of-pocket costs and increase manufacturer liability and (3) requires drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation.

The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in the ACA marketplaces through plan year 2025 and eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost to $2,000 through a newly established manufacturer discount program.

These provisions will take effect progressively starting in 2023, although they may be subject to legal challenges.

It is currently unclear how the IRA will be implemented;

however, it is likely to have a significant impact on the pharmaceutical industry and prescription drug pricing.

While the IRA targets high-expenditure drugs that have been on the market for several years without generic or biosimilar competition, we have qualified for the small biotech manufacturer exemption that is set to expire in 2029.

However, the qualification for this exemption is subject to various requirements and there is no assurance that we will continue to qualify for this exemption in the future.

Further, the loss of this exemption or the potential loss of this exemption, including as a result of a potential acquisition or strategic transaction, could have an adverse impact on our business.

The most significant prior revisions to federal law governing the pharmaceutical industry and prescription drug pricing was enacted through the March 2010 the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the ACA.

This law was intended to broaden access to health insurance by reducing the number of uninsured persons, reducing or constraining the growth of healthcare spending, enhancing remedies against fraud and abuse, adding transparency requirements for the healthcare and health insurance industries, imposing taxes and fees on the health industry and imposing additional health policy reforms.

We expect that these health reform measures, may result in more rigorous coverage criteria and lower reimbursement for prescription drugs, as well as result in additional downward pressure on any price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private third-party payors.

Other significant legislative changes impacting the pharmaceutical industry and prescription drug pricing have been adopted since the ACA was enacted.

Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequestration.

Also, there has been heightened governmental scrutiny recently over pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.

Such scrutiny has resulted in several Congressional hearings and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to drug pricing that sought to implement several of the administration’s proposals.

As a result, the FDA concurrently released a final rule and guidance in September 2020, providing pathways for states to build and submit importation plans for drugs from Canada.

This rule is undergoing legal challenge.

Further, on November 20, 2020, the U.S.

Department of Health and Human Services, or HHS, finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.

The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.

This rule has been stayed by the Biden Administration until 2023 while pending litigation is heard in the courts.

On November 20, 2020, CMS issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

As a result of litigation challenging the Most Favored Nation model, on December 27, 2021, CMS published a final rule that rescinds the Most Favored Nation model interim final rule.

Additionally, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

No legislation or administrative actions have been finalized to implement these principles.

It is unclear whether these or similar policy initiatives will be implemented in the future.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to examine and/or control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Proposed Healthcare Reform Measures

The United States and some foreign jurisdictions are considering a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and may be significantly affected by major legislative initiatives.

We are currently unable to predict what other additional legislation or regulation, if any, relating to the health care industry may be enacted in the future or what effect recently enacted federal legislation or any such additional legislation or regulation would have on our business.

The biotechnology and pharmaceutical industries are subject to rapid and intense technological change.

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oral contraceptives, NSAIDs and other pain medications, including opioids.

Congenital Adrenal Hyperplasia.

Classic Congenital Adrenal Hyperplasia, or CAH.

For CAH, high doses of corticosteroids are the current standard of care to both correct the endogenous cortisol deficiency as well as reduce the excessive ACTH levels.

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Commonly used anti-seizure medications include phenytoin, levetiracetam, brivaracetam, cenobamate, carbamazepine, clobazam, lamotrigine, valproate, oxcarbazepine, topiramate, lacosamide, perampanel and cannabidiol, among others.

There are currently no FDA-approved treatments specifically indicated for the early infantile epileptic encephalopathies SCN8A-DEE and EE-CSWS;

There are currently no FDA-approved treatments specifically indicated for the early infantile epileptic encephalopathy SCN8A-DEE;

however, a number of different anti-seizure medications are currently used in these patient populations.

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Our Employees.

We have grown to a team of more than 900 employees as of December 31, 2021, all of whom were employed in the United States.

We have grown to a team of more than 1,200 employees as of December 31, 2022, primarily employed in the United States.

Our highly qualified and experienced team, which includes scientists, physicians and professionals across sales, marketing, manufacturing, regulatory, finance and other essential functions are critical to our success.

We also leverage temporary workers to provide flexibility for our business needs.

During 2021, we added over 200 new employees to our team.

We expect to continue to add additional employees in 2022 with a focus on expanding our commercial salesforce, research, and development organizations.

During 2022, we added more than 250 new employees to our team, reflecting the completion of our sales force expansion to approximately 350 experienced sales professionals.

We expect to add additional employees in 2023 with a focus on expanding our research and development organization.

We continually evaluate our business needs and opportunities and balance in-house expertise and capacity with external expertise and capacity.

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The success of our human capital management investments is evidenced by our low employee turnover, a number which is regularly reviewed by our Board of Directors as part of their oversight of our human capital strategy.

In recognition of our efforts, in 2021, we received the following rewards:

• #4 in Fortune Best Workplaces in Health Care & Biopharma TM

• #7 in Fortune Best Small & Medium Workplaces TM

• #13 in Fortune Best Workplaces for Women TM

• #25 in Fortune Best Workplaces for Millennials TM

In recognition of our efforts, in 2022, we were ranked in #8 in Fortune Best Small & Medium Workplaces in Biopharma TM .

Employee Engagement, Talent Development & Benefits.

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As part of our promotion and retention efforts, we also invest in ongoing leadership development programs as well as offer tuition reimbursement.

In addition, we regularly conduct an employee survey to gauge employee engagement and identify areas of focus.

In addition, we regularly conduct employee surveys to gauge employee engagement and identify areas of focus.

Diversity & Inclusion.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business