What changed in this filing

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Item 1. Financial Statements

2025-05-05 compared with 2024-10-30 · 238 added, 241 removed, 244 unchanged (66% of the section changed)

3 unchanged sentences

(in millions, except per share data)

September 30,

2025 December 31,

16 unchanged sentences

Accounts payable and accrued liabilities $ 475.2 $ 461.6

Convertible senior notes — 170.1

Other current liabilities 47.7 46.1

12 unchanged sentences

Accumulated other comprehensive income 9.0 5.8

Retained earnings (accumulated deficit) 81.1 ( 157.1 )

(Accumulated deficit) Retained earnings

Total stockholders’ equity 2,535.7 2,589.7

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share data) 2025 2024

9 unchanged sentences

Operating income

Other income (expense):

Unrealized loss on equity investments ( 16.9 ) ( 40.1 ) ( 35.2 ) ( 0.6 )

Other (expense) income:

Unrealized (loss) gain on equity investments

Charges associated with convertible senior notes

— — ( 138.4 ) —

Investment income and other, net 21.7 22.3

Total other income (expense), net

Total other expense, net

( 8.9 ) ( 64.8 )

Income before provision for income taxes

190.3 115.6 323.4 133.9

Provision for income taxes 60.5 32.5 85.2 31.9

Provision for (Benefit from) income taxes

Net income $ 7.9 $ 43.4

Foreign currency translation adjustments, net of tax 1.5 ( 0.5 )

Unrealized gain on available-for-sale debt securities, net of tax

9.1 0.8 5.0 5.5

Unrealized gain (loss) on available-for-sale debt securities, net of tax

Comprehensive income $ 11.1 $ 39.7

11 unchanged sentences

(in millions) Shares $ Total

Balance at June 30, 2024

100.9 $ 0.1 $ 2,555.3 $ 2.5 $ ( 48.7 ) $ 2,509.2

Net income — — — — 129.8 129.8

Other comprehensive income, net of tax

— — — 12.0 — 12.0

Stock-based compensation expense — — 41.5 — — 41.5

Issuances of common stock under stock plans 0.3 — 26.4 — — 26.4

Balance at September 30, 2024

101.2 $ 0.1 $ 2,623.2 $ 14.5 $ 81.1 $ 2,718.9

Balance at June 30, 2023

97.6 $ 0.1 $ 2,241.9 $ ( 1.1 ) $ ( 387.9 ) $ 1,853.0

Net income — — — — 83.1 83.1

Other comprehensive loss, net of tax — — — ( 0.6 ) — ( 0.6 )

Stock-based compensation expense — — 47.8 — — 47.8

Issuances of common stock under stock plans 0.6 — 18.8 — — 18.8

Balance at September 30, 2023

98.2 $ 0.1 $ 2,308.5 $ ( 1.7 ) $ ( 304.8 ) $ 2,002.1

Balance at December 31,2024

5 unchanged sentences

Issuances of common stock under stock plans 1.2 — 32.1 — — 32.1

Balance at September 30, 2024

Repurchases of common stock

( 1.6 ) — ( 107.6 ) — ( 42.4 ) ( 150.0 )

Balance at March 31, 2025

99.0 $ 0.1 $ 2,531.9 $ 9.0 $ ( 5.3 ) $ 2,535.7

Balance at December 31,2023

1 unchanged sentence

Net income — — — — 43.4 43.4

Other comprehensive income, net of tax — — — 6.2 — 6.2

Other comprehensive loss, net of tax — — — ( 3.7 ) — ( 3.7 )

Stock-based compensation expense — — 44.5 — — 44.5

Issuances of common stock under stock plans 1.9 — 69.9 — — 69.9

Balance at September 30, 2023

Balance at March 31, 2024

100.6 $ 0.1 $ 2,496.4 $ 3.3 $ ( 113.7 ) $ 2,386.1

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2025 2024

Cash flows from operating activities:

$ 238.2 $ 102.0

Adjustments to reconcile net income to net cash from operating activities:

1 unchanged sentence

Charges associated with convertible senior notes

Impairment charges associated with leased properties 14.0 —

Depreciation 6.6 5.3

13 unchanged sentences

Sales and maturities of available-for-sale debt securities 298.1 276.3

Purchases of equity investments — ( 31.3 )

Capital expenditures ( 10.7 ) ( 11.2 )

2 unchanged sentences

Issuances of common stock under benefit plans 32.1 69.9

Payments to settle convertible senior notes

Repurchases of common stock

Cash flows from financing activities ( 117.9 ) 69.9

Effect of exchange rate changes on cash and cash equivalents 0.3 —

Change in cash, cash equivalents and restricted cash ( 38.9 ) 145.2

3 unchanged sentences

Accrued capital expenditures

Right-of-use assets acquired through operating leases $ 9.0 $ 1.8

Cash paid for interest $ 1.6 $ 1.9

Cash paid for income taxes $ 0.6 $ 0.2

9 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023, included in our Annual Report on Form 10-K, or the 2023 Form 10-K, filed with the SEC.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K (the 2024 Form 10-K) filed with the SEC.

The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or the full year.

1 unchanged sentence

There were no significant changes to our significant accounting policies as disclosed in the 2024 Form 10-K.

Recently Issued Accounting Pronouncements Not Yet Adopted.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

1 unchanged sentence

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023, and for interim reporting periods beginning January 1, 2025, with early adoption permitted.

We are currently evaluating the impact that adoption of ASU 2023-07 will have on our financial statement disclosures.

We adopted ASU 2023-07 for annual reporting periods beginning January 1, 2024 and interim reporting periods beginning January 1, 2025.

The adoption of ASU 2023-07 had no significant impact on our financial statement disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

2 unchanged sentences

We are currently evaluating the impact that adoption of ASU 2023-09 will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires public entities to disclose specified information about certain costs and expenses on an interim and annual basis.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact that adoption of ASU 2024-03 will have on our financial statement disclosures.

Collaboration and License Agreements

Nxera Pharma UK Limited, or Nxera.

Nxera Pharma UK Limited (Nxera)

In 2021, we entered into a collaboration and license agreement with Nxera (formerly Sosei Heptares) to develop and commercialize certain compounds containing sub-type selective muscarinic M1, M4, or dual M1/M4 receptor agonists, which we have the exclusive rights to develop, manufacture and commercialize worldwide, excluding in Japan, where Nxera retains the rights to develop, manufacture, and commercialize all compounds comprised of M1 receptor agonists, subject to certain exceptions.

2 unchanged sentences

We are responsible for all development, manufacturing, and commercialization costs of any collaboration product.

In connection with the successful completion of a long-term toxicity program for NBI-1117568 in April 2024, we paid Nxera a milestone of $ 15.0 million, which was expensed as research and development (R&D) in the second quarter of 2024.

In connection with the successful completion of the Phase 2 clinical study for NBI-1117568 in August 2024, we paid Nxera a milestone of $ 35.0 million, which was expensed as R&D in the third quarter of 2024.

We expect to advance NBI-1117568 into Phase 3 development in the first half of 2025, which would trigger a milestone of $ 15.0 million payable to Nxera upon initiation of the Phase 3 clinical study.

Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.6 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product.

Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.5 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.

Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which the royalty term for such licensed product has expired in such country.

3 unchanged sentences

Either party may terminate the agreement, subject to specified conditions, (i) in the event of material breach by the other party, subject to a cure period, (ii) if the other party challenges the validity or enforceability of certain intellectual property rights, subject to a cure period, or (iii) if the other party becomes insolvent or takes certain actions related to insolvency.

Takeda Pharmaceutical Company Limited, or Takeda.

In 2020, we entered into an exclusive license agreement with Takeda, pursuant to which we acquired the exclusive rights to develop and commercialize certain early to mid-stage psychiatry compounds, including luvadaxistat, NBI-1070770, NBI-1065845, NBI-1065846 and three non-clinical stage compounds.

In the third quarter of 2024, we provided Takeda with written notice of termination of the license agreement to develop and commercialize luvadaxistat and NBI-1065846.

The termination is anticipated to be effective in April 2025.

NBI-1070770 and the three non-clinical stage compounds have each been designated as a royalty-bearing product.

We are responsible for all manufacturing, development and commercialization costs of any royalty-bearing product.

NBI-1065845 is currently designated as a profit-share product, meaning we and Takeda will equally share in the operating profits and losses.

Takeda retains the right to opt-out of the profit-sharing arrangement, pursuant to which Takeda would be entitled to receive potential future payments upon the achievement of certain event-based milestones with respect to NBI-1065845 and receive royalties on the future net sales of NBI-1065845 (in lieu of equally sharing in the operating profits and losses).

Takeda may elect to exercise the opt-out right for NBI-1065845 immediately following the completion of a second Phase 2 clinical study for NBI-1065845, or, under certain circumstances related to the development and commercialization activities to be performed by us, before the initiation of a Phase 3 clinical study for NBI-1065845.

In connection with the initiation of a Phase 2 clinical study for NBI-1070770 as a potential treatment for major depressive disorder in April 2024, we paid Takeda a milestone of $ 7.5 million, which was expensed as R&D in the second quarter of 2024.

Under the terms of the agreement, Takeda may be entitled to receive potential future payments of up to $ 1.9 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any royalty-bearing product.

Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which, (i) for any royalty-bearing product, the royalty term has expired in such country;

Takeda Pharmaceutical Company Limited (Takeda)

In 2020, we entered into an exclusive license agreement with Takeda (the 2020 Takeda Agreement), pursuant to which we acquired the exclusive rights to develop and commercialize certain early to mid-stage psychiatry compounds, including luvadaxistat, NBI-1070770, osavampator (formerly NBI-1065845), NBI-1065846, and three non-clinical stage compounds.

Pursuant to the 2020 Takeda Agreement, osavampator was designated as a profit-share product, meaning we and Takeda would equally share in the operating profits and losses.

Takeda also retained the right to opt-out of the profit-sharing arrangement, pursuant to which Takeda would be entitled to receive potential future payments upon the achievement of certain event-based milestones with respect to osavampator and receive royalties on the future net sales of osavampator (in lieu of equally sharing in the operating profits and losses).

In October 2024, we provided Takeda with written notice of termination of the license under the 2020 Takeda Agreement to develop and commercialize luvadaxistat and NBI-1065846, which became effective in April 2025.

In January 2025, we and Takeda amended and restated the exclusive license agreement (the Restated Takeda Agreement) to, among other things, reflect the conversion from sharing operating profits and losses with respect to the development and commercialization of osavampator to a royalty-bearing license, the return of rights to osavampator in Japan to Takeda, and our previous termination of DAAO inhibitors under the 2020 Takeda Agreement, including luvadaxistat, and GPR139 agonists, including NBI-1065846.

Under the Restated Takeda Agreement, we will retain exclusive rights to develop and commercialize osavampator for all indications in all territories worldwide except Japan, where Takeda will reacquire exclusive development and commercialization rights.

In addition, each party is responsible for development costs for osavampator in its respective territory, and each party is eligible to receive royalty payments based on the other party’s net sales of osavampator in the other party’s territory.

Pursuant to the Restated Takeda Agreement and upon the successful development and commercialization of osavampator, we will incur tiered based royalties payable to Takeda in the mid-to-upper teens in the U.S.

and low double-digits outside of the U.S.

on a blended basis as a percentage of net sales.

Additionally, we are entitled to receive royalties from Takeda on the future net sales of osavampator in Japan.

In connection with the initiation of a Phase 3 clinical study for osavampator in major depressive disorder, we expensed a milestone of $ 37.5 million payable to Takeda as research and development (R&D) in the first quarter of 2025.

The milestone was paid in the second quarter of 2025.

Takeda may be entitled to receive potential future payments of up to $ 0.7 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any royalty-bearing product.

Unless earlier terminated, the Restated Takeda Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which, (i) for any royalty-bearing product, the royalty term has expired in such country;

and (ii) for any profit-share product, for so long as we continue to develop, manufacture, or commercialize such licensed product.

On a licensed product-by-licensed product and country-by-country basis, royalty payments would commence on the first commercial sale of a royalty-bearing product and terminate on the later of (i) the expiration of the last patent covering such royalty-bearing product in such country, (ii) a number of years from the first commercial sale of such royalty-bearing product in such country and (iii) the expiration of regulatory exclusivity for such royalty-bearing product in such country.

We may terminate the agreement in its entirety or in one or more (but not all) of the United States, Japan, the European Union and the United Kingdom, or, collectively, the major markets, upon six months ’ written notice to Takeda (i) with respect to all licensed products prior to the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes, as defined in the agreement, prior to the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

We may terminate the agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

Takeda may terminate the agreement, subject to specified conditions, (i) if we challenge the validity or enforceability of certain Takeda intellectual property rights or (ii) on a target class-by-target class basis, in the event that we do not conduct any material development or commercialization activities with respect to any licensed product within such target class for a specified continuous period.

Subject to a cure period, either party may terminate the agreement in the event of any material breach, solely with respect to the target class of a licensed product to which such material breach relates, or in its entirety in the event of any material breach that relates to all licensed products.

Idorsia Pharmaceuticals Ltd., or Idorsia.

In 2020, we entered into a collaboration and license agreement with Idorsia, pursuant to which we acquired the exclusive rights to develop and commercialize NBI-827104, a potent, selective, orally active and brain penetrating T-type calcium channel blocker in clinical development for the treatment of a rare pediatric epilepsy and other potential indications, including essential tremor.

We are responsible for all manufacturing, development and commercialization costs of any collaboration product.

In the fourth quarter of 2024, we provided Idorsia with written notice of termination of the license agreement to develop and commercialize NBI-827104.

The termination is anticipated to be effective in January 2025.

Under the terms of the agreement, Idorsia may be entitled to receive potential future payments of up to $ 1.7 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product.

We may terminate the agreement, in its entirety or with respect to a particular compound or development candidate, upon 90 days’ written notice to Idorsia.

Further, in the event a party commits a material breach and fails to cure such material breach within 90 days after receiving written notice thereof, the non-breaching party may terminate the agreement in its entirety immediately upon written notice to the breaching party.

Xenon Pharmaceuticals Inc., or Xenon.

We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the U.S., Japan, the European Union and the United Kingdom, or, collectively, the major markets, upon six months ’ written notice to Takeda (i) with respect to all licensed products prior to the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes, as defined in the Restated Takeda Agreement, prior to the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

Takeda may terminate the Restated Takeda Agreement, subject to specified conditions, (i) if we challenge the validity or enforceability of certain Takeda intellectual property rights or (ii) on a target class-by-target class basis, in the event that we do not conduct any material development or commercialization activities with respect to any licensed product within such target class for a specified continuous period.

Subject to a cure period, either party may terminate the Restated Takeda Agreement in the event of any material breach, solely with respect to the target class of a licensed product to which such material breach relates, or in its entirety in the event of any material breach that relates to all licensed products, or if either party challenges the validity or enforceability of certain intellectual property rights.

Xenon Pharmaceuticals Inc.

In 2019, we entered into a collaboration and license agreement with Xenon to identify, research and develop sodium channel inhibitors, including NBI-921352 and three preclinical candidates, which compounds we have the exclusive rights to develop and commercialize.

In connection with the agreement, we purchased 1.4 million shares (at $ 14.196 per share) of Xenon common stock in 2019, 0.3 million shares (at $ 19.9755 per share) of Xenon common stock in 2021, and 0.3 million shares (at $ 31.855 per share) of Xenon common stock in 2022.

We are responsible for all development and manufacturing costs of any collaboration product, subject to certain exceptions.

In connection with entering the agreement in 2019, we purchased approximately 1.4 million shares (at $ 14.196 per share) of Xenon common stock (the 2019 Xenon Shares).

The 2019 Xenon Shares were recorded at a fair value of $ 14.1 million after considering Xenon’s stock price and certain transfer restrictions that were applicable to the shares on the measurement date.

In connection with the achievement of a development milestone in 2021, we purchased approximately 0.3 million shares (at $ 19.9755 per share) of Xenon common stock (the 2021 Xenon Shares).

The 2021 Xenon Shares were recorded at a fair value of $ 4.6 million after considering Xenon’s stock price and certain transfer restrictions that were applicable to the shares on the measurement date.

In connection with the achievement of a development milestone in 2022, we purchased approximately 0.3 million shares (at $ 31.855 per share) of Xenon common stock (the 2022 Xenon Shares).

The 2022 Xenon Shares were recorded at a fair value of $ 7.7 million after considering Xenon’s stock price on the measurement date.

Under the terms of the agreement, Xenon may be entitled to receive potential future payments of up to $ 1.7 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product.

In connection with the initiation of a Phase 1 clinical study for NBI-921355, an investigational, selective inhibitor of voltage-gated sodium channels Na v 1.2 and Na v 1.6, as a potential treatment of certain types of epilepsy, we expensed a milestone of $ 7.5 million payable to Xenon as R&D in the first quarter of 2025.

The milestone was paid in the second quarter of 2025.

Under the terms of the agreement, Xenon may be entitled to receive potential future payments of up to $ 1.7 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.

Xenon retains the right to elect to co-develop one product in a major indication, pursuant to which Xenon would receive a mid-single digit percentage increase in royalties earned on the future net sales of such product in the United States and we and Xenon would equally share in the development costs of such product in the applicable indication, except where such development costs relate solely to the regulatory approval of such product outside the United States.

3 unchanged sentences

Either party may terminate the agreement in the event of a material breach in whole or in part, subject to specified conditions.

Voyager Therapeutics, Inc., or Voyager.

Voyager Therapeutics, Inc.

2019 Voyager Agreement

1 unchanged sentence

We are responsible for all development and commercialization costs of any collaboration product under the 2019 Voyager Agreement, subject to certain co-development and co-commercialization rights retained by Voyager.

In connection with the 2019 Voyager Agreement, we purchased approximately 4.2 million shares (at $ 11.9625 per share) of Voyager common stock (the 2019 Voyager Shares), which are subject to certain transfer, beneficial ownership, and voting restrictions for a period of up to three years from the effective date of the 2023 Voyager Agreement (defined below).

The 2019 Voyager Shares were recorded at a fair value of $ 54.7 million after considering Voyager’s stock price and certain transfer restrictions that were applicable to the shares on the measurement date.

In connection with the 2019 Voyager Agreement, we purchased 4.2 million shares (at $ 11.9625 per share) of Voyager common stock (the 2019 Voyager Shares), which are subject to certain transfer, beneficial ownership, and voting restrictions for a period of up to three years from the effective date of the 2023 Voyager Agreement (defined below).

In connection with the selection of a development candidate under the FA program pursuant to our collaboration with Voyager, we expensed a milestone of $ 5.0 million as R&D in the first quarter of 2024.

Under the terms of the 2019 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 1.3 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.

Under the terms of the 2019 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 1.3 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.

Unless terminated earlier, the 2019 Voyager Agreement will continue in effect until the expiration of the last to expire royalty term with respect to any collaboration product under the agreement or the last expiration or termination of any exercised co-development and co-commercialization rights by Voyager as provided for in the 2019 Voyager Agreement.

1 unchanged sentence

2023 Voyager Agreement

In 2023, we entered into a collaboration and license agreement with Voyager (the 2023 Voyager Agreement), pursuant to which we acquired the global rights to the gene therapy products directed to the gene that encodes glucosylceramidase beta 1 (GBA1) for the treatment of Parkinson's disease and other diseases associated with GBA1 (the GBA1 Program), and three gene therapy programs directed to rare central nervous system (CNS) targets, each enabled by Voyager's next-generation TRACER TM capsids.

In 2023, we entered into a collaboration and license agreement with Voyager, which we amended in April 2024 (as amended, the 2023 Voyager Agreement), pursuant to which we acquired the global rights to the gene therapy products directed to the gene that encodes glucosylceramidase beta 1 (GBA1) for the treatment of Parkinson's disease and other diseases associated with GBA1 (the GBA1 Program), and three gene therapy programs directed to rare central nervous system (CNS) targets, each enabled by Voyager's next-generation TRACER TM capsids.

With respect to collaboration products subject to the GBA1 Program, we are responsible for all development and commercialization costs of any such products, including in the U.S., where Voyager retains certain co-development and co-commercialization rights.

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With respect to collaboration products subject to the three gene therapy programs directed to rare CNS targets, we are responsible for all development and commercialization costs for any such products.

In connection with the 2023 Voyager Agreement, we paid Voyager $ 175.0 million upfront, including a purchase of approximately 4.4 million shares (at $ 8.88 per share) of Voyager common stock (the 2023 Voyager Shares), which are subject to certain transfer, beneficial ownership, and voting restrictions for a period of up to three years from the effective date of the 2023 Voyager Agreement.

We accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business.

In addition, as part of the collaboration, Jude Onyia, Ph.D., Chief Scientific Officer of Neurocrine Biosciences, was appointed to Voyager's board of directors.

Onyia (or another individual designated by us) will be nominated for election to Voyager's board of directors annually for a maximum duration of 10 years from the effective date of the 2023 Voyager Agreement.

As a result, our equity investment in Voyager became subject to the equity method of accounting, and Voyager became a related party, following our purchase of the 2023 Voyager Shares, after which, together with the 2019 Voyager Shares, we owned approximately 19.9 % of the voting stock of Voyager.

In connection with the 2023 Voyager Agreement, we purchased 4.4 million shares (at $ 8.88 per share) of Voyager common stock (the 2023 Voyager Shares), which are subject to certain transfer, beneficial ownership, and voting restrictions for a period of up to three years from the effective date of the 2023 Voyager Agreement.

Our equity investment in Voyager became subject to the equity method of accounting, and Voyager became a related party, following our purchase of the 2023 Voyager Shares, after which, together with the 2019 Voyager Shares, we owned approximately 19.9 % of the voting stock of Voyager.

We elected the fair value option to account for our equity investment in Voyager as we believe it creates greater transparency regarding the investment's fair value at future reporting dates.

The 2023 Voyager Shares were recorded at a fair value of $ 31.3 million after considering Voyager’s stock price on the measurement date.

The remaining $ 143.9 million of the purchase price, which includes certain transaction-related costs, was expensed as in-process research and development in the first quarter of 2023 as the license had no foreseeable alternative future use.

In connection with the selection of development candidates under the GBA1 program pursuant to our collaboration with Voyager, we expensed milestones of $ 3.0 million as R&D in both the second and third quarters of 2024.

Under the terms of the 2023 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 6.1 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.

Under the terms of the 2023 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 6.1 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.

Unless terminated earlier, the 2023 Voyager Agreement will continue in effect until the expiration of the last to expire royalty term with respect to any collaboration product under the 2023 Voyager Agreement or the last expiration or termination of any exercised co-development and co-commercialization rights by Voyager as provided for in the 2023 Voyager Agreement.

We may terminate the 2023 Voyager Agreement upon 180 days’ written notice to Voyager prior to the first commercial sale of any collaboration product under the 2023 Voyager Agreement or upon one year after the date of notice if such notice is provided after the first commercial sale of any collaboration product under the 2023 Voyager Agreement.

Mitsubishi Tanabe Pharma Corporation, or MTPC.

In 2014, we entered into a license agreement with Sanofi, pursuant to which we acquired the global rights to develop and commercialize certain corticotropin-releasing factor type 1 receptor (CRF1) antagonists, including crinecerfont.

We launched CRENESSITY TM (crinecerfont) in the U.S.

as a first-in-class U.S.

Food and Drug Administration (FDA)-approved treatment of classic congenital adrenal hyperplasia (CAH) in December 2024.

We are responsible for all manufacturing, development, and commercialization costs of any licensed product.

Under the terms of our license agreement with Sanofi, Sanofi may be entitled to receive potential future payments of up to $ 10.0 million upon the achievement of certain event-based milestones and is entitled to receive royalties at tiered percentage rates ranging from 3.0 % to 5.0 % on our future net sales of CRENESSITY in the U.S.

for the longer of 16 years or the life of the related patent rights.

Mitsubishi Tanabe Pharma Corporation (MTPC)

In 2015, we out-licensed the rights to valbenazine in Japan and other select Asian markets to MTPC.

In 2020, we entered into a commercial supply agreement with MTPC, pursuant to which we supply MTPC with valbenazine drug product for commercial use in such markets.

MTPC is responsible for all development, manufacturing and commercialization costs of valbenazine in such markets.

MTPC launched DYSVAL ® (valbenazine) in Japan for the treatment of tardive dyskinesia in June 2022 and subsequently in other select Asian markets, where it is marketed as REMLEAS ® (valbenazine).

We receive royalties at tiered percentage rates on MTPC net sales of valbenazine.

MTPC is responsible for all development, manufacturing, and commercialization costs of valbenazine in such markets.

Under the terms of our license agreement with MTPC, we may be entitled to receive potential future payments of up to $ 30.0 million upon the achievement of certain sales-based milestones and are entitled to receive royalties at tiered percentage rates on future MTPC net sales of valbenazine for the longer of 10 years or the life of the related patent rights.

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In such event, all out-licensed product rights would revert to us.

AbbVie Inc., or AbbVie.

In 2010, we out-licensed the global rights to elagolix to AbbVie.

AbbVie is responsible for all development and commercialization costs of elagolix.

AbbVie launched ORILISSA ® (elagolix tablets) in the U.S.

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for the treatment of heavy menstrual bleeding due to uterine fibroids in June 2020.

We receive royalties at tiered percentage rates on AbbVie net sales of elagolix and recognized elagolix royalty revenue of $ 3.3 million and $ 4.2 million, respectively, for the third quarter of 2024 and 2023 and $ 9.8 million and $ 12.0 million, respectively, for the first nine months of 2024 and 2023.

AbbVie is responsible for all development and commercialization costs of elagolix.

Under the terms of our license agreement with AbbVie, we may be entitled to receive potential future payments of up to $ 366.0 million upon the achievement of certain event-based milestones and are entitled to receive royalties at tiered percentage rates on future AbbVie net sales of elagolix for the longer of 10 years or the life of the related patent rights.

We recognized royalty revenue of $ 6.7 million and $ 3.0 million, respectively, on AbbVie net sales of elagolix for the first quarter of 2025 and 2024.

AbbVie may terminate the agreement upon 180 days’ written notice to us.

In such event, all out-licensed product rights would revert to us.

Available-for-Sale Debt Securities

The following table presents a summary of available-for-sale debt securities, aggregated by major security type and contractual maturity.

September 30,

2024 December 31,

(in millions) Contractual

Maturity Amortized

Cost Unrealized

Gain Unrealized

Value Amortized

Cost Unrealized

Gain Unrealized

Commercial paper 0 to 1 years $ 37.3 $ — $ — $ 37.3 $ 53.5 $ — $ — $ 53.5

Corporate debt securities 0 to 1 years 531.4 1.0 ( 0.1 ) 532.3 382.1 0.1 ( 1.0 ) 381.2

Securities of government-sponsored entities 0 to 1 years 308.7 0.6 — 309.3 346.1 0.2 ( 0.5 ) 345.8

$ 877.4 $ 1.6 $ ( 0.1 ) $ 878.9 $ 781.7 $ 0.3 $ ( 1.5 ) $ 780.5

Corporate debt securities 1 to 3 years $ 488.9 $ 6.2 $ ( 0.1 ) $ 495.0 $ 483.5 $ 2.9 $ ( 0.4 ) $ 486.0

Securities of government-sponsored entities 1 to 3 years 148.2 0.8 ( 0.1 ) 148.9 201.1 0.5 ( 0.1 ) 201.5

$ 637.1 $ 7.0 $ ( 0.2 ) $ 643.9 $ 684.6 $ 3.4 $ ( 0.5 ) $ 687.5

Unrealized losses on available-for-sale debt securities were primarily due to changes in interest rates.

These investments are of high credit quality, and we do not intend to sell these investments and it is not more likely than not that we will be required to sell these investments before recovery of their amortized cost basis.

No allowance for credit losses was recognized as of September 30, 2024 or December 31, 2023.

The following table presents available-for-sale debt securities that were in an unrealized loss position as of September 30, 2024, aggregated by major security type and length of time in a continuous loss position.

Less Than 12 Months 12 Months or Longer Total

(in millions) Fair

Value Unrealized

Corporate debt securities $ 125.9 $ ( 0.1 ) $ 49.1 $ ( 0.1 ) $ 175.0 $ ( 0.2 )

Securities of government-sponsored entities $ 84.8 $ ( 0.1 ) $ — $ — $ 84.8 $ ( 0.1 )

The following table presents available-for-sale debt securities that were in an unrealized loss position as of December 31, 2023, aggregated by major security type and length of time in a continuous loss position.

Less Than 12 Months 12 Months or Longer Total

(in millions) Fair

Value Unrealized

Corporate debt securities $ 265.1 $ ( 0.4 ) $ 183.8 $ ( 1.0 ) $ 448.9 $ ( 1.4 )

Securities of government-sponsored entities $ 214.6 $ ( 0.2 ) $ 16.7 $ ( 0.4 ) $ 231.3 $ ( 0.6 )

Accrued interest receivables on available-for-sale debt securities totaled $ 13.5 million and $ 11.2 million, respectively, as of September 30, 2024 and December 31, 2023.

We do not measure an allowance for credit losses for accrued interest receivables.

For the purposes of identifying and measuring an impairment, accrued interest is excluded from both the fair value and amortized cost basis of the debt security.

Uncollectible accrued interest receivables associated with an impaired debt security are reversed against interest income upon identification of the impairment.

No accrued interest receivables were written off during the first nine months of 2024 or 2023.

Fair Value Measurements

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The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis.

September 30,

2025 December 31,

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$ 1,853.0 $ 288.3 $ 1,564.7 $ 1,940.4 $ 357.8 $ 1,582.6

Other Balance Sheet Details

Inventory consisted of the following:

(in millions) September 30,

2024 December 31,

Raw materials $ 23.7 $ 21.5

Work in process 10.6 9.7

Finished goods 11.5 12.3

Less inventory reserves

Total inventory

$ 45.8 $ 38.3

Accounts payable and accrued liabilities consisted of the following:

(in millions) September 30,

2024 December 31,

Sales rebates and reserves $ 138.9 $ 139.3

Accrued employee related costs 77.1 86.2

Current branded prescription drug fee 42.7 45.7

Accrued development costs 38.3 44.3

Accounts payable and other accrued liabilities 95.7 133.3

Total accounts payable and accrued liabilities $ 392.7 $ 448.8

Other noncurrent liabilities consisted of the following:

(in millions) September 30,

2024 December 31,

Noncurrent income taxes payable

$ 134.9 $ 96.0

Other noncurrent liabilities

Total other noncurrent liabilities $ 135.0 $ 106.3

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in millions) September 30,

2024 September 30,

Cash and cash equivalents $ 349.1 $ 293.7

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash $ 357.1 $ 301.7

Goodwill and Intangible Assets

The following table presents the changes in the carrying amount of goodwill.

Goodwill is included in other noncurrent assets in our condensed consolidated balance sheets.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments in available-for-sale debt securities, and accounts receivable.

To minimize the risks related to cash and cash equivalents and investments in available-for-sale debt securities, we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity.

Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards, and limits the credit exposure of any single issuer.

As of March 31, 2025 and December 31, 2024, we held available-for-sale debt securities with a total fair value of $ 317.3 million and $ 458.7 million, respectively, that were in unrealized loss positions totaling $ 0.6 million and $ 1.7 million, respectively.

Available-for-sale debt securities that had been in unrealized loss positions for longer than twelve months were not significant as of March 31, 2025 or December 31, 2024.

Unrealized losses on available-for-sale debt securities are primarily caused by changes in interest rates.

Our investments in available-for-sale debt securities are of high credit quality, and we do not intend to sell these investments and it is not more likely than not that we will be required to sell these investments before their maturity.

Accrued interest receivables on available-for-sale debt securities totaled $ 14.5 million and $ 14.4 million, respectively, as of March 31, 2025 and December 31, 2024 and are included in other current assets on the condensed consolidated balance sheets.

We do not measure an allowance for credit losses for accrued interest receivables.

For the purposes of identifying and measuring an impairment, accrued interest is excluded from both the fair value and amortized cost basis of the debt security.

Uncollectible accrued interest receivables associated with an impaired debt security are reversed against interest income upon identification of the impairment.

To minimize the risks related to accounts receivable, which are typically unsecured, we monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles.

The following table presents the percent of total gross product sales for each of our customers who individually accounted for 10% or more of total gross product sales.

Three Months Ended

(in millions) 2025 2024

Balance as of December 31, 2023

Foreign currency translation adjustments 0.3

Balance as of September 30, 2024

The following table presents information relating to our recognized intangible assets.

September 30,

Customer A 41 % 43 %

Customer B 30 % 28 %

Customer C 14 % 14 %

The following table presents the percent of total accounts receivable for each of our customers who individually accounted for 10% or more of total accounts receivable.

(in millions) March 31,

2025 December 31,

(dollars in millions) Useful Life Gross Carrying Amount Accumulated Amortization Net

Carrying Amount Gross Carrying Amount Accumulated Amortization Net

Carrying Amount

Developed product rights 10 years $ 37.9 $ 7.3 $ 30.6 $ 35.9 $ 4.0 $ 31.9

Acquired IPR&D Indefinite $ 3.9 $ — 3.9 $ 3.6 $ — 3.6

Total intangible assets, net $ 34.5 $ 35.5

The following table presents approximate future annual amortization expense for our finite-lived intangible assets as of September 30, 2024.

(in millions)

2024 (3 months remaining)

Thereafter $ 14.5

Customer A 45 % 41 %

Customer B 31 % 37 %

Customer C 11 % 11 %

Customer D 10 % < 10 %

Earnings per Share

Earnings per share were calculated as follows:

Three Months Ended

(in millions, except per share data) 2025 2024

Net income - basic and diluted $ 7.9 $ 43.4

Weighted-average common shares outstanding:

Basic 99.7 99.8

Effect of dilutive securities 2.8 3.8

Diluted 102.5 103.6

Earnings per share:

Basic $ 0.08 $ 0.43

Diluted $ 0.08 $ 0.42

Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 3.3 1.7

Our operating leases that have commenced have terms that expire beginning 2025 through 2036 and consist of office space and research and development laboratories, including our corporate headquarters.

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The following table presents supplemental operating lease information for operating leases that have commenced.

Nine Months Ended

September 30,

Three Months Ended

(in millions, except weighted average data) 2025 2024

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Cash paid for amounts included in the measurement of operating lease liabilities $ 9.3 $ 6.1

September 30,

2024 September 30,

Weighted average remaining lease term

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Restricted cash related to letters of credit issued in lieu of cash security deposits $ 7.8 $ 7.8

The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of September 30, 2024.

The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of March 31, 2025.

(in millions) Operating

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Total operating lease payments (sublease income) 645.9 $ ( 22.0 )

Less accreted interest 85.9

Less imputed interest

Total operating lease liabilities 493.1

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_________________________

(1) Amounts presented in the table above exclude $ 5.6 million for 2025, $ 22.6 million for 2026, $ 23.3 million for 2027, $ 24.0 million for 2028 and $ 214.4 million thereafter of approximate non-cancelable future minimum lease payments under an operating lease related to our new campus facility that has not yet commenced.

New Campus Facility.

On February 8, 2022, we entered into a lease agreement for a four-building campus facility currently under construction in San Diego, California, including a six-year option for the construction of a fifth building.

This campus facility, comprised of office space and research and development laboratories, now serves as our corporate headquarters.

The construction of the campus facility is phased.

The first phase of construction, consisting of two buildings relating to office space, was completed in December 2023 and resulted in the recognition of ROU assets and operating lease liabilities totaling $ 199.0 million and $ 189.8 million, respectively.

The second phase of construction, consisting of two buildings relating to laboratory space, is scheduled for completion by the end of 2024.

As we continue to occupy our new campus facility, certain of our existing leased properties will be marketed for sublease when we determine there is excess leased capacity.

Certain of these subleases contain both lease and non-lease components.

Sublease income is recognized as an offset to operating expense on a straight-line basis over the lease term.

Income related to non-lease components is recognized in operating expenses as a reduction to costs we incur in relation to the primary lease.

Impairment of ROU Assets.

ROU assets are reviewed for impairment when indicators of impairment are present.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities.

An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

Corporate ROU assets that are actively being marketed for sublease in connection with excess leased capacity are tested for impairment individually when the cash flows related to the ROU asset are determined to be independent from the cash flows of other assets and liabilities.

Corporate ROU assets are otherwise tested for impairment on a consolidated level with consideration given to all cash flows of the company as corporate functions do not generate cash flows and are funded by revenue-producing activities at lower levels of the entity.

In the second quarter of 2024, we reassessed the asset groupings for corporate ROU assets that are actively being marketed for sublease in connection with leased office space that has been vacated as we continue to occupy our new campus facility.

For asset groups where impairment was triggered, we used discounted cash flow models (an income approach) with Level 3 inputs to estimate the fair values of the asset groups and recognized corresponding impairment charges totaling $ 14.0 million in the second quarter of 2024, of which $ 11.3 million and $ 2.7 million, respectively, was related to the ROU assets and tenant improvements associated with the underlying leased properties.

The significant assumptions used in the discounted cash flows models included projected sublease income over the remaining lease term, expected downtime prior to the commencement of executed or future subleases, and discount rates that reflected a market participant's assumptions in valuing the asset groups.

(1) Amounts presented in the table above exclude $ 0.9 million for 2025, $ 1.7 million for 2026, and $ 0.9 million for 2027 of approximate non-cancelable future minimum lease payments under operating leases that have not yet commenced.

Stockholders’ Equity

Share Repurchases

In February 2025, our Board of Directors authorized a new share repurchase program (the 2025 Repurchase Program) under which we may repurchase up to $ 500.0 million of our common stock, subject to market conditions.

Under the 2025 Repurchase Program, we repurchased 1.4 million shares on the open market for a cost of $ 150.0 million during the first quarter of 2025.

As of March 31, 2025, we had $ 350.0 million remaining under the 2025 Repurchase Program.

Under the 2025 Repurchase Program, share repurchases may be made from time to time at management's discretion through a variety of methods, such as open-market transactions including pre-set trading plans, privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws.

Shares repurchased under the 2025 Repurchase Program are retired immediately, resulting in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares for both basic and diluted earnings per share, and included in the category of authorized but unissued shares.

The excess of the purchase price over the par value of the common shares was recorded as a reduction to additional paid-in capital.

In November 2024, we entered into an accelerated share repurchase transaction (the 2024 Repurchase Program) with a third-party financial institution to repurchase an aggregate of $ 300.0 million of our common stock.

Shares repurchased under the 2024 Repurchase Program were retired immediately upon receipt, resulting in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares for both basic and diluted earnings per share in the period received, and included in the category of authorized but unissued shares.

At inception, we paid the financial institution $ 300.0 million using cash on hand and took initial delivery of 2.0 million shares in November 2024.

The fair market value of the 2.0 million initial shares received was $ 240.5 million, with the excess of the fair market value over the par value of the initial shares received recorded as reductions to retained earnings and additional paid-in capital.

The remaining $ 59.5 million of the repurchase price was recorded as a reduction to additional paid-in capital.

The 2024 Repurchase Program was completed in February 2025, at which time we received an additional 0.3 million shares upon settlement, with the excess of the fair market value over the par value of the settlement shares received recorded as an increase to additional paid-in capital and a reduction to retained earnings.

In total, we repurchased 2.3 million shares under the 2024 Repurchase Program at an average price of $ 131.83 per share, which represents the daily volume-weighted average price of our common stock over the term of the transaction, less a negotiated discount.

The following table presents information relating to purchases of our common stock.

Three Months Ended

(in millions, except per share data)

Total number of shares repurchased

Amount repurchased

Average price per share

Intangible Assets

The following table presents information relating to our recognized intangible assets.

2025 December 31,

(dollars in millions) Gross Carrying Amount Accumulated Amortization Net

Carrying Amount Gross Carrying Amount Accumulated Amortization Net

Carrying Amount

Developed product rights (1)

$ 41.6 $ 9.0 $ 32.6 $ 40.5 $ 7.7 $ 32.8

Acquired IPR&D (2)

$ 3.8 $ — 3.8 $ 3.7 $ — 3.7

Total intangible assets, net $ 36.4 $ 36.5

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(1) Developed product rights have a useful life of 10 to 16 years.

(2) Acquired IPR&D is considered indefinite lived until the completion or abandonment of the associated research and development efforts.

The following table presents approximate future annual amortization expense for our finite-lived intangible assets as of March 31, 2025.

(in millions) Amount

Year ending December 31, 2025 (9 months remaining)

Year ending December 31, 2026

Year ending December 31, 2027

Year ending December 31, 2028

Year ending December 31, 2029

Thereafter $ 13.6

Convertible Senior Notes

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In 2022, we repurchased $ 210.8 million in aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 279.0 million in cash.

On or after January 15, 2024, holders of the 2024 Notes had the ability to convert the 2024 Notes at any time until the close of business on the scheduled trading day immediately preceding May 15, 2024.

In January 2024, we provided notice to the holders of the 2024 Notes electing to settle all conversions of the 2024 Notes which occur on or after January 15, 2024 in cash.

Consequently, the embedded conversion option of the 2024 Notes (the conversion feature) required bifurcation and separate accounting from the 2024 Notes as it no longer qualified for the equity scope exception under ASC 815, Derivatives and Hedging.

Upon bifurcation of the conversion feature, we recorded a derivative liability at a fair value of $ 126.6 million (Level 3) and a corresponding debt discount that was accreted over the remaining term of the 2024 Notes using the straight-line method.

Subsequent changes in the fair value of the derivative liability and accretion of the associated debt discount were recorded in other income (expense), net in our condensed consolidated statements of income.

During the second quarter of 2024, holders of the 2024 Notes converted $ 169.8 million in aggregate principal amount of the 2024 Notes for $ 308.2 million in cash, reflecting a conversion premium of $ 138.4 million calculated based on the per share volume-weighted average price (VWAP) for each of the 30 consecutive trading days during the observation period (as more fully described in the 2017 Indenture).

The 2024 Notes were settled in full upon maturity on May 15, 2024.

The following table presents a summary of charges recognized in connection with the bifurcation of the conversion feature of the 2024 Notes and conversions of the 2024 Notes by holders during the first nine months of 2024.

Upon bifurcation of the conversion feature in the first quarter of 2024, we recorded a derivative liability at a fair value of $ 126.6 million (Level 3) and a corresponding debt discount that was accreted over the remaining term of the 2024 Notes using the straight-line method.

Subsequent changes in the fair value of the derivative liability and accretion of the associated debt discount were recorded in other expense, net on the condensed consolidated statements of income and comprehensive income.

The following table presents a summary of charges recognized in connection with the bifurcation of the conversion feature of the 2024 Notes in the first quarter of 2024.

(in millions)

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Change in fair value of derivative liability 9.6

Loss on extinguishment of convertible senior notes 2.2

Charges associated with convertible senior notes $ 88.7

Earnings per Share

Earnings per share were calculated as follows:

The 2024 Notes were settled in full upon maturity on May 15, 2024.

Other Balance Sheet Details

Inventory consisted of the following:

(in millions) March 31,

2025 December 31,

Raw materials $ 31.9 $ 33.7

Work in process 13.8 10.9

Finished goods 13.6 12.8

Less inventory reserves

Total inventory

$ 59.1 $ 57.4

Prior to FDA approval of CRENESSITY in December 2024, all costs related to its manufacturing were expensed as R&D in the period incurred.

As a result, our physical inventories as of March 31, 2025 and December 31, 2024 included active pharmaceutical product with no cost basis.

Costs related to the manufacturing of bulk drug product, finished bottling, and other labeling activities that occurred post-FDA approval are included in the inventory values as of March 31, 2025 and December 31, 2024.

Accounts payable and accrued liabilities consisted of the following:

(in millions) March 31,

2025 December 31,

Sales rebates and reserves $ 154.6 $ 144.2

Accrued development costs (including unpaid development milestones)

Accrued employee related costs 57.5 107.5

Current branded prescription drug fee 38.0 49.2

Current income taxes payable

Accounts payable and other accrued liabilities 110.0 99.9

Total accounts payable and accrued liabilities $ 475.2 $ 461.6

Other noncurrent liabilities consisted of the following:

(in millions) March 31,

2025 December 31,

Noncurrent income taxes payable

$ 166.0 $ 160.7

Other noncurrent liabilities

Total other noncurrent liabilities $ 181.6 $ 166.2

(in millions) March 31,

2025 March 31,

Cash and cash equivalents $ 194.1 $ 396.3

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash $ 202.1 $ 404.3

Segment Reporting and Disaggregation of Relevant Expense Captions

Neurocrine Biosciences operates as a single global business segment dedicated to the research and development, commercialization, and sale of pharmaceuticals primarily in the U.S.

for the treatment of neurological, neuroendocrine, and neuropsychiatric disorders.

There were no changes to the accounting policies of the segment as disclosed in the 2024 Form 10-K.

The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer as chief operating decision maker (CODM) in assessing segment performance and deciding how to allocate resources on a consolidated basis.

The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of income and comprehensive income as consolidated net income.

The CODM uses net income to monitor budget and forecast versus actual results in assessing segment performance and to evaluate income generated from segment assets in deciding how to allocate resources.

The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

The following table presents information about reported segment revenues, segment profit, and significant segment expenses.

Three Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share data) 2024 2023 2024 2023

Net income - basic and diluted $ 129.8 $ 83.1 $ 238.2 $ 102.0

Weighted-average common shares outstanding:

Basic 101.1 97.9 100.6 97.5

Effect of dilutive securities 3.2 3.2 3.4 3.1

Diluted 104.3 101.1 104.0 100.6

Earnings per share:

Basic $ 1.28 $ 0.85 $ 2.37 $ 1.05

Diluted $ 1.24 $ 0.82 $ 2.29 $ 1.01

Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 1.7 4.4 1.9 5.2

(in millions) 2025 2024

INGREZZA net product sales $ 545.2 $ 506.0

CRENESSITY net product sales 14.5 —

Other revenues (1)

Total revenues 572.6 515.3

Cost of revenues 9.2 7.5

Research and development:

External research and development 107.9 77.6

Payroll and benefits 75.0 57.6

Milestones 45.4 6.1

Other research and development (2)

Total research and development 263.2 159.4

Acquired in-process research and development 0.1 6.0

Selling, general, and administrative 276.5 243.1

Unrealized loss (gain) on equity investments 30.6 ( 1.6 )

Charges associated with convertible senior notes — 88.7

Interest income and other, net

( 21.7 ) ( 22.3 )

Provision for (Benefit from) income taxes 6.8 ( 8.9 )

_________________________

(1) Other revenues primarily consist of net product sales for ALKINDI and EFMODY and royalties earned on AbbVie net sales of elagolix and MTPC net sales of valbenazine.

(2) Other research and development consists of indirect costs incurred for the benefit of multiple research and development programs, including facility-based expenses (such as rent expense) and other overhead allocations.

Legal Proceedings

In March 2025, we received a notice from Zydus Lifesciences Global FZE (Zydus FZE) that it had filed an abbreviated new drug application, or ANDA, with the FDA seeking approval of a generic version of INGREZZA SPRINKLE (valbenazine).

The ANDA contained a Paragraph IV Patent Certification alleging that certain of our patents covering INGREZZA SPRINKLE are invalid and/or will not be infringed by Zydus FZE’s importation, manufacture, use or sale of the medicine for which the ANDA was submitted.

We filed suit in the U.S.

District Court for the District of Delaware in April 2025 against Zydus Pharmaceuticals (USA) Inc.

and its affiliates Zydus FZE, Zydus Worldwide DMCC, Zydus Lifesciences Limited, and Zydus Healthcare (USA) LLC (collectively, Zydus).

We also filed suit in the U.S.

District Court for the District of New Jersey in April 2025 against Zydus seeking to prevent Zydus from selling a generic version of INGREZZA SPRINKLE.

In January 2025, we filed suit in the United States District Court for the District of Delaware against Spruce Biosciences, Inc.

(Spruce), seeking to invalidate one of Spruce’s patents.

In addition, we have initiated (1) administrative proceedings against another Spruce patent in the U.S.

Patent and Trademark Office, and (2) both judicial and administrative proceedings against Spruce patents in other jurisdictions.

From time to time, we may also become subject to other legal proceedings or claims arising in the ordinary course of our business.

We currently believe that none of the claims or actions pending against us is likely to have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations.

Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters.

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 1. Financial Statements