Neurocrine Biosciences, Inc. (NASDAQ:NBIX) Q4 2022 Earnings Call Transcript

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We’ve been narrowing the focus in terms of where we need to spend our time. And we’re seeing good I think initial results. And so we’re very pleased with the progress that we’re making in long-term care. But I do think that in the end, it’s still a new space for us and not as far along in terms of level of education and awareness of TD is what we’re seeing in psychiatry and neurology. But we’re excited about the opportunity, and we’re going to continue to make progress in 2023.

Operator: And we will go next to Myles Minter with William Blair. Please go ahead.

Myles Minter: Hi. Just back on the catalyst trial, the adult one specifically, just wondering whether these patients are well controlled in terms of their A4 levels on their current glucocorticoid dose, just curious about that given your expectations that you would see additional A4 reductions there. And if those patients are already controlled, how much emphasis we should put on that secondary endpoint? Thanks.

Eiry Roberts: Thanks, Myles. I think in general, patients with CAH are not well controlled. Intermittently, they have some degree of androgen control. But certainly, what we wanted was our trial to reflect the real world situation. And so it’s a requirement in the trial that patients not only have excess steroid dosing but also a lack of control of androgen. So I think there’s a real opportunity for us to demonstrate a benefit for patients in the context of these trials, both from an androgen control point of view, which is the direct action of crinecerfont and then from the ability to reduce the steroid dosing.

Operator: And we’ll take our next question from Brian Abrahams with RBC Capital Markets. Please go ahead.

Brian Abrahams: Hi. Good morning. Thanks for taking my question and congrats on another nice quarter. I have a question on the balance of sales growth versus investment. So you guys are guiding for roughly 300 million in year-over-year growth in INGREZZA at the midpoint, but only half of that or less in additional SG&A investment year-over-year. So I guess I’m wondering, is this the right way to be thinking about leverage going forward as you continue the successful direct-to-consumer campaign and push into long-term care facilities, or are there other factors to consider that could enable perhaps even greater operating leverage on INGREZZA commercial franchise going forward over time? Thanks.

Matt Abernethy: Yes. So I’d say first and foremost, we expect a tremendous amount of growth in INGREZZA here into the future. Seven out of 10 patients still have not been diagnosed, two have tardive dyskinesia. So you have to have a growing product to, of course, drive SG&A leverage. The second piece of investment this year is also preparing for the Huntington’s disease launch. So we do have investment associated with that. That is going to be leveraged in particular as you think about 2024 when the growth will more holistically kick in. So I don’t want to set up an exact algorithm for you in terms of how do you think about SG&A leverage, but our expectation is this year 300 basis points of leverage and we would continue to expect leverage as you look into even next year.

Brian Abrahams: It’s really helpful. Thank you.

Operator: We will take our next question from Jay Olson with Oppenheimer. Please go ahead.

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