What changed in this filing

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Item 1A. Risk Factors

2024-10-30 compared with 2024-08-01 · 28 added, 21 removed, 702 unchanged (7% of the section changed)

20 unchanged sentences

• We currently depend on a limited number of third-party suppliers.

The loss of these suppliers, or delays or problems in the supply of INGREZZA or any of our other products, could materially and adversely affect our ability to successfully commercialize INGREZZA or any of our other products.

The loss of these suppliers, or delays or problems in the supply of INGREZZA or any of our other products or product candidates, could materially and adversely affect our ability to successfully develop or commercialize INGREZZA, crinecerfont or any of our other products or product candidates.

• We license some of our core technologies and drug candidates from third parties.

10 unchanged sentences

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

We have continued to invest in our commercial infrastructure and distribution capabilities since the launch of INGREZZA, including the recent expansion of our psychiatry and long-term care sales teams, which we announced in June 2024.

While our team members and consultants have experience marketing and selling pharmaceutical products, we may face difficulties related to managing the rapid growth of our personnel and infrastructure, and there can be no guarantee that we will be able to maintain the personnel, systems, arrangements and capabilities necessary to continue to successfully commercialize INGREZZA or any of our other products, or any product candidate approved by the FDA, or equivalent foreign authorities, in the future.

21 unchanged sentences

Developments by others (including the development of generic equivalents) may render our product candidates or technologies obsolete or noncompetitive.

We are commercializing and performing research on or developing products for the treatment of several disorders including endometriosis, tardive dyskinesia, chorea associated with Huntington's disease, uterine fibroids, classic congenital adrenal hyperplasia, pain, Parkinson’s disease and other neurology, neuroendocrinology and neuropsychiatry-related diseases and disorders, and there are a number of competitors to our products and product candidates.

We are commercializing and performing research on or developing products for the treatment of several disorders, including tardive dyskinesia, chorea associated with Huntington's disease, uterine fibroids, endometriosis, classic congenital adrenal hyperplasia, pain, Parkinson’s disease, schizophrenia, epilepsy, and other neurology, neuroendocrinology, and neuropsychiatry-related diseases and disorders, and there are a number of competitors to our products and product candidates.

If one or more of our competitors’ products or programs are successful (including the development of generic equivalents), the market for our products may be reduced or eliminated.

12 unchanged sentences

In addition, there are several programs in clinical development by other companies targeting CAH.

• Our investigational treatments for potential use in schizophrenia and depression may in the future compete with several development-stage programs being pursued by other companies.

In addition, there are a number of different anti-psychotic and anti-depressant medications currently used in these patient populations.

• Our investigational treatments for potential use in epilepsy may in the future compete with numerous approved anti-seizure medications and development-stage programs being pursued by several other companies.

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 encephalopathy SCN8A-DEE.

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

• Our investigational treatments for potential use in schizophrenia and depression may in the future compete with several development-stage programs being pursued by other companies.

Currently, there are no FDA-approved treatments specifically indicated for cognitive impairment associated with schizophrenia;

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

• Our investigational treatments for potential use in neurology, neuroendocrinology and neuropsychiatry may in the future compete with numerous approved products and development-stage programs being pursued by several other companies.

21 unchanged sentences

• a study is compromised due to patients dropping out and not completing the trials;

• unforeseen disruptions or delays may occur, caused by man-made or natural disasters or public health pandemics or epidemics or other business interruptions, including, for example, the conflict between Russia and Ukraine and the conflict in the Middle East;

• unforeseen disruptions or delays may occur, caused by man-made or natural disasters, public health pandemics or epidemics, trade restrictions or other business interruptions, including, for example, the conflict between Russia and Ukraine, the conflict in the Middle East, and the potential impact of the proposed BIOSECURE Act;

• regulatory requirements may change.

1 unchanged sentence

For example, the conflict between Russia and Ukraine, together with sanctions imposed on Russia, caused us to suspend all planned clinical trial activities in Russia and Ukraine.

As a result, our planned clinical development timelines for valbenazine and luvadaxistat were significantly delayed while we identified and operationalized alternative clinical trial sites, which we have now done.

Additionally, any of these events described above could result in suspension of a program and/or obviate any filings for necessary regulatory approvals.

As a result, our planned clinical development timelines for valbenazine were significantly delayed while we identified and operationalized alternative clinical trial sites, which we have now done.

Geopolitical tensions could also affect our ability to obtain supplies of our investigational products, which could cause delays or otherwise disrupt our clinical trials and research and development efforts.

Some of our suppliers are located in China, exposing us to the possibility of supply disruption in the event of changes to the laws, rules, regulations, and policies of the governments of the U.S.

For example, the BIOSECURE Act, which recently passed in the House of Representatives and is now with the Senate, targets certain Chinese biotechnology companies.

If this bill becomes law, or similar laws are passed, these regulations would have the potential to restrict our ability to contract with certain Chinese biotechnology companies.

Such restrictions could cause delays or have other adverse effects on the development of certain of our research programs.

In addition, late-stage clinical trials are often conducted with patients having the most advanced stages of disease.

20 unchanged sentences

We collaborate with MTPC for the commercialization of DYSVAL in Japan and for the continued development and commercialization of valbenazine for movement disorders in other select Asian markets.

Our additional collaborators include Idorsia Pharmaceuticals Ltd., Nxera Pharma UK Limited (formerly Heptares Therapeutics Limited), Takeda Pharmaceutical Company Limited, Voyager Therapeutics, Inc., and Xenon Pharmaceuticals, Inc.

Our additional collaborators include Idorsia Pharmaceuticals Ltd., Nxera Pharma UK Limited (formerly Sosei Heptares), Takeda Pharmaceutical Company Limited, Voyager Therapeutics, Inc., and Xenon Pharmaceuticals, Inc.

Our current and future collaborations and licenses could subject us to a number of risks, including:

22 unchanged sentences

We may encounter difficulties with managing our growth, which could adversely affect our results of operations.

As of June 30, 2024, we had approximately 1,500 full-time employees.

As of September 30, 2024, we had approximately 1,700 full-time employees.

Although we have substantially increased the size of our organization, we may need to add additional qualified personnel and resources, especially with the recent increase in the size of our sales force.

24 unchanged sentences

Our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.

In May 2024, we announced that Kevin Gorman, Ph.D., will retire as the Company's President and Chief Executive Officer on October 11, 2024 and that Kyle Gano, Ph.D., currently our Chief Business Development and Strategy Officer, will succeed Dr.

On October 11, 2024, Kevin Gorman, Ph.D., retired as the Company's President and Chief Executive Officer and Kyle Gano, Ph.D., formerly our Chief Business Development and Strategy Officer, succeeded Dr.

Gorman in the CEO role.

Gano will also join our Board of Directors effective as of October 11, 2024.

Gano also joined our Board of Directors effective as of October 11, 2024.

Gorman founded Neurocrine in 1992 and has held numerous positions across the Company, including Chief Operating Officer, Chief Business Officer, and Senior Vice President of Business Development, before being appointed CEO in 2008.

25 unchanged sentences

*We currently depend on a limited number of third-party suppliers.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of process controls required to consistently produce the active pharmaceutical ingredients (API), the finished drug product and packaging in sufficient quantities while meeting detailed product specifications on a repeated basis.

1 unchanged sentence

regulations, and disruptions or delays caused by man-made or natural disasters, pandemics or epidemics, or other business interruptions.

We depend on a limited number of suppliers for the production and packaging of INGREZZA and its API.

If our third-party suppliers for INGREZZA encounter these or any other manufacturing, quality or compliance difficulties, we may be unable to meet commercial demand for INGREZZA, which could materially and adversely affect our ability to successfully commercialize INGREZZA.

In addition, if our suppliers fail or refuse to supply us with INGREZZA or its API for any reason, it would take a significant amount of time and expense to qualify a new supplier.

We depend on a limited number of suppliers for the production (including API) of INGREZZA, crinecerfont and our other product candidates and for the packaging of INGREZZA.

If our third-party suppliers for INGREZZA, crinecerfont or any of our other product candidates encounter these or any other manufacturing, quality or compliance difficulties, our ability to successfully develop or commercialize INGREZZA, crinecerfont or any of our other product candidates could be materially and adversely affected.

In addition, if our suppliers fail or refuse to supply us with INGREZZA, crinecerfont or any of our other product candidates, or their APIs for any reason, or terminate our supply agreements or do not perform as agreed, it would take a significant amount of time and expense to qualify a new supplier.

The FDA and similar foreign regulatory authorities must approve manufacturers of the active and inactive pharmaceutical ingredients and certain packaging materials used in pharmaceutical products.

The loss of a supplier could require us to obtain regulatory clearance and to incur validation and other costs associated with the transfer of the API or product manufacturing processes.

If there are delays in qualifying new suppliers or facilities or if a new supplier is unable to meet FDA or a similar foreign regulatory authority’s requirements for approval, there could be a shortage of INGREZZA, which could materially and adversely affect our ability to successfully commercialize INGREZZA.

If there are delays in qualifying new suppliers or facilities or if a new supplier is unable to meet FDA or a similar foreign regulatory authority’s requirements for approval, there could be a shortage of INGREZZA, crinecerfont or any of our other product candidates, which could materially and adversely affect our ability to successfully develop or commercialize INGREZZA, crinecerfont or any of our other product candidates.

We license some of our core technologies and drug candidates from third parties.

76 unchanged sentences

We have entered into agreements for the distribution of INGREZZA with a limited number of specialty pharmacy providers and distributors, and all of our product sales of INGREZZA are to these customers.

Four of these customers represented approximately 93% of our total product sales for the six months ended June 30, 2024 and approximately 97% of our accounts receivable balance as of June 30, 2024.

Four of these customers represented approximately 93% of our total product sales for the nine months ended September 30, 2024 and approximately 98% of our accounts receivable balance as of September 30, 2024.

If any of these significant customers becomes subject to bankruptcy, is unable to pay us for our products or is acquired by a company that wants to terminate the relationship with us, or if we otherwise lose any of these significant customers, our revenue, results of operations and cash flows would be adversely affected.

96 unchanged sentences

• future sales of our common stock by us or our stockholders;

• any trading activity in our share repurchase program;

• comments by securities analysts;

9 unchanged sentences

Such sales may result in further negative pressure on our stock price and, when combined with reduced trading volume and liquidity, could adversely affect the value of your investment and your ability to sell your shares.

*There can be no assurance with respect to the number of shares of our common stock repurchased under the share repurchase program or that any share repurchases will enhance long-term stockholder value.

In October 2024, our Board of Directors authorized a share repurchase program to repurchase up to $300 million of our common stock, which we intend to execute by entering into an accelerated share repurchase transaction with a financial institution, subject to market conditions.

We can provide no assurance with respect to the number of shares of our common stock repurchased under the share repurchase program or that any share repurchases will enhance long-term stockholder value, and it may not prove to be the best use of our cash.

The program could affect the trading price of our stock and increase volatility, and any announcement of a termination of this program may result in a decrease in the trading price of our stock.

In addition, this program will reduce our cash reserves.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

311 unchanged sentences

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-Q

Item 1A. Risk Factors