Neurocrine(US:NBIX)2022-02-11 22:11Financial Performance - INGREZZA net product sales reached $1.1 billion in 2021, up from $993.1 million in 2020 and $752.9 million in 2019, representing the majority of total net product sales [21]. - Two significant customers accounted for approximately 82% of total product revenue for 2021, indicating a high concentration risk [197]. - The company has an accumulated deficit of $0.6 billion as of December 31, 2021, due to historical operating losses [183]. - The market price of the company's common stock has fluctuated between approximately $72 and $120 per share over the last twelve months [195]. - The company expects to increase expenses and investments in the coming years to fund operations and product development, despite having been profitable for the year ended December 31, 2021 [187]. Product Development and Clinical Trials - The company plans to submit a supplemental new drug application for valbenazine for the treatment of Huntington chorea in the second half of 2022, following positive top-line data from the KINECT-HD study [30]. - A Phase III clinical study for valbenazine in dyskinetic cerebral palsy has been initiated, with top-line data expected in 2023, involving 144 pediatric and adult patients [31]. - The company has initiated a Phase II clinical study for NBI-827104 in essential tremor, with top-line data anticipated in mid-2022, involving 28 adult patients [33]. - The STEAMBOAT study for NBI-827104 in pediatric patients with EE-CSWS has been initiated, with top-line data expected in the second half of 2022, involving 24 patients aged 4 to 12 years [36]. - The KAYAK study for NBI-921352, a Nav1.6 sodium channel inhibitor, has been initiated with 52 adolescent patients aged 12 to 21 years, and the protocol was amended to include pediatric patients aged 2 to 11 years [37]. - A Phase II study for NBI-921352 in 100 adult patients with focal onset seizures is underway, with top-line data expected in 2023 [38]. - Crinecerfont is being evaluated in a Phase III study involving 165 adult patients with classic congenital adrenal hyperplasia (CAH), with top-line data anticipated in 2023 [40]. - A separate Phase III study for crinecerfont includes 81 pediatric patients aged 2 to 17 years, also expecting top-line data in 2023 [41]. - A Phase III study for valbenazine, a VMAT2 inhibitor, is being conducted with 400 patients with schizophrenia, with top-line data expected in 2023 [44]. - NBI-1065845, an AMPA potentiator, is in a Phase II study with 212 adult patients with inadequate response to treatment in major depressive disorder, with data expected in 2023 [51]. - NBI-1065846, a GPR139 agonist, is being tested in 88 adult patients with major depressive disorder experiencing anhedonia, with top-line data anticipated in 2023 [53]. Market and Competitive Landscape - Tardive dyskinesia affects an estimated 600,000 people in the United States, while Parkinson's disease affects approximately 1 million people in the U.S. and over 10 million worldwide [23][25]. - ORILISSA and ORIAHNN, both out-licensed to AbbVie, target endometriosis and uterine fibroids, affecting nearly 200 million women globally and over 10 million in the U.S. [26][27]. - The company faces intense competition in the biotechnology and pharmaceutical industries, with many competitors having greater financial resources and expertise [117]. - The commercial success of INGREZZA and ONGENTYS will depend on their acceptance as safe and effective by the medical community and patients [135]. - Governmental and third-party payors may impose pricing controls or limit coverage and reimbursement for the company's products, potentially impacting revenues [136]. Regulatory and Compliance Issues - The ongoing evaluation of the impact of COVID-19 on business operations remains uncertain, with potential changes in policies affecting patient access and interactions [19]. - The FDA provides a 5-year exclusivity period for new medicinal compounds in the US, with additional exclusivity for orphan drugs potentially extending to 7 years [63]. - The approval process for product candidates varies by country, with potential delays and additional testing required for foreign approvals [90]. - Post-approval requirements include ongoing FDA regulation, recordkeeping, and potential mandatory revisions to labeling based on new safety information [96]. - The company is subject to ongoing regulatory obligations for INGREZZA, including post-marketing requirements and potential Phase IV clinical trials [174]. Workforce and Organizational Growth - The company has grown to a team of more than 900 employees as of December 31, 2021, adding over 200 new employees during 2021 [125]. - The company plans to continue adding employees in 2022, focusing on expanding its commercial salesforce and research and development organizations [126]. - The expanded specialty salesforce in the US consists of approximately 350 sales professionals, focusing on psychiatry, neurology, and long-term care [68]. - The company anticipates completing its salesforce expansion by the second quarter of 2022 [68]. Intellectual Property and Legal Matters - INGREZZA is protected by 19 issued US patents expiring between 2027 and 2040, with a potential extension of up to 2 years for patent No. 8,039,627, expiring in 2029 [12]. - ONGENTYS is covered by 9 issued US patents expiring between 2026 and 2035, with a potential extension of up to 4 years for one patent [12]. - ORILISSA has 5 issued US patents expiring between 2024 and 2036, with a potential extension of up to 5 years for patents expiring in 2024 [12]. - ORIAHNN is protected by 4 issued US patents expiring between 2024 and 2034, with a potential extension of up to 5 years for one patent [12]. - The company is engaged in various intellectual property litigation matters related to INGREZZA, which may result in substantial costs [206]. Financial Risks and Future Outlook - The company has a history of losses and expects to increase expenses for the foreseeable future, raising concerns about sustaining profitability [133]. - The company may incur additional indebtedness, which could limit cash flow and expose it to financial risks [182]. - Changes in tax laws could adversely affect the company's business and financial condition, impacting cash flows and results of operations [190]. - The company may require additional funding for research and development, clinical trials, and establishing manufacturing capabilities in the future [198]. - The impact of the COVID-19 pandemic continues to pose challenges for accessing capital and conducting business operations [200].