Eric Benevich: Yes, and just a quick comment on the sprinkle formulation – obviously it’s not an approved formulation, but we’re looking forward to, upon approval, rolling it out. We estimate that 5% to 10% of patients with either Huntington’s chorea or tardive dyskinesia experience difficulty in swallowing, so this may be a better alternative for them, and so we’re looking forward to introducing that product upon approval.
Operator: Thank you. Our next question comes from Laura Chico with Wedbush Securities. Please go ahead.
Laura Chico: Hey, good morning guys. Thanks for taking the question. Obviously a lot of discussion today on your internal pipeline activities, but wondering if you can discuss your appetite for external BD at this point, and what flexibility does the balance sheet now provide in terms of potential deal size? Thank you.
Kyle Gano: Hey, this is Kyle. Thanks for the question this morning. I think what you’ve seen here from Neurocrine over the past year was good progress on bringing programs from our internal drug discovery efforts into the clinic – we put five programs in last year. Our team, we work with great urgency here in business development. We don’t feel like we have the need to do something large at this particular time. I think what we would expect here over the near term, midterm is to continue to help our research team accelerate some of their efforts and bring their assets that they’re currently working into the pipeline, to help us transform that pipeline that we’ve been discussing at our R&D day into this next year. In terms of what we’re looking at beyond helping our research colleagues, we’re probably not going to spend a lot of time looking at things that are pre-proof of concept, so it’s earlier stage opportunities to bring in technologies for our research team, and then obviously anything that’s a de-risked, later stage clinical stage asset through commercial are things that would be of interest to us.
They are few and far between, as you know, and they are quite expensive as well, so we’d look at those but I think our mind right now is doing what we can to help build the pipeline organically.
Matt Abernethy: When you think about how we expect to drive shareholder value, you can see where our money’s going – to continue to drive growth in Ingrezza, getting ready to launch crinecerfont – I think that’s going to be a meaningful contributor to both help patients and then also to Neurocrine’s top line, and a lot of investment in our internal research programs. Between all the Phase I starts that we have this year, as well as what Jude highlighted at R&D day, we feel very confident about what we have going forward. We of course have financial flexibility with $1.7 billion in cash, and then also a growing EBITDA profile. We do have the financial flexibility, but right not we’re really prioritizing executing what we have, and we have a lot to look forward to.
Laura Chico: Thank you.
Operator: Thank you. Our next question comes from Sumant Kulkarni with Canaccord Genuity. Please go ahead.
Sumant Kulkarni: Morning, thanks for taking my question. On your efforts in major depressive disorder, do you think there is any medicine approaching that indication within episodic versus chronic treatment, and do you expect either 770 or 845 to have an episodic component or a more durable efficacy aspect to [indiscernible]?
Eiry Roberts: I think the goal with our current efforts in both 985 and also 770 is to be able to try to replicate some of the findings that have been seen with ketamine, but to do it in a way that is–that expands on the efficacy that obviously you’ve been seeing in that area. Episodic dosing is the part of the consideration there, and we haven’t talked very much about our dosing regimen for our current programs. We have said for 770, this is an oral approach to NR2B NAM – that is the first, to our knowledge, oral approach to this target, and obviously as we endeavor to generate the data from those Phase II studies, we’ll be able to talk more about the plans moving forward.
Sumant Kulkarni: Thank you.
Operator: Thank you. Our next question comes from Evan Siegerman with BMO Capital Markets. Please go ahead.
Unknown Analyst: Hi guys, [indiscernible] on for Evan. Thanks for taking our question. Coming back to the muscarinics, you’re using an M4 agonism in the Phase II for schizophrenia, but the antagonism for the Phase I in treatment of movement disorders. Maybe can you walk us through the mechanism of action differences and what gives you confidence for those indications, and expectations for how antagonism can be differentiated for movement disorders. Thank you.
Eiry Roberts: The approaches here are very different. M4 agonism, we are focused on looking at that in the context of treating neuropsychiatric disorders, particularly schizophrenia as the starting indication, and it’s very clear, I think now from data generated in this field, that the M4 system plays a role in the psychosis within schizophrenia. For the M4 antagonist, we’re actually targeting movement disorders, and so in terms of the M4 systems that are associated with abnormal movement within the brain, in diseases such as Parkinson’s tremors, dystonia, that is disrupted, and antagonizing this system, we believe has the potential to add value and to be able to treat those disorders, so it is very different in terms of the approach that we’re taking there.
Operator: Thank you. We’ll take our next question from David Hoang at Citigroup. Please go ahead.
David Hoang: Hi, thanks so much for taking the question. Maybe just to circle back on Ingrezza for a moment, could you talk a little bit about the higher end of the guidance range in 2024, what would be the factors that would play into that, and maybe along those lines, in terms of accessing the remaining two-thirds of undiagnosed TD patients, do you perceive any barriers to reaching that group?
Eric Benevich: Yes, as we mentioned earlier in terms of the 2024 guidance range, it’s really driven by the success that we’ll have early in the year in driving new patient starts and continuing to retain existing patients. As we get to the later part of the year or middle of the year, as Matt said, we’ll re-assess and tighten up what our expected guidance is. In terms of being able to continue to develop the market, continue to drive recognition, diagnosis and treatment, the fundamentals remain the same. When we started with the launch of Ingrezza over six years ago, only a very small fraction of the TD patients had actually been diagnosed, and none had been treated effectively, so we’ve made great progress. Now, we believe that about a third of all TD patients have been diagnosed and yet only about half of the time are they actually offered treatment with VMAT2 inhibitor, so there is still a lot of room in terms of organic growth and a lot of opportunity to make a big difference in patients’ lives.
The fundamentals of what we do, both in terms of educating healthcare providers across psychiatry, neurology and long term care, as well as continuing to invest in long term–or excuse me, in DTC, to reach and educate those that are suffering from TD, and encouraging them to have that conversation with their doctor. These are the things that we’re doing. We’re very focused on education, as Matt said, and we’re continuing to drive leverage within our existing TD and HD franchises.
Operator: Thank you. We’ll take our next question from Mohit Bansal with Wells Fargo. Please go ahead.
Mohit Bansal: Thank you very much for the question. Maybe one question on the expense side. It seems like there is some level of margin improvement here on the SG&A side, but you are committing to spending or investing in R&D. As you go forward–I mean, it’s still close to 40% SG&A as a percent of sales. As you move forward, how should we think about the leverage given that for CAH, you still may have to invest money in terms of that launch preparation? Thank you.
Matt Abernethy: Yes, I think the SG&A leverage, when you take a step back and think about where we were in 2022, we were at 51%. I think this year in 2024, if you exclude crinecerfont, we’d be down to 41%, so I think–you know, 1,000 basis points of leverage over two years is quite substantive, and proud of what the team has been able to accomplish with the investments that we’ve made. In terms of leverage going forward, the investment behind crinecerfont is not going to be anything near the investment that we have behind Ingrezza. I’d expect it to be very accretive early in the launch, and we’ll of course give updated guidance next year in terms of expense and revenue expectations. But I think the addition of crinecerfont is only helpful to our SG&A leverage ambitions over the years ahead.
Mohit Bansal: Excellent, thank you.
Operator: Your next question comes from Uy Ear from Mizuho. Please go ahead.
Uy Ear: Hi guys, thanks for taking my question. Matt, I think you said the 4Q Ingrezza number, the growth was offset by gross-to-net. I was wondering if you can help us understand the dynamics of gross-to-net in the quarter, and as well as the factors that will improve gross-to-net in 2024. Thanks.
