On February 4, 2021 Neurocrine Biosciences, Inc. (Nasdaq: NBIX) reported its financial results for the fourth quarter and full-year ended December 31, 2020 and provided full-year 2021 financial expense guidance (Press release, Neurocrine Biosciences, FEB 4, 2021, View Source [SID1234574648]).
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"In 2020, we served more patients with tardive dyskinesia than ever before despite the pandemic weighing on the development of the overall market. We are pleased with the recently updated guidelines from the American Psychiatric Association that now recommend first-line treatment for tardive dyskinesia with a VMAT2 inhibitor, which we hope will benefit even more patients as the vast majority of patients living with tardive dyskinesia remain undiagnosed," said Kevin Gorman, Ph.D., Chief Executive Officer of Neurocrine Biosciences. "In 2021, we plan to initiate eight mid-to-late stage clinical studies and look forward to important data read-outs for NBI-1065844 in the negative symptoms of schizophrenia and valbenazine for the treatment of chorea associated with Huntington’s Disease."
Fourth Quarter and Full-Year Net Product Sales and Revenues Highlights:
INGREZZA net product sales for the fourth quarter and full-year 2020 were $240 million and $993 million, respectively, representing an increase of 1% and 32% versus respective 2019 comparable periods
INGREZZA inventory adjusted net product sales for the fourth quarter of 2020 were $258 million representing 4% sequential growth vs. the third quarter of 2020
INGREZZA end of fourth quarter 2020 days-on-hand channel inventory decreased by $18 million relative to the third quarter
INGREZZA new prescriptions increased in the fourth quarter of 2020 vs. the third quarter of 2020
Refill and persistency rates continued to be strong for existing INGREZZA patients
ONGENTYS launched in the United States in late September 2020 and net product sales for the fourth quarter of 2020 were approximately $1 million reflecting growing uptake throughout the quarter
Elagolix royalties received from AbbVie on combined fourth quarter 2020 net sales of ORILISSA (elagolix tablets) and ORIAHNNTM (elagolix, estradiol and norethindrone acetate capsules and elagolix capsules) totaled $6 million
Financial Highlights:
Fourth quarter 2020 GAAP net income and diluted earnings per share were approximately $348 million and $3.58, respectively, compared with approximately $34 million and $0.35, respectively, in the fourth quarter of 2019, primarily driven by a non-cash tax benefit of $296 million related to the release of substantially all of the Company’s valuation allowance against its deferred tax assets on December 31, 2020
Fourth quarter 2020 non-GAAP net income and diluted earnings per share were approximately $88 million and $0.91, respectively, compared with approximately $102 million and $1.05, respectively, in the fourth quarter of 2019 driven by:
Increased Research and Development (R&D) expense primarily due to increased investment across our expanded pipeline programs and higher headcount costs
Increased Selling, General and Administrative (SG&A) expense primarily due to increased investment in marketing initiatives and higher headcount costs
2020 full-year GAAP and non-GAAP net income of $407 million and $402 million, respectively, represents year-over-year growth of approximately 10 times and 41%, respectively
Total debt outstanding decreased by $136 million to $381 million after repurchase of approximately 26% of debt outstanding during the fourth quarter of 2020. The total aggregate repurchase price of $187 million was paid in cash and the transaction resulted in an $18 million loss recognized during the fourth quarter of 2020.
At December 31, 2020, the Company had cash, cash equivalents and debt securities available-for-sale of $1.0 billion
A reconciliation of GAAP to non-GAAP financial results can be found in Table 3 and Table 4 at the end of this earnings release.
Income Tax Benefit:
The Company’s fourth quarter financial results include the reversal of substantially all of the valuation allowance recorded against the deferred tax assets of the Company. This reversal resulted in the recognition of a non-cash income tax benefit in the fourth quarter 2020 of $296 million, or $3.05 earnings per diluted share. The Company has performed a continuing evaluation of its deferred tax asset valuation allowance on a quarterly basis. The Company has now concluded that, as of December 31, 2020, it is more likely than not that the Company will generate sufficient taxable income within the applicable net operating loss and R&D carryforward periods to realize substantially all of its deferred tax assets. This conclusion, and the resulting reversal of the deferred tax asset valuation allowance, is based upon consideration of a number of factors, including the Company’s strong financial performance over the past few years and its forecast of future profitability.
After recognizing the valuation allowance reversal, the Company’s net deferred tax assets totaled $319 million at December 31, 2020, net of a valuation allowance of $50 million. The ability to recognize the remaining deferred tax assets that continue to be subject to a valuation allowance will be evaluated on a quarterly basis to determine if there are significant events that would affect the Company’s ability to utilize these deferred tax assets. As a result of this reversal, the Company will begin recording federal and state tax expense on its earnings beginning in the first quarter of 2021. No federal cash tax is expected in 2021 based upon a net operating loss position of approximately $500 million entering 2021.
Recent Events
In October 2020, the U.S. Food and Drug Administration (FDA) requested additional non-clinical data to support the Investigational New Drug Application (IND) we submitted in August 2020 in support of a Phase II clinical study for NBI-921352 in patients with SCN8A Developmental Epileptic Encephalopathy (SCN8A-DEE). Based on feedback received in January 2021, we plan to initiate a Phase II clinical study in adolescent patients (aged 12 years and older) with SCN8A-DEE in the third quarter of 2021, and the study protocol will be amended to include younger pediatric patients (aged 2-11 years) with SCN8A-DEE as soon as the FDA has reviewed and approved additional non-clinical information. We are also advancing clinical plans to initiate a Phase II clinical study of NBI-921352 for the treatment of adult focal epilepsy in 2021. In addition, in October 2020, we announced the FDA granted us Rare Pediatric Disease Designation for NBI-921352 for the treatment of SCN8A-DEE.
In November 2020, the Company announced the initiation of a Phase II study of NBI-827104 (formerly ACT-709478) in Epileptic Encephalopathy with Continuous Spike and Wave during Sleep (CSWS), a rare pediatric epilepsy. NBI-827104 was licensed from Idorsia and is a potent, selective, orally active and brain penetrating T-type calcium channel blocker.
In February 2021, the Mitsubishi Tanabe Pharma Corporation (MTPC) reported positive top-line results from the J-KINECT Phase III Study, designed to evaluate the efficacy and safety of valbenazine in tardive dyskinesia. Detailed results from this trial will be presented at a future medical conference. With positive data in hand, a marketing authorization with the Ministry of Health and Welfare is planned for 2021 in Japan. In addition, MTPC submitted filings for marketing authorization in South Korea, Thailand, Singapore, Indonesia, and Malaysia in 2020.
In February 2021, the Company notified Voyager Therapeutics, Inc. (Voyager) of the Company’s termination of the NBIb-1817 (VY-AADC) development program in Parkinson’s disease (the Program). The Company will work to transfer the rights to the Program to Voyager by August 2, 2021.
GAAP and Non-GAAP expense guidance range reflects increased investment in:
R&D expense including meaningful investments in collaboration programs (specifically with Idorsia, Xenon and Takeda) and the planned initiation of eight mid-to-late-stage clinical studies
INGREZZA and ONGENTYS marketing costs
GAAP-only guidance includes approximately $125 million of share-based compensation. GAAP-only guidance does not include any potential milestones or in-process research and development costs associated with current collaborations or future business development activities.
2021 Expected Milestones and Key Activities
Program
Indication
2021 Milestones / Key Activities
Valbenazine
Chorea in Huntington’s Disease
Phase III Top-Line Data Expected in Q4 2021
Tardive Dyskinesia
Marketing Authorization with Ministry of Health and Welfare in Japan
Neurological Indication
Initiate Phase III Registrational Study
Psychiatric Indication
Initiate Registrational Study
Crinecerfont
Congenital Adrenal Hyperplasia (Adult)
Continue Phase III Registrational Study Enrollment
Congenital Adrenal Hyperplasia (Pediatric)
Initiate Phase III Registrational Study
NBI-1065844
Negative Symptoms of Schizophrenia
Phase II Top-Line Data Expected in Q1 2021
NBI-1065845
Treatment Resistant Depression
Initiate Phase II
NBI-1065846
Anhedonia in Depression
Initiate Phase II
NBI-827104
Rare Pediatric Epilepsy: CSWS
Continue Phase II Enrollment
Neurological Indication
Initiate Phase II
NBI-921352
Focal Onset Seizure in Adults
Initiate Phase II
Rare Pediatric Epilepsy: SCN8A-DEE
Initiate Phase II
Conference Call and Webcast Today at 4:30 PM Eastern Time
Neurocrine Biosciences will hold a live conference call and webcast today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants can access the live conference call by dialing 800-895-3361 (US) or 785-424-1062 (International) using the conference ID: NBIX. The webcast can also be accessed on Neurocrine Biosciences’ website under Investors at www.neurocrine.com. A replay of the webcast will be available on the website approximately one hour after the conclusion of the event and will be archived for approximately one month.