Neurocrine Biosciences Inc at Jefferies Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Akash Tewari - Jefferies - Analyst : Well, I think, Kevin, the question that I think most people are thinking -- and these are people who are -- I think you are what I would describe a crowded long for a lot of investors right now. Given you've gone from a one-product story to -- legitimately, this could become a four-product story over the next couple of years. Why was now maybe the right time, especially going into your muscarinic card flip, to announce this step down? Why not wait until after that readout? .

Question: Akash Tewari - Jefferies - Analyst : Understood. Maybe for Kyle also, like let's go to next year, 2025, JPMorgan. I think you're getting to a point with your company where this is not a one-product story. You could argue, even on INGREZZA alone, you'd be able to generate up to $10 billion in EBITDA by the end of this decade. I mean, you're in a pretty enviable financial position, too. The question that sometimes I get from [long-onlys] is, is there appetite on Neurocrine's side to maybe give a five-year long-term guidance, right? Like, put a line in the sand and say, hey, you sell INGREZZA out to 2038. You have data points on a lot of your Phase 2 products. And you'll have that, by the way, from muscarinic. And then on top of that, crinecerfont is about to launch.

Question: Akash Tewari - Jefferies - Analyst : Is there appetite to maybe give long-term guidance here?

Question: Akash Tewari - Jefferies - Analyst : Understood. Makes sense. So I wanted to start off with your muscarinic franchise. And look, pharma, at the end of last year, spent $22 billion on Karuna and Cerevel, betting that this class is going to be bigger than what investors realize. I think we've done a lot of work internally. I think we share that view. The question that I get a lot from investors is on 586. You have a lot of muscarinics in the portfolio. On 586, I don't think there's a lot of public data that has been disclosed about that compound. And I'd like -- if you can qualitatively describe us, A, what would be ideal for an M4-direct agonist whether it comes to selectivity, PK/PD, QD dosing; and whether 586 met your internal hurdles to move forward into, A, that Phase 2 study, but, B, potentially moving into a Phase 3 registrational trial? What are the attributes of your compound that make you feel confident?

Question: Akash Tewari - Jefferies - Analyst : Okay. Understood. So you've also talked about, hey, there are some known on-target toxicities with hitting M4. And I think you've kind of talked about like those toxicities won't be so different from our molecule, but we feel comfortable with kind of the therapeutic profile. In terms of known AEs that you see with this class that investors should be expecting, can you just kind of outline, a, what we should be seeing with M4s, and then b, why you feel comfortable that your compound 586 has an acceptable therapeutic window?

Question: Akash Tewari - Jefferies - Analyst : Understood. Now I'm sure -- I wanted to kind of get this on the transcript. You get this question, I'm sure, a bunch. Why -- this asset used to be in the hands of AbbVie-Allergan, why did they give it up? If they're -- they were so excited about it and, of course, they did Cerevel. And I think the color you gave is really important. Can you just kind of give us the cadence of events that occurred there and how that asset actually got into your hands? And whether we should read into the fact that, that compound was originally in the hands of Allergan here when we think about the overall success of 586?

Question: Akash Tewari - Jefferies - Analyst : Understood. Now it's funny, everyone likes playing setups into data, but then when you actually have to own the risk into a trial, it gets a little more complicated. And I think one of the questions I get a lot from investors is, what is this adaptive design that Neurocrine talks to me about? I don't know much about the preclinical profile of the drug right now. But then on top of that, I've got this adaptive design. Would that actually lead to the absolute PANSS benefit potentially being more modest? So I'd love to hand it to you, why do that adaptive design in your kind of Phase 1 first-in-human kind of asymptomatic pool? And can you explain to us maybe qualitatively why we should not be scared, adaptive design is not a dirty word here for investors who are looking to own your stock, into that readout?

Question: Akash Tewari - Jefferies - Analyst : Okay. Understood. And maybe let's put it this way. Would you describe your trial design as an adaptive design? Do you like that term? Or what do you think is a better way to maybe describe the study?

Question: Akash Tewari - Jefferies - Analyst : That's very helpful. Now it's interesting. I don't know if it's clear whether you go with a fixed non-titration dose, like we've seen with Cerevel, or you do a titration. Frankly, when you look at the Karuna data, when you talk to the team, one of the things they say, especially in the context of Alzheimer's psychosis, is Cmax, AEs and PD effect are all kind of correlated. So if you're showing AEs, it's probably a sign you have adequate PD effects or the ability to down-titrate is really important because you can actually ensure patients get -- stay on the trial. They don't drop out. And then number two, they're getting adequate exposure. That actually kind of leaves this provocative question where, let's say, you titrate and you're an M4 selective. You don't have to deal with the M1 type AEs. So, a, is titration or no titration, how do you think about that decision for 586? But then number two, is there a possibility that as you get to higher doses and you're more selective, not only are you showing a differentiation on safety, but you might actually be able to show a differentiation on efficacy on, let's say, the PANSS score at higher exposures?

Question: Akash Tewari - Jefferies - Analyst : Okay. Understood. And then maybe once we have that data in-house, I think you're going to have a compound that could be theoretically viable for schizophrenia. I think Cerevel tells you, hey, I'm forced by it so good work. But when I think about where you might be able to differentiate the most, Alzheimer's psychosis seems like an obvious second indication. You're not going to be a PAM, so you're not going to have to deal with the issue of patients probably having to get dosed with Aricept in a Cerevel approach. And number two is you're not hitting M1, so you may be able to avoid some of the urinary retention issues that come with trospium. When you think about how quickly you can move into Alzheimer's psychosis once you have your proof point in schizophrenia, can you lay out the development strategy and how quickly you'd be able to move there?

Question: Akash Tewari - Jefferies - Analyst : Can you qualitatively give us some color, in your upcoming 586 study, what proportion of those patients would be elderly? And maybe you could use some of that PK/PD data to inform your Alzheimer's psychosis strategy.

Question: Akash Tewari - Jefferies - Analyst : Understood. And actually, maybe to that point, is that averaging all your doses or at your high exposures A+?

Question: Akash Tewari - Jefferies - Analyst : Okay. Understood. Now maybe just kind of stepping back here, and we're looking at, let's say, crinecerfont, right? And you had data that came out at ENDO. I think the question that a lot of investors had is like, hey, did Neurocrine have maybe a looser definition in terms of control of A4? And then number two, hey, at week 28, some of the doses of steroids started to kind of bounce back. I wanted to give you an opportunity. Can you contextualize the data that showed at ENDO and then, really, what your long-term confidence of your clinical profile is not only as a stand-alone drug but also as more competitors that are maybe a couple of years behind you are going to enter the market here?

Question: Akash Tewari - Jefferies - Analyst : Last question, if I can sneak it in. M&A. Again, you have the kind of luxury where I think you can either take your time on M&A. I think that's probably where a lot of investors are, where I want to see the readouts, more data on -- I want to see the readout in muscarinic before Neurocrine looks at BD. I know Kevin has always danced around this question as well, but I'll hand it over to you. Where does Neurocrine stand right now in terms of appetite for M&A going into the muscarinic readout? Would you want to wait for that readout? Or if there's the right asset right now, you'd pull the trigger?

Question: Akash Tewari - Jefferies - Analyst : Understood. Thanks so much. And by the way, Kevin, before you go to an island, why not take over BIO because someone needs to fight the IRA probably.

Question: Akash Tewari - Jefferies - Analyst : You'd be surprised. You can do it -- you can do it.

Question: Akash Tewari - Jefferies - Analyst : On that note. It's always a pleasure. Thanks so much.