"I am very pleased with the accomplishments of
Fourth Quarter and Full-Year 2019 Financial Highlights |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
(unaudited, in millions, except per share data) |
2019 |
2018 |
2019 |
2018 |
|||||||||||
Revenues: |
|||||||||||||||
INGREZZA product sales, net |
$ |
237.9 |
$ |
130.3 |
$ |
752.9 |
$ |
409.6 |
|||||||
Collaboration revenue |
6.2 |
1.1 |
35.2 |
41.6 |
|||||||||||
Total revenues |
$ |
244.1 |
$ |
131.4 |
$ |
788.1 |
$ |
451.2 |
|||||||
GAAP R&D |
$ |
55.3 |
$ |
34.5 |
$ |
200.0 |
$ |
155.8 |
|||||||
Non-GAAP R&D |
$ |
47.9 |
$ |
29.9 |
$ |
164.2 |
$ |
119.6 |
|||||||
GAAP SG&A |
$ |
101.3 |
$ |
69.0 |
$ |
354.1 |
$ |
248.9 |
|||||||
Non-GAAP SG&A |
$ |
87.4 |
$ |
60.5 |
$ |
304.6 |
$ |
217.1 |
|||||||
GAAP net income |
$ |
34.0 |
$ |
18.0 |
$ |
37.0 |
$ |
21.1 |
|||||||
GAAP net income per share – diluted |
$ |
0.35 |
$ |
0.19 |
$ |
0.39 |
$ |
0.22 |
|||||||
Non-GAAP net income |
$ |
102.2 |
$ |
38.4 |
$ |
283.8 |
$ |
70.5 |
|||||||
Non-GAAP net income per share – diluted |
$ |
1.05 |
$ |
0.40 |
$ |
2.96 |
$ |
0.74 |
|||||||
December 31, |
|||||||||||||||
(unaudited, in millions) |
2019 |
2018 |
|||||||||||||
Cash, cash equivalents and marketable securities |
$ |
970.2 |
$ |
866.9 |
|||||||||||
Fourth Quarter and Full Year Net Product Sales Highlights:
- INGREZZA® (valbenazine) net product sales for the fourth quarter and full year 2019 were
$238 million and$753 million respectively, representing an increase of over 80% versus prior period comparisons. - Continued strength in INGREZZA new patient additions in the fourth quarter.
- End of fourth quarter 2019 days-on-hand channel inventory increased relative to the third quarter 2019 due to timing of quarter-end purchases resulting in an approximate
$11 million benefit to net product sales.
Financial Highlights:
- Research and Development (R&D) investment increased in the fourth quarter of 2019 versus the fourth quarter of 2018 primarily as a result of the Company's ongoing activities in congenital adrenal hyperplasia studies and in gene therapy partially offset by prior year spending on the Tourette syndrome program.
- Selling, General and Administrative (SG&A) investment increased in the fourth quarter of 2019 versus the fourth quarter of 2018, primarily as a result of the patient-focused disease state awareness campaign, "Talk About TD", and an increase in the Branded Pharmaceutical Drug, or BPD, fee expense.
In-Process Research and Development (IPR&D) expense of$36 million in the fourth quarter of 2019 reflects the Company's collaboration withXenon Pharmaceuticals specific to NBI-921352 (XEN901) for epilepsy.- Fourth quarter of 2019 GAAP net income and diluted earnings per share (EPS) were
$34 million and$0.35 , respectively, compared to$18 million and$0.19 , respectively, in the fourth quarter of 2018. - Fourth quarter of 2019 non-GAAP net income and diluted earnings per share (EPS) were
$102 million and$1.05 , respectively, compared to$38 million and$0.40 , respectively, in the fourth quarter of 2018. - As of
December 31, 2019 , the Company had cash, cash equivalents and marketable securities totaling$970 million .
A reconciliation of GAAP to non-GAAP quarterly financial results can be found in Tables 3 through 5 at the end of this earnings release.
Recent Events
- In
December 2019 , the Company entered into a license and collaboration agreement with Xenon, a clinical-stage biopharmaceutical company. Pursuant to the terms of the agreement, the Company gained an exclusive license to NBI-921352, a clinical-stage selective Nav1.6 sodium channel inhibitor with potential in SCN8A developmental and epileptic encephalopathy (SCN8A-DEE) and other forms of epilepsy, including focal epilepsy. Upon filing of an Investigational New Drug (IND) application with theU.S. Food and Drug Administration (FDA ) in mid-2020, the Company intends to start a Phase II study in SCN8A-DEE patients in 2H 2020. - In
January 2020 , the Company announced an option agreement that was originally signed in 2019 withIdorsia granting the Company an option to license ACT-709478, a potent, selective, orally-active, and brain penetrating T-type calcium channel blocker, in clinical development for the treatment of a rare pediatric epilepsy. A Phase II study in a rare pediatric epilepsy is planned in 2H 2020 dependent upon IND application acceptance by theFDA in mid-2020.
Full-Year 2020 Financial Guidance |
|||||||||||||||
Range |
|||||||||||||||
(in millions) |
Low |
High |
|||||||||||||
Combined GAAP R&D and SG&A expenses |
$ |
740 |
$ |
770 |
|||||||||||
Combined Non-GAAP R&D and SG&A expenses |
$ |
620 |
$ |
650 |
- GAAP and Non-GAAP expense guidance range reflects increased investment in R&D programs including three registrational programs, meaningful investments across early stage programs including Voyager and Xenon collaborations, continued investment in INGREZZA and marketing costs associated with the anticipated launch of opicapone.
- GAAP-only guidance includes approximately
$100 million of share-based compensation and a$20 million expected milestone payment to BIAL connected with the expected approval of opicapone by theFDA during the second quarter. GAAP-only guidance does not include any other potential milestones or in-process research and development costs associated with current collaborations or future business development activities.
Conference Call and Webcast Today at
About INGREZZA® (valbenazine) Capsules
INGREZZA, a selective vesicular monoamine transporter 2 (VMAT2) inhibitor, is the first
INGREZZA is thought to work by reducing the amount of dopamine released in a region of the brain that controls movement and motor function, helping to regulate nerve signaling in adults with tardive dyskinesia. VMAT2 is a protein in the brain that packages neurotransmitters, such as dopamine, for transport and release from presynaptic neurons. INGREZZA, developed in Neurocrine's laboratories, is novel in that it selectively inhibits VMAT2 with no appreciable binding affinity for VMAT1, dopaminergic (including D2), serotonergic, adrenergic, histaminergic, or muscarinic receptors. Additionally, INGREZZA can be taken for the treatment of tardive dyskinesia as one capsule, once-daily, together with psychiatric medications such as antipsychotics or antidepressants.
Important Safety Information
Contraindications
INGREZZA is contraindicated in patients with a history of hypersensitivity to valbenazine or any components of INGREZZA. Rash, urticaria, and reactions consistent with angioedema (e.g., swelling of the face, lips, and mouth) have been reported.
Warnings & Precautions
Somnolence
INGREZZA can cause somnolence. Patients should not perform activities requiring mental alertness such as operating a motor vehicle or operating hazardous machinery until they know how they will be affected by INGREZZA.
QT Prolongation
INGREZZA may prolong the QT interval, although the degree of QT prolongation is not clinically significant at concentrations expected with recommended dosing. INGREZZA should be avoided in patients with congenital long QT syndrome or with arrhythmias associated with a prolonged QT interval. For patients at increased risk of a prolonged QT interval, assess the QT interval before increasing the dosage.
Parkinsonism
INGREZZA may cause Parkinsonism in patients with tardive dyskinesia. Parkinsonism has also been observed with other VMAT2 inhibitors. Reduce the dose or discontinue INGREZZA treatment in patients who develop clinically significant parkinson-like signs or symptoms.
Adverse Reactions
The most common adverse reaction (≥5% and twice the rate of placebo) is somnolence. Other adverse reactions (≥2% and >placebo) include: anticholinergic effects, balance disorders/falls, headache, akathisia, vomiting, nausea, and arthralgia.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit MedWatch at www.fda.gov/medwatch or call 1-800-
Please see INGREZZA full Prescribing Information at www.INGREZZA.com/PI.
About
Non-GAAP Financial Measures
In addition to the financial results and financial guidance that are provided in accordance with accounting principles generally accepted in
Forward-Looking Statements
In addition to historical facts, this press release contains forward-looking statements that involve a number of risks and uncertainties. These statements include, but are not limited to, statements related to: our preliminary unaudited financial information; the benefits to be derived from our products and product candidates, including INGREZZA and our partnered product, ORILISSA; the value INGREZZA, ORILISSA, and/or our product candidates may bring to patients; the continued success of the launch of INGREZZA;
TABLE 1 NEUROCRINE BIOSCIENCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||
(in millions, except per share data) |
2019 |
2018 |
2019 |
2018 |
||||||||
Revenues: |
||||||||||||
Product sales, net |
$ |
237.9 |
$ |
130.3 |
$ |
752.9 |
$ |
409.6 |
||||
Collaboration revenue |
6.2 |
1.1 |
35.2 |
41.6 |
||||||||
Total revenues |
244.1 |
131.4 |
788.1 |
451.2 |
||||||||
Operating expenses: |
||||||||||||
Cost of sales |
2.5 |
1.4 |
7.4 |
4.9 |
||||||||
Research and development |
55.3 |
34.5 |
200.0 |
155.8 |
||||||||
Acquired in-process research and development |
36.2 |
4.8 |
154.3 |
4.8 |
||||||||
Selling, general and administrative |
101.3 |
69.0 |
354.1 |
248.9 |
||||||||
Total operating expenses |
195.3 |
109.7 |
715.8 |
414.4 |
||||||||
Operating income |
48.8 |
21.7 |
72.3 |
36.8 |
||||||||
Other (expense) income: |
||||||||||||
Interest expense |
(8.2) |
(7.7) |
(32.0) |
(30.5) |
||||||||
Unrealized loss on restricted equity securities |
(7.2) |
— |
(13.0) |
— |
||||||||
Investment income and other, net |
5.2 |
4.7 |
19.2 |
15.5 |
||||||||
Total other expense, net |
(10.2) |
(3.0) |
(25.8) |
(15.0) |
||||||||
Income before provision for income taxes |
38.6 |
18.7 |
46.5 |
21.8 |
||||||||
Provision for income taxes |
4.6 |
0.7 |
9.5 |
0.7 |
||||||||
Net income |
$ |
34.0 |
$ |
18.0 |
$ |
37.0 |
$ |
21.1 |
||||
Net income per share, basic |
$ |
0.37 |
$ |
0.20 |
$ |
0.40 |
$ |
0.23 |
||||
Net income per share, diluted |
$ |
0.35 |
$ |
0.19 |
$ |
0.39 |
$ |
0.22 |
||||
Weighted average common shares outstanding, basic |
92.2 |
90.7 |
91.6 |
90.2 |
||||||||
Weighted average common shares outstanding, diluted |
97.2 |
95.7 |
95.7 |
95.4 |
TABLE 2 NEUROCRINE BIOSCIENCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
|||||||||
December 31, |
|||||||||
(in millions) |
2019 |
2018 |
|||||||
Cash, cash equivalents and marketable securities |
$ |
670.5 |
$ |
650.9 |
|||||
Other current assets |
160.5 |
86.9 |
|||||||
Total current assets |
831.0 |
737.8 |
|||||||
Property and equipment, net |
41.9 |
33.9 |
|||||||
Marketable securities |
299.7 |
216.0 |
|||||||
Restricted equity securities |
55.9 |
— |
|||||||
Operating lease assets |
74.3 |
— |
|||||||
Restricted cash |
3.2 |
5.5 |
|||||||
Total assets |
$ |
1,306.0 |
$ |
993.2 |
|||||
Convertible senior notes |
$ |
408.8 |
$ |
— |
|||||
Other current liabilities |
156.5 |
88.2 |
|||||||
Total current liabilities |
565.3 |
88.2 |
|||||||
Noncurrent operating lease liabilities |
86.7 |
— |
|||||||
Convertible senior notes |
— |
388.5 |
|||||||
Other long-term liabilities |
17.1 |
35.7 |
|||||||
Stockholders' equity |
636.9 |
480.8 |
|||||||
Total liabilities and stockholders' equity |
$ |
1,306.0 |
$ |
993.2 |
|||||
TABLE 3 NEUROCRINE BIOSCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (unaudited) |
||||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||||||
(in millions, except per share data) |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||
GAAP net income |
$ |
34.0 |
$ |
18.0 |
$ |
37.0 |
$ |
21.1 |
||||||||||||
Adjustments: |
||||||||||||||||||||
Milestones received from licenses and collaborations A |
— |
— |
(20.0) |
(40.0) |
||||||||||||||||
Non-cash collaboration revenue B |
(0.9) |
— |
(0.9) |
— |
||||||||||||||||
Acquired in-process research and development (IPR&D) C |
36.2 |
4.8 |
154.3 |
4.8 |
||||||||||||||||
Milestones paid related to licenses and collaborations – R&D D |
— |
— |
10.0 |
10.0 |
||||||||||||||||
Share-based compensation expense – R&D |
7.4 |
4.6 |
25.8 |
26.2 |
||||||||||||||||
Share-based compensation expense – SG&A |
13.9 |
8.5 |
49.5 |
31.8 |
||||||||||||||||
Non-cash interest related to convertible debt |
5.2 |
4.8 |
20.3 |
18.9 |
||||||||||||||||
Changes in fair value of equity security investments E |
7.2 |
— |
13.0 |
— |
||||||||||||||||
Income tax effect related to reconciling items F |
(0.8) |
(2.3) |
(5.2) |
(2.3) |
||||||||||||||||
Non-GAAP net income |
$ |
102.2 |
$ |
38.4 |
$ |
283.8 |
$ |
70.5 |
||||||||||||
Net income per diluted common share: |
||||||||||||||||||||
GAAP |
$ |
0.35 |
$ |
0.19 |
$ |
0.39 |
$ |
0.22 |
||||||||||||
Non-GAAP |
$ |
1.05 |
$ |
0.40 |
$ |
2.96 |
$ |
0.74 |
||||||||||||
_______ |
A During the third quarter of 2019 and third quarter of 2018, the Company recognized event-based milestones from AbbVie of $20.0 million and $40.0 million, respectively, for regulatory milestones associated with elagolix. |
B During the fourth quarter of 2019, the Company recognized non-cash collaboration revenue from Mitsubishi Tanabe Pharma Corporation (MTPC) under the collaboration and license agreement entered into in 2015. |
C During 2019, the Company incurred IPR&D expenses of $118.1 million and $36.2 million, respectively, in association with collaboration and license agreements entered into with Voyager and Xenon and $4.8 million in association with a research collaboration agreement entered into with Jnana Therapeutics Inc during fourth quarter of 2018. |
D During each of the second quarter of 2019 and first quarter of 2018, the Company incurred milestone expenses of $10.0 million related to event-based milestones for opicapone related to the Company's collaboration with BIAL. |
E The Company's investments include equity security investments in Voyager and Xenon. The Company recognized unrealized losses of $7.2 million for the fourth quarter of 2019 and $13.0 million for full-year 2019 to adjust its equity security investments to fair value. |
F Estimated income tax effect of non-GAAP reconciling items are calculated using applicable statutory tax rates, taking into consideration any valuation allowance. |
TABLE 4 NEUROCRINE BIOSCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (unaudited) |
|||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||
(in millions, except per share data) |
March 31, 2019 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
December 31, 2019 |
||||||||||||
GAAP net income |
$ |
(102.1) |
$ |
51.3 |
$ |
53.8 |
$ |
34.0 |
$ |
37.0 |
|||||||
Adjustments: |
|||||||||||||||||
Milestones received from licenses and collaborations A |
— |
— |
(20.0) |
— |
(20.0) |
||||||||||||
Non-cash collaboration revenue B |
— |
— |
— |
(0.9) |
(0.9) |
||||||||||||
Acquired in-process research and development (IPR&D) C |
113.1 |
5.0 |
— |
36.2 |
154.3 |
||||||||||||
Milestones paid related to licenses and collaborations – R&D D |
— |
10.0 |
— |
— |
10.0 |
||||||||||||
Share-based compensation expense – R&D |
5.4 |
6.0 |
7.0 |
7.4 |
25.8 |
||||||||||||
Share-based compensation expense – SG&A |
10.4 |
11.9 |
13.3 |
13.9 |
49.5 |
||||||||||||
Non-cash interest related to convertible debt |
4.9 |
5.1 |
5.1 |
5.2 |
20.3 |
||||||||||||
Changes in fair value of equity security investments E |
(1.7) |
(21.0) |
28.5 |
7.2 |
13.0 |
||||||||||||
Income tax effect related to reconciling items F |
(2.3) |
(1.1) |
(1.0) |
(0.8) |
(5.2) |
||||||||||||
Non-GAAP net income |
$ |
27.7 |
$ |
67.2 |
$ |
86.7 |
$ |
102.2 |
$ |
283.8 |
|||||||
Net income per diluted common share: |
|||||||||||||||||
GAAP |
$ |
(1.12) |
$ |
0.54 |
$ |
0.56 |
$ |
0.35 |
$ |
0.39 |
|||||||
Non-GAAP |
$ |
0.29 |
$ |
0.71 |
$ |
0.90 |
$ |
1.05 |
$ |
2.96 |
_______ |
A During the third quarter of 2019, the Company recognized a $20.0 million event-based milestone as revenue upon FDA acceptance of AbbVie's NDA submission of elagolix for the treatment of uterine fibroids. |
B During the fourth quarter of 2019, the Company recognized non-cash collaboration revenue from MTPC under the collaboration and license agreement entered into in 2015. |
C The Company incurred IPR&D expenses of $118.1 million and $36.2 million, respectively, in association with collaboration and license agreements entered into with Voyager and Xenon during 2019. |
D During the second quarter of 2019, the Company incurred milestone expenses of $10.0 million related to FDA acceptance of the opicapone NDA for Parkinson's disease. |
E The Company's investments include equity security investments in Voyager and Xenon. The Company recognized unrealized (gains) losses to adjust its equity security investments to fair value. |
F Estimated income tax effect of non-GAAP reconciling items are calculated using applicable statutory tax rates, taking into consideration any valuation allowance. |
TABLE 5 NEUROCRINE BIOSCIENCES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (unaudited) |
|||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||
(in millions, except per share data) |
March 31, 2018 |
June 30, 2018 |
September 30, 2018 |
December 31, 2018 |
December 31, 2018 |
||||||||||||
GAAP net income (loss) |
$ |
(41.8) |
$ |
(5.9) |
$ |
50.8 |
$ |
18.0 |
$ |
21.1 |
|||||||
Adjustments: |
|||||||||||||||||
Milestones received from licenses and collaborations A |
— |
— |
(40.0) |
— |
(40.0) |
||||||||||||
Acquired in-process research and development (IPR&D) B |
— |
— |
— |
4.8 |
4.8 |
||||||||||||
Milestones paid related to licenses and collaborations – R&D C |
10.0 |
— |
— |
— |
10.0 |
||||||||||||
Share-based compensation expense – R&D |
12.6 |
4.3 |
4.7 |
4.6 |
26.2 |
||||||||||||
Share-based compensation expense – SG&A |
7.3 |
7.6 |
8.4 |
8.5 |
31.8 |
||||||||||||
Non-cash interest related to convertible debt |
4.6 |
4.7 |
4.8 |
4.8 |
18.9 |
||||||||||||
Income tax effect related to reconciling items D |
— |
— |
— |
(2.3) |
(2.3) |
||||||||||||
Non-GAAP net income (loss) |
$ |
(7.3) |
$ |
10.7 |
$ |
28.7 |
$ |
38.4 |
$ |
70.5 |
|||||||
Net income (loss) per diluted common share: |
|||||||||||||||||
GAAP |
$ |
(0.47) |
$ |
(0.07) |
$ |
0.52 |
$ |
0.19 |
$ |
0.22 |
|||||||
Non-GAAP |
$ |
(0.08) |
$ |
0.11 |
$ |
0.30 |
$ |
0.40 |
$ |
0.74 |
_______ |
A During the third quarter of 2018, the Company recognized a $40.0 million event-based milestone as revenue related to FDA approval of ORILISSA. |
B During the fourth quarter of 2018, the Company made a $4.8 million upfront payment in association with a research collaboration agreement entered into with Jnana Therapeutics Inc. |
C During the first quarter of 2018, the Company incurred milestone expenses of $10.0 million related to guidance received from the FDA in which it did not request an additional Phase III clinical trial to support an NDA submission for opicapone. |
D Estimated income tax effect of non-GAAP reconciling items are calculated using applicable statutory tax rates, taking into consideration any valuation allowance. |
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SOURCE
Neurocrine Biosciences, Inc., Navjot Rai (Media), 858-617-7623, media@neurocrine.com; Todd Tushla (Investors), 858-617-7143, ir@neurocrine.com