Item 1. Financial Statements
Item 1. Financial Statements
NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions, except per share data)
June 30,
2026 December 31,
2025
Assets
Current assets:
Cash and cash equivalents $ 332.4 $ 713.0
Available-for-sale debt securities 57.4 767.4
Accounts receivable
887.0 686.8
Inventory
104.2 69.0
Prepaid expenses
217.1 170.7
Other current assets 39.4 115.8
Total current assets 1,637.5 2,522.7
Noncurrent inventory 149.1 —
Noncurrent available-for-sale debt securities 91.9 1,063.0
Right-of-use assets 448.0 455.4
Equity investments 147.3 120.8
Property and equipment, net 90.5 89.8
Intangible assets, net 2,226.0 4.7
Goodwill 500.6 6.1
Deferred tax assets 8.9 320.3
Other noncurrent assets 59.3 48.7
Total assets $ 5,359.1 $ 4,631.5
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 808.3 $ 674.3
Other current liabilities 66.2 69.1
Total current liabilities 874.5 743.4
Deferred tax liabilities 91.5 —
Noncurrent operating lease liabilities 401.8 415.3
Other noncurrent liabilities 297.7 219.7
Total liabilities 1,665.5 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; 101.6 and 100.1 shares issued and outstanding, respectively
0.1 0.1
Additional paid-in capital 2,964.4 2,792.2
Accumulated other comprehensive income 5.1 13.1
Retained earnings
724.0 447.7
Total stockholders’ equity 3,693.6 3,253.1
Total liabilities and stockholders’ equity $ 5,359.1 $ 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
June 30, Six Months Ended
June 30,
(in millions, except per share data) 2026 2025 2026 2025
Revenues:
Net product sales $ 954.3 $ 682.0 $ 1,765.3 $ 1,245.7
Collaboration revenues 4.7 5.5 8.2 14.4
Total revenues 959.0 687.5 1,773.5 1,260.1
Operating expenses:
Cost of revenues, excluding amortization of acquired intangible assets 23.2 10.3 36.9 18.5
Research and development 326.7 244.3 622.9 507.5
Acquired in-process research and development 1.5 — 22.7 0.1
Selling, general, and administrative 439.7 286.3 758.2 562.8
Amortization of acquired intangible assets 16.4 1.0 16.5 2.0
Gain on sale of business, net of transaction costs — — ( 28.6 ) —
Total operating expenses 807.5 541.9 1,428.6 1,090.9
Operating income 151.5 145.6 344.9 169.2
Other income (expense):
Interest expense ( 2.9 ) — ( 2.9 ) —
Unrealized gain (loss) on equity investments 1.2 ( 6.7 ) 26.5 ( 37.3 )
Investment income and other, net 12.4 20.6 40.5 42.3
Total other income, net 10.7 13.9 64.1 5.0
Income before provision for income taxes
162.2 159.5 409.0 174.2
Provision for income taxes 17.8 52.0 66.7 58.8
Net income $ 144.4 $ 107.5 $ 342.3 $ 115.4
Foreign currency translation adjustments, net of tax 0.6 0.8 0.6 2.3
Unrealized gain (loss) on available-for-sale debt securities, net of tax 4.1 2.7 ( 8.6 ) 4.4
Comprehensive income $ 149.1 $ 111.0 $ 334.3 $ 122.1
Earnings per share:
Basic $ 1.43 $ 1.09 $ 3.40 $ 1.16
Diluted $ 1.39 $ 1.06 $ 3.30 $ 1.13
Weighted-average shares outstanding:
Basic 101.0 99.0 100.8 99.3
Diluted 104.2 101.0 103.8 101.8
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 March 31, 2026
100.6 $ 0.1 $ 2,817.3 $ 0.4 $ 589.6 $ 3,407.4
Net income — — — — 144.4 144.4
Other comprehensive income, net of tax
— — — 4.7 — 4.7
Stock-based compensation expense — — 65.0 — — 65.0
Issuances of common stock under benefit plans, net of tax 1.1 — 82.1 — — 82.1
Repurchases of common stock
( 0.1 ) — — — ( 10.0 ) ( 10.0 )
Balance at June 30, 2026
101.6 $ 0.1 $ 2,964.4 $ 5.1 $ 724.0 $ 3,693.6
Balance at March 31, 2025
99.0 $ 0.1 $ 2,531.9 $ 9.0 $ ( 5.3 ) $ 2,535.7
Net income — — — — 107.5 107.5
Other comprehensive income, net of tax
— — — 3.5 — 3.5
Stock-based compensation expense — — 52.8 — — 52.8
Issuances of common stock under benefit plans 0.2 — 12.5 — — 12.5
Repurchases of common stock
( 0.2 ) — — — ( 17.7 ) ( 17.7 )
Balance at June 30, 2025
99.0 $ 0.1 $ 2,597.2 $ 12.5 $ 84.5 $ 2,694.3
Balance at December 31, 2025
100.1 $ 0.1 $ 2,792.2 $ 13.1 $ 447.7 $ 3,253.1
Net income — — — — 342.3 342.3
Other comprehensive loss, net of tax
— — — ( 8.0 ) — ( 8.0 )
Stock-based compensation expense — — 122.2 — — 122.2
Issuances of common stock under benefit plans, net of tax 2.0 — 50.0 — — 50.0
Repurchases of common stock
( 0.5 ) — — — ( 66.0 ) ( 66.0 )
Balance at June 30, 2026
101.6 $ 0.1 $ 2,964.4 $ 5.1 $ 724.0 $ 3,693.6
Balance at December 31, 2024
99.4 $ 0.1 $ 2,554.6 $ 5.8 $ 29.2 $ 2,589.7
Net income — — — — 115.4 115.4
Other comprehensive income, net of tax
— — — 6.7 — 6.7
Stock-based compensation expense — — 105.6 — — 105.6
Issuances of common stock under benefit plans 1.4 — 44.6 — — 44.6
Repurchases of common stock
( 1.8 ) — ( 107.6 ) — ( 60.1 ) ( 167.7 )
Balance at June 30, 2025
99.0 $ 0.1 $ 2,597.2 $ 12.5 $ 84.5 $ 2,694.3
See accompanying notes to the condensed consolidated financial statements.
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NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
June 30,
(in millions) 2026 2025
Cash flows from operating activities:
Net income
$ 342.3 $ 115.4
Adjustments to reconcile net income to net cash from operating activities:
Stock-based compensation 122.2 105.6
Depreciation 15.6 12.9
Amortization of inventory fair-value step-up 3.0 —
Accretion of discount on available-for-sale debt securities, net ( 1.6 ) ( 8.0 )
Realized loss on sale of available-for-sale debt securities 5.2 —
Amortization of acquired intangible assets 16.5 2.0
Changes in fair values of equity investments ( 26.5 ) 37.3
Deferred income taxes ( 86.4 ) ( 51.1 )
Non-cash lease expense 3.6 14.3
Gain on sale of business, net of transaction costs ( 28.6 ) —
Other — 1.2
Change in operating assets and liabilities:
Accounts receivable ( 165.7 ) ( 116.6 )
Inventory ( 2.2 ) 0.4
Accounts payable and accrued liabilities ( 22.8 ) 12.1
Income tax assets and liabilities 60.2 15.8
Other assets and liabilities, net 47.4 25.5
Cash flows from operating activities 282.2 166.8
Cash flows from investing activities:
Purchases of available-for-sale debt securities ( 856.9 ) ( 588.3 )
Sales and maturities of available-for-sale debt securities 2,527.5 596.7
Acquisition of business, net of cash acquired ( 2,358.5 ) —
Proceeds from sale of business 63.2 —
Capital expenditures ( 16.9 ) ( 23.2 )
Cash flows from investing activities ( 641.6 ) ( 14.8 )
Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility 600.0 —
Repayments of borrowings under revolving credit facility ( 600.0 ) —
Payment of debt issuance costs ( 6.7 ) —
Issuances of common stock under benefit plans 108.4 46.5
Taxes paid related to net share settlement of equity awards
( 58.4 ) —
Repurchases of common stock
( 66.0 ) ( 167.7 )
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, cash equivalents and restricted cash at beginning of period 721.0 241.0
Cash, cash equivalents and restricted cash at end of period $ 338.9 $ 272.0
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. Acquisition of Soleno Therapeutics, Inc.
On May 18, 2026 (the acquisition date), we completed our acquisition of Soleno Therapeutics, Inc. (Soleno) through a cash tender offer followed by a merger. Pursuant to the merger agreement, we paid $ 53.00 per share in cash for each outstanding share of Soleno common stock. Following the merger, Soleno became a wholly owned subsidiary of the Company.
Soleno is a commercial-stage rare disease company that markets VYKAT ® (diazoxide choline) XR for the treatment of hyperphagia in patients with Prader-Willi syndrome. The acquisition expands the Company’s rare disease portfolio and commercial product base.
We accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were recognized at their estimated fair values as of the acquisition date.
In connection with the merger, the vesting of certain outstanding Soleno equity awards was accelerated as of the acquisition date and each vested Soleno equity award became entitled to receive cash consideration. The purchase price for the acquisition included $ 67.4 million related to the settlement of outstanding Soleno equity awards attributable to pre-combination service. In addition, we recognized stock-based compensation expense of $ 60.1 million during the second quarter and first six months of 2026 related to the acceleration of outstanding Soleno equity awards attributable to post-combination service that were settled in cash.
The purchase price allocation related to this acquisition is preliminary and subject to change during the measurement period, which will not exceed one year from the acquisition date. We continue to evaluate, among other items, deferred tax assets and liabilities and uncertain tax positions. Measurement-period adjustments will be recognized with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined and will be applied as if the accounting had been completed as of the acquisition date.
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The following table summarizes the preliminary consideration transferred:
(in millions) May 18,
2026
Cash paid to Soleno stockholders $ 2,762.5
Cash paid to settle Soleno equity awards attributable to pre-combination service 67.4
Total preliminary consideration transferred $ 2,829.9
The following table summarizes the preliminary allocation of consideration transferred to the assets acquired and liabilities assumed as of the acquisition date:
(in millions) May 18,
2026
Cash and cash equivalents $ 471.3
Accounts receivable 34.7
Inventory 185.3
Prepaid expenses and other current assets 9.0
Intangible assets 2,237.8
Right-of-use assets 4.6
Accounts payable and accrued liabilities ( 113.9 )
Operating lease liabilities ( 4.6 )
Deferred tax liabilities ( 489.4 )
Other assets and liabilities, net 0.5
Total identifiable net assets acquired 2,335.3
Goodwill 494.6
Total assets acquired and liabilities assumed $ 2,829.9
Acquired Inventory
The estimated fair value of the acquired inventory was determined based on the estimated selling price of the related finished product, reduced, as applicable, for costs to complete manufacturing, costs of disposal and market-participant profit allowances for the remaining manufacturing and selling efforts. The valuation resulted in fair-value step-ups for VYKAT XR work-in-process and finished goods inventory of $ 41.5 million and $ 126.7 million, respectively. The fair-value step-ups will be recognized in cost of revenues as the related acquired inventory is sold, which is expected to occur over approximately four to six years following the acquisition date.
Acquired Intangible Assets
The estimated fair value of the acquired intangible assets relates to the developed product rights for VYKAT XR and was determined using a probability adjusted discounted cash flow analysis approach using a discount rate of 24.0 %. The developed product rights are being amortized over a useful life of 16 years using the straight line method.
Deferred Tax Assets and Liabilities
The deferred tax liability relates to the tax effect of the difference between the fair value and tax basis of acquired intangible assets and inventory.
Goodwill
Goodwill was recognized as the excess of consideration transferred over the preliminary fair values of identifiable net assets acquired. A significant portion of the goodwill recognized resulted from the recognition of deferred tax liabilities associated with the fair value adjustments recorded for acquired assets. The remaining goodwill is primarily attributable to expected synergies from combining operations, the assembled workforce, expanded commercial capabilities, and future economic benefits that do not qualify for separate recognition. Goodwill is not deductible for income tax purposes.
Transaction Costs
Transaction costs, which were comprised primarily of financial advisory and legal fees, totaled $ 33.1 million during the second quarter and first six months of 2026 and were included in selling, general, and administrative expenses. No transaction costs were incurred during the second quarter and first six months of 2025.
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Revenues and Net Income of Soleno
The results of operations of Soleno have been included in the condensed consolidated statements of income and comprehensive income beginning on the acquisition date. From the acquisition date through June 30, 2026, total net revenues and net loss attributable to Soleno were $ 54.4 million and $ 52.2 million, respectively, inclusive of $ 104.7 million in acquisition-related expenses, amortization of the VYKAT XR fair-value step up, and amortization of the acquired intangible asset related to the developed product rights for VYKAT XR.
Pro Forma Financial Information (unaudited)
The following unaudited pro forma financial information presents the combined results of the Company and Soleno for the periods presented as if the acquisition had occurred on January 1, 2025:
Three Months Ended
June 30, Six Months Ended
June 30,
(in millions) 2026 2025 2026 2025
Revenues $ 998.4 $ 720.2 $ 1,907.5 $ 1,292.8
Net income (loss) $ 203.4 $ 67.7 $ 395.0 $ ( 57.9 )
The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of the Company and Soleno. In order to reflect the occurrence of the acquisition as if it had occurred on January 1, 2025 as required, the unaudited pro forma financial information includes adjustments to reflect:
(i) the incremental amortization expense to be incurred based on the fair values of the VYKAT XR identifiable intangible asset acquired;
(ii) the incremental cost of revenues related to the fair value adjustments associated with acquisition date inventory;
(iii) t he reallocation of acquisition-related compensation costs, including stock-based compensation expense associated with accelerated Soleno equity awards attributable to post-combination service and transaction bonuses payable to certain Soleno employees, from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025;
(iv) the reallocation of non-recurring acquisition-related transaction costs incurred by Neurocrine and Soleno from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025;
(v) the reversal of Soleno's direct acquisition-related costs; and
(vi) the related income tax effects of the aforementioned adjustments to the provision for Neurocrine.
The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2025. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.
3. 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.
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The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis.
June 30,
2026 December 31,
2025
Fair
Value Leveling Fair
Value Leveling
(in millions) Level 1 Level 2 Level 1 Level 2
Cash and cash equivalents $ 332.4 $ 332.4 $ — $ 713.0 $ 713.0 $ —
Available-for-sale debt securities 149.3 — 149.3 1,830.4 — 1,830.4
Equity investments 147.3 147.3 — 120.8 120.8 —
$ 629.0 $ 479.7 $ 149.3 $ 2,664.2 $ 833.8 $ 1,830.4
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 June 30, 2026 and December 31, 2025, we held available-for-sale debt securities with a total fair value of $ 139.6 million and $ 335.1 million, respectively, that were in unrealized loss positions totaling $ 0.7 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 June 30, 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, and we do not intend to sell these investments and it is not more likely than not that we will be required to sell these investments before their maturity.
Accrued interest receivables on available-for-sale debt securities totaled $ 3.1 million and $ 20.5 million, respectively, as of June 30, 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.
Six Months Ended
June 30,
2026 2025
Customer A 34 % 41 %
Customer B 26 % 29 %
Customer C 28 % 15 %
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.
June 30,
2026 December 31,
2025
Customer A 38 % 41 %
Customer B 29 % 31 %
Customer C 23 % 16 %
Customer D < 10 % 10 %
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4. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill.
(in millions) Amount
Balance as of December 31, 2025
$ 6.1
Foreign currency translation adjustments ( 0.1 )
Balance as of March 31, 2026 6.0
Additions in connection with the acquisition of Soleno Therapeutics, Inc. 494.6
Balance as of June 30, 2026
$ 500.6
The following table presents information relating to our recognized intangible assets.
June 30,
2026 December 31,
2025
(dollars in millions) Gross Carrying Amount Accumulated Amortization Net
Carrying Amount Gross Carrying Amount Accumulated
Amortization Net
Carrying Amount
Developed product rights 1
$ 2,242.8 $ 16.8 $ 2,226.0 $ 5.0 $ 0.3 $ 4.7
Total intangible assets, net $ 2,226.0 $ 4.7
_________________________
(1) Developed product rights have a useful life of 16 years.
The following table presents approximate future annual amortization expense for our finite-lived intangible assets as of June 30, 2026.
(in millions) Amount
2026 (6 months remaining)
$ 70.1
2027
$ 140.2
2028
$ 140.2
2029
$ 140.2
2030
$ 140.2
Thereafter $ 1,595.1
5. Debt
On May 14, 2026, we entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, providing for a $ 1.0 billion senior secured revolving credit facility (the 2026 Credit Facility) that matures on May 14, 2031. Subject to the terms of the credit agreement, we may borrow, prepay, and reborrow loans under the 2026 Credit Facility prior to maturity.
Borrowings under the 2026 Credit Facility bear interest, at the Company's option, at a rate based on either an alternate base rate plus an applicable margin or a Term Secured Overnight Financing Rate (SOFR), risk-free rate, or other applicable benchmark rate plus an applicable margin, in each case determined under the credit agreement. We are also required to pay a commitment fee on the unused portion of the revolving commitments. The initial Term SOFR borrowing under the 2026 Credit Facility bears interest at an all-in rate of 4.90 %, consisting of a Chicago Mercantile Exchange Term SOFR reference rate of 3.65 % plus an applicable margin of 1.25 %. The initial commitment fee rate is 0.15 % per annum.
On May 14, 2026, we borrowed $ 600.0 million under the 2026 Credit Facility. In June 2026, we repaid $ 600.0 million of principal and paid $ 2.7 million of accrued interest related to the repayment. In the condensed consolidated statements of cash flows, proceeds from borrowings under the 2026 Credit Facility are presented within financing activities net of debt issuance costs paid to lenders. Debt issuance costs paid to third parties, including certain reimbursed third-party costs, are presented separately as financing cash outflows. Repayments of borrowings under the 2026 Credit Facility are presented as financing cash outflows. As of June 30, 2026, no borrowings were outstanding and we had $ 1.0 billion of available borrowing capacity under the 2026 Credit Facility, subject to continued compliance with the covenants and other conditions to borrowing under the credit agreement.
In connection with the 2026 Credit Facility, we incurred $ 6.7 million of financing costs, which were deferred as assets and are being amortized to interest expense over the term of the facility. As of June 30, 2026, unamortized deferred financing costs were $ 6.5 million and were included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2026. In addition, interest expense associated with the 2026 Credit Facility totaled $ 2.9 million for each of the second quarter and first six months of 2026, including $ 0.2 million related to the amortization of deferred financing costs.
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The credit agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, restricted payments and certain other transactions, as well as financial covenants requiring us to maintain a maximum total net leverage ratio and a minimum consolidated interest coverage ratio. The obligations under the credit agreement are guaranteed by certain of our subsidiaries and secured by liens on substantially all assets of the Company and the subsidiary guarantors, subject to customary exceptions. As of June 30, 2026, we were in compliance with the covenants under the credit agreement.
6. 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.
The following table presents supplemental operating lease information for operating leases that have commenced.
Six Months Ended
June 30,
(in millions, except weighted average data) 2026 2025
Operating lease cost $ 31.2 $ 33.0
Sublease income ( 1.9 ) ( 1.7 )
Net operating lease cost $ 29.3 $ 31.3
Cash paid for amounts included in the measurement of operating lease liabilities $ 27.6 $ 18.7
June 30,
2026 2025
Weighted average remaining lease term
9.4 years 10.4 years
Weighted average discount rate 4.9 % 4.9 %
Restricted cash related to leases $ 6.3 $ 7.8
The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of June 30, 2026.
(dollars in millions)
Operating
Leases
Sublease
Income
2026 (6 months remaining)
$ 30.4 $ ( 2.0 )
2027
61.3 ( 4.0 )
2028
62.5 ( 4.0 )
2029
61.3 ( 3.6 )
2030
60.7 ( 3.5 )
Thereafter 306.9 ( 2.0 )
Total operating lease payments (sublease income) 583.1 $ ( 19.1 )
Less imputed interest
121.5
Total operating lease liabilities 461.6
Less current operating lease liabilities included in other current liabilities 59.8
Noncurrent operating lease liabilities $ 401.8
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7. Supplemental Financial Information
Inventory consisted of the following:
(in millions) June 30,
2026 December 31,
2025
Raw materials $ 39.9 $ 35.7
Work in process 70.1 19.2
Finished goods 143.3 14.1
Total inventory 253.3 69.0
Balance Sheet Classification:
Inventory $ 104.2 $ 69.0
Noncurrent inventory 149.1 —
Total inventory $ 253.3 $ 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 June 30, 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 June 30, 2026 and December 31, 2025.
As of June 30, 2026, noncurrent inventory consisted of VYKAT XR inventory acquired in the Soleno acquisition that, based on management’s current demand forecasts, was expected to be realized after June 30, 2027. Refer to Note 2 for additional information regarding the acquired inventory and related fair-value step-up.
In addition, in connection with the acquisition of Soleno, we recorded a step-up in the fair value of work in process and finished goods inventory for VYKAT XR of $ 41.5 million and $ 126.7 million, respectively. The fair value step-up adjustment is being amortized to cost of revenues as the acquired inventory is sold. We recognized $ 3.0 million of expense related to the amortization of the fair value step-up during the second quarter and first six months of 2026.
Prepaid expenses consisted of the following:
(in millions) June 30,
2026 December 31,
2025
Prepaid income taxes $ 121.8 $ 94.0
Prepaid development costs 66.1 55.6
Other prepaid expenses 29.2 21.1
Total prepaid expenses $ 217.1 $ 170.7
Accounts payable and accrued liabilities consisted of the following:
(in millions) June 30,
2026 December 31,
2025
Sales rebates and reserves $ 292.1 $ 226.0
Current income taxes payable
114.6 68.0
Accrued development costs
93.5 101.3
Accrued employee related costs 123.2 128.8
Current branded prescription drug fee 42.9 45.3
Accounts payable and other accrued liabilities 142.0 104.9
Total accounts payable and accrued liabilities $ 808.3 $ 674.3
Other noncurrent liabilities consisted of the following:
(in millions) June 30,
2026 December 31,
2025
Noncurrent income taxes payable
$ 262.2 $ 214.5
Other noncurrent liabilities
35.5 5.2
Total other noncurrent liabilities $ 297.7 $ 219.7
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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) June 30,
2026 June 30,
2025
Cash and cash equivalents $ 332.4 $ 264.0
Restricted cash included in other noncurrent assets
6.5 8.0
Total cash, cash equivalents, and restricted cash $ 338.9 $ 272.0
The following table presents supplemental cash flow information.
Six Months Ended
June 30,
(in millions) 2026 2025
Cash paid for interest $ 2.7 $ —
Cash paid for income taxes $ 88.2 $ 72.5
Accrued capital expenditures
$ 1.3 $ 1.9
Right-of-use assets acquired through operating leases $ 2.6 $ 3.4
8. 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
June 30, Six Months Ended
June 30,
(in millions)
2026 2025 2026 2025
Number of shares
0.1 0.2 0.5 1.8
Total cost of shares (1)
$ 10.0 $ 17.7 $ 66.0 $ 167.7
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(1) Reflects the total trade-date cost of shares repurchased during the period.
As of June 30, 2026, we had $ 266.3 million remaining under the 2025 Repurchase Program.
9. Earnings per Share
Earnings per share were calculated as follows:
Three Months Ended
June 30, Six Months Ended
June 30,
(in millions, except per share data) 2026 2025 2026 2025
Net income - basic and diluted $ 144.4 $ 107.5 $ 342.3 $ 115.4
Weighted-average common shares outstanding:
Basic 101.0 99.0 100.8 99.3
Effect of dilutive securities 3.2 2.0 3.0 2.5
Diluted 104.2 101.0 103.8 101.8
Earnings per share:
Basic $ 1.43 $ 1.09 $ 3.40 $ 1.16
Diluted $ 1.39 $ 1.06 $ 3.30 $ 1.13
Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 4.8 6.3 4.5 4.8
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10. 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 payment of $ 22.5 million as research and development (R&D) in the first quarter of 2026.
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 May 2025, we expensed a milestone payment of $ 15.0 million as R&D in the second quarter of 2025.
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.
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.
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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 January 2025, we expensed a milestone payment of $ 37.5 million 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.
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.
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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 February 2025, we expensed a milestone payment of $ 7.5 million 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).
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
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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.
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.
11. 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.
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The following table presents information about reported segment revenues, segment profit, and significant segment expenses.
Three Months Ended
June 30, Six Months Ended
June 30,
(in millions) 2026 2025 2026 2025
Revenues:
INGREZZA net product sales $ 716.5 $ 624.4 $ 1,373.3 $ 1,169.6
CRENESSITY net product sales 183.5 53.2 336.8 67.7
VYKAT XR net product sales 54.3 — 54.3 —
Other revenues (1)
4.7 9.9 9.1 22.8
Total revenues 959.0 687.5 1,773.5 1,260.1
Less:
Cost of revenues, excluding amortization of acquired intangible assets 23.2 10.3 36.9 18.5
Research and development:
External research and development 168.5 120.6 316.5 228.5
Payroll and benefits 115.4 72.2 199.9 147.2
Milestones 0.3 15.1 22.9 60.5
Other research and development (2)
42.5 36.4 83.6 71.3
Total research and development 326.7 244.3 622.9 507.5
Acquired in-process research and development 1.5 — 22.7 0.1
Selling, general, and administrative 439.7 286.3 758.2 562.8
Amortization of acquired intangible assets 16.4 1.0 16.5 2.0
Gain on sale of business, net of transaction costs — — ( 28.6 ) —
Interest expense 2.9 — 2.9 —
Unrealized (gain) loss on equity investments
( 1.2 ) 6.7 ( 26.5 ) 37.3
Investment income and other, net
( 12.4 ) ( 20.6 ) ( 40.5 ) ( 42.3 )
Provision for income taxes
17.8 52.0 66.7 58.8
Net income
$ 144.4 $ 107.5 $ 342.3 $ 115.4
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(1) Other revenues primarily consist of royalties earned on AbbVie Inc. 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.
12. 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 condensed 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
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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.
13. 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.
On March 6, 2026, the City of Pontiac Police and Fire Retirement System, a purported stockholder of Soleno, filed a putative class-action complaint for violations of the Federal securities laws against Soleno and certain members of Soleno's management in the U.S. District Court for the Northern District of California. The plaintiff alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5 on behalf of a putative class of purchasers of Soleno’s common stock during a purported class period of March 26, 2025 through November 4, 2025, inclusive. On June 25, 2026, the Court appointed a Lead Plaintiff. Lead Plaintiff’s consolidated complaint is due August 28, 2026. Defendants’ motion to dismiss is due October 30, 2026. A hearing date on the motion to dismiss has not yet been scheduled.
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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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.