Item 1. Financial Statements
Item 1. Financial Statements
NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions, except per share data)
March 31,
2026 December 31,
2025
Assets
Current assets:
Cash and cash equivalents $ 266.5 $ 713.0
Available-for-sale debt securities 1,049.7 767.4
Accounts receivable
768.1 686.8
Inventory
64.5 69.0
Prepaid expenses
224.8 170.7
Other current assets 62.5 115.8
Total current assets 2,436.1 2,522.7
Deferred tax assets 381.4 320.3
Available-for-sale debt securities 1,331.0 1,063.0
Right-of-use assets 447.1 455.4
Equity investments 146.1 120.8
Property and equipment, net 90.9 89.8
Other noncurrent assets 73.6 59.5
Total assets $ 4,906.2 $ 4,631.5
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 773.0 $ 674.3
Other current liabilities 58.7 69.1
Total current liabilities 831.7 743.4
Noncurrent operating lease liabilities 406.2 415.3
Other noncurrent liabilities 260.9 219.7
Total liabilities 1,498.8 1,378.4
Stockholders’ equity:
Preferred stock, $ 0.001 par value; 5.0 shares authorized; no shares issued and outstanding
— —
Common stock, $ 0.001 par value; 220.0 shares authorized; 100.6 and 100.1 shares issued and outstanding, respectively
0.1 0.1
Additional paid-in capital 2,817.3 2,792.2
Accumulated other comprehensive income 0.4 13.1
Retained earnings
589.6 447.7
Total stockholders’ equity 3,407.4 3,253.1
Total liabilities and stockholders’ equity $ 4,906.2 $ 4,631.5
See accompanying notes to the condensed consolidated financial statements.
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NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited)
Three Months Ended
March 31,
(in millions, except per share data) 2026 2025
Revenues:
Net product sales $ 811.0 $ 563.7
Collaboration revenues 3.5 8.9
Total revenues 814.5 572.6
Operating expenses:
Cost of revenues 13.8 9.2
Research and development 296.2 263.2
Acquired in-process research and development 21.2 0.1
Selling, general, and administrative 318.5 276.5
Gain on sale of business, net of transaction costs
( 28.6 ) —
Total operating expenses 621.1 549.0
Operating income
193.4 23.6
Other income (expense):
Unrealized gain (loss) on equity investments
25.3 ( 30.6 )
Investment income and other, net 28.1 21.7
Total other income (expense), net
53.4 ( 8.9 )
Income before provision for income taxes
246.8 14.7
Provision for income taxes 48.9 6.8
Net income $ 197.9 $ 7.9
Foreign currency translation adjustments, net of tax — 1.5
Unrealized (loss) gain on available-for-sale debt securities, net of tax
( 12.7 ) 1.7
Comprehensive income $ 185.2 $ 11.1
Earnings per share:
Basic $ 1.97 $ 0.08
Diluted $ 1.91 $ 0.08
Weighted-average shares outstanding:
Basic 100.5 99.7
Diluted 103.4 102.5
See accompanying notes to the condensed consolidated financial statements.
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NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
Accumulated Other Comprehensive Income
Retained Earnings (Accumulated Deficit)
Common Stock Additional Paid-In Capital
(in millions) Shares $ Total
Balance at December 31, 2025
100.1 $ 0.1 $ 2,792.2 $ 13.1 $ 447.7 $ 3,253.1
Net income — — — — 197.9 197.9
Other comprehensive loss, net of tax
— — — ( 12.7 ) — ( 12.7 )
Stock-based compensation expense — — 57.2 — — 57.2
Issuances of common stock under benefit plans, net of tax
0.9 — ( 32.1 ) — — ( 32.1 )
Repurchases of common stock
( 0.4 ) — — — ( 56.0 ) ( 56.0 )
Balance at March 31, 2026
100.6 $ 0.1 $ 2,817.3 $ 0.4 $ 589.6 $ 3,407.4
Balance at December 31, 2024
99.4 $ 0.1 $ 2,554.6 $ 5.8 $ 29.2 $ 2,589.7
Net income — — — — 7.9 7.9
Other comprehensive income, net of tax
— — — 3.2 — 3.2
Stock-based compensation expense — — 52.8 — — 52.8
Issuances of common stock under benefit plans 1.2 — 32.1 — — 32.1
Repurchases of common stock
( 1.6 ) — ( 107.6 ) — ( 42.4 ) ( 150.0 )
Balance at March 31, 2025
99.0 $ 0.1 $ 2,531.9 $ 9.0 $ ( 5.3 ) $ 2,535.7
See accompanying notes to the condensed consolidated financial statements.
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NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
March 31,
(in millions) 2026 2025
Cash flows from operating activities:
Net income
$ 197.9 $ 7.9
Adjustments to reconcile net income to net cash from operating activities:
Stock-based compensation 57.2 52.8
Depreciation 7.2 6.6
Accretion of discount on available-for-sale debt securities, net ( 1.3 ) ( 4.6 )
Amortization of acquired intangible assets 0.1 1.0
Changes in fair values of equity investments ( 25.3 ) 30.6
Deferred income taxes ( 61.1 ) ( 13.7 )
Non-cash lease expense
2.7 7.2
Gain on sale of business, net of transaction costs ( 28.6 ) —
Other — 0.7
Change in operating assets and liabilities:
Accounts receivable ( 81.4 ) ( 36.9 )
Inventory 4.3 ( 1.7 )
Accounts payable and accrued liabilities ( 14.3 ) ( 3.0 )
Income tax assets and liabilities
119.8 15.4
Other assets and liabilities, net ( 31.4 ) 2.5
Cash flows from operating activities 145.8 64.8
Cash flows from investing activities:
Purchases of available-for-sale debt securities ( 819.5 ) ( 273.2 )
Sales and maturities of available-for-sale debt securities 259.2 298.1
Proceeds from sale of business 63.2 —
Capital expenditures ( 9.1 ) ( 10.7 )
Cash flows from investing activities ( 506.2 ) 14.2
Cash flows from financing activities:
Issuances of common stock under benefit plans 23.6 32.1
Taxes paid related to net share settlement of equity awards
( 55.7 ) —
Repurchases of common stock
( 54.0 ) ( 150.0 )
Cash flows from financing activities ( 86.1 ) ( 117.9 )
Change in cash, cash equivalents and restricted cash ( 446.5 ) ( 38.9 )
Cash, cash equivalents and restricted cash at beginning of period 721.0 241.0
Cash, cash equivalents and restricted cash at end of period $ 274.5 $ 202.1
Supplemental disclosures:
Accrued capital expenditures
$ 1.4 $ 2.7
Cash paid for income taxes $ 0.3 $ 0.6
See accompanying notes to the condensed consolidated financial statements.
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NEUROCRINE BIOSCIENCES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Organization and Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position and of the results of operations and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of Neurocrine Biosciences and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to previously reported amounts to conform to the current period presentation.
These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K (the 2025 Form 10-K) filed with the SEC. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or the full year. The condensed consolidated balance sheet as of December 31, 2025, has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.
There were no significant changes to our significant accounting policies as disclosed in the 2025 Form 10-K.
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): Disaggregation of Income Statement Expenses, which requires public entities to disclose specified information about certain costs and expenses on an interim and annual basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact that adoption of ASU 2024-03 will have on our financial statement disclosures.
2. Fair Value Measurements
The fair value hierarchy consists of the following three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability when there is little, if any, market activity for the asset or liability at the measurement date.
The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis.
March 31,
2026 December 31,
2025
Fair
Value Leveling Fair
Value Leveling
(in millions) Level 1 Level 2 Level 1 Level 2
Cash and cash equivalents $ 266.5 $ 266.5 $ — $ 713.0 $ 713.0 $ —
Available-for-sale debt securities 2,380.7 — 2,380.7 1,830.4 — 1,830.4
Equity investments 146.1 146.1 — 120.8 120.8 —
$ 2,793.3 $ 412.6 $ 2,380.7 $ 2,664.2 $ 833.8 $ 1,830.4
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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 available-for-sale debt securities, and accounts receivable.
To minimize the risks related to cash and cash equivalents and investments in available-for-sale debt securities, we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards, and limits the credit exposure of any single issuer.
As of March 31, 2026 and December 31, 2025, we held available-for-sale debt securities with a total fair value of $ 1.58 billion and $ 335.1 million, respectively, that were in unrealized loss positions totaling $ 7.2 million and $ 0.6 million, respectively. Available-for-sale debt securities that had been in unrealized loss positions for longer than twelve months were not significant as of March 31, 2026 or December 31, 2025. Unrealized losses on available-for-sale debt securities are primarily caused by changes in interest rates. Our investments in available-for-sale debt securities are of high credit quality. Further, as of March 31, 2026, we did not intend to sell, and it was not more likely than not that we would be required to sell, these investments before recovery of their amortized cost basis. Subsequent to March 31, 2026, we entered into an Agreement and Plan of Merger to acquire Soleno Therapeutics, Inc. If the proposed acquisition is consummated, we expect to fund the transaction with cash on hand and available investments and, accordingly, may sell certain available-for-sale debt securities prior to maturity. As of March 31, 2026, potential realized losses on such investments that may be sold prior to maturity were not expected to be material.
Accrued interest receivables on available-for-sale debt securities totaled $ 21.9 million and $ 20.5 million, respectively, as of March 31, 2026 and December 31, 2025 and are included in other current assets on the condensed consolidated balance sheets. We do not measure an allowance for credit losses for accrued interest receivables. For the purposes of identifying and measuring an impairment, accrued interest is excluded from both the fair value and amortized cost basis of the debt security. Uncollectible accrued interest receivables associated with an impaired debt security are reversed against interest income upon identification of the impairment.
To minimize the risks related to accounts receivable, which are typically unsecured, we monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles.
The following table presents the percent of total gross product sales for each of our customers who individually accounted for 10% or more of total gross product sales.
Three Months Ended
March 31,
2026 2025
Customer A 36 % 41 %
Customer B 27 % 30 %
Customer C 24 % 14 %
The following table presents the percent of total accounts receivable for each of our customers who individually accounted for 10% or more of total accounts receivable.
March 31,
2026 December 31,
2025
Customer A 40 % 41 %
Customer B 30 % 31 %
Customer C 18 % 16 %
Customer D 10 % 10 %
3. Leases
Our operating leases that have commenced 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 right-of-use (ROU) assets or operating lease liabilities.
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The following table presents supplemental operating lease information for operating leases that have commenced.
Three Months Ended
March 31,
(in millions, except weighted average data) 2026 2025
Operating lease cost $ 15.4 $ 16.5
Sublease income ( 0.9 ) ( 0.9 )
Net operating lease cost $ 14.5 $ 15.6
Cash paid for amounts included in the measurement of operating lease liabilities $ 12.7 $ 9.3
March 31,
2026 2025
Weighted average remaining lease term
9.7 years 10.6 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 March 31, 2026.
(dollars in millions)
Operating
Leases
Sublease
Income
2026 (9 months remaining)
$ 44.0 $ ( 3.0 )
2027
59.1 ( 4.0 )
2028
59.7 ( 4.0 )
2029
59.8 ( 3.6 )
2030
60.7 ( 3.5 )
Thereafter 306.9 ( 2.0 )
Total operating lease payments (sublease income) 590.2 $ ( 20.1 )
Less imputed interest
126.7
Total operating lease liabilities 463.5
Less current operating lease liabilities included in other current liabilities 57.3
Noncurrent operating lease liabilities $ 406.2
4. Supplemental Financial Information
Inventory consisted of the following:
(in millions) March 31,
2026 December 31,
2025
Raw materials $ 30.7 $ 35.7
Work in process 21.1 19.2
Finished goods 12.9 14.3
64.7 69.2
Less inventory reserves
( 0.2 ) ( 0.2 )
Total inventory
$ 64.5 $ 69.0
Prior to FDA approval of CRENESSITY in December 2024, all costs related to its manufacturing were expensed as R&D in the period incurred. As a result, our physical inventories as of March 31, 2026 and December 31, 2025 included active pharmaceutical product with no cost basis. Costs related to the manufacturing of bulk drug product, finished bottling, and other labeling activities that occurred post-FDA approval are included in the inventory values as of March 31, 2026 and December 31, 2025.
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Prepaid expenses consisted of the following:
(in millions) March 31,
2026 December 31,
2025
Prepaid income taxes $ 127.7 $ 94.0
Prepaid development costs 69.6 55.6
Other prepaid expenses 27.5 21.1
Total prepaid expenses $ 224.8 $ 170.7
Accounts payable and accrued liabilities consisted of the following:
(in millions) March 31,
2026 December 31,
2025
Sales rebates and reserves $ 231.3 $ 226.0
Current income taxes payable
186.4 68.0
Accrued development costs
110.7 101.3
Accrued employee related costs 81.7 128.8
Current branded prescription drug fee 42.9 45.3
Accounts payable and other accrued liabilities 120.0 104.9
Total accounts payable and accrued liabilities $ 773.0 $ 674.3
Other noncurrent liabilities consisted of the following:
(in millions) March 31,
2026 December 31,
2025
Noncurrent income taxes payable
$ 241.3 $ 214.5
Other noncurrent liabilities
19.6 5.2
Total other noncurrent liabilities $ 260.9 $ 219.7
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.
(in millions) March 31,
2026 March 31,
2025
Cash and cash equivalents $ 266.5 $ 194.1
Restricted cash included in other noncurrent assets
8.0 8.0
Total cash, cash equivalents, and restricted cash $ 274.5 $ 202.1
5. Stockholders’ Equity
Share Repurchases
Our Board of Directors have authorized share repurchase programs, including a share repurchase program for up to $ 500.0 million of our common stock which was authorized in February 2025 (the 2025 Repurchase Program).
The following table presents the shares of our common stock that we repurchased under our share repurchase programs and the cost of such shares, which were retired immediately upon repurchase.
Three Months Ended
March 31,
(in millions)
2026 2025
Number of shares
0.4 1.6
Total cost of shares (1)
$ 56.0 $ 150.0
_________________________
(1) Reflects the total trade-date cost of shares repurchased during the period.
As of March 31, 2026, we had $ 276.3 million remaining under the 2025 Repurchase Program.
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6. Earnings per Share
Earnings per share were calculated as follows:
Three Months Ended
March 31,
(in millions, except per share data) 2026 2025
Net income - basic and diluted $ 197.9 $ 7.9
Weighted-average common shares outstanding:
Basic 100.5 99.7
Effect of dilutive securities 2.9 2.8
Diluted 103.4 102.5
Earnings per share:
Basic $ 1.97 $ 0.08
Diluted $ 1.91 $ 0.08
Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 4.1 3.3
7. Collaboration and License Agreements
Nxera Pharma UK Limited (Nxera)
In 2021, we entered into a collaboration and license agreement with Nxera (formerly Sosei Heptares) to develop and commercialize certain compounds containing sub-type selective muscarinic M1, M4, or dual M1/M4 receptor agonists, which we have the exclusive rights to develop, manufacture and commercialize worldwide, excluding in Japan, where Nxera retains the rights to develop, manufacture, and commercialize all compounds comprised of M1 receptor agonists, subject to certain exceptions. 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.
NBI-1117570 is a dual M1/M4 muscarinic agonist in development as a potential treatment for schizophrenia and other psychiatric indications. In connection with the initiation of a Phase 2 clinical study for NBI-1117570 in schizophrenia in March 2026, we expensed a milestone of $ 22.5 million payable to Nxera as research and development (R&D) in the first quarter of 2026. The milestone was paid in the second quarter of 2026.
Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.48 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.
Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which the royalty term for such licensed product has expired in such country. 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.
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. 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.
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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. Takeda also retained the right to opt-out of the profit-sharing arrangement, pursuant to which Takeda would be entitled to receive potential future payments upon the achievement of certain event-based milestones with respect to osavampator and receive royalties on the future net sales of osavampator (in lieu of equally sharing in the operating profits and losses).
In October 2024, we provided Takeda with written notice of termination of the license under the 2020 Takeda Agreement with respect to certain D-amino acid oxidase (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 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. In addition, each party is responsible for development costs for osavampator in its respective territory, and each party is eligible to receive royalty payments based on the other party’s net sales of osavampator in the other party’s territory. Pursuant to the Restated Takeda Agreement and upon the successful development and commercialization of osavampator, we will incur tiered based royalties payable to Takeda in the mid-to-upper teens in the U.S. and low double-digits outside of the U.S. on a blended basis as a percentage of net sales. Additionally, we are entitled to receive royalties from Takeda on the future net sales of osavampator in Japan.
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, which was expensed as R&D in the first quarter of 2025.
Takeda may be entitled to receive potential future payments of up to $ 742.5 million upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any royalty-bearing product.
Unless earlier terminated, the Restated Takeda Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which, (i) for any royalty-bearing product, the royalty term has expired in such country; and (ii) for any profit-share product, for so long as we continue to develop, manufacture, or commercialize such licensed product. On a licensed product-by-licensed product and country-by-country basis, royalty payments would commence on the first commercial sale of a royalty-bearing product and terminate on the later of (i) the expiration of the last patent covering such royalty-bearing product in such country, (ii) a number of years from the first commercial sale of such royalty-bearing product in such country and (iii) the expiration of regulatory exclusivity for such royalty-bearing product in such country.
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We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the U.S., Japan, the European Union and the United Kingdom, or, collectively, the major markets, upon six months ’ written notice to Takeda (i) with respect to all licensed products prior to the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes, as defined in the Restated Takeda Agreement, prior to the first commercial sale of the first licensed product in such target class for which first commercial sale occurs. We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first commercial sale of the first licensed product in such target class for which first commercial sale occurs. Takeda may terminate the Restated Takeda Agreement, subject to specified conditions, (i) if we challenge the validity or enforceability of certain Takeda intellectual property rights or (ii) on a target class-by-target class basis, in the event that we do not conduct any material development or commercialization activities with respect to any licensed product within such target class for a specified continuous period. Subject to a cure period, either party may terminate the Restated Takeda Agreement in the event of any material breach, solely with respect to the target class of a licensed product to which such material breach relates, or in its entirety in the event of any material breach that relates to all licensed products, or if either party challenges the validity or enforceability of certain intellectual property rights.
Xenon Pharmaceuticals Inc. (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. 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 the first quarter of 2025.
Under the terms of the agreement, Xenon may be entitled to receive potential future payments of up to $ 1.66 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 U.S. 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.
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. (Voyager)
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. 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).
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Under the terms of the 2019 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 465.0 million 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 ® 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 in 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 purchased 4.4 million shares (at $ 8.88 per share) of Voyager common stock (the 2023 Voyager Shares). 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. Dr. 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.
Under the terms of the 2023 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 6.13 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.
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Sanofi S.A. (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 (CRF-1) receptor antagonists, including crinecerfont. We launched CRENESSITY ® (crinecerfont) in the U.S. as a first-in-class U.S. Food and Drug Administration (FDA)-approved treatment of classic congenital adrenal hyperplasia (CAH) in December 2024. We are responsible for all manufacturing, development, and commercialization costs of any licensed product.
Under the terms of our license agreement with Sanofi, Sanofi may be entitled to receive potential future payments of up to $ 10.0 million upon the achievement of certain event-based milestones and is entitled to receive royalties at tiered percentage rates ranging from 3.0 % to 5.0 % on our future net sales of CRENESSITY in the U.S. for the longer of 16 years or the life of the related patent rights.
8. Segment Reporting and Disaggregation of Relevant Expense Captions
Neurocrine Biosciences operates as a single global business segment dedicated to the research and development, commercialization, and sale of pharmaceuticals primarily in the U.S. for the treatment of under-addressed neurological, psychiatric, endocrine, and immunological disorders. There were no changes to the accounting policies of the segment as disclosed in the 2025 Form 10-K.
The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer as chief operating decision maker (CODM) in assessing segment performance and deciding how to allocate resources on a consolidated basis.
The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of income and comprehensive income as consolidated net income. The CODM uses net income to monitor budget and forecast versus actual results in assessing segment performance and to evaluate income generated from segment assets in deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.
The following table presents information about reported segment revenues, segment profit, and significant segment expenses.
Three Months Ended
March 31,
(in millions) 2026 2025
Revenues:
INGREZZA net product sales $ 656.9 $ 545.2
CRENESSITY net product sales 153.3 14.5
Other revenues (1)
4.3 12.9
Total revenues 814.5 572.6
Less:
Cost of revenues 13.8 9.2
Research and development:
External research and development 148.0 107.9
Payroll and benefits 84.5 75.0
Milestones 22.6 45.4
Other research and development (2)
41.1 34.9
Total research and development 296.2 263.2
Acquired in-process research and development 21.2 0.1
Selling, general, and administrative 318.5 276.5
Gain on sale of business, net of transaction costs
( 28.6 ) —
Unrealized (gain) loss on equity investments
( 25.3 ) 30.6
Investment income and other, net
( 28.1 ) ( 21.7 )
Provision for income taxes
48.9 6.8
Net income
$ 197.9 $ 7.9
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(1) Other revenues primarily consist of royalties earned on AbbVie net sales of elagolix and Tanabe Pharma Corporation (formerly Mitsubishi Tanabe Pharma Corporation) 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.
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9. Sale of Neurocrine Group Limited
On December 24, 2025, we entered into a definitive agreement with Immedica Pharma AB 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 were presented separately as “Assets held for sale” and “Liabilities related to assets held for sale” and were 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 major classes of assets and liabilities classified as held for sale as of December 31, 2025, were as follows:
(in millions) Amount
Assets held for sale:
Intangible assets, net
$ 29.8
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
$ 6.8
Other liabilities
1.4
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 excluded certain assets and obligations that were not transferred to the buyer upon closing. Specifically, cash and cash equivalents of the disposal group were not expected to be conveyed to the buyer. Accordingly, such cash and the related liabilities expected to be settled prior to closing were excluded from the assets and liabilities presented as held for sale as of December 31, 2025.
On January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $ 63.2 million in cash. As a result of the transaction, during the first quarter of 2026 we recognized a pre-tax gain on sale of $ 28.6 million in "Gain on sale of business, net of transaction costs" within income from continuing operations. The sale did not qualify for discontinued operations presentation. Following the closing of the transaction, our operating results no longer include the disposed business beginning on the closing date.
10. Legal Matters
Legal Proceedings
In March 2025, we received a notice from Zydus Lifesciences Global FZE (Zydus FZE) that it had filed an abbreviated new drug application, or ANDA, with the FDA seeking approval of a generic version of INGREZZA SPRINKLE (valbenazine). The ANDA contained a Paragraph IV Patent Certification alleging that certain of our patents covering INGREZZA SPRINKLE are invalid and/or will not be infringed by Zydus FZE’s importation, manufacture, use or sale of the medicine for which the ANDA was submitted. We filed suit in the U.S. District Court for the District of Delaware in April 2025 against Zydus Pharmaceuticals (USA) Inc. and its affiliates Zydus FZE, Zydus Worldwide DMCC (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.
U.S. 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.
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11. Subsequent Event
On April 5, 2026, we entered into an Agreement and Plan of Merger with Sigma Merger Sub, Inc. (Sigma Merger Sub), a wholly owned subsidiary of Neurocrine Biosciences, Inc., and Soleno Therapeutics, Inc. (Soleno). Pursuant to the merger agreement, we, through Sigma Merger Sub, agreed to commence a cash tender offer to acquire all of the outstanding shares of Soleno common stock for $ 53.00 per share in cash, without interest and subject to any required withholding of taxes. We commenced the tender offer on April 20, 2026. Following completion of the tender offer, and subject to the satisfaction of the conditions set forth in the merger agreement, Sigma Merger Sub will merge with and into Soleno, with Soleno surviving as a wholly owned subsidiary of Neurocrine Biosciences, Inc. The announced transaction has an equity value of approximately $ 2.9 billion and is subject to customary closing conditions, including the tender of at least a majority of the outstanding shares of Soleno common stock and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR Act). On April 27, 2026, at 11:59 p.m. Eastern Time, the waiting period under the HSR Act applicable to the tender offer expired, satisfying the closing condition relating to the expiration or termination of the waiting period under the HSR Act. The transaction is not subject to a financing condition. We expect to fund the transaction with cash on hand. Because the merger agreement was executed subsequent to the balance sheet date, no amounts related to the pending acquisition have been recognized in these condensed consolidated financial statements. As of the date these financial statements were issued, the acquisition had not been completed, and we are continuing to evaluate the accounting and disclosure effects of the transaction, including the related purchase accounting, and therefore cannot yet estimate all of the financial statement effects of the pending acquisition.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.