What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-11 compared with 2025-02-10 · 414 added, 379 removed, 581 unchanged (58% of the section changed)

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Reserves for government rebates related to product sales

Reserves for Medicaid rebates related to product sales

Description of the Matter The Company sells product to specialty pharmacies and specialty distributors in the U.S.

(collectively, “customers”).

As described in Note 1 to the consolidated financial statements, the Company recognizes revenues for sales of INGREZZA to its customers after deducting management’s estimates of reserves, including drug coverage gap rebates, it will provide under government rebate programs (“government rebates”).

Estimated government rebates are presented within accounts payable and accrued liabilities on the consolidated balance sheet.

Auditing the estimates of government rebates was complex and judgmental due to the level of uncertainty involved in management’s assumptions used in the measurement process.

In particular, management was required to estimate the portion of product that is expected to be subject to a government rebate and the applicable contractual government rebate percentage by payor type underlying the revenue and the applicable rebate amount applicable for the payor type.

How We Addressed the Matter in Our Audit We tested the Company’s internal controls over management’s process for estimating the portion of product that is expected to be subject to a government rebate for product that remains in the distribution channel at December 31, 2024.

This included controls over management’s review of significant assumptions and other inputs into the estimation of government rebates including the accuracy of data used in the calculation.

To test management’s estimate of government rebate reserves our audit procedures included, among others, evaluating the methodologies used, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analyses.

As described in Note 1 to the consolidated financial statements, the Company recognizes revenues for product sales to its customers after deducting management’s estimates of reserves for rebates it will provide under Medicaid rebate programs (“Medicaid rebates”).

Estimated Medicaid rebates are presented within accounts payable and accrued liabilities on the consolidated balance sheet.

Auditing the estimates of Medicaid rebates was complex and judgmental due to the level of uncertainty involved in management’s assumptions used in the measurement process.

In particular, management was required to estimate the portion of product that is expected to be subject to a Medicaid rebate and the applicable contractual rebate percentage underlying the revenue and the applicable rebate amount.

How We Addressed the Matter in Our Audit We tested the Company’s internal controls over management’s process for estimating the rebate amounts and the portion of product that is expected to be subject to a Medicaid rebate for product that remains in the distribution channel at December 31, 2025.

This included controls over management’s review of significant assumptions and other inputs into the estimation of Medicaid rebates including the completeness and accuracy of data used in the calculation.

To test management’s estimate of Medicaid rebate reserves, our audit procedures included, among others, evaluating the methodologies used, testing the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its analyses.

Specifically, we compared the significant assumptions to third-party reports used by the Company to estimate product remaining in the distribution channel at December 31, 2025.

In addition, we compared the underlying government rebate percentages used in the Company’s analyses to those published by the applicable government entity.

We assessed the historical accuracy of management’s rebate estimates, tested payments of rebates and performed a sensitivity analysis of significant assumptions to evaluate the changes in the rebate allowance that would result from changes in the assumptions.

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Accounts receivable

Prepaid expenses

Other current assets 115.8 63.6

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Property and equipment, net 89.8 82.6

Intangible assets, net 36.5 35.5

Other noncurrent assets 59.5 52.0

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Accounts payable and accrued liabilities $ 674.3 $ 461.6

Convertible senior notes — 170.1

Other current liabilities 69.1 46.1

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Accumulated other comprehensive income 13.1 5.8

Retained earnings (accumulated deficit)

29.2 ( 157.1 )

Retained earnings

Total stockholders’ equity 3,253.1 2,589.7

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NEUROCRINE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS INCOME

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

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$ 2,833.9 $ 2,330.6 $ 1,860.6

Collaboration revenue

Collaboration revenues

26.6 24.7 26.5

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Operating income 619.1 570.5 250.9

Other (expense) income:

Other income (expense):

Unrealized (loss) gain on equity investments ( 4.0 ) ( 37.1 ) 28.4

Charges associated with convertible senior notes — ( 138.4 ) —

Interest income and other, net 91.0 52.8 4.1

Total other (expense) income, net ( 84.5 ) 81.2 ( 35.1 )

Investment income and other, net

90.3 91.0 52.8

Total other income (expense), net

86.3 ( 84.5 ) 81.2

Income before provision for income taxes 705.4 486.0 332.1

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Net income — — — — 249.7 249.7

Other comprehensive loss, net of tax — — — ( 6.2 ) — ( 6.2 )

Cumulative-effect adjustment due to adoption of ASU 2020-06 — — ( 106.8 ) — 74.5 ( 32.3 )

Other comprehensive income, net of tax

— — — 14.9 — 14.9

Stock-based compensation expense — — 194.3 — — 194.3

Issuances of common stock under stock plans 1.6 — 44.7 — — 44.7

Issuances of common stock under benefit plans

2.2 — 65.3 — — 65.3

Balances at December 31, 2023 98.7 $ 0.1 $ 2,382.0 $ 7.0 $ ( 157.1 ) $ 2,232.0

Net income — — — — 341.3 341.3

Other comprehensive income, net of tax — — — 14.9 — 14.9

Other comprehensive loss, net of tax

— — — ( 1.2 ) — ( 1.2 )

Stock-based compensation expense — — 195.5 — — 195.5

Issuances of common stock under stock plans 2.2 — 65.3 — — 65.3

Issuances of common stock under benefit plans

2.7 — 122.1 — — 122.1

Repurchases of common stock

( 2.0 ) — ( 145.0 ) — ( 155.0 ) ( 300.0 )

Balances at December 31, 2024 99.4 $ 0.1 $ 2,554.6 $ 5.8 $ 29.2 $ 2,589.7

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Other comprehensive income, net of tax

— — — 7.3 — 7.3

Stock-based compensation expense — — 217.9 — — 217.9

Issuances of common stock under stock plans 2.7 — 122.1 — — 122.1

Repurchases of common stock under accelerated buyback agreements ( 2.0 ) — ( 145.0 ) — ( 155.0 ) ( 300.0 )

Issuances of common stock under benefit plans

2.5 — 127.3 — — 127.3

Repurchases of common stock

( 1.8 ) — ( 107.6 ) — ( 60.1 ) ( 167.7 )

Balances at December 31, 2025 100.1 $ 0.1 $ 2,792.2 $ 13.1 $ 447.7 $ 3,253.1

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

Stock-based compensation expense 195.5 194.3 173.1

Stock-based compensation

217.9 195.5 194.3

Charges associated with convertible senior notes — 138.4 —

Impairment charges associated with leased properties

Depreciation 26.0 23.5 17.8

(Accretion) amortization of (discount) premium on investments, net

( 26.2 ) ( 18.3 ) 3.7

Amortization of intangible assets 3.6 3.5 0.5

Accretion of discount on available-for-sale debt securities, net ( 12.7 ) ( 26.2 ) ( 18.3 )

Amortization of acquired intangible assets

Changes in fair values of equity investments 4.0 37.1 ( 28.4 )

Deferred income taxes

Deferred tax assets

165.4 ( 123.1 ) ( 56.7 )

Non-cash lease expense 26.8 10.4 ( 0.9 )

Other 0.7 0.1 0.7

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Accounts payable and accrued liabilities 160.2 43.4 49.0

Income tax assets and liabilities ( 18.8 ) 50.3 91.6

Other assets and liabilities, net ( 44.4 ) ( 54.0 ) ( 28.5 )

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Sales and maturities of available-for-sale debt securities 1,089.4 967.5 972.4

Acquisition of business, net of cash acquired — — ( 42.7 )

Purchases of equity investments — — ( 31.3 )

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Issuances of common stock under benefit plans 129.4 122.1 65.3

Repurchases of common stock under accelerated buyback agreements ( 300.0 ) — —

Payments associated with convertible senior notes ( 308.8 ) — ( 279.0 )

Repurchases of common stock

( 167.7 ) ( 300.0 ) —

Payments to settle convertible senior notes

— ( 308.8 ) —

Cash flows from financing activities ( 38.3 ) ( 486.7 ) 65.3

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Neurocrine Biosciences, Inc.

and its subsidiaries (Neurocrine Biosciences, the Company, we, our, or us) is a neuroscience-focused global biopharmaceutical company focused on discovering, developing, and delivering innovative therapies to help ease the burden of debilitating disorders and diseases.

and its subsidiaries (Neurocrine Biosciences, the Company, we, our, or us) is a neuroscience-focused global biopharmaceutical company focused on discovering, developing, and commercializing life-changing treatments for patients with under-addressed neurological, psychiatric, endocrine, and immunological disorders.

Use of Estimates

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All intercompany transactions and balances have been eliminated in consolidation.

Certain reclassifications have been made to previously reported amounts to conform to the current period presentation.

Revenue Recognition

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Product Revenue

We sell INGREZZA ® (valbenazine) in the U.S.

primarily to specialty pharmacy providers and distributors and CRENESSITY TM (crinecerfont) in the U.S.

to a specialty pharmacy provider.

Net product sales of INGREZZA totaled $ 2.3 billion for 2024, $ 1.8 billion for 2023, and $ 1.4 billion for 2022 and accounted for substantially all of our total net product sales during each of these years.

We sell INGREZZA ® (valbenazine) exclusively in the U.S.

through a limited specialty network.

Our customers include select specialty pharmacy providers, wholesale distributors, and specialty distributors.

In addition, we sell CRENESSITY ® (crinecerfont) in the U.S.

through a single specialty pharmacy provider.

Net product sales of INGREZZA were $ 2.51 billion for 2025, $ 2.31 billion for 2024, and $ 1.84 billion for 2023 and accounted for a significant portion of our total net product sales during each of these years.

Net product sales of CRENESSITY were $ 301.2 million for 2025.

Product revenue is recorded net of reserves for variable consideration, including discounts and allowances offered within contracts with our customers, payors, and other third parties.

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If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings.

For available-for-sale debt securities that do not meet the aforementioned criteria, we evaluate whether the decline in fair value has resulted from credit losses or other factors.

For available-for-sale debt securities that do not meet the aforementioned criteria, we

evaluate whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes in interest rates, and any changes to the rating of the security by a rating agency, among other factors.

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Concentration of Credit Risk

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

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

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.

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Year Ended December 31, December 31,

(in millions) 2024 2023 2022 2024 2023

2025 2024 2023 2025 2024

Customer A 39 % 43 % 36 % 41 % 41 %

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Food and Drug Administration (FDA) approval of CRENESSITY in December 2024, all costs related to its manufacturing were expensed as research and development (R&D) in the period incurred.

As a result, our physical inventory as of 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 value as of December 31, 2024.

As a result, our physical inventory as of December 31, 2025 and 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 value as of December 31, 2025 and 2024.

We determine if an arrangement is a lease at contract inception.

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Depreciation expense was $ 26.0 million for 2025, $ 23.5 million for 2024, and $ 17.8 million for 2023.

Goodwill, Intangible Assets, and Other Long-Lived Assets

Assets acquired, including intangible assets and in-process research and development (IPR&D) and liabilities assumed are measured at fair value as of the acquisition date.

Goodwill, which has an indefinite useful life, represents the excess of cost over fair value of the net assets acquired.

Intangible assets acquired in a business combination that are used for IPR&D activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts.

Upon reaching the end of the relevant research and development project (i.e., upon commercialization), the IPR&D asset is amortized over its estimated useful life.

If the relevant research and development project is abandoned, the IPR&D asset is expensed in the period of abandonment.

Goodwill and IPR&D are not amortized;

however, they are reviewed for impairment at least annually, as of October 1, and more frequently if an event occurs indicating the potential for impairment.

Goodwill and IPR&D are considered to be impaired if the carrying value of the reporting unit or IPR&D asset exceeds its respective fair value.

We perform our goodwill impairment analysis at the reporting unit level, which aligns with our reporting structure and availability of discrete financial information.

During the goodwill impairment review, we assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount, including goodwill.

The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and our overall financial performance.

If, after assessing the totality of these qualitative factors, we determine that it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then no additional assessment is deemed necessary.

Otherwise, we proceed to compare the estimated fair value of the reporting unit with the carrying value, including goodwill.

If the carrying amount of the reporting unit exceed the fair value, we record an impairment loss based on the difference.

We may elect to bypass the qualitative assessment in a period and proceed to perform the quantitative goodwill impairment test.

Our identifiable intangible assets with a finite life are typically comprised of acquired product rights.

The cost of identifiable intangible assets with finite lives is generally amortized on a straight-line basis over the assets’ respective estimated useful lives.

We perform regular reviews to determine if any event has occurred that may indicate that intangible assets with finite useful lives and other long-lived assets are potentially impaired.

If indicators of impairment exist, an impairment test is performed to assess the recoverability of the affected assets by determining whether the carrying amount of such assets exceeds the undiscounted expected future cash flows.

If the affected assets are not recoverable, we estimate the fair value of the assets and record an impairment loss if the carrying value of the assets exceeds the fair value.

Factors that may indicate potential impairment include a significant decline in our stock price and market capitalization compared to the net book value, significant changes in the ability of a particular asset to generate positive cash flows for our strategic business objectives, and the pattern of utilization of a particular asset.

Share Repurchases

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Cost of Revenues

Cost of revenues includes third-party manufacturing, transportation, freight, and indirect overhead costs primarily for the manufacture and distribution of INGREZZA drug product sold, manufacturing costs in connection with our supply of valbenazine drug product under our collaboration with Mitsubishi Tanabe Pharma Corporation, royalties on net sales of CRENESSITY and elagolix, amortization of intangible assets, and adjustments for excess and obsolete inventory to the extent management determines that the cost cannot be recovered based on estimates about future demand.

Cost of revenues primarily consists of third-party manufacturing, transportation, freight, and indirect overhead costs for the manufacture and distribution of INGREZZA and CRENESSITY drug product sold, royalties on net product sales of CRENESSITY, amortization of intangible assets, manufacturing costs in connection with our supply of valbenazine drug product under our collaboration with Tanabe Pharma Corporation (TPC) (formerly Mitsubishi Tanabe Pharma Corporation), and adjustments for excess and obsolete inventory to the extent management determines that the cost cannot be recovered based on estimates about future demand.

A portion of the costs associated with the manufacture of CRENESSITY sold to date was expensed as R&D prior to the FDA’s approval of CRENESSITY and is therefore excluded from cost of sales during this period.

Research and Development

R&D expenses primarily consist of preclinical and clinical trial costs, payroll and benefits costs, including stock-based compensation associated with employees involved in R&D activities, certain facility-based costs, and certain costs associated with our collaborative arrangements.

R&D expenses primarily consist of preclinical and clinical trial costs, payroll and benefits costs, including stock-based compensation associated with employees involved in R&D activities, certain costs associated with our collaborative arrangements, and certain facility-based expenses (such as rent expense) and other overhead allocations.

All such costs are expensed as R&D when incurred.

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We generally receive certain licensing rights under these arrangements.

These collaborations often require upfront payments and may include additional milestone, R&D cost sharing, royalty, or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development and commercialization.

Upfront payments associated with collaborative arrangements are generally expensed as IPR&D.

Amounts paid or payable to the partner in connection with the achievement of development milestones prior to regulatory approval are expensed as R&D when such milestones are achieved.

Regulatory and commercial milestone payments made to the partner subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of revenues over the estimated useful life of the related asset.

Upfront payments associated with collaborative arrangements are generally expensed as in-process research and development (IPR&D) when incurred.

Milestone payments that are contingent upon the achievement of specified development, regulatory, or commercial events are recognized when the applicable contingency is resolved and the consideration is paid or becomes payable.

Milestone payments that are paid or payable prior to regulatory approval are expensed as R&D, and milestone payments that are paid or payable subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of revenues over the estimated useful life of the related asset.

Royalties are expensed as cost of revenues when incurred.

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A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets, including net operating losses and tax credits, will not be realized.

We periodically re-assess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration.

We periodically reassess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration.

Significant judgment is required in making this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred tax assets is deemed appropriate, a tax benefit will be recognized against our income tax provision in the period of such reversal.

Our income tax provision is also affected by intercompany transfer pricing arrangements, including the allocation of income related to intellectual property held by foreign affiliates.

These arrangements are intended to reflect arm’s-length pricing and require management judgment in their application.

We have elected to account for Global Intangible Low-Taxed Income (GILTI) as a current period tax expense in the period incurred in accordance with its accounting policy under ASC 740.

We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities based on the technical merits of the position.

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Basic earnings per share are computed using the weighted average number of common shares outstanding during the period.

Diluted earnings per share are computed using the treasury stock and if-converted methods and reflect the weighted average number of common and potentially dilutive shares outstanding during the period, excluding those which effect would be anti-dilutive.

PRSUs for which the performance condition has not been achieved are excluded from the calculation of diluted earnings per share.

Recently Adopted Accounting Pronouncements

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

Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

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.

We adopted ASU 2023-07 for our annual reporting period beginning on January 1, 2024.

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):

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted.

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

ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and should be applied on a prospective basis.

We adopted ASU 2023-09 on January 1, 2025.

Our adoption of ASU 2023-09 did not have a material impact on our consolidated financial statements (since the requirements of this ASU are disclosure-specific) and will not affect our quarterly income tax disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

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

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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.

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.

With respect to such rights retained by Nxera, we retain the rights to opt in to profit sharing arrangements, pursuant to which we and Nxera will equally share in the operating profits and losses for such compounds in Japan.

Subject to specified conditions, we may elect to exercise such opt-in rights with respect to each such compound either before initiation of the first proof of concept Phase 2 clinical trial for such compound or following our receipt from Nxera of the top-line data from such clinical trial for such compound.

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

In connection with the FDA's acceptance of our investigational new drug application for NBI-1117568 for the treatment of schizophrenia in 2022, we expensed a milestone payment of $ 30.0 million to Nxera as R&D in 2022.

In connection with the successful completions of a long-term toxicity program for NBI-1117568 and a Phase 2 clinical study for NBI-1117568 in schizophrenia in 2024, we expensed milestone payments totaling $ 50.0 million to Nxera as R&D in 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 $ 2.5 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.

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.

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

We may terminate the agreement in its entirety or with respect to one or more targets upon 180 days’ written notice to Heptares during the research collaboration term and upon 90 days’ written notice to Nxera following the expiration of the research collaboration term.

Following the expiration of the research collaboration term, Nxera may terminate the agreement on a target-by-target basis in the event that we do not conduct any material development activities outside of Japan with respect to a certain compound or licensed product within the applicable target class for a continuous period of not less than 365 days and do not commence any such activities within 120 days of receiving written notice.

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 (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 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.

The termination is anticipated to be 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 expect tiered based royalties payable to Takeda to be 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 approval of our clinical trial application for NBI-1070770 for the treatment of major depressive disorder in 2022, we expensed a milestone payment of $ 5.0 million to Takeda as R&D in 2022.

In connection with the initiation of a Phase 2 clinical study for NBI-1070770 in major depressive disorder in 2024, we expensed a milestone payment of $ 7.5 million to Takeda as R&D in 2024.

Takeda may be entitled to receive potential future payments upon the achievement of certain event-based milestones.

As of December 31, 2024, the aggregate amount of these potential future payments was up to $ 1.9 billion, excluding the effects of the Restated Takeda Agreement and any pending terminations.

Takeda is also entitled to receive royalties on the future net sales of any royalty-bearing product.

In January 2025, we advanced osavampator into Phase 3 development to evaluate the efficacy and safety of osavampator in adults with major depressive disorder.

The initiation of the Phase 3 study, as defined, will trigger a $ 35.0 million milestone payable to Takeda.

No expense was recognized in connection with this milestone in 2024.

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 Restated Takeda 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 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.

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 became effective in January 2025.

Xenon Pharmaceuticals Inc., or Xenon.

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.

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

In connection with the achievement of a development milestone in 2022, we paid Xenon $ 15.0 million, including a purchase of 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.

The remaining $ 7.3 million of the milestone payment was expensed as R&D in 2022.

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.

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

Upon the expiration of the royalty term for a particular licensed product and country, the license obtained by us with respect to such product and country will become fully paid, royalty free, perpetual and irrevocable.

We may terminate the agreement upon 90 days’ written notice to Xenon, provided that such unilateral termination will not be effective for certain products until we have used commercially reasonable efforts to complete certain specified clinical studies.

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.

2019 Voyager Agreement

In 2019, we entered into a collaboration and license agreement with Voyager (the 2019 Voyager Agreement), pursuant to which we retain certain rights to develop and commercialize the Friedreich’s ataxia (FA) program and two undisclosed programs.

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

We may terminate the 2019 Voyager Agreement upon 180 days’ written notice to Voyager prior to the first commercial sale of any collaboration product under the 2019 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 2019 Voyager Agreement.

2023 Voyager Agreement

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.

Voyager may elect to exercise such rights, pursuant to which we and Voyager would equally share in the operating profits and losses of such products in the U.S.

(in lieu of Voyager being entitled to receive potential future payments of certain event-based milestones upon their achievement in the U.S.

and receive royalties on the future net sales of such products in the U.S.), following Voyager’s receipt of the top-line data from a first clinical trial Parkinson’s disease.

However, if we and Voyager elect to focus on an indication other than Parkinson’s disease prior to Voyager’s receipt of top-line data from a first clinical trial for Parkinson’s disease, then Voyager may elect to exercise such co-development and co-commercialization rights after the later of:

(i) Voyager’s receipt of top-line data from the first clinical trial of a product that is the subject of the GBA1 Program or (ii) the date we and Voyager decide not to pursue Parkinson’s disease as an indication for development under the GBA1 Program.

Irrespective of Voyager’s election to exercise such rights, Voyager may be entitled to receive potential future payments upon the achievement of certain event-based milestones outside the U.S.

and would be entitled to receive royalties on the future net sales of any such product outside the U.S.

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 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.

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 two development candidates under the GBA1 program pursuant to our collaboration with Voyager, we expensed milestone payments totaling $ 6.0 million to Voyager as R&D in 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 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.

Sanofi S.A., or Sanofi.

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

In connection with FDA approval of CRENESSITY capsules and oral solution as an adjunctive treatment of classic congenital adrenal hyperplasia (CAH) in December 2024, we paid a $ 5.0 million milestone to Sanofi in January 2025, which we accrued to other current liabilities and recorded within intangible assets, net on the consolidated balance sheet as of December 31, 2024.

Under the terms of the agreement, 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, or 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.

In connection with MTPC's first commercial sale of DYSVAL in Japan, we received a milestone payment of $ 20.0 million in 2022.

ASC 606 provides a royalty exception for a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Under the royalty exception, the milestone would be recognized as revenue only when the later of (1) the subsequent sale or usage occurs or (2) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied).

As the milestone related to a license of intellectual property and was contingent upon MTPC’s first commercial sale of DYSVAL in Japan, the milestone was recognized as revenue in 2022.

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.

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

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.

for the treatment of moderate to severe pain associated with endometriosis in August 2018 and ORIAHNN ® (elagolix, estradiol and norethindrone acetate capsules and elagolix capsules) in the U.S.

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 $ 13.5 million for 2024, $ 16.7 million for 2023, and $ 21.2 million for 2022.

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.

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.

2024 December 31,

(in millions) Contractual

December 31, 2025 December 31, 2024

(dollars in millions)

Maturity Amortized

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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 December 31, 2024 or December 31, 2023.

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.

No allowance for credit losses was recognized as of December 31, 2025 or 2024.

The following table presents available-for-sale debt securities that were in an unrealized loss position as of December 31, 2025, aggregated by major security type and length of time in a continuous loss position.

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Corporate debt securities $ 298.2 $ ( 0.5 ) $ — $ — $ 298.2 $ ( 0.5 )

Securities of government-sponsored entities $ 123.8 $ ( 0.6 ) $ — $ — $ 123.8 $ ( 0.6 )

The following table presents available-for-sale debt securities that were in an unrealized loss position as of December 31, 2024, aggregated by major security type and length of time in a continuous loss position.

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

2024 December 31,

December 31, 2025 December 31, 2024

Value Leveling Fair

5 unchanged sentences

$ 2,664.2 $ 833.8 $ 1,830.4 $ 1,940.4 $ 357.8 $ 1,582.6

Our operating leases have terms that expire beginning 2027 through 2036 and consist of office space and research and development laboratories, including our corporate headquarters.

Certain of these lease agreements contain clauses for renewal at our option.

As we were not reasonably certain to exercise any of these renewal options at commencement of the associated leases, no such options were recognized as part of our ROU assets or operating lease liabilities.

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

Year Ended December 31,

(dollars in millions)

2025 2024 2023

Operating lease cost $ 64.6 $ 43.6 $ 17.1

Sublease income ( 3.5 ) ( 2.0 ) ( 0.7 )

Net operating lease cost $ 61.1 $ 41.6 $ 16.4

Cash paid for amounts included in the measurement of operating lease liabilities $ 37.8 $ 33.1 $ 17.9

2025 December 31,

Weighted average remaining lease term

9.9 years 10.8 years

Weighted average discount rate 4.9 % 4.9 %

Restricted cash related to leases $ 7.8 $ 7.8

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

(in millions) Operating

Year ending December 31, 2026

$ 56.7 $ ( 3.9 )

Year ending December 31, 2027

Year ending December 31, 2028

Year ending December 31, 2029

Year ending December 31, 2030

Thereafter 306.9 ( 2.0 )

Total operating lease payments (sublease income)

602.9 $ ( 21.0 )

Less imputed interest

Total operating lease liabilities 471.3

Less current operating lease liabilities included in other current liabilities 56.0

Noncurrent operating lease liabilities $ 415.3

Impairment of ROU Assets

During 2024, we reassessed the asset groupings for corporate ROU assets that are actively being marketed for sublease in connection with leased office space that was vacated 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 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.

Impairment charges were not significant for 2025 or 2023.

Convertible Senior Notes

In May 2017, we issued $ 517.5 million in aggregate principal amount of 2.25 % fixed-rate convertible senior notes due May 15, 2024 (the 2024 Notes) and entered into an indenture in May 2017 with U.S.

Bank National Association, as trustee, with respect to the 2024 Notes.

From 2020 through 2022, we repurchased $ 347.0 million in aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 465.9 million in cash.

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 on the consolidated statements of income and comprehensive income.

During 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.

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 2024.

(in millions) Amount

Accretion of debt discount associated with derivative liability $ 126.6

Change in fair value of derivative liability 9.6

Loss on extinguishment of convertible senior notes 2.2

Total charges associated with convertible senior notes

Supplemental Financial Information

Prepaid expenses consisted of the following:

(in millions) 2025 2024

Prepaid income taxes $ 94.0 $ —

Prepaid development costs 55.6 32.1

Other prepaid expenses 21.1 16.4

Total prepaid expenses $ 170.7 $ 48.5

Inventory consisted of the following:

(in millions) 2025 2024

Raw materials $ 35.7 $ 33.7

Work in process 19.2 10.9

Finished goods 14.3 12.8

Less inventory reserves

Total inventory $ 69.0 $ 57.4

Property and equipment, net, consisted of the following:

(in millions) 2025 2024

Scientific equipment $ 123.3 $ 95.7

Computer equipment 28.9 38.9

Tenant improvements 35.6 35.9

Furniture and fixtures 20.3 18.6

Less accumulated depreciation ( 118.3 ) ( 106.5 )

Total property and equipment, net $ 89.8 $ 82.6

Accounts payable and accrued liabilities consisted of the following:

(in millions) 2025 2024

Sales rebates and reserves $ 226.0 $ 144.2

Accrued employee related costs 128.8 107.5

Accrued development costs

Current income taxes payable

Current branded prescription drug fee 45.3 49.2

Accounts payable and other accrued liabilities 104.9 99.9

Total accounts payable and accrued liabilities $ 674.3 $ 461.6

Other noncurrent liabilities consisted of the following:

(in millions) 2025 2024

Noncurrent income taxes payable

$ 214.5 $ 160.7

Other noncurrent liabilities 5.2 5.5

Total other noncurrent liabilities $ 219.7 $ 166.2

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

(in millions) 2025 2024

Cash and cash equivalents $ 713.0 $ 233.0

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash $ 721.0 $ 241.0

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 1.5 million shares on the open market for a cost of $ 167.7 million during 2025.

As of December 31, 2025, we had $ 332.3 million remaining available for additional repurchases 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 reductions to retained earnings and 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.

Earnings Per Share

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Diluted $ 4.67 $ 3.29 $ 2.47

Shares which have been excluded from diluted per share amounts because their effect would have been anti-dilutive were 2.4 million for 2024, 4.7 million for 2023, and 4.6 million for 2022.

Stockholders’ Equity

Share Repurchases

During 2024, we entered into an accelerated share repurchase (ASR) transaction with a third-party financial institution to repurchase an aggregate of $ 300.0 million of shares of the Company’s common stock.

The transaction was accounted for as a treasury stock transaction and a forward stock purchase contract, which was considered indexed to the Company’s own stock and classified as an equity instrument.

At inception, we paid the financial institution $ 300.0 million using cash on hand and took initial delivery of 2.0 million shares, which resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares for both basic and diluted earnings per share.

The fair market value of the 2.0 million initial shares received was $ 240.5 million, with the par value of the initial shares received recorded as a reduction to common stock, the excess of the fair market value over the par value of the initial shares received recorded as a reduction to retained earnings to the extent available, and the remainder recorded as a reduction to additional paid-in capital.

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

The ASR transaction terminated in February 2025, at which time we became contractually entitled to receive an additional 0.3 million shares upon settlement.

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

Stock-Based Compensation

2025 Equity Incentive Plan

In May 2022, 2023, and 2024, our stockholders approved amendments of the 2020 Equity Incentive Plan (as so amended, the Amended 2020 Plan).

The Amended 2020 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards.

As of December 31, 2024, 10.6 million shares of common stock remain available for future grant under the Amended 2020 Plan.

Under the terms of the Amended 2020 Plan, the number of shares of common stock available for issuance will be:

(i) reduced by (a) one share for each share issued pursuant to an appreciation award (as defined in the Amended 2020 Plan) granted under the Amended 2020 Plan and (b) 2.13 shares for each share issued pursuant to a full value award (as defined in the Amended 2020 Plan) granted under the Amended 2020 Plan on or after May 18, 2022;

and (ii) increased by (a) one share for each share subject to an appreciation award that becomes available again for issuance under the terms of the Amended 2020 Plan and (b) 2.13 shares for each share subject to a full value award that becomes available again for issuance under the terms of the Amended 2020 Plan on or after May 18, 2022.

In May 2025, our stockholders approved the 2025 Equity Incentive Plan (the 2025 Plan).

The 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards.

As of December 31, 2025, 7.4 million shares of common stock remain available for future grant under the 2025 Plan.

Under the terms of the 2025 Plan, the number of shares of common stock available for issuance will be:

(i) reduced by (a) one share for each share issued pursuant to an appreciation award (as defined in the 2025 Plan) and (b) 2.43 shares for each share issued pursuant to a full value award (as defined in the 2025 Plan);

and (ii) increased by (a) one share for each share subject to an appreciation award that becomes available again for issuance under the terms of the 2025 Plan and (b) 2.43 shares for each share subject to a full value award that becomes available again for issuance under the terms of the 2025 Plan.

2020 Equity Incentive Plan

In May 2020, we adopted the 2020 Equity Incentive Plan (as amended, the Amended 2020 Plan).

The Amended 2020 Plan was a stockholder-approved plan pursuant to which no additional awards will be granted following the effective date of the 2025 Plan.

Outstanding awards under the Amended 2020 Plan will continue to be governed by its terms.

2011 Equity Incentive Plan

In May 2011, we adopted the 2011 Equity Incentive Plan (the 2011 Plan).

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2018 Employee Stock Purchase Plan

In May 2021, our stockholders approved an amendment and restatement of the 2018 Employee Stock Purchase Plan (as so amended and restated, the Amended 2018 ESPP).

In May 2022 and 2025, our stockholders approved amendments and restatements of the 2018 Employee Stock Purchase Plan (as so amended and restated, the Amended 2018 ESPP).

As of December 31, 2025, 1.0 million shares of common stock remain available for future issuance under the Amended 2018 ESPP.

79 unchanged sentences

Granted 0.1 $ 118.24

Canceled ( 0.1 ) $ 81.19

Unvested at December 31, 2025

17 unchanged sentences

State 1.9 ( 18.1 ) ( 15.5 )

Foreign 19.8 — —

Deferred income taxes

1 unchanged sentence

Provision for income taxes $ 226.8 $ 144.7 $ 82.4

The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate due to the following:

As discussed in Note 1 , we adopted ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, on January 1, 2025 on a prospective basis.

As a result, our rate reconciliation for 2025 is presented in accordance with the new disclosure requirements, while the reconciliations for 2024 and 2023 continue to be presented under disclosure requirements in effect for those periods.

The provision for income taxes on earnings subject to income taxes differed from the statutory federal rate due to the following (after the adoption of ASU 2023-09):

Year Ended December 31, 2025

(in millions) 2024 2023 2022

(dollars in millions)

Federal income taxes at 21 %

$ 148.1 21.0 %

State and local income taxes, net of federal benefit (1)

Foreign tax effects

Statutory tax rate difference between Switzerland and U.S.

Changes in valuation allowances ( 18.8 ) ( 2.7 ) %

Undistributed earnings

Other ( 11.2 ) ( 1.6 ) %

Other foreign jurisdictions 3.7 0.5 %

Effect of cross-border tax laws

Global intangible low-taxed income, net 52.9 7.5 %

Foreign tax credits

( 7.9 ) ( 1.1 ) %

Other effects of cross-border tax laws total - below 1.05 %

( 0.5 ) ( 0.1 ) %

Research and development tax credits ( 35.6 ) ( 5.0 ) %

Changes in valuation allowance 7.7 1.1 %

Nontaxable or nondeductible items

Officer compensation

Branded prescription drug fee

Other non-deductible and non-taxable total - below 1.05 %

Stock-based compensation expense (windfall/shortfall)

( 13.7 ) ( 1.9 ) %

Basis difference in subsidiary held for sale

( 15.7 ) ( 2.2 ) %

Changes in unrecognized tax benefits 49.1 7.0 %

Provision for income taxes $ 226.8 32.2 %

_________________________

(1) 50% or more of our state tax provision relates to the Tennessee and Kentucky state jurisdictions.

The provision for income taxes on earnings subject to income taxes differed from the statutory federal rate due to the following (prior to the adoption of ASU 2023-09):

Year Ended December 31,

(dollars in millions)

Federal income taxes at 21 %

$ 102.1 $ 69.7

State income tax, net of federal benefit 34.6 17.5

4 unchanged sentences

Foreign rate differential

7.2 3.4 ( 0.2 )

Change in tax rate ( 0.6 ) ( 5.5 )

3 unchanged sentences

Provision for income taxes $ 144.7 $ 82.4

The following table presents income taxes paid for 2025:

(in millions) Amount

Aggregated state and local jurisdictions (1)

Total income taxes paid, net

_________________________

(1) The amount of income taxes paid during 2025 did not meet the 5% disaggregation threshold.

The following table presents the significant components of our deferred tax assets:

7 unchanged sentences

Intangible assets 117.0 121.4

Accrued payroll

Other 55.0 27.6

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As of December 31, 2025, management determined there was sufficient positive evidence to conclude that it is more likely than not deferred tax assets of $ 320.3 million are realizable.

The recorded valuation allowance of $ 112.2 million consisted primarily of state and foreign net operating loss carryforwards and state credit carryforwards for which management cannot conclude it is more likely than not to be realized.

As of December 31, 2024, we had state and foreign income tax net operating loss carryforwards of $ 279.5 million and $ 237.5 million, respectively.

We had no federal income tax operating loss carryforwards as of December 31, 2024.

California net operating losses will begin to expire in 2031 unless previously utilized and the net operating losses related to other states will begin to expire in 2037.

Swiss net operating losses will begin to expire in 2030 unless previously utilized.

UK net operating losses will carry forward indefinitely.

The recorded valuation allowance of $ 97.3 million consisted primarily of unrealized capital losses, state net operating losses, and state research credit carryforwards for which management cannot conclude it is more likely than not to be realized.

As of December 31, 2025, we had state income tax net operating loss carryforwards of $ 279.0 million.

We had no federal or foreign income tax operating loss carryforwards as of December 31, 2025.

California net operating losses and net operating losses related to other states will begin to expire in 2032 and 2041, respectively, unless previously utilized.

As of December 31, 2025, we had state R&D tax credit carryforwards of $ 114.7 million.

California R&D tax credits carry forward indefinitely, while R&D tax credits related to other states will begin to expire in 2034 unless previously utilized.

Additionally, the future utilization of our net operating loss and R&D tax credit carryforwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that could occur in the future.

Additionally, the future utilization of our state net operating loss and R&D tax credit carryforwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that could occur in the future.

No ownership changes have occurred through December 31, 2025.

As of December 31, 2025, we have recorded a U.S.

deferred income tax liability of $ 12.0 million on the unremitted earnings of certain foreign subsidiaries as we cannot assert these earnings are indefinitely reinvested in foreign operations.

The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.

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We recognize interest and penalties related to income tax matters in income tax expense.

We had accruals for interest related to income tax matters of $ 10.9 million as of December 31, 2024 and $ 3.1 million as of December 31, 2023.

We had accruals for penalties related to income tax matters of $ 2.2 million as of December 31, 2024 and 2023.

As of December 31, 2025 and 2024, we had accruals for interest related to income tax matters of $ 24.9 million and $ 10.9 million, respectively.

In addition, we had accruals for penalties related to income tax matters of $ 3.8 million and $ 2.2 million, respectively, as of December 31, 2025 and 2024.

We are subject to taxation in the U.S.

and various state and foreign jurisdictions.

Our tax years for 2002 for federal, 2000 for California, 2015 for other significant state jurisdictions, and 2019 and forward for foreign jurisdictions are subject to examination by tax authorities due to the carryforward of unutilized net operating losses and R&D tax credits.

The IRS is currently examining the 2023 tax year.

Management believes that an adequate provision has been made for any adjustments that may result from tax examinations.

However, the outcome of tax audits cannot be predicted with certainty.

If any issues addressed in the tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs.

The following table presents a summary of activity related to unrecognized tax benefits:

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Balance at January 1 $ 179.8 $ 121.0 $ 84.5

Increase related to prior year tax positions 4.0 3.4 4.7

(Decrease) increase related to prior year tax positions

( 11.2 ) 4.0 3.4

Increase related to current year tax positions 51.3 54.8 36.7

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As of December 31, 2025, we had $ 177.6 million of unrecognized tax benefits that, if recognized and realized, would affect the effective tax rate, subject to changes in the valuation allowance.

We do not expect a significant change in our unrecognized tax benefits in the next 12 months.

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

Certain of these lease agreements contain clauses for renewal at our option.

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

Year Ended December 31,

(in millions, except weighted average data) 2024 2023 2022

Operating lease cost $ 43.6 $ 17.1 $ 16.3

Sublease income ( 2.0 ) ( 0.7 ) —

Net operating lease cost $ 41.6 $ 16.4 $ 16.3

Cash paid for amounts included in the measurement of operating lease liabilities $ 33.1 $ 17.9 $ 16.9

2024 December 31,

Weighted average remaining lease term

10.8 years 10.8 years

Weighted average discount rate 4.9 % 5.1 %

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 December 31, 2024.

(in millions) Operating

Year ending December 31, 2025

$ 41.8 $ ( 3.5 )

Year ending December 31, 2026

Year ending December 31, 2027

Year ending December 31, 2028

Year ending December 31, 2029

Thereafter 373.9 ( 5.3 )

Total operating lease payments (sublease income)

654.3 $ ( 22.8 )

Less accreted interest 158.6

Total operating lease liabilities 495.7

Less current operating lease liabilities included in other current liabilities 40.6

Noncurrent operating lease liabilities $ 455.1

New Campus Facility

On February 8, 2022, we entered into a lease agreement for a four-building campus facility to be constructed 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 new corporate headquarters.

The construction of the new campus facility was phased.

In connection with the completion of the first phase of construction relating to office space, we recognized ROU assets of $ 199.0 million and operating lease liabilities of $ 189.8 million in December 2023.

In connection with the completion of the second phase of construction relating to laboratory space, we recognized ROU assets of $ 258.9 million and operating lease liabilities of $ 211.7 million in October 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

During 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.

Convertible Senior Notes

On May 2, 2017, we completed a private placement of $ 517.5 million in aggregate principal amount of 2.25 % fixed-rate convertible senior notes due May 15, 2024 (the 2024 Notes) and entered into the 2017 Indenture with respect to the 2024 Notes.

Interest on the 2024 Notes was due semi-annually on May 15 and November 15 of each year.

In 2020, we repurchased $ 136.2 million in aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 186.9 million in cash.

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, which resulted in the recognition of a $ 70.0 million loss on extinguishment.

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.

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

During 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 2024.

(in millions) Amount

Accretion of debt discount associated with derivative liability $ 126.6

Change in fair value of derivative liability 9.6

Loss on extinguishment of convertible senior notes 2.2

Charges associated with convertible senior notes $ 138.4

Goodwill and Intangible Assets

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

Goodwill is included in other noncurrent assets in the consolidated balance sheets.

(in millions) Amount

Balance as of December 31, 2022 $ 5.4

Foreign currency translation adjustments 0.4

Balance as of December 31, 2023 5.8

Foreign currency translation adjustments ( 0.1 )

Balance as of December 31, 2024 $ 5.7

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

2024 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)

$ 40.5 $ 7.7 $ 32.8 $ 35.9 $ 4.0 $ 31.9

Acquired IPR&D $ 3.7 $ — 3.7 $ 3.6 $ — 3.6

Total intangible assets, net $ 36.5 $ 35.5

_________________________

(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 December 31, 2024.

On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was signed into law.

The OBBBA includes significant changes to U.S.

tax and related laws.

Some of the provisions of the OBBBA affecting us include the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act (TCJA), changes to the treatment of research and development expenditures under Internal Revenue Code Section 174, modifications to the Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII) international tax provisions, and reinstatement of 100% bonus depreciation deduction from the TCJA for eligible property acquired after January 19, 2025.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA’s financial reporting implications have been recognized in our income tax provision for 2025.

Swiss Cantonal Tax Relief

In August 2025, the Company received approval from Swiss tax authorities granting cantonal tax relief to its Swiss subsidiary, Neurocrine Switzerland GmbH.

The tax relief applies for a period of 10 tax years beginning with the 2024 tax year through 2033.

The Swiss cantonal tax relief had a minimal impact on the Company’s earnings per share for the year ended December 31, 2025.

Collaboration and License Agreements

Nxera Pharma UK Limited (Nxera)

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

Direclidine (NBI-1117568) is a potential first-in-class, orally active, highly selective investigational M4 agonist in development as a potential treatment for schizophrenia.

In connection with the initiation of a Phase 3 clinical study for direclidine in schizophrenia in 2025, we expensed a milestone payment of $ 15.0 million to Nxera as R&D in 2025.

In connection with the successful completions of a long-term toxicity program for direclidine and Phase 2 clinical study for direclidine in schizophrenia in 2024, we expensed milestone payments totaling $ 50.0 million to Nxera as R&D in 2024.

Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.50 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.

Following the expiration of the research collaboration term, we may terminate the agreement in its entirety or with respect to one or more targets upon 90 days’ written notice to Nxera.

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 (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.

In October 2024, we provided Takeda with written notice of termination of the license under the 2020 Takeda Agreement with respect to certain DAAO inhibitors, including the license 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 of the license to develop and commercialize certain DAAO inhibitors under the 2020 Takeda Agreement, including luvadaxistat, and GPR139 agonists, including NBI-1065846.

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

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.

Osavampator is a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM) in development for patients with inadequate response to treatment of major depressive disorder (MDD).

In connection with the initiation of a Phase 3 clinical study for osavampator in MDD in 2025, we expensed a milestone payment of $ 37.5 million to Takeda as R&D in 2025.

NBI-1070770 is a novel, selective, and orally active, negative allosteric modulator (NAM) of the NR2B subunit-containing N-methyl-D-aspartate (NMDA NR2B) receptor in development as a potential treatment for MDD.

In connection with the initiation of a Phase 2 clinical study for NBI-1070770 in MDD in 2024, we expensed a milestone payment of $ 7.5 million to Takeda as R&D in 2024.

In November 2025, we announced that the Phase 2 study evaluating the efficacy, safety, and tolerability of NBI-1070770 in adults with MDD did not meet the primary endpoint.

Takeda may be entitled to receive potential future payments of up to $ 0.74 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.

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

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.

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.

NBI-921355 is an investigational, selective inhibitor of voltage-gated sodium channels Na v 1.2 and Na v 1.6 in development as a potential treatment of certain types of epilepsy.

In connection with the initiation of a Phase 1 clinical study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of NBI-921355 in healthy adult participants in 2025, we expensed a milestone payment of $ 7.5 million to Xenon as R&D in 2025.

Under the terms of the agreement, Xenon may be entitled to receive potential future payments of up to $ 1.70 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.

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 U.S.

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.

2019 Voyager Agreement

In 2019, we entered into a collaboration and license agreement with Voyager (the 2019 Voyager Agreement), pursuant to which we obtained certain rights to develop and commercialize product candidates, including the rights to gene therapy product candidates for the treatment of Friedreich’s ataxia (FA) and two undisclosed programs.

In April 2025, we mutually agreed with Voyager to discontinue the two undisclosed programs and the rights to the targets selected under these programs returned to Voyager.

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 until February 23, 2026, the third anniversary of the closing date of the share purchase transaction.

Under the terms of the 2019 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 0.47 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.

2023 Voyager Agreement

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 ® capsids.

Voyager may elect to exercise such rights, pursuant to which we and Voyager would equally share in the operating profits and losses of such products in the U.S.

(in lieu of Voyager being entitled to receive potential future payments of certain event-based milestones upon their achievement in the U.S.

and receive royalties on the future net sales of such products in the U.S.), following Voyager’s receipt of the top-line data from a first clinical trial in Parkinson’s disease.

Irrespective of Voyager’s election to exercise such rights, Voyager may be entitled to receive potential future payments upon the achievement of certain event-based milestones outside the U.S.

and would be entitled to receive royalties on the future net sales of any such product outside the U.S.

In connection with the 2023 Voyager Agreement, we paid Voyager $ 175.0 million upfront, including a purchase of 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 until February 23, 2026, the third anniversary of the closing date of the share purchase transaction.

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.

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 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 milestone payments totaling $ 3.0 million and $ 6.0 million, respectively, to Voyager as R&D in 2025 and 2024.

Under the terms of the 2023 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 6.10 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.

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 (CRF-1) receptor antagonists, including crinecerfont.

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

as a first-in-class FDA-approved treatment of classic congenital adrenal hyperplasia due to 21-hydroxylase deficiency (CAH) in December 2024.

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

In connection with FDA approval of CRENESSITY capsules and oral solution as an adjunctive treatment of CAH in December 2024, we paid a $ 5.0 million milestone to Sanofi in January 2025, which we accrued to other current liabilities and recorded within intangible assets, net on the consolidated balance sheet as of December 31, 2024.

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.

Assets and Liabilities Held for Sale

On December 24, 2025, we committed to a plan to sell the Neurocrine Group Limited (formerly Diurnal Group plc) operating unit, which met the criteria for classification as held for sale under ASC 360.

As a result, the assets and liabilities of the disposal group are presented separately as “Assets held for sale” and “Liabilities related to assets held for sale” below, and included in other current assets and other current liabilities, respectively, on the consolidated balance sheet as of December 31, 2025.

In connection with the classification of the operating unit as held for sale on December 24, 2025, $ 29.8 million of intangible assets, net of amortization, have been included in the disposal group presented as “Assets held for sale” on the consolidated balance sheet as of December 31, 2025.

The disposal group was measured at the lower of the carrying amount or fair value less costs to sell.

Based on an estimated fair value (net of selling costs) of $ 62.2 million and a carrying value of $ 34.6 million, no impairment loss was recognized in connection with the held-for-sale classification.

In addition, depreciation and amortization associated with the disposal group ceased as of the held-for-sale classification date.

The disposal group did not qualify as a discontinued operation under ASC 205, as it does not represent a strategic shift that will have a major effect on our operations or financial results.

As required by ASC 360, any potential gain or loss will be recognized upon completion of the sale.

The major classes of assets and liabilities classified as held for sale as of December 31, 2025, were as follows:

(in millions) Amount

Year ending December 31, 2025

Year ending December 31, 2026

Year ending December 31, 2027

Year ending December 31, 2028

Year ending December 31, 2029

Thereafter $ 13.3

Other Balance Sheet Details

Inventory consisted of the following:

(in millions) 2024 2023

Raw materials $ 33.7 $ 21.5

Work in process 10.9 9.7

Finished goods 12.8 12.3

Less inventory reserves

Total inventory $ 57.4 $ 38.3

Property and equipment, net, consisted of the following:

(in millions) 2024 2023

Tenant improvements $ 35.9 $ 38.1

Scientific equipment 95.7 79.6

Computer equipment 38.9 25.2

Furniture and fixtures 18.6 10.9

Less accumulated depreciation ( 106.5 ) ( 83.0 )

Total property and equipment, net $ 82.6 $ 70.8

Accounts payable and accrued liabilities consisted of the following:

(in millions) 2024 2023

Sales rebates and reserves $ 144.2 $ 139.3

Accrued employee related costs 107.5 86.2

Accrued development costs 50.8 44.3

Current branded prescription drug fee 49.2 45.7

Accounts payable and other accrued liabilities 110.0 133.3

Total accounts payable and accrued liabilities $ 461.6 $ 448.8

Other noncurrent liabilities consisted of the following:

(in millions) 2024 2023

Noncurrent income taxes payable

$ 160.7 $ 96.0

Other noncurrent liabilities 5.5 10.3

Total other noncurrent liabilities $ 166.2 $ 106.3

(in millions) 2024 2023

Cash and cash equivalents $ 233.0 $ 251.1

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash $ 241.0 $ 259.1

Assets held for sale:

Intangible assets, net

Other assets 13.0

Total assets held for sale included in other current assets $ 42.8

Liabilities related to assets held for sale:

Accounts payable and accrued liabilities

Other liabilities

Total liabilities related to assets held for sale included in other current liabilities $ 8.2

As of December 31, 2025, the disposal group classified as held for sale excludes certain assets and obligations that will not be transferred to the buyer upon closing.

Specifically, cash and cash equivalents of the disposal group are not expected to be conveyed to the buyer.

Accordingly, such cash and the related liabilities expected to be settled prior to closing are excluded from the assets and liabilities presented as held for sale as of December 31, 2025.

Subsequent to December 31, 2025, on January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $ 65.0 million in cash, and we expect to recognize the related gain in the first quarter of 2026.

Retirement Plan

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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.

Net product sales from external customers attributed to foreign countries, intra-entity sales, and long-lived assets located outside the U.S.

were not significant for 2024, 2023, or 2022.

for the treatment of under-addressed neurological, psychiatric, endocrine, and immunological disorders.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

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 as consolidated net income.

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.

3 unchanged sentences

(in millions) 2025 2024 2023

INGREZZA net product sales $ 2,513.7 $ 2,313.5 $ 1,836.0

CRENESSITY net product sales 301.2 1.7 —

Other revenues (1)

45.6 40.1 51.1

Total revenues 2,860.5 2,355.3 1,887.1

Cost of revenues 52.1 34.0 39.7

14 unchanged sentences

_________________________

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

(1) Other revenues primarily consist of net product sales of ALKINDI and EFMODY and royalties earned on AbbVie net sales of elagolix and TPC 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 Matters

Legal Proceedings

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 other Spruce patents in the U.S.

Patent 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.

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 (entity subsequently dismissed), Zydus Lifesciences Limited, and Zydus Healthcare (USA) LLC (entity subsequently dismissed) (collectively, Zydus).

The complaint alleged that by filing their ANDAs, Zydus infringed certain of our patents covering INGREZZA SPRINKLE and sought to prevent Zydus from selling a generic version of INGREZZA SPRINKLE.

We also filed suit in the U.S.

District Court for the District of New Jersey in April 2025 against Zydus on a similar factual basis seeking to prevent Zydus from selling a generic version of INGREZZA SPRINKLE and this case was dismissed in favor of continued prosecution of the Delaware proceeding against the same entities.

From time to time, we may 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.

Changes and Disagreements with Accountants on Accounting and Financial Disclosure

Department of Justice Investigation

In August 2025, we received a civil investigative demand from the U.S.

Department of Justice (DOJ) requesting certain documents and information related to our sales and marketing of INGREZZA.

We are cooperating with the DOJ’s request.

No assurance can be given as to the timing or outcome of the DOJ’s investigation.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

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 8. Financial Statements and Supplementary Data