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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-05 · 111 added, 56 removed, 170 unchanged (50% of the section changed)

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The following Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains forward-looking statements, which involve risks and uncertainties.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

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Our portfolio of products includes U.S.

Food and Drug Administration (FDA) approved treatments for tardive dyskinesia (TD), chorea associated with Huntington's disease, classic congenital adrenal hyperplasia due to 21-hydroxylase deficiency (CAH), and endometriosis and uterine fibroids in collaboration with AbbVie Inc.

Food and Drug Administration (FDA) approved treatments for tardive dyskinesia (TD), chorea associated with Huntington's disease, classic congenital adrenal hyperplasia due to 21-hydroxylase deficiency (CAH), hyperphagia in Prader-Willi syndrome (PWS), and endometriosis and uterine fibroids in collaboration with AbbVie Inc.

In addition, we have a diversified portfolio of multiple compounds in mid- to late-phase development across our core therapeutic areas and an expanding early-phase pipeline that includes a range of modalities including small molecules, peptides, proteins, antibodies, conjugates, and gene therapies.

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as a first-in-class FDA-approved treatment of CAH in December 2024.

We acquired VYKAT ® (diazoxide choline) XR, the first and only FDA-approved treatment for hyperphagia in PWS, through the acquisition of Soleno Therapeutics, Inc.

(Soleno) in May 2026.

We estimate that TD affects approximately 800,000 people in the U.S., that approximately 90% of the 40,000 people in the U.S.

affected by Huntington’s disease will develop chorea, and that CAH affects at least 20,000 people in the U.S.

Key elements of our commercial strategy include maximizing the opportunities in INGREZZA and CRENESSITY through consistent and effective commercial execution, continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease.

affected by Huntington’s disease will develop chorea, that CAH affects at least 20,000 people in the U.S., and that hyperphagia in PWS affects approximately 10,000 people in the U.S.

Key elements of our commercial strategy include maximizing the opportunities of our FDA approved products through consistent and effective commercial execution, including continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease.

2026 Business Highlights

• Total net product sales for the first quarter of 2026 increased $247.3 million, or 43.9%, to $811.0 million, reflecting increased net product sales of CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024, and INGREZZA, driven primarily by volume growth and record new prescriptions on strong patient demand.

• In April 2026, we entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire all of the outstanding shares of common stock of Soleno Therapeutics, Inc.

(Soleno) for approximately $2.9 billion.

Pursuant to the Merger Agreement, we commenced a tender offer to purchase all of the outstanding shares of common stock of Soleno for $53.00 per share in cash, without interest and subject to any required withholding of taxes.

On April 27, 2026, at 11:59 p.m.

Eastern Time, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (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.

We expect the transaction to close in the second quarter of 2026, subject to the tender of at least a majority of the outstanding shares of Soleno common stock and the satisfaction of other customary closing conditions.

• Total net product sales for the first six months of 2026 increased $519.6 million, or 41.7%, to $1.77 billion, primarily reflecting increased net product sales of CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024, increased net product sales of INGREZZA, driven by volume growth in total prescriptions and record new prescriptions on strong patient demand, and the inclusion of VYKAT XR net product sales following the acquisition of Soleno in May 2026.

• On May 18, 2026, we completed our acquisition of Soleno in an all-cash transaction representing a total equity value of approximately $2.9 billion, adding VYKAT XR, the first and only FDA-approved treatment for hyperphagia in PWS, to our rare disease commercial portfolio.

• In May 2026, we entered into a $1.0 billion senior secured revolving credit facility (the 2026 Credit Facility).

In June 2026, we repaid $600.0 million of principal that was borrowed under the 2026 Credit Facility in May 2026.

As of June 30, 2026, we had $1.0 billion of available borrowing capacity under the 2026 Credit Facility.

We may use borrowings under the 2026 Credit Facility for general corporate purposes and other purposes permitted by the credit agreement.

Our ability to borrow under the 2026 Credit Facility is subject to the satisfaction of customary conditions, including compliance with the covenants contained in the credit agreement.

• 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.

• Promoted Samir Siddhanti to the executive management team as Chief Business Officer where he will lead the Company’s business development, corporate strategy, and R&D portfolio management functions helping guide Neurocrine’s continued evolution into a leading, global biotechnology company.

• Promoted Andrew Ratz, Ph.D., to the executive management team as the Chief Technical Operations Officer.

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2026 Pipeline Highlights

• Initiated Phase 2 clinical study to assess the safety and tolerability of crinecerfont in children aged 3 months to under 4 years with CAH.

• Initiated and dosed the first patients in a Phase 2 clinical study of NBI-1117570, a dual M1/M4 selective agonist in adults with schizophrenia.

• Presented new real-world evidence demonstrating that adult patients with tardive dyskinesia receiving INGREZZA (valbenazine) capsules showed higher treatment persistence compared to those on AUSTEDO XR (deutetrabenazine).

• Initiated Phase 1 first-in-human clinical study evaluating the safety and tolerability of NBIP-2118 in adult participants.

NBIP-2118 is an investigational corticotropin-releasing factor 2 receptor (CRF 2 ) peptide agonist and a potential first-in-class therapy for obesity.

• Announced new two-year data from the Phase 3 CAHtalyst ® Pediatric study showing positive growth outcomes in children and adolescents with CAH treated with CRENESSITY.

• Announced new two-year data from the Phase 3 CAHtalyst ® Adult study demonstrating improved cardiometabolic outcomes alongside sustained glucocorticoid dose reduction through up to two years of treatment with CRENESSITY for CAH.

• Announced publication of expert recommendations for glucocorticoid dose reduction after initiating CRENESSITY for the treatment of CAH.

• Announced new post-hoc data from the KINECT ® 4 clinical trial demonstrating that adults with TD treated with INGREZZA capsules experienced clinically meaningful and robust improvements in involuntary movement severity, including those who did not meet the stringent symptomatic remission threshold.

• Presented new VYKAT XR data demonstrating meaningful and durable improvements in hyperphagia and behavioral symptoms in PWS following randomized withdrawal period.

• Presented new real-world evidence demonstrating that adult patients with TD receiving INGREZZA (valbenazine) capsules showed higher treatment persistence compared to those on AUSTEDO XR (deutetrabenazine).

The findings were presented at the Academy of Managed Care Pharmacy 2026 Annual Meeting in Nashville.

• Presented the first expert consensus recommendations focused on screening, diagnosis and treatment of tardive dyskinesia among older adults in long-term care settings.

The recommendations address persistent gaps in recognizing and managing tardive dyskinesia in this higher-risk population.

• Presented the first expert consensus recommendations focused on screening, diagnosis and treatment of TD among older adults in long-term care settings.

The recommendations address persistent gaps in recognizing and managing TD in this higher-risk population.

Findings were presented at the Society for Post-Acute and Long-Term Care Medical Association (PALTmed) PALTC26 Annual Conference in Anaheim, CA.

• Presented new two-year CRENESSITY data demonstrating durable hormonal control, reduced glucocorticoid exposure and meaningful clinical improvements in pediatric patients with classic congenital adrenal hyperplasia.

• Presented new two-year CRENESSITY data demonstrating durable hormonal control, reduced glucocorticoid exposure and meaningful clinical improvements in pediatric patients with CAH.

The findings were presented at the Pediatric Endocrine Society 2026 Annual Meeting in San Francisco.

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data)

2026 2025 2026 2025

Revenues $ 959.0 $ 687.5 $ 1,773.5 $ 1,260.1

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Operating income 151.5 145.6 344.9 169.2

Other income (expense) 53.4 (8.9)

Other income 10.7 13.9 64.1 5.0

Provision for income taxes 17.8 52.0 66.7 58.8

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Weighted average common shares outstanding, diluted

104.2 101.0 103.8 101.8

Three Months Ended

June 30, Six Months Ended

( in millions)

2026 2025 2026 2025

INGREZZA net product sales

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CRENESSITY net product sales

183.5 53.2 336.8 67.7

VYKAT XR net product sales

54.3 — 54.3 —

— 4.4 0.9 8.4

Total net product sales

954.3 682.0 1,765.3 1,245.7

Collaboration revenues 4.7 5.5 8.2 14.4

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Net Product Sales

Compared with the comparable period last year, the increase primarily reflected increased net product sales of CRENESSITY, which was launched in the U.S.

as a first-in-class FDA-approved treatment of CAH in December 2024, and INGREZZA, driven by volume growth in total prescriptions and record new prescriptions on strong patient demand, partially offset by a lower net price compared to the first quarter of 2025.

Compared with the comparable periods last year, the increase primarily reflected the increased net product sales of CRENESSITY, which was launched in the U.S.

Collaboration Revenues

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Three Months Ended

June 30, Six Months Ended

(dollars in millions) 2026 2025 2026 2025

Cost of revenues $ 13.8 $ 9.2

Cost of revenues, excluding amortization of acquired intangible assets $ 23.2 $ 10.3 $ 36.9 $ 18.5

as a % of total revenues 2.4 % 1.6 % 2.1 % 1.5 %

Compared with the comparable period last year, the increase primarily reflected increased royalties payable on net product sales of CRENESSITY and increased total net product sales.

Compared with the comparable periods last year, the increase primarily reflected increased total net product sales, increased royalties on net product sales of CRENESSITY, $3.0 million of expense related to the amortization of the acquisition-date fair value step-up of VYKAT XR inventory acquired through the acquisition of Soleno in May 2026 and $2.0 million of acquisition related expenses, including $1.8 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026.

The acquired fair value step-up is expected to be recognized in cost of revenues as the acquired inventory is sold over approximately four to six years following the acquisition date.

Research and Development

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Three Months Ended

June 30, Six Months Ended

(dollars in millions) 2026 2025 2026 2025

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Late stage consists of costs incurred for product candidates in Phase 2 registrational studies and all subsequent activities.

Compared with the comparable period last year, the increase primarily reflected progression of the Phase 3 programs for osavampator in MDD and direclidine in schizophrenia.

Compared with the comparable periods last year, the increase primarily reflected the progression of the Phase 3 programs for osavampator in major depressive disorder (MDD) and direclidine in schizophrenia.

Early Stage .

Early stage consists of costs incurred for product candidates after the approval of an investigational new drug application by the applicable regulatory agency through Phase 2 non-registrational studies.

Compared with the comparable period last year, the increase primarily reflected increased investments in the Phase 1 program for NBIP-01435 in CAH and our early-stage obesity and immunology programs.

Compared with the comparable periods last year, the increase primarily reflected increased investments in the Phase 1 program for NBIP-01435 in CAH, the Phase 2 program for NBI-1065890 in TD, and our early-stage obesity and immunology programs, partially offset by decreased investments in certain early-stage psychiatry and neurology programs.

Research and Discovery .

Research and discovery consists of costs incurred prior to the approval of an investigational new drug application by the applicable regulatory agency.

Compared with the comparable period last year, the increase primarily reflected continued investments to expand our discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.

Compared with the comparable periods last year, the increase primarily reflected continued investments to expand our discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.

Milestones consists of costs incurred in connection with the achievement of development milestones under collaborative arrangements.

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Three Months Ended

June 30, Six Months Ended

(in millions)

2026 2025 2026 2025

Nxera Pharma UK Limited

$ — $ 15.0 $ 22.5 $ 15.0

Takeda Pharmaceutical Company Limited

Xenon Pharmaceuticals Inc.

0.3 0.1 0.4 0.5

Total milestones

$ 0.3 $ 15.1 $ 22.9 $ 60.5

Refer to Note 7 to the condensed consolidated financial statements for more information on our significant collaboration and license agreements.

Refer to Note 10 to the condensed consolidated financial statements for additional information regarding our significant collaboration and license agreements.

Payroll and Benefits.

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Stock-based compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates stock-based grants are issued.

Compared with the comparable period last year, the increase primarily reflected higher headcount to support our expanded discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.

Compared with the comparable periods last year, the increase primarily reflected higher headcount to support our expanded discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, expanding our capabilities in biologics (including peptides and antibodies) and gene therapy, and $23.1 million of acquisition-related expenses, including $18.1 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026.

Facilities and Other.

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

Compared with the comparable period last year, the increase primarily reflected increased facility-based expenses related to our new campus facility.

Compared with the comparable periods last year, the increase primarily reflected increased facility-based expenses related to our new campus facility.

Acquired In-Process Research and Development (IPR&D)

Three Months Ended

June 30, Six Months Ended

(dollars in millions)

2026 2025 2026 2025

Acquired in-process research and development $ 1.5 $ — $ 22.7 $ 0.1

as a % of total revenues 0.2 % — % 1.3 % — %

Compared with the comparable period last year, the increase reflected increased payments for upfront fees in connection with our collaborations.

Compared with the comparable periods last year, the increase reflected increased payments for upfront fees in connection with our collaborations.

Selling, General, and Administrative (SG&A)

Three Months Ended

June 30, Six Months Ended

(dollars in millions)

2026 2025 2026 2025

Selling, general, and administrative $ 439.7 $ 286.3 $ 758.2 $ 562.8

as a % of total revenues 45.8 % 41.6 % 42.8 % 44.7 %

Compared with the comparable period last year, the increase primarily reflected continued investment in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026.

Compared with the comparable periods last year, the increase primarily reflected continued investment in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026, and $96.8 million of acquisition-related expenses, including $40.2 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026.

Amortization of Acquired Intangible Assets

Three Months Ended

June 30, Six Months Ended

(dollars in millions)

2026 2025 2026 2025

Amortization of acquired intangible assets $ 16.4 $ 1.0 $ 16.5 $ 2.0

as a % of total revenues 1.7 % 0.1 % 0.9 % 0.2 %

Compared with the comparable periods last year, the increase primarily reflected amortization of intangible assets acquired through the acquisition of Soleno in May 2026.

The estimated fair value of the acquired intangible assets, which relates to developed product rights for VYKAT XR and is being amortized straight line over a useful life of 16 years, was $2.24 billion as of the acquisition date.

Gain on Sale of Business, Net of Transaction Costs

Three Months Ended

June 30, Six Months Ended

(dollars in millions)

2026 2025 2026 2025

Gain on sale of business, net of transaction costs

Compared with the comparable period last year, the change reflected a pre-tax gain, net of transaction costs, recognized on the sale of Neurocrine Group Limited in January 2026.

$ — $ — $ (28.6) $ —

Compared with the comparable periods last year, the change reflected a pre-tax gain, net of transaction costs, recognized on the sale of Neurocrine Group Limited in January 2026.

Other Income (Expense)

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

Interest expense $ (2.9) $ — $ (2.9) $ —

Unrealized gain (loss) on equity investments

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Investment income and other, net 12.4 20.6 40.5 42.3

Total other income (expense), net

$ 53.4 $ (8.9)

Compared with the comparable period last year, the change reflected periodic fluctuations in the fair values of our equity investments and increased interest income on our debt security investments.

Total other income, net $ 10.7 $ 13.9 $ 64.1 $ 5.0

Compared with the comparable periods last year, the change primarily reflected periodic fluctuations in the fair values of our equity investments and decreased interest income on lower investment balances due to the liquidation of a significant portion of our debt security investments to fund the acquisition of Soleno in May 2026.

Provision for Income Taxes

Three Months Ended

June 30, Six Months Ended

(dollars in millions)

2026 2025 2026 2025

Provision for income taxes

$ 17.8 $ 52.0 $ 66.7 $ 58.8

Effective tax rate 11.0 % 32.6 % 16.3 % 33.8 %

For the first quarter of 2026, the effective tax rate varied from the federal and state statutory rates primarily due to foreign tax effects, including the impact of net CFC tested income (NCTI) (formerly referred to as global intangible low-taxed income (GILTI)), credits generated for research activities, certain nondeductible expenses, and state income tax effects including fluctuations in state effective tax rates.

For the first quarter of 2025, the effective tax rate varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and losses in foreign and domestic jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future.

For the second quarter and first six months of 2026, the effective tax rate varied from the federal and state statutory rates primarily due to foreign tax effects, including the impact of net CFC tested income (NCTI), credits generated for research activities, excess tax benefits related to stock-based compensation, certain nondeductible expenses and state income tax effects which include fluctuations in state effective tax rates and a discrete tax benefit from the release of a portion of the valuation allowance against certain state deferred tax assets.

For the second quarter and first six months of 2025, the effective tax rate varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and losses in foreign and domestic jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future.

Liquidity and Capital Resources

Sources of Liquidity

We believe that our existing capital resources, funds generated by anticipated INGREZZA and CRENESSITY net product sales, and investment income will be sufficient to satisfy our current and projected funding requirements for at least the next 12 months.

We believe that our existing capital resources, funds generated by anticipated net product sales of our commercial products, available borrowing capacity under our 2026 Credit Facility, and investment income will be sufficient to satisfy our current and projected funding requirements for at least the next 12 months.

However, we cannot guarantee that our existing capital resources and anticipated revenues will be sufficient to conduct and complete all of our research and development programs or commercialization activities as planned.

We may seek to access the public or private equity markets whenever conditions are favorable or pursue opportunities to obtain debt financing in the future.

We may seek to access the public or private equity markets whenever conditions are favorable or pursue opportunities to obtain additional debt financing in the future.

We may also seek additional funding through strategic alliances or other financing mechanisms.

However, we cannot provide assurance that adequate funding will be available on terms acceptable to us, if at all.

In April 2026, we entered into the Merger Agreement to acquire Soleno for approximately $2.9 billion in cash, as described above.

The transaction is expected to close in the second quarter of 2026, subject to certain customary closing conditions.

If the proposed acquisition is consummated, we expect to fund the transaction with cash on hand and available investments, which would significantly reduce our cash, cash equivalents and investment balances.

We also plan to optimize our capital structure by taking on a modest amount of pre-payable debt to preserve additional liquidity.

In May 2026, we completed our acquisition of Soleno.

Preliminary consideration transferred was $2.83 billion, and cash paid to acquire Soleno, net of cash acquired, was $2.36 billion.

Refer to Note 2 to the condensed consolidated financial statements for additional information.

On May 14, 2026, we entered into a credit agreement that provides for a five-year, $1.0 billion senior secured revolving credit facility, which we refer to as the 2026 Credit Facility.

The 2026 Credit Facility provides us with an additional source of liquidity for general corporate purposes.

In May 2026, we borrowed $600.0 million under the 2026 Credit Facility, and in June 2026, we repaid $600.0 million of principal.

As of June 30, 2026, no amounts were outstanding under the 2026 Credit Facility and we had $1.0 billion of available borrowing capacity, subject to continued compliance with the covenants and other conditions to borrowing under the credit agreement.

The credit agreement contains customary affirmative and negative covenants and financial covenants requiring us to maintain a maximum total net leverage ratio and a minimum consolidated interest coverage ratio.

Refer to Note 5 to the condensed consolidated financial statements for additional information regarding the 2026 Credit Facility.

Information Regarding Our Financial Condition

(in millions) March 31,

(in millions) June 30,

2026 December 31,

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Information Regarding Our Cash Flows

Three Months Ended

Six Months Ended

(in millions) 2026 2025

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Cash flows from financing activities (22.7) (121.2)

Effect of exchange rate changes on cash and cash equivalents — 0.2

Change in cash, cash equivalents, and restricted cash $ (382.1) $ 31.0

Cash Flows from Operating Activities

Compared with the comparable period last year, the increase primarily reflected increased net product sales of INGREZZA and CRENESSITY, partially offset by continued investments in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026, and expanded pre-clinical and clinical portfolio.

The increase in accounts receivable was primarily driven by higher total gross product sales, and to a lesser extent, timing of collections at the end of the first quarter of 2026.

Compared with the comparable period last year, the increase primarily reflected increased total net product sales, partially offset by acquisition and divestiture-related expenses of $125.6 million, including $60.1 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026 and which were settled in cash, and continued investments in our commercial organization, including the recent expansion of our CRENESSITY and INGREZZA sales teams in the first quarter of 2026 and expanded pre-clinical and clinical portfolio.

The increase in accounts receivable was primarily driven by higher total gross product sales.

The increase in income tax assets and liabilities was primarily due to timing of income tax payments.

Cash Flows from Investing Activities

Periodic fluctuations in cash flows from investing activities primarily reflected timing differences related to our purchases, sales, and maturities of debt security investments and changes in our portfolio-mix.

Cash flows from investing activities for the first quarter of 2026 also reflected $63.2 million in cash proceeds from our sale of Neurocrine Group Limited in January 2026.

Compared with the comparable period last year, the decrease reflected $2.36 billion in cash paid, net of cash acquired, to acquire Soleno in May 2026, partially offset by increased sales and maturities of debt security investments, net of purchases, to fund the Soleno acquisition and $63.2 million in proceeds from our sale of Neurocrine Group Limited in January 2026.

Cash Flows from Financing Activities

Compared with the comparable period last year, the change reflected decreased repurchases of our common stock under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and increased taxes paid related to net share settlement of equity awards (shares withheld for taxes).

In addition, in May 2026, we borrowed $600.0 million under the 2026 Credit Facility, and in June 2026, we repaid $600.0 million of principal under the 2026 Credit Facility.

Material Cash Requirements

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In particular, our future capital requirements will depend on many factors, including:

• the commercial success of INGREZZA and CRENESSITY;

• the success of our commercial products;

• continued scientific progress in our research and clinical development programs;

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With respect to our existing collaboration and license agreements, we may be required to make potential future payments of up to $15.35 billion upon the achievement of certain milestones.

Refer to Note 7 to the condensed consolidated financial statements for more information on our significant collaboration and license agreements.

In April 2026, we entered into the Merger Agreement to acquire Soleno for approximately $2.9 billion in cash, as described above.

The transaction is expected to close in the second quarter of 2026, subject to certain customary closing conditions.

We intend to fund the transaction with cash on hand.

Refer to Note 10 to the condensed consolidated financial statements for additional information regarding our significant collaboration and license agreements.

In May 2026, we completed our acquisition of Soleno.

Cash paid for the acquisition, net of cash acquired, was approximately $2.36 billion and was funded from available liquidity, including cash on hand and proceeds from sales and maturities of available-for-sale debt securities.

Following the acquisition, our future capital requirements may include costs associated with integrating Soleno and supporting commercialization and development activities related to the acquired business.

Refer to Note 2 to the condensed consolidated financial statements for additional information regarding the acquisition.

Share Repurchase Program

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The 2025 Repurchase Program is in addition to the $300.0 million 2024 Repurchase Program that was announced in October 2024 and completed in February 2025.

Under the 2025 Repurchase Program, we repurchased 0.4 million shares on the open market for a cost of $56.0 million during the first quarter of 2026.

As of March 31, 2026, we had $276.3 million remaining under the 2025 Repurchase Program.

Under the 2025 Repurchase Program, we repurchased 0.5 million shares on the open market for a cost of $66.0 million during the first six months of 2026.

As of June 30, 2026, we had $266.3 million remaining under the 2025 Repurchase Program.

Critical Accounting Policies and Estimates

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The primary objective of our investment activities is to preserve principal and maintain liquidity.

If a 1% unfavorable change in interest rates were to have occurred on March 31, 2026, it would not have had a material effect on the fair value of our investment portfolio as of that date.

If a 1% unfavorable change in interest rates were to have occurred on June 30, 2026, it would not have had a material effect on the fair value of our investment portfolio as of that date.

Forward-Looking Statements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis