SEC EDGAR · 10-Q

10-Q – 2026-07-31 – nbix-20260630.htm

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 63
Revenues: | Net product sales $ 954.3 $ 682.0 $ 1,765.3 $ 1,245.7 | Collaboration revenues 4.7 5.5 8.2 14.4
Purchases of available-for-sale debt securities ( 856.9 ) ( 588.3 ) | Sales and maturities of available-for-sale debt securities 2,527.5 596.7 | Acquisition of business, net of cash acquired ( 2,358.5 ) —
To minimize the risks related to accounts receivable, which are typically unsecured, we monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles. | The following table presents the percent of total gross product sales for each of our customers who individually accounted for 10% or more of total gross product sales.
2025 | Sales rebates and reserves $ 292.1 $ 226.0 | Current income taxes payable
Direclidine (NBI-1117568) is a potential first-in-class, orally active, highly selective investigational M4 agonist in development as a potential treatment for schizophrenia. In connection with the initiation of a Phase 3 clinical study for direclidine in schizophrenia in May 2025, we expensed a milestone payment of $ 15.0 million as R&D in the second quarter of 2025. | Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.48 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product. | Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which the royalty term for such licensed product has expired in such country. On a licensed product-by-licensed product and country-by-country basis, royalty payments would commence on the first commercial sale of a licensed product and terminate on the later of (i) the expiration of the last patent covering such licensed product in such country, (ii) a
Takeda Pharmaceutical Company Limited (Takeda) | In 2020, we entered into an exclusive license agreement with Takeda (the 2020 Takeda Agreement), pursuant to which we acquired the exclusive rights to develop and commercialize certain early to mid-stage psychiatry compounds, including luvadaxistat, NBI-1070770, osavampator (NBI-1065845), NBI-1065846, and three non-clinical stage compounds. Pursuant to the 2020 Takeda Agreement, osavampator was designated as a profit-share product, meaning we and Takeda would equally share in the operating profi | In October 2024, we provided Takeda with written notice of termination of the license under the 2020 Takeda Agreement with respect to certain D-amino acid oxidase (DAAO) inhibitors, including the license to develop and commercialize luvadaxistat and NBI-1065846, which became effective in April 2025.
In January 2025, we and Takeda amended and restated the exclusive license agreement (the Restated Takeda Agreement) to, among other things, reflect the conversion from sharing operating profits and losses with respect to the development and commercialization of osavampator to a royalty-bearing license, the return of rights to osavampator in Japan to Takeda, and our previous termination of the license to develop and commercialize certain DAAO inhibitors under the 2020 Takeda Agreement, including | Under the Restated Takeda Agreement, we retain exclusive rights to develop and commercialize osavampator for all indications in all territories worldwide except Japan, where Takeda reacquired exclusive development and commercialization rights. In addition, each party is responsible for development costs for osavampator in its respective territory, and each party is eligible to receive royalty payments based on the other party’s net sales of osavampator in the other party’s territory. Pursuant to | Osavampator is a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM) in development for patients with inadequate response to treatment of major depressive disorder (MDD). In connection with the initiation of a Phase 3 clinical study for osavampator in MDD in January 2025, we expensed a milestone payment of $ 37.5 million as R&D in the first quarter of 2025.

Rörelseresultat

Total operating expenses 807.5 541.9 1,428.6 1,090.9 | Operating income 151.5 145.6 344.9 169.2 | Other income (expense):
Operating expenses 807.5 541.9 1,428.6 1,090.9 | Operating income 151.5 145.6 344.9 169.2 | Other income 10.7 13.9 64.1 5.0

Periodens resultat

Provision for income taxes 17.8 52.0 66.7 58.8 | Net income $ 144.4 $ 107.5 $ 342.3 $ 115.4 | Foreign currency translation adjustments, net of tax 0.6 0.8 0.6 2.3
100.6 $ 0.1 $ 2,817.3 $ 0.4 $ 589.6 $ 3,407.4 | Net income — — — — 144.4 144.4 | Other comprehensive income, net of tax
99.0 $ 0.1 $ 2,531.9 $ 9.0 $ ( 5.3 ) $ 2,535.7 | Net income — — — — 107.5 107.5 | Other comprehensive income, net of tax
100.1 $ 0.1 $ 2,792.2 $ 13.1 $ 447.7 $ 3,253.1 | Net income — — — — 342.3 342.3 | Other comprehensive loss, net of tax
99.4 $ 0.1 $ 2,554.6 $ 5.8 $ 29.2 $ 2,589.7 | Net income — — — — 115.4 115.4 | Other comprehensive income, net of tax
Cash flows from operating activities: | Net income | $ 342.3 $ 115.4
$ 342.3 $ 115.4 | Adjustments to reconcile net income to net cash from operating activities: | Stock-based compensation 122.2 105.6
Revenues and Net Income of Soleno | The results of operations of Soleno have been included in the condensed consolidated statements of income and comprehensive income beginning on the acquisition date. From the acquisition date through June 30, 2026, total net revenues and net loss attributable to Soleno were $ 54.4 million and $ 52.2 million, respectively, inclusive of $ 104.7 million in acquisition-related expenses, amortization of the VYKAT XR fair-value step up, and amortization of the acquired intangible asset related to the

Resultat per aktie

Comprehensive income $ 149.1 $ 111.0 $ 334.3 $ 122.1 | Earnings per share: | Basic $ 1.43 $ 1.09 $ 3.40 $ 1.16
9. Earnings per Share | Earnings per share were calculated as follows:
Diluted 104.2 101.0 103.8 101.8 | Earnings per share: | Basic $ 1.43 $ 1.09 $ 3.40 $ 1.16
Earnings per share, diluted | $ 1.39 $ 1.06 $ 3.30 $ 1.13

Kassaflöde

Acquired Intangible Assets | The estimated fair value of the acquired intangible assets relates to the developed product rights for VYKAT XR and was determined using a probability adjusted discounted cash flow analysis approach using a discount rate of 24.0 %. The developed product rights are being amortized over a useful life of 16 years using the straight line method. | Deferred Tax Assets and Liabilities
The following table presents supplemental cash flow information.
• hire additional clinical, scientific, sales, marketing and administrative personnel. | We expect to increase our expenses and other investments in the coming years as we fund our operations and capital expenditures. Thus, our future operating results and profitability may fluctuate from period to period due to the factors described above, and we will need to generate significant revenues to achieve and maintain profitability and positive cash flow on a sustained basis. We may not be able to generate these revenues, and we may never achieve profitability on a sustained basis in the | The independent clinical investigators and contract research organizations that we rely upon to conduct our clinical trials may not be diligent, careful or timely, or may make mistakes in the conduct of our trials.

Likvida medel

Current assets: | Cash and cash equivalents $ 332.4 $ 713.0 | Available-for-sale debt securities 57.4 767.4
Cash flows from financing activities ( 22.7 ) ( 121.2 ) | Effect of exchange rate changes on cash and cash equivalents — 0.2 | Change in cash, cash equivalents and restricted cash ( 382.1 ) 31.0
2026 | Cash and cash equivalents $ 471.3 | Accounts receivable 34.7
(in millions) Level 1 Level 2 Level 1 Level 2 | Cash and cash equivalents $ 332.4 $ 332.4 $ — $ 713.0 $ 713.0 $ — | Available-for-sale debt securities 149.3 — 149.3 1,830.4 — 1,830.4
Concentration of Credit Risk | Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments in available-for-sale debt securities, and accounts receivable. | To minimize the risks related to cash and cash equivalents and investments in available-for-sale debt securities, we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards, and limits the credit exposure of any single issuer.
Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments in available-for-sale debt securities, and accounts receivable. | To minimize the risks related to cash and cash equivalents and investments in available-for-sale debt securities, we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards, and limits the credit exposure of any single issuer. | As of June 30, 2026 and December 31, 2025, we held available-for-sale debt securities with a total fair value of $ 139.6 million and $ 335.1 million, respectively, that were in unrealized loss positions totaling $ 0.7 million and $ 0.6 million, respectively. Available-for-sale debt securities that had been in unrealized loss positions for longer than twelve months were not significant as of June 30, 2026 or December 31, 2025. Unrealized losses on available-for-sale debt securities are primarily
2025 | Cash and cash equivalents $ 332.4 $ 264.0 | Restricted cash included in other noncurrent assets
As of December 31, 2025, the disposal group classified as held for sale excluded certain assets and obligations that were not transferred to the buyer upon closing. Specifically, cash and cash equivalents of the disposal group were not expected to be conveyed to the buyer. Accordingly, such cash and the related liabilities expected to be settled prior to closing were excluded from the assets and liabilities presented as held for sale as of December 31, 2025. | On January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $ 63.2 million in cash. As a result of the transaction, during the first quarter of 2026 we recognized a pre-tax gain on sale of $ 28.6 million in "Gain on sale of business, net of transaction costs" within income from continuing operations. The sale did not qualify for discontinued operations presentation. Following the closing of the transaction, our operating results no longer include the disposed

Nettoskuld

$ 342.3 $ 115.4 | Adjustments to reconcile net income to net cash from operating activities: | Stock-based compensation 122.2 105.6

Eget kapital

Condensed Consolidated Statements of Stockholders' Equity | 5
Liabilities and Stockholders' Equity | Current liabilities:
Stockholders’ equity: | Preferred stock, $ 0.001 par value; 5.0 shares authorized; no shares issued and outstanding
724.0 447.7 | Total stockholders’ equity 3,693.6 3,253.1 | Total liabilities and stockholders’ equity $ 5,359.1 $ 4,631.5
Total stockholders’ equity 3,693.6 3,253.1 | Total liabilities and stockholders’ equity $ 5,359.1 $ 4,631.5
NEUROCRINE BIOSCIENCES, INC. | CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY | (unaudited)
8. Stockholders’ Equity | Share Repurchases

Antal aktier

Diluted $ 1.39 $ 1.06 $ 3.30 $ 1.13 | Weighted-average shares outstanding: | Basic 101.0 99.0 100.8 99.3
2026 2025 2026 2025 | Number of shares | 0.1 0.2 0.5 1.8
Net income - basic and diluted $ 144.4 $ 107.5 $ 342.3 $ 115.4 | Weighted-average common shares outstanding: | Basic 101.0 99.0 100.8 99.3
$ 1.39 $ 1.06 $ 3.30 $ 1.13 | Weighted average common shares outstanding, diluted | 104.2 101.0 103.8 101.8
Period Total Number of Shares | Repurchased Average Price
** Not intended to satisfy the affirmative defense of Rule 10b5-1(c) | *** Represents the maximum number of shares that may be sold pursuant to the 10b5-1 arrangement. The number of shares sold is dependent on the satisfaction of certain conditions as set forth in the written plan and the satisfaction of applicable vesting conditions of equity awards.

Antal anställda

(ii) the incremental cost of revenues related to the fair value adjustments associated with acquisition date inventory; | (iii) t he reallocation of acquisition-related compensation costs, including stock-based compensation expense associated with accelerated Soleno equity awards attributable to post-combination service and transaction bonuses payable to certain Soleno employees, from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025; | (iv) the reallocation of non-recurring acquisition-related transaction costs incurred by Neurocrine and Soleno from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025;
Refer to Note 10 to the condensed consolidated financial statements for additional information regarding our significant collaboration and license agreements. | Payroll and Benefits. Payroll and benefits consist of costs incurred for salaries and wages, payroll taxes, benefits, and stock-based compensation associated with employees involved in research and development activities. Stock-based compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates stock-based grants are issued. | Compared with the comparable periods last year, the increase primarily reflected higher headcount to support our expanded discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, expanding our capabilities in biologics (including peptides and antibodies) and gene therapy, and $23.1 million of acquisition-related expenses, including $18.1 million of stock-based compensation expense related to Sole
• We are transforming our research and development strategies to include the development of biologics, which requires substantial investment, including in personnel and facilities. We may encounter difficulties as we expand and may fail to successfully develop or commercialize our biologic product candidates, which could adversely affect our results of operations. | • If we are unable to retain and recruit qualified scientists and other employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of our commercial products or any product candidate approved by the FDA in the future. | • Use of our approved products or those of our collaborators could be associated with side effects or adverse events.
In the second quarter of 2026, we completed the acquisition of Soleno. Our ability to realize the anticipated benefits of the acquisition depends on our ability to integrate Soleno’s business, personnel, operations, systems, controls, commercial capabilities, supply, distribution and patient-support arrangements and regulatory activities into our existing business in a timely and efficient manner. Integration activities may require significant management attention, time and resources and may dis | We may encounter difficulties integrating Soleno, retaining key employees, maintaining relationships with healthcare providers, patients, payors, suppliers, specialty pharmacies, distributors and other business partners, or maintaining the commercialization and regulatory strategy for VYKAT XR. | We also have assumed, and may become responsible for, liabilities and risks relating to Soleno that may not have been identified or fully quantified in due diligence, including product liability, regulatory, commercial, employment, contract, tax, intellectual property, securities and other claims or proceedings. For example, on March 6, 2026, a purported stockholder of Soleno filed a putative federal securities class action against Soleno and certain members of Soleno’s management alleging viola
* We have increased the size of our organization and will need to continue to increase the size of our organization. Such increases may not be sufficient and we may encounter difficulties with managing our growth, which could adversely affect our results of operations. | Since 2017, the number of our full-time employees has grown from approximately 200 to over 2,500. Although we have substantially increased the size of our organization, we may need to add additional qualified personnel and resources, especially with the recent increase in the size of our sales force. Our current facilities, infrastructure and systems may be inadequate to support our development and commercialization efforts and expected growth. Future growth will impose significant added respons | Our future financial performance and our ability to commercialize our commercial products or any of our product candidates that receive regulatory approval in the future, will partially depend on our ability to manage any future growth effectively. In particular, as we commercialize our commercial products we will need to support the training and ongoing activities of our sales force and will likely need to continue to expand the size of our employee base for managerial, operational, financial a
• integrate additional management, administrative and manufacturing personnel; | • manage increased operational complexity from employees and functions operating across multiple office locations and facilities; | • further develop our marketing and sales organization;
• further develop our marketing and sales organization; | • compensate our employees on adequate terms in an increasingly competitive, inflationary market; | • attract and retain personnel; and
We are transforming our research and development strategies to include the development of biologics, including peptides, proteins, antibodies, conjugates, gene therapies and nucleic acid-based therapeutics. As a company, we do not have experience successfully developing and commercializing biologics and our current infrastructure may be inadequate to support the expected growth and transformation of processes, personnel, and technologies required for these new programs. We have hired employees w | * If we are unable to retain and recruit qualified scientists and other employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of our commercial products or any product candidate approved by the FDA in the future. | We are highly dependent on the principal members of our management, commercial, and scientific staff. The loss of any of these people could impede the achievement of our objectives, including the successful commercialization of our commercial products or the commercialization of any product candidate approved by the FDA in the future. Furthermore, recruiting and retaining qualified scientific personnel to perform research and development work in the future, along with personnel with experience m

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to           
Commission file number: 0-22705

NEUROCRINE BIOSCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
33-0525145
(IRS Employer Identification No.)
6027 Edgewood Bend Court
San Diego , CA 92130
(858 ) 617-7600
(Address, including zip code, and telephone number of Registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Trading Symbol Name of Each Exchange on Which Registered
Common Stock, $0.001 par value NBIX Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   Yes ☒  No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes ☒   No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☒
The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, was 101,649,181 as of July 22, 2026.

NEUROCRINE BIOSCIENCES, INC.
TABLE OF CONTENTS

  PAGE

Part I. Financial Information
3

 
Item 1. Financial Statements
3

   
Condensed Consolidated Balance Sheets
3

   
Condensed Consolidated Statements of Income and Comprehensive Income
4

Condensed Consolidated Statements of Stockholders' Equity
5

Condensed Consolidated Statements of Cash Flows
6

Notes to the Condensed Consolidated Financial Statements
7

   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
21

   
Item 3. Quantitative and Qualitative Disclosures About Market Risk
29

   
Item 4. Controls and Procedures
30

   
Part II. Other Information
31

Item 1. Legal Proceedings
31

   
Item 1A. Risk Factors
31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
63

   
Item 5. Other Information
63

Item 6. Exhibits
65

   
Signatures
66

2

Part I. Financial Information

Item 1. Financial Statements

NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

(in millions, except per share data)
June 30,
2026 December 31,
2025
Assets
Current assets:
Cash and cash equivalents $ 332.4   $ 713.0  
Available-for-sale debt securities 57.4   767.4  
Accounts receivable
887.0   686.8  
Inventory
104.2   69.0  
Prepaid expenses
217.1   170.7  
Other current assets 39.4   115.8  
Total current assets 1,637.5   2,522.7  
Noncurrent inventory 149.1   —  
Noncurrent available-for-sale debt securities 91.9   1,063.0  
Right-of-use assets 448.0   455.4  
Equity investments 147.3   120.8  
Property and equipment, net 90.5   89.8  
Intangible assets, net 2,226.0   4.7  
Goodwill 500.6   6.1  
Deferred tax assets 8.9   320.3  
Other noncurrent assets 59.3   48.7  
Total assets $ 5,359.1   $ 4,631.5  

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 808.3   $ 674.3  

Other current liabilities 66.2   69.1  
Total current liabilities 874.5   743.4  

Deferred tax liabilities 91.5   —  
Noncurrent operating lease liabilities 401.8   415.3  
Other noncurrent liabilities 297.7   219.7  
Total liabilities 1,665.5   1,378.4  

Stockholders’ equity:
Preferred stock, $ 0.001 par value; 5.0 shares authorized; no shares issued and outstanding
—   —  
Common stock, $ 0.001 par value; 220.0 shares authorized; 101.6 and 100.1 shares issued and outstanding, respectively
0.1   0.1  
Additional paid-in capital 2,964.4   2,792.2  
Accumulated other comprehensive income 5.1   13.1  
Retained earnings
724.0   447.7  
Total stockholders’ equity 3,693.6   3,253.1  
Total liabilities and stockholders’ equity $ 5,359.1   $ 4,631.5  

See accompanying notes to the condensed consolidated financial statements.

3

NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions, except per share data) 2026 2025 2026 2025
Revenues:
Net product sales $ 954.3   $ 682.0   $ 1,765.3   $ 1,245.7  
Collaboration revenues 4.7   5.5   8.2   14.4  
Total revenues 959.0   687.5   1,773.5   1,260.1  
Operating expenses:
Cost of revenues, excluding amortization of acquired intangible assets 23.2   10.3   36.9   18.5  
Research and development 326.7   244.3   622.9   507.5  
Acquired in-process research and development 1.5   —   22.7   0.1  
Selling, general, and administrative 439.7   286.3   758.2   562.8  
Amortization of acquired intangible assets 16.4   1.0   16.5   2.0  
Gain on sale of business, net of transaction costs —   —   ( 28.6 ) —  
Total operating expenses 807.5   541.9   1,428.6   1,090.9  
Operating income 151.5   145.6   344.9   169.2  
Other income (expense):
Interest expense ( 2.9 ) —   ( 2.9 ) —  
Unrealized gain (loss) on equity investments 1.2   ( 6.7 ) 26.5   ( 37.3 )
Investment income and other, net 12.4   20.6   40.5   42.3  
Total other income, net 10.7   13.9   64.1   5.0  
Income before provision for income taxes
162.2   159.5   409.0   174.2  
Provision for income taxes 17.8   52.0   66.7   58.8  
Net income $ 144.4   $ 107.5   $ 342.3   $ 115.4  
Foreign currency translation adjustments, net of tax 0.6   0.8   0.6   2.3  
Unrealized gain (loss) on available-for-sale debt securities, net of tax 4.1   2.7   ( 8.6 ) 4.4  
Comprehensive income $ 149.1   $ 111.0   $ 334.3   $ 122.1  
Earnings per share:
Basic $ 1.43   $ 1.09   $ 3.40   $ 1.16  
Diluted $ 1.39   $ 1.06   $ 3.30   $ 1.13  
Weighted-average shares outstanding:
Basic 101.0 99.0 100.8 99.3
Diluted 104.2 101.0 103.8 101.8

See accompanying notes to the condensed consolidated financial statements.

4

NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)

Accumulated Other Comprehensive Income
Retained Earnings (Accumulated Deficit)

Common Stock Additional Paid-In Capital
(in millions) Shares $ Total
Balance at March 31, 2026
100.6   $ 0.1   $ 2,817.3   $ 0.4   $ 589.6   $ 3,407.4  
Net income —  —  —  —  144.4   144.4  
Other comprehensive income, net of tax
—  —  —  4.7   —  4.7  
Stock-based compensation expense —  —  65.0   —  —  65.0  
Issuances of common stock under benefit plans, net of tax 1.1   —  82.1   —  —  82.1  
Repurchases of common stock
( 0.1 ) —  —  —  ( 10.0 ) ( 10.0 )
Balance at June 30, 2026
101.6   $ 0.1   $ 2,964.4   $ 5.1   $ 724.0   $ 3,693.6  

Balance at March 31, 2025
99.0   $ 0.1   $ 2,531.9   $ 9.0   $ ( 5.3 ) $ 2,535.7  
Net income —  —  —  —  107.5   107.5  
Other comprehensive income, net of tax
—  —  —  3.5   —  3.5  
Stock-based compensation expense —  —  52.8   —  —  52.8  
Issuances of common stock under benefit plans 0.2   —  12.5   —  —  12.5  
Repurchases of common stock
( 0.2 ) —  —  —  ( 17.7 ) ( 17.7 )
Balance at June 30, 2025
99.0   $ 0.1   $ 2,597.2   $ 12.5   $ 84.5   $ 2,694.3  

Balance at December 31, 2025
100.1   $ 0.1   $ 2,792.2   $ 13.1   $ 447.7   $ 3,253.1  
Net income —  —  —  —  342.3   342.3  
Other comprehensive loss, net of tax
—  —  —  ( 8.0 ) —  ( 8.0 )
Stock-based compensation expense —  —  122.2   —  —  122.2  
Issuances of common stock under benefit plans, net of tax 2.0   —  50.0   —  —  50.0  
Repurchases of common stock
( 0.5 ) —  —  —  ( 66.0 ) ( 66.0 )
Balance at June 30, 2026
101.6   $ 0.1   $ 2,964.4   $ 5.1   $ 724.0   $ 3,693.6  

Balance at December 31, 2024
99.4   $ 0.1   $ 2,554.6   $ 5.8   $ 29.2   $ 2,589.7  
Net income —  —  —  —  115.4   115.4  
Other comprehensive income, net of tax
—  —  —  6.7   —  6.7  
Stock-based compensation expense —  —  105.6   —  —  105.6  
Issuances of common stock under benefit plans 1.4   —  44.6   —  —  44.6  
Repurchases of common stock
( 1.8 ) —  ( 107.6 ) —  ( 60.1 ) ( 167.7 )
Balance at June 30, 2025
99.0   $ 0.1   $ 2,597.2   $ 12.5   $ 84.5   $ 2,694.3  

See accompanying notes to the condensed consolidated financial statements.

5

NEUROCRINE BIOSCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six Months Ended
June 30,
(in millions) 2026 2025
Cash flows from operating activities:
Net income
$ 342.3   $ 115.4  
Adjustments to reconcile net income to net cash from operating activities:
Stock-based compensation 122.2   105.6  
Depreciation 15.6   12.9  
Amortization of inventory fair-value step-up 3.0   —  
Accretion of discount on available-for-sale debt securities, net ( 1.6 ) ( 8.0 )
Realized loss on sale of available-for-sale debt securities 5.2   —  
Amortization of acquired intangible assets 16.5   2.0  
Changes in fair values of equity investments ( 26.5 ) 37.3  
Deferred income taxes ( 86.4 ) ( 51.1 )
Non-cash lease expense 3.6   14.3  
Gain on sale of business, net of transaction costs ( 28.6 ) —  
Other —   1.2  
Change in operating assets and liabilities:
Accounts receivable ( 165.7 ) ( 116.6 )
Inventory ( 2.2 ) 0.4  
Accounts payable and accrued liabilities ( 22.8 ) 12.1  
Income tax assets and liabilities 60.2   15.8  
Other assets and liabilities, net 47.4   25.5  
Cash flows from operating activities 282.2   166.8  

Cash flows from investing activities:
Purchases of available-for-sale debt securities ( 856.9 ) ( 588.3 )
Sales and maturities of available-for-sale debt securities 2,527.5   596.7  
Acquisition of business, net of cash acquired ( 2,358.5 ) —  
Proceeds from sale of business 63.2   —  
Capital expenditures ( 16.9 ) ( 23.2 )
Cash flows from investing activities ( 641.6 ) ( 14.8 )

Cash flows from financing activities:
Proceeds from borrowings under revolving credit facility 600.0   —  
Repayments of borrowings under revolving credit facility ( 600.0 ) —  
Payment of debt issuance costs ( 6.7 ) —  
Issuances of common stock under benefit plans 108.4   46.5  
Taxes paid related to net share settlement of equity awards
( 58.4 ) —  
Repurchases of common stock
( 66.0 ) ( 167.7 )
Cash flows from financing activities ( 22.7 ) ( 121.2 )
Effect of exchange rate changes on cash and cash equivalents —   0.2  
Change in cash, cash equivalents and restricted cash ( 382.1 ) 31.0  
Cash, cash equivalents and restricted cash at beginning of period 721.0   241.0  
Cash, cash equivalents and restricted cash at end of period $ 338.9   $ 272.0  

See accompanying notes to the condensed consolidated financial statements.

6

NEUROCRINE BIOSCIENCES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization and Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions of the Securities and Exchange Commission (SEC) on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of our financial position and of the results of operations and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements include the accounts of Neurocrine Biosciences and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to previously reported amounts to conform to the current period presentation.
These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K (the 2025 Form 10-K) filed with the SEC. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or the full year. The condensed consolidated balance sheet as of December 31, 2025, has been derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.
There were no significant changes to our significant accounting policies as disclosed in the 2025 Form 10-K.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to disclose specified information about certain costs and expenses on an interim and annual basis. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact that adoption of ASU 2024-03 will have on our financial statement disclosures.

2. Acquisition of Soleno Therapeutics, Inc.
On May 18, 2026 (the acquisition date), we completed our acquisition of Soleno Therapeutics, Inc. (Soleno) through a cash tender offer followed by a merger. Pursuant to the merger agreement, we paid $ 53.00 per share in cash for each outstanding share of Soleno common stock. Following the merger, Soleno became a wholly owned subsidiary of the Company.
Soleno is a commercial-stage rare disease company that markets VYKAT ® (diazoxide choline) XR for the treatment of hyperphagia in patients with Prader-Willi syndrome. The acquisition expands the Company’s rare disease portfolio and commercial product base.
We accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were recognized at their estimated fair values as of the acquisition date.
In connection with the merger, the vesting of certain outstanding Soleno equity awards was accelerated as of the acquisition date and each vested Soleno equity award became entitled to receive cash consideration. The purchase price for the acquisition included $ 67.4  million related to the settlement of outstanding Soleno equity awards attributable to pre-combination service. In addition, we recognized stock-based compensation expense of $ 60.1  million during the second quarter and first six months of 2026 related to the acceleration of outstanding Soleno equity awards attributable to post-combination service that were settled in cash.
The purchase price allocation related to this acquisition is preliminary and subject to change during the measurement period, which will not exceed one year from the acquisition date. We continue to evaluate, among other items, deferred tax assets and liabilities and uncertain tax positions. Measurement-period adjustments will be recognized with a corresponding adjustment to goodwill in the reporting period in which the adjustment amounts are determined and will be applied as if the accounting had been completed as of the acquisition date.

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The following table summarizes the preliminary consideration transferred:

(in millions) May 18,
2026
Cash paid to Soleno stockholders $ 2,762.5  
Cash paid to settle Soleno equity awards attributable to pre-combination service 67.4  
Total preliminary consideration transferred $ 2,829.9  

The following table summarizes the preliminary allocation of consideration transferred to the assets acquired and liabilities assumed as of the acquisition date:

(in millions) May 18,
2026
Cash and cash equivalents $ 471.3  
Accounts receivable 34.7  
Inventory 185.3  
Prepaid expenses and other current assets 9.0  
Intangible assets 2,237.8  
Right-of-use assets 4.6  
Accounts payable and accrued liabilities ( 113.9 )
Operating lease liabilities ( 4.6 )
Deferred tax liabilities ( 489.4 )
Other assets and liabilities, net 0.5  
Total identifiable net assets acquired 2,335.3  
Goodwill 494.6  
Total assets acquired and liabilities assumed $ 2,829.9  

Acquired Inventory
The estimated fair value of the acquired inventory was determined based on the estimated selling price of the related finished product, reduced, as applicable, for costs to complete manufacturing, costs of disposal and market-participant profit allowances for the remaining manufacturing and selling efforts. The valuation resulted in fair-value step-ups for VYKAT XR work-in-process and finished goods inventory of $ 41.5  million and $ 126.7  million, respectively. The fair-value step-ups will be recognized in cost of revenues as the related acquired inventory is sold, which is expected to occur over approximately four to six years following the acquisition date.
Acquired Intangible Assets
The estimated fair value of the acquired intangible assets relates to the developed product rights for VYKAT XR and was determined using a probability adjusted discounted cash flow analysis approach using a discount rate of 24.0 %. The developed product rights are being amortized over a useful life of 16 years using the straight line method.
Deferred Tax Assets and Liabilities
The deferred tax liability relates to the tax effect of the difference between the fair value and tax basis of acquired intangible assets and inventory.
Goodwill
Goodwill was recognized as the excess of consideration transferred over the preliminary fair values of identifiable net assets acquired. A significant portion of the goodwill recognized resulted from the recognition of deferred tax liabilities associated with the fair value adjustments recorded for acquired assets. The remaining goodwill is primarily attributable to expected synergies from combining operations, the assembled workforce, expanded commercial capabilities, and future economic benefits that do not qualify for separate recognition. Goodwill is not deductible for income tax purposes.
Transaction Costs
Transaction costs, which were comprised primarily of financial advisory and legal fees, totaled $ 33.1 million during the second quarter and first six months of 2026 and were included in selling, general, and administrative expenses. No transaction costs were incurred during the second quarter and first six months of 2025.

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Revenues and Net Income of Soleno
The results of operations of Soleno have been included in the condensed consolidated statements of income and comprehensive income beginning on the acquisition date. From the acquisition date through June 30, 2026, total net revenues and net loss attributable to Soleno were $ 54.4 million and $ 52.2 million, respectively, inclusive of $ 104.7  million in acquisition-related expenses, amortization of the VYKAT XR fair-value step up, and amortization of the acquired intangible asset related to the developed product rights for VYKAT XR.
Pro Forma Financial Information (unaudited)
The following unaudited pro forma financial information presents the combined results of the Company and Soleno for the periods presented as if the acquisition had occurred on January 1, 2025:

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions) 2026 2025 2026 2025
Revenues $ 998.4   $ 720.2   $ 1,907.5   $ 1,292.8  
Net income (loss) $ 203.4   $ 67.7   $ 395.0   $ ( 57.9 )

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting and was based on the historical financial information of the Company and Soleno. In order to reflect the occurrence of the acquisition as if it had occurred on January 1, 2025 as required, the unaudited pro forma financial information includes adjustments to reflect:
(i) the incremental amortization expense to be incurred based on the fair values of the VYKAT XR identifiable intangible asset acquired;
(ii) the incremental cost of revenues related to the fair value adjustments associated with acquisition date inventory;
(iii) t he reallocation of acquisition-related compensation costs, including stock-based compensation expense associated with accelerated Soleno equity awards attributable to post-combination service and transaction bonuses payable to certain Soleno employees, from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025;
(iv) the reallocation of non-recurring acquisition-related transaction costs incurred by Neurocrine and Soleno from the historical three and six month periods ended June 30, 2026, in which such costs were recognized, to the periods in which they would have been recognized assuming the acquisition had occurred on January 1, 2025;
(v) the reversal of Soleno's direct acquisition-related costs; and
(vi) the related income tax effects of the aforementioned adjustments to the provision for Neurocrine.
The unaudited pro forma financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2025. In addition, the unaudited pro forma financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any synergies or cost savings associated with the acquisition.

3. Fair Value Measurements
The fair value hierarchy consists of the following three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability when there is little, if any, market activity for the asset or liability at the measurement date.

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The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis.

June 30,
2026 December 31,
2025
Fair
Value Leveling Fair
Value Leveling
(in millions) Level 1 Level 2 Level 1 Level 2
Cash and cash equivalents $ 332.4   $ 332.4   $ —   $ 713.0   $ 713.0   $ —  
Available-for-sale debt securities 149.3   —   149.3   1,830.4   —   1,830.4  
Equity investments 147.3   147.3   —   120.8   120.8   —  
$ 629.0   $ 479.7   $ 149.3   $ 2,664.2   $ 833.8   $ 1,830.4  

Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments in available-for-sale debt securities, and accounts receivable.
To minimize the risks related to cash and cash equivalents and investments in available-for-sale debt securities, we have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards, and limits the credit exposure of any single issuer.
As of June 30, 2026 and December 31, 2025, we held available-for-sale debt securities with a total fair value of $ 139.6 million and $ 335.1 million, respectively, that were in unrealized loss positions totaling $ 0.7 million and $ 0.6 million, respectively. Available-for-sale debt securities that had been in unrealized loss positions for longer than twelve months were not significant as of June 30, 2026 or December 31, 2025. Unrealized losses on available-for-sale debt securities are primarily caused by changes in interest rates. Our investments in available-for-sale debt securities are of high credit quality, and we do not intend to sell these investments and it is not more likely than not that we will be required to sell these investments before their maturity.
Accrued interest receivables on available-for-sale debt securities totaled $ 3.1 million and $ 20.5 million, respectively, as of June 30, 2026 and December 31, 2025 and are included in other current assets on the condensed consolidated balance sheets. We do not measure an allowance for credit losses for accrued interest receivables. For the purposes of identifying and measuring an impairment, accrued interest is excluded from both the fair value and amortized cost basis of the debt security. Uncollectible accrued interest receivables associated with an impaired debt security are reversed against interest income upon identification of the impairment.
To minimize the risks related to accounts receivable, which are typically unsecured, we monitor the financial performance and creditworthiness of our customers so that we can properly assess and respond to changes in their credit profiles.
The following table presents the percent of total gross product sales for each of our customers who individually accounted for 10% or more of total gross product sales.

Six Months Ended
June 30,
2026 2025
Customer A 34   % 41   %
Customer B 26   % 29   %
Customer C 28   % 15   %

The following table presents the percent of total accounts receivable for each of our customers who individually accounted for 10% or more of total accounts receivable.

June 30,
2026 December 31,
2025
Customer A 38   % 41   %
Customer B 29   % 31   %
Customer C 23   % 16   %
Customer D < 10 % 10   %

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4. Goodwill and Intangible Assets
The following table presents the changes in the carrying amount of goodwill.

(in millions) Amount
Balance as of December 31, 2025
$ 6.1  
Foreign currency translation adjustments ( 0.1 )
Balance as of March 31, 2026 6.0  
Additions in connection with the acquisition of Soleno Therapeutics, Inc. 494.6  
Balance as of June 30, 2026
$ 500.6  

The following table presents information relating to our recognized intangible assets.

June 30,
2026 December 31,
2025
(dollars in millions) Gross Carrying Amount Accumulated Amortization Net
Carrying Amount Gross Carrying Amount Accumulated
Amortization Net
Carrying Amount
Developed product rights 1
$ 2,242.8   $ 16.8   $ 2,226.0   $ 5.0   $ 0.3   $ 4.7  
Total intangible assets, net $ 2,226.0   $ 4.7  

_________________________
(1) Developed product rights have a useful life of 16 years.
The following table presents approximate future annual amortization expense for our finite-lived intangible assets as of June 30, 2026.

(in millions) Amount
2026 (6 months remaining)
$ 70.1  
2027
$ 140.2  
2028
$ 140.2  
2029
$ 140.2  
2030
$ 140.2  
Thereafter $ 1,595.1  

5. Debt
On May 14, 2026, we entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, providing for a $ 1.0  billion senior secured revolving credit facility (the 2026 Credit Facility) that matures on May 14, 2031. Subject to the terms of the credit agreement, we may borrow, prepay, and reborrow loans under the 2026 Credit Facility prior to maturity.
Borrowings under the 2026 Credit Facility bear interest, at the Company's option, at a rate based on either an alternate base rate plus an applicable margin or a Term Secured Overnight Financing Rate (SOFR), risk-free rate, or other applicable benchmark rate plus an applicable margin, in each case determined under the credit agreement. We are also required to pay a commitment fee on the unused portion of the revolving commitments. The initial Term SOFR borrowing under the 2026 Credit Facility bears interest at an all-in rate of 4.90 %, consisting of a Chicago Mercantile Exchange Term SOFR reference rate of 3.65 % plus an applicable margin of 1.25 %. The initial commitment fee rate is 0.15 % per annum.
On May 14, 2026, we borrowed $ 600.0  million under the 2026 Credit Facility. In June 2026, we repaid $ 600.0  million of principal and paid $ 2.7  million of accrued interest related to the repayment. In the condensed consolidated statements of cash flows, proceeds from borrowings under the 2026 Credit Facility are presented within financing activities net of debt issuance costs paid to lenders. Debt issuance costs paid to third parties, including certain reimbursed third-party costs, are presented separately as financing cash outflows. Repayments of borrowings under the 2026 Credit Facility are presented as financing cash outflows. As of June 30, 2026, no borrowings were outstanding and we had $ 1.0  billion of available borrowing capacity under the 2026 Credit Facility, subject to continued compliance with the covenants and other conditions to borrowing under the credit agreement.
In connection with the 2026 Credit Facility, we incurred $ 6.7 million of financing costs, which were deferred as assets and are being amortized to interest expense over the term of the facility. As of June 30, 2026, unamortized deferred financing costs were $ 6.5  million and were included in other noncurrent assets in the condensed consolidated balance sheet as of June 30, 2026. In addition, interest expense associated with the 2026 Credit Facility totaled $ 2.9 million for each of the second quarter and first six months of 2026, including $ 0.2  million related to the amortization of deferred financing costs.

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The credit agreement contains customary affirmative and negative covenants, including limitations on indebtedness, liens, investments, restricted payments and certain other transactions, as well as financial covenants requiring us to maintain a maximum total net leverage ratio and a minimum consolidated interest coverage ratio. The obligations under the credit agreement are guaranteed by certain of our subsidiaries and secured by liens on substantially all assets of the Company and the subsidiary guarantors, subject to customary exceptions. As of June 30, 2026, we were in compliance with the covenants under the credit agreement.

6. Leases
Our operating leases that have commenced have terms that expire beginning 2027 through 2036 and consist of office space and research and development laboratories, including our corporate headquarters. Certain of these lease agreements contain clauses for renewal at our option. As we were not reasonably certain to exercise any of these renewal options at commencement of the associated leases, no such options were recognized as part of our right-of-use (ROU) assets or operating lease liabilities.
The following table presents supplemental operating lease information for operating leases that have commenced.

Six Months Ended
June 30,
(in millions, except weighted average data) 2026 2025
Operating lease cost $ 31.2   $ 33.0  
Sublease income ( 1.9 ) ( 1.7 )
Net operating lease cost $ 29.3   $ 31.3  
Cash paid for amounts included in the measurement of operating lease liabilities $ 27.6   $ 18.7  

June 30,
2026 2025
Weighted average remaining lease term
9.4 years 10.4 years
Weighted average discount rate 4.9   % 4.9   %
Restricted cash related to leases $ 6.3   $ 7.8  

The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of June 30, 2026.

(dollars in millions)
Operating
Leases
Sublease
Income
2026 (6 months remaining)
$ 30.4   $ ( 2.0 )
2027
61.3   ( 4.0 )
2028
62.5   ( 4.0 )
2029
61.3   ( 3.6 )
2030
60.7   ( 3.5 )
Thereafter 306.9   ( 2.0 )
Total operating lease payments (sublease income) 583.1   $ ( 19.1 )
Less imputed interest
121.5  
Total operating lease liabilities 461.6  
Less current operating lease liabilities included in other current liabilities 59.8  
Noncurrent operating lease liabilities $ 401.8  

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7. Supplemental Financial Information
Inventory consisted of the following:

(in millions) June 30,
2026 December 31,
2025
Raw materials $ 39.9   $ 35.7  
Work in process 70.1   19.2  
Finished goods 143.3   14.1  
Total inventory 253.3   69.0  

Balance Sheet Classification:
Inventory $ 104.2   $ 69.0  
Noncurrent inventory 149.1   —  
Total inventory $ 253.3   $ 69.0  

Prior to FDA approval of CRENESSITY in December 2024, all costs related to its manufacturing were expensed as R&D in the period incurred. As a result, our physical inventories as of June 30, 2026 and December 31, 2025 included active pharmaceutical product with no cost basis. Costs related to the manufacturing of bulk drug product, finished bottling, and other labeling activities that occurred post-FDA approval are included in the inventory values as of June 30, 2026 and December 31, 2025.
As of June 30, 2026, noncurrent inventory consisted of VYKAT XR inventory acquired in the Soleno acquisition that, based on management’s current demand forecasts, was expected to be realized after June 30, 2027. Refer to Note 2 for additional information regarding the acquired inventory and related fair-value step-up.
In addition, in connection with the acquisition of Soleno, we recorded a step-up in the fair value of work in process and finished goods inventory for VYKAT XR of $ 41.5  million and $ 126.7  million, respectively. The fair value step-up adjustment is being amortized to cost of revenues as the acquired inventory is sold. We recognized $ 3.0  million of expense related to the amortization of the fair value step-up during the second quarter and first six months of 2026.
Prepaid expenses consisted of the following:

(in millions) June 30,
2026 December 31,
2025
Prepaid income taxes $ 121.8   $ 94.0  
Prepaid development costs 66.1   55.6  
Other prepaid expenses 29.2   21.1  
Total prepaid expenses $ 217.1   $ 170.7  

Accounts payable and accrued liabilities consisted of the following:

(in millions) June 30,
2026 December 31,
2025
Sales rebates and reserves $ 292.1   $ 226.0  
Current income taxes payable
114.6   68.0  
Accrued development costs
93.5   101.3  
Accrued employee related costs 123.2   128.8  
Current branded prescription drug fee 42.9   45.3  
Accounts payable and other accrued liabilities 142.0   104.9  
Total accounts payable and accrued liabilities $ 808.3   $ 674.3  

Other noncurrent liabilities consisted of the following:

(in millions) June 30,
2026 December 31,
2025
Noncurrent income taxes payable
$ 262.2   $ 214.5  
Other noncurrent liabilities
35.5   5.2  
Total other noncurrent liabilities $ 297.7   $ 219.7  

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.

(in millions) June 30,
2026 June 30,
2025
Cash and cash equivalents $ 332.4   $ 264.0  
Restricted cash included in other noncurrent assets
6.5   8.0  
Total cash, cash equivalents, and restricted cash $ 338.9   $ 272.0  

The following table presents supplemental cash flow information.

Six Months Ended
June 30,
(in millions) 2026 2025
Cash paid for interest $ 2.7   $ —  
Cash paid for income taxes $ 88.2   $ 72.5  
Accrued capital expenditures
$ 1.3   $ 1.9  
Right-of-use assets acquired through operating leases $ 2.6   $ 3.4  

8. Stockholders’ Equity
Share Repurchases
Our Board of Directors have authorized share repurchase programs, including a share repurchase program for up to $ 500.0  million of our common stock which was authorized in February 2025 (the 2025 Repurchase Program).
The following table presents the shares of our common stock that we repurchased under our share repurchase programs and the cost of such shares, which were retired immediately upon repurchase.

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions)
2026 2025 2026 2025
Number of shares
0.1   0.2   0.5   1.8  
Total cost of shares (1)
$ 10.0   $ 17.7   $ 66.0   $ 167.7  

_________________________
(1) Reflects the total trade-date cost of shares repurchased during the period.
As of June 30, 2026, we had $ 266.3 million remaining under the 2025 Repurchase Program.

9. Earnings per Share
Earnings per share were calculated as follows:

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions, except per share data) 2026 2025 2026 2025
Net income - basic and diluted $ 144.4   $ 107.5   $ 342.3   $ 115.4  
Weighted-average common shares outstanding:
Basic 101.0   99.0   100.8   99.3  
Effect of dilutive securities 3.2 2.0 3.0   2.5  
Diluted 104.2   101.0   103.8   101.8  
Earnings per share:
Basic $ 1.43   $ 1.09   $ 3.40   $ 1.16  
Diluted $ 1.39   $ 1.06   $ 3.30   $ 1.13  

Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 4.8   6.3   4.5   4.8  

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10. Collaboration and License Agreements
Nxera Pharma UK Limited (Nxera)
In 2021, we entered into a collaboration and license agreement with Nxera (formerly Sosei Heptares) to develop and commercialize certain compounds containing sub-type selective muscarinic M1, M4, or dual M1/M4 receptor agonists, which we have the exclusive rights to develop, manufacture and commercialize worldwide, excluding in Japan, where Nxera retains the rights to develop, manufacture, and commercialize all compounds comprised of M1 receptor agonists, subject to certain exceptions. With respect to such rights retained by Nxera, we retain the rights to opt in to profit sharing arrangements, pursuant to which we and Nxera will equally share in the operating profits and losses for such compounds in Japan. Subject to specified conditions, we may elect to exercise such opt-in rights with respect to each such compound either before initiation of the first proof of concept Phase 2 clinical trial for such compound or following our receipt from Nxera of the top-line data from such clinical trial for such compound. We are responsible for all development, manufacturing, and commercialization costs of any collaboration product.
NBI-1117570 is a dual M1/M4 muscarinic agonist in development as a potential treatment for schizophrenia and other psychiatric indications. In connection with the initiation of a Phase 2 clinical study for NBI-1117570 in schizophrenia in March 2026, we expensed a milestone payment of $ 22.5 million as research and development (R&D) in the first quarter of 2026.
Direclidine (NBI-1117568) is a potential first-in-class, orally active, highly selective investigational M4 agonist in development as a potential treatment for schizophrenia. In connection with the initiation of a Phase 3 clinical study for direclidine in schizophrenia in May 2025, we expensed a milestone payment of $ 15.0 million as R&D in the second quarter of 2025.
Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $ 2.48 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product.
Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which the royalty term for such licensed product has expired in such country. On a licensed product-by-licensed product and country-by-country basis, royalty payments would commence on the first commercial sale of a licensed product and terminate on the later of (i) the expiration of the last patent covering such licensed product in such country, (ii) a number of years from the first commercial sale of such licensed product in such country and (iii) the expiration of regulatory exclusivity for such licensed product in such country.
Following the expiration of the research collaboration term, we may terminate the agreement in its entirety or with respect to one or more targets upon 90 days’ written notice to Nxera. Following the expiration of the research collaboration term, Nxera may terminate the agreement on a target-by-target basis in the event that we do not conduct any material development activities outside of Japan with respect to a certain compound or licensed product within the applicable target class for a continuous period of not less than 365 days and do not commence any such activities within 120 days of receiving written notice. Either party may terminate the agreement, subject to specified conditions, (i) in the event of material breach by the other party, subject to a cure period, (ii) if the other party challenges the validity or enforceability of certain intellectual property rights, subject to a cure period, or (iii) if the other party becomes insolvent or takes certain actions related to insolvency.
Takeda Pharmaceutical Company Limited (Takeda)
In 2020, we entered into an exclusive license agreement with Takeda (the 2020 Takeda Agreement), pursuant to which we acquired the exclusive rights to develop and commercialize certain early to mid-stage psychiatry compounds, including luvadaxistat, NBI-1070770, osavampator (NBI-1065845), NBI-1065846, and three non-clinical stage compounds. Pursuant to the 2020 Takeda Agreement, osavampator was designated as a profit-share product, meaning we and Takeda would equally share in the operating profits and losses. Takeda also retained the right to opt-out of the profit-sharing arrangement, pursuant to which Takeda would be entitled to receive potential future payments upon the achievement of certain event-based milestones with respect to osavampator and receive royalties on the future net sales of osavampator (in lieu of equally sharing in the operating profits and losses).
In October 2024, we provided Takeda with written notice of termination of the license under the 2020 Takeda Agreement with respect to certain D-amino acid oxidase (DAAO) inhibitors, including the license to develop and commercialize luvadaxistat and NBI-1065846, which became effective in April 2025.

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In January 2025, we and Takeda amended and restated the exclusive license agreement (the Restated Takeda Agreement) to, among other things, reflect the conversion from sharing operating profits and losses with respect to the development and commercialization of osavampator to a royalty-bearing license, the return of rights to osavampator in Japan to Takeda, and our previous termination of the license to develop and commercialize certain DAAO inhibitors under the 2020 Takeda Agreement, including luvadaxistat, and GPR139 agonists, including NBI-1065846.
Under the Restated Takeda Agreement, we retain exclusive rights to develop and commercialize osavampator for all indications in all territories worldwide except Japan, where Takeda reacquired exclusive development and commercialization rights. In addition, each party is responsible for development costs for osavampator in its respective territory, and each party is eligible to receive royalty payments based on the other party’s net sales of osavampator in the other party’s territory. Pursuant to the Restated Takeda Agreement and upon the successful development and commercialization of osavampator, we will incur tiered based royalties payable to Takeda in the mid-to-upper teens in the U.S. and low double-digits outside of the U.S. on a blended basis as a percentage of net sales. Additionally, we are entitled to receive royalties from Takeda on the future net sales of osavampator in Japan.
Osavampator is a potential first-in-class alpha-amino-3-hydroxy-5-methyl-4-isoxazole propionic acid (AMPA) positive allosteric modulator (PAM) in development for patients with inadequate response to treatment of major depressive disorder (MDD). In connection with the initiation of a Phase 3 clinical study for osavampator in MDD in January 2025, we expensed a milestone payment of $ 37.5 million as R&D in the first quarter of 2025.
Takeda may be entitled to receive potential future payments of up to $ 742.5 million upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any royalty-bearing product.
Unless earlier terminated, the Restated Takeda Agreement will continue on a licensed product-by-licensed product and country-by-country basis until the date on which, (i) for any royalty-bearing product, the royalty term has expired in such country; and (ii) for any profit-share product, for so long as we continue to develop, manufacture, or commercialize such licensed product. On a licensed product-by-licensed product and country-by-country basis, royalty payments would commence on the first commercial sale of a royalty-bearing product and terminate on the later of (i) the expiration of the last patent covering such royalty-bearing product in such country, (ii) a number of years from the first commercial sale of such royalty-bearing product in such country and (iii) the expiration of regulatory exclusivity for such royalty-bearing product in such country.
We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the U.S., Japan, the European Union and the United Kingdom, or, collectively, the major markets, upon six months ’ written notice to Takeda (i) with respect to all licensed products prior to the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes, as defined in the Restated Takeda Agreement, prior to the first commercial sale of the first licensed product in such target class for which first commercial sale occurs. We may terminate the Restated Takeda Agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first commercial sale of the first licensed product in such target class for which first commercial sale occurs. Takeda may terminate the Restated Takeda Agreement, subject to specified conditions, (i) if we challenge the validity or enforceability of certain Takeda intellectual property rights or (ii) on a target class-by-target class basis, in the event that we do not conduct any material development or commercialization activities with respect to any licensed product within such target class for a specified continuous period. Subject to a cure period, either party may terminate the Restated Takeda Agreement in the event of any material breach, solely with respect to the target class of a licensed product to which such material breach relates, or in its entirety in the event of any material breach that relates to all licensed products, or if either party challenges the validity or enforceability of certain intellectual property rights.
Xenon Pharmaceuticals Inc. (Xenon)
In 2019, we entered into a collaboration and license agreement with Xenon to identify, research, and develop sodium channel inhibitors, including NBI-921352 and three preclinical candidates, which compounds we have the exclusive rights to develop and commercialize. In connection with the agreement, we purchased 1.4  million shares (at $ 14.196 per share) of Xenon common stock in 2019, 0.3  million shares (at $ 19.9755 per share) of Xenon common stock in 2021, and 0.3  million shares (at $ 31.855 per share) of Xenon common stock in 2022. We are responsible for all development and manufacturing costs of any collaboration product, subject to certain exceptions.

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NBI-921355 is an investigational, selective inhibitor of voltage-gated sodium channels Na v 1.2 and Na v 1.6 in development as a potential treatment of certain types of epilepsy. In connection with the initiation of a Phase 1 clinical study to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of NBI-921355 in healthy adult participants in February 2025, we expensed a milestone payment of $ 7.5 million as R&D in the first quarter of 2025.
Under the terms of the agreement, Xenon may be entitled to receive potential future payments of up to $ 1.66 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product. Xenon retains the right to elect to co-develop one product in a major indication, pursuant to which Xenon would receive a mid-single digit percentage increase in royalties earned on the future net sales of such product in the U.S. and we and Xenon would equally share in the development costs of such product in the applicable indication, except where such development costs relate solely to the regulatory approval of such product outside the U.S.
Unless earlier terminated, the agreement will continue on a licensed product-by-licensed product and country-by-country basis until the expiration of the royalty term for such product in such country. Upon the expiration of the royalty term for a particular licensed product and country, the license obtained by us with respect to such product and country will become fully paid, royalty free, perpetual and irrevocable. We may terminate the agreement upon 90 days’ written notice to Xenon, provided that such unilateral termination will not be effective for certain products until we have used commercially reasonable efforts to complete certain specified clinical studies. Either party may terminate the agreement in the event of a material breach in whole or in part, subject to specified conditions.
Voyager Therapeutics, Inc. (Voyager)
2019 Voyager Agreement
In 2019, we entered into a collaboration and license agreement with Voyager (the 2019 Voyager Agreement), pursuant to which we obtained certain rights to develop and commercialize product candidates, including the rights to gene therapy product candidates for the treatment of Friedreich’s ataxia (FA) and two undisclosed programs. In April 2025, we mutually agreed with Voyager to discontinue the two undisclosed programs and the rights to the targets selected under these programs returned to Voyager. We are responsible for all development and commercialization costs of any collaboration product under the 2019 Voyager Agreement, subject to certain co-development and co-commercialization rights retained by Voyager.
In connection with the 2019 Voyager Agreement, we purchased 4.2 million shares (at $ 11.9625 per share) of Voyager common stock (the 2019 Voyager Shares).
Under the terms of the 2019 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 465.0 million upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.
Unless terminated earlier, the 2019 Voyager Agreement will continue in effect until the expiration of the last to expire royalty term with respect to any collaboration product under the agreement or the last expiration or termination of any exercised co-development and co-commercialization rights by Voyager as provided for in the 2019 Voyager Agreement. We may terminate the 2019 Voyager Agreement upon 180 days’ written notice to Voyager prior to the first commercial sale of any collaboration product under the 2019 Voyager Agreement or upon one year after the date of notice if such notice is provided after the first commercial sale of any collaboration product under the 2019 Voyager Agreement.
2023 Voyager Agreement
In 2023, we entered into a collaboration and license agreement with Voyager, which we amended in April 2024 (as amended, the 2023 Voyager Agreement), pursuant to which we acquired the global rights to the gene therapy products directed to the gene that encodes glucosylceramidase beta 1 (GBA1) for the treatment of Parkinson's disease and other diseases associated with GBA1 (the GBA1 Program), and three gene therapy programs directed to rare central nervous system (CNS) targets, each enabled by Voyager's next-generation TRACER ® capsids.
With respect to collaboration products subject to the GBA1 Program, we are responsible for all development and commercialization costs of any such products, including in the U.S., where Voyager retains certain co-development and co-commercialization rights. Voyager may elect to exercise such rights, pursuant to which we and Voyager would equally share in the operating profits and losses of such products in the U.S. (in lieu of Voyager being entitled to receive potential future payments of certain event-based milestones upon their achievement in the U.S. and receive royalties on the future net sales of such products in the U.S.), following Voyager’s receipt of the top-line data from a first clinical trial in Parkinson’s disease. However, if we and Voyager elect to focus on an indication other than Parkinson’s disease prior to Voyager’s receipt of top-line data from a first clinical trial for Parkinson’s disease, then Voyager may elect to exercise such co-development and co-commercialization rights after the later of: (i) Voyager’s receipt of top-line data from the first clinical trial of a product that is the subject of the GBA1 Program or (ii) the date we and Voyager decide not to pursue Parkinson’s disease as an indication

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for development under the GBA1 Program. Irrespective of Voyager’s election to exercise such rights, Voyager may be entitled to receive potential future payments upon the achievement of certain event-based milestones outside the U.S. and would be entitled to receive royalties on the future net sales of any such product outside the U.S.
With respect to collaboration products subject to the three gene therapy programs directed to rare CNS targets, we are responsible for all development and commercialization costs for any such products.
In connection with the 2023 Voyager Agreement, we purchased 4.4 million shares (at $ 8.88 per share) of Voyager common stock (the 2023 Voyager Shares). We accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business. In addition, as part of the collaboration, Jude Onyia, Ph.D., Chief Scientific Officer of Neurocrine Biosciences, was appointed to Voyager's board of directors. Dr. Onyia (or another individual designated by us) will be nominated for election to Voyager's board of directors annually for a maximum duration of 10 years from the effective date of the 2023 Voyager Agreement. As a result, our equity investment in Voyager became subject to the equity method of accounting, and Voyager became a related party, following our purchase of the 2023 Voyager Shares, after which, together with the 2019 Voyager Shares, we owned approximately 19.9 % of the voting stock of Voyager. We elected the fair value option to account for our equity investment in Voyager as we believe it creates greater transparency regarding the investment's fair value at future reporting dates.
Under the terms of the 2023 Voyager Agreement, Voyager may be entitled to receive potential future payments of up to $ 6.13 billion upon the achievement of certain event-based milestones and is entitled to receive royalties on the future net sales of any collaboration product, subject to certain co-development and co-commercialization rights retained by Voyager.
Unless terminated earlier, the 2023 Voyager Agreement will continue in effect until the expiration of the last to expire royalty term with respect to any collaboration product under the 2023 Voyager Agreement or the last expiration or termination of any exercised co-development and co-commercialization rights by Voyager as provided for in the 2023 Voyager Agreement. We may terminate the 2023 Voyager Agreement upon 180 days’ written notice to Voyager prior to the first commercial sale of any collaboration product under the 2023 Voyager Agreement or upon one year after the date of notice if such notice is provided after the first commercial sale of any collaboration product under the 2023 Voyager Agreement.
Sanofi S.A. (Sanofi)
In 2014, we entered into a license agreement with Sanofi, pursuant to which we acquired the global rights to develop and commercialize certain corticotropin-releasing factor type 1 (CRF-1) receptor antagonists, including crinecerfont. We launched CRENESSITY ® (crinecerfont) in the U.S. as a first-in-class U.S. Food and Drug Administration (FDA)-approved treatment of classic congenital adrenal hyperplasia (CAH) in December 2024. We are responsible for all manufacturing, development, and commercialization costs of any licensed product.
Under the terms of our license agreement with Sanofi, Sanofi may be entitled to receive potential future payments of up to $ 10.0 million upon the achievement of certain event-based milestones and is entitled to receive royalties at tiered percentage rates ranging from 3.0 % to 5.0 % on our future net sales of CRENESSITY in the U.S. for the longer of 16 years or the life of the related patent rights.

11. Segment Reporting and Disaggregation of Relevant Expense Captions
Neurocrine Biosciences operates as a single global business segment dedicated to the research and development, commercialization, and sale of pharmaceuticals primarily in the U.S. for the treatment of under-addressed neurological, psychiatric, endocrine, and immunological disorders. There were no changes to the accounting policies of the segment as disclosed in the 2025 Form 10-K.
The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer as chief operating decision maker (CODM) in assessing segment performance and deciding how to allocate resources on a consolidated basis.
The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of income and comprehensive income as consolidated net income. The CODM uses net income to monitor budget and forecast versus actual results in assessing segment performance and to evaluate income generated from segment assets in deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets.

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The following table presents information about reported segment revenues, segment profit, and significant segment expenses.

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions) 2026 2025 2026 2025
Revenues:

INGREZZA net product sales $ 716.5   $ 624.4   $ 1,373.3   $ 1,169.6  
CRENESSITY net product sales 183.5   53.2   336.8   67.7  
VYKAT XR net product sales 54.3   —   54.3   —  
Other revenues (1)
4.7   9.9   9.1   22.8  
Total revenues 959.0   687.5   1,773.5   1,260.1  
Less:
Cost of revenues, excluding amortization of acquired intangible assets 23.2   10.3   36.9   18.5  
Research and development:
External research and development 168.5   120.6   316.5   228.5  
Payroll and benefits 115.4   72.2   199.9   147.2  
Milestones 0.3   15.1   22.9   60.5  
Other research and development (2)
42.5   36.4   83.6   71.3  
Total research and development 326.7   244.3   622.9   507.5  
Acquired in-process research and development 1.5   —   22.7   0.1  
Selling, general, and administrative 439.7   286.3   758.2   562.8  
Amortization of acquired intangible assets 16.4   1.0   16.5   2.0  
Gain on sale of business, net of transaction costs —   —   ( 28.6 ) —  
Interest expense 2.9   —   2.9   —  
Unrealized (gain) loss on equity investments
( 1.2 ) 6.7   ( 26.5 ) 37.3  
Investment income and other, net
( 12.4 ) ( 20.6 ) ( 40.5 ) ( 42.3 )
Provision for income taxes
17.8   52.0   66.7   58.8  
Net income
$ 144.4   $ 107.5   $ 342.3   $ 115.4  

_________________________
(1) Other revenues primarily consist of royalties earned on AbbVie Inc. net sales of elagolix and Tanabe Pharma Corporation (formerly Mitsubishi Tanabe Pharma Corporation) net sales of valbenazine.
(2) Other research and development consists of indirect costs incurred for the benefit of multiple research and development programs, including facility-based expenses (such as rent expense) and other overhead allocations.

12. Sale of Neurocrine Group Limited
On December 24, 2025, we entered into a definitive agreement with Immedica Pharma AB to sell the Neurocrine Group Limited (formerly Diurnal Group plc) operating unit, which met the criteria for classification as held for sale under ASC 360. As a result, the assets and liabilities of the disposal group were presented separately as “Assets held for sale” and “Liabilities related to assets held for sale” and were included in other current assets and other current liabilities, respectively, on the condensed consolidated balance sheet as of December 31, 2025.
The major classes of assets and liabilities classified as held for sale as of December 31, 2025, were as follows:
(in millions) Amount
Assets held for sale:

Intangible assets, net
$ 29.8  
Other assets 13.0  
Total assets held for sale included in other current assets $ 42.8  

Liabilities related to assets held for sale:

Accounts payable and accrued liabilities
$ 6.8  
Other liabilities
1.4  
Total liabilities related to assets held for sale included in other current liabilities $ 8.2  

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As of December 31, 2025, the disposal group classified as held for sale excluded certain assets and obligations that were not transferred to the buyer upon closing. Specifically, cash and cash equivalents of the disposal group were not expected to be conveyed to the buyer. Accordingly, such cash and the related liabilities expected to be settled prior to closing were excluded from the assets and liabilities presented as held for sale as of December 31, 2025.
On January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $ 63.2  million in cash. As a result of the transaction, during the first quarter of 2026 we recognized a pre-tax gain on sale of $ 28.6  million in "Gain on sale of business, net of transaction costs" within income from continuing operations. The sale did not qualify for discontinued operations presentation. Following the closing of the transaction, our operating results no longer include the disposed business beginning on the closing date.

13. Legal Matters
Legal Proceedings
In March 2025, we received a notice from Zydus Lifesciences Global FZE (Zydus FZE) that it had filed an abbreviated new drug application, or ANDA, with the FDA seeking approval of a generic version of INGREZZA SPRINKLE (valbenazine). The ANDA contained a Paragraph IV Patent Certification alleging that certain of our patents covering INGREZZA SPRINKLE are invalid and/or will not be infringed by Zydus FZE’s importation, manufacture, use or sale of the medicine for which the ANDA was submitted. We filed suit in the U.S. District Court for the District of Delaware in April 2025 against Zydus Pharmaceuticals (USA) Inc. and its affiliates Zydus FZE, Zydus Worldwide DMCC (entity subsequently dismissed), Zydus Lifesciences Limited, and Zydus Healthcare (USA) LLC (entity subsequently dismissed) (collectively, Zydus). The complaint alleged that by filing their ANDAs, Zydus infringed certain of our patents covering INGREZZA SPRINKLE and sought to prevent Zydus from selling a generic version of INGREZZA SPRINKLE. We also filed suit in the U.S. District Court for the District of New Jersey in April 2025 against Zydus on a similar factual basis seeking to prevent Zydus from selling a generic version of INGREZZA SPRINKLE and this case was dismissed in favor of continued prosecution of the Delaware proceeding against the same entities.
On March 6, 2026, the City of Pontiac Police and Fire Retirement System, a purported stockholder of Soleno, filed a putative class-action complaint for violations of the Federal securities laws against Soleno and certain members of Soleno's management in the U.S. District Court for the Northern District of California. The plaintiff alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5 on behalf of a putative class of purchasers of Soleno’s common stock during a purported class period of March 26, 2025 through November 4, 2025, inclusive. On June 25, 2026, the Court appointed a Lead Plaintiff. Lead Plaintiff’s consolidated complaint is due August 28, 2026. Defendants’ motion to dismiss is due October 30, 2026. A hearing date on the motion to dismiss has not yet been scheduled.
From time to time, we may become subject to other legal proceedings or claims arising in the ordinary course of our business. We currently believe that none of the claims or actions pending against us is likely to have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations. Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters.
U.S. Department of Justice Investigation
In August 2025, we received a civil investigative demand from the U.S. Department of Justice (DOJ) requesting certain documents and information related to our sales and marketing of INGREZZA. We are cooperating with the DOJ’s request. No assurance can be given as to the timing or outcome of the DOJ’s investigation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations section contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A under the caption “Risk Factors.” The interim financial statements and this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2026.

Overview
Neurocrine Biosciences is a neuroscience-focused, biopharmaceutical company with a simple purpose: to relieve suffering for people with great needs. We are dedicated to discovering, developing, and commercializing life-changing treatments for patients with under-addressed neurological, psychiatric, endocrine, and immunological disorders.
Our portfolio of products includes U.S. Food and Drug Administration (FDA) approved treatments for tardive dyskinesia (TD), chorea associated with Huntington's disease, classic congenital adrenal hyperplasia due to 21-hydroxylase deficiency (CAH), hyperphagia in Prader-Willi syndrome (PWS), and endometriosis and uterine fibroids in collaboration with AbbVie Inc. (AbbVie). In addition, we have a diversified portfolio of multiple compounds in mid- to late-phase development across our core therapeutic areas and an expanding early-phase pipeline that includes a range of modalities including small molecules, peptides, proteins, antibodies, conjugates, and gene therapies.
We launched INGREZZA ® (valbenazine) in the U.S. as the first FDA-approved drug for the treatment of TD in May 2017 and for the treatment of chorea associated with Huntington's disease in August 2023 and launched CRENESSITY ® (crinecerfont) in the U.S. as a first-in-class FDA-approved treatment of CAH in December 2024. We acquired VYKAT ® (diazoxide choline) XR, the first and only FDA-approved treatment for hyperphagia in PWS, through the acquisition of Soleno Therapeutics, Inc. (Soleno) in May 2026.
We estimate that TD affects approximately 800,000 people in the U.S., that approximately 90% of the 40,000 people in the U.S. affected by Huntington’s disease will develop chorea, that CAH affects at least 20,000 people in the U.S., and that hyperphagia in PWS affects approximately 10,000 people in the U.S. Key elements of our commercial strategy include maximizing the opportunities of our FDA approved products through consistent and effective commercial execution, including continued development of valbenazine as the best-in-class treatment for new patient populations, and to lead the evolving understanding of vesicular monoamine transporter 2 (VMAT2) biology and its role in disease.

2026 Business Highlights
• Total net product sales for the first six months of 2026 increased $519.6 million, or 41.7%, to $1.77 billion, primarily reflecting increased net product sales of CRENESSITY, which was launched in the U.S. as a first-in-class FDA-approved treatment of CAH in December 2024, increased net product sales of INGREZZA, driven by volume growth in total prescriptions and record new prescriptions on strong patient demand, and the inclusion of VYKAT XR net product sales following the acquisition of Soleno in May 2026.
• On May 18, 2026, we completed our acquisition of Soleno in an all-cash transaction representing a total equity value of approximately $2.9 billion, adding VYKAT XR, the first and only FDA-approved treatment for hyperphagia in PWS, to our rare disease commercial portfolio.
• In May 2026, we entered into a $1.0 billion senior secured revolving credit facility (the 2026 Credit Facility). In June 2026, we repaid $600.0 million of principal that was borrowed under the 2026 Credit Facility in May 2026. As of June 30, 2026, we had $1.0 billion of available borrowing capacity under the 2026 Credit Facility. We may use borrowings under the 2026 Credit Facility for general corporate purposes and other purposes permitted by the credit agreement. Our ability to borrow under the 2026 Credit Facility is subject to the satisfaction of customary conditions, including compliance with the covenants contained in the credit agreement.
• On January 21, 2026, we completed the sale of Neurocrine Group Limited to Immedica Pharma AB for $63.2 million in cash. As a result of the transaction, during the first quarter of 2026 we recognized a pre-tax gain on sale of $28.6 million in "Gain on sale of business, net of transaction costs" within income from continuing operations.
• Promoted Samir Siddhanti to the executive management team as Chief Business Officer where he will lead the Company’s business development, corporate strategy, and R&D portfolio management functions helping guide Neurocrine’s continued evolution into a leading, global biotechnology company.

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• Promoted Andrew Ratz, Ph.D., to the executive management team as the Chief Technical Operations Officer. In his new role, Dr. Ratz will lead the company's global technical development, manufacturing, and supply chain functions, supporting Neurocrine's expansion beyond small molecules into biologics and device-based therapies.

2026 Pipeline Highlights
• Initiated Phase 2 clinical study to assess the safety and tolerability of crinecerfont in children aged 3 months to under 4 years with CAH.
• Initiated and dosed the first patients in a Phase 2 clinical study of NBI-1117570, a dual M1/M4 selective agonist in adults with schizophrenia.
• Initiated Phase 1 first-in-human clinical study evaluating the safety and tolerability of NBIP-2118 in adult participants. NBIP-2118 is an investigational corticotropin-releasing factor 2 receptor (CRF 2 ) peptide agonist and a potential first-in-class therapy for obesity.
• Announced new two-year data from the Phase 3 CAHtalyst ® Pediatric study showing positive growth outcomes in children and adolescents with CAH treated with CRENESSITY.
• Announced new two-year data from the Phase 3 CAHtalyst ® Adult study demonstrating improved cardiometabolic outcomes alongside sustained glucocorticoid dose reduction through up to two years of treatment with CRENESSITY for CAH.
• Announced publication of expert recommendations for glucocorticoid dose reduction after initiating CRENESSITY for the treatment of CAH.
• Announced new post-hoc data from the KINECT ® 4 clinical trial demonstrating that adults with TD treated with INGREZZA capsules experienced clinically meaningful and robust improvements in involuntary movement severity, including those who did not meet the stringent symptomatic remission threshold.
• Presented new VYKAT XR data demonstrating meaningful and durable improvements in hyperphagia and behavioral symptoms in PWS following randomized withdrawal period.
• Presented new real-world evidence demonstrating that adult patients with TD receiving INGREZZA (valbenazine) capsules showed higher treatment persistence compared to those on AUSTEDO XR (deutetrabenazine). The findings were presented at the Academy of Managed Care Pharmacy 2026 Annual Meeting in Nashville.
• Presented the first expert consensus recommendations focused on screening, diagnosis and treatment of TD among older adults in long-term care settings. The recommendations address persistent gaps in recognizing and managing TD in this higher-risk population. Findings were presented at the Society for Post-Acute and Long-Term Care Medical Association (PALTmed) PALTC26 Annual Conference in Anaheim, CA.
• Presented new two-year CRENESSITY data demonstrating durable hormonal control, reduced glucocorticoid exposure and meaningful clinical improvements in pediatric patients with CAH. The findings were presented at the Pediatric Endocrine Society 2026 Annual Meeting in San Francisco.

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

  Three Months Ended
June 30, Six Months Ended
June 30,
(in millions, except per share data)
2026 2025 2026 2025
Revenues $ 959.0  $ 687.5  $ 1,773.5  $ 1,260.1 
Operating expenses 807.5  541.9  1,428.6  1,090.9 
Operating income 151.5  145.6  344.9  169.2 
Other income 10.7  13.9  64.1  5.0 
Provision for income taxes 17.8  52.0  66.7  58.8 
Net income
$ 144.4  $ 107.5  $ 342.3  $ 115.4 

Earnings per share, diluted
$ 1.39  $ 1.06  $ 3.30  $ 1.13 
Weighted average common shares outstanding, diluted
104.2 101.0 103.8 101.8

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Revenues

  Three Months Ended
June 30, Six Months Ended
June 30,
( in millions)
2026 2025 2026 2025
INGREZZA net product sales
$ 716.5  $ 624.4  $ 1,373.3  $ 1,169.6 
CRENESSITY net product sales
183.5  53.2  336.8  67.7 
VYKAT XR net product sales
54.3  —  54.3  — 
Other
—  4.4  0.9  8.4 
Total net product sales
954.3  682.0  1,765.3  1,245.7 
Collaboration revenues 4.7  5.5  8.2  14.4 
Total revenues
$ 959.0  $ 687.5  $ 1,773.5  $ 1,260.1 

Net Product Sales
Compared with the comparable periods last year, the increase primarily reflected the increased net product sales of CRENESSITY, which was launched in the U.S. as a first-in-class FDA-approved treatment of CAH in December 2024, increased net product sales of INGREZZA, driven by volume growth in total prescriptions and record new prescriptions on strong patient demand, and the inclusion of VYKAT XR net product sales following the acquisition of Soleno in May 2026.
Collaboration Revenues
Collaboration revenues for all periods presented primarily reflected royalties earned on AbbVie net sales of elagolix and Tanabe Pharma Corporation (formerly Mitsubishi Tanabe Pharma Corporation) net sales of valbenazine.

Operating Expenses

Cost of Revenues

  Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2026 2025 2026 2025
Cost of revenues, excluding amortization of acquired intangible assets $ 23.2  $ 10.3  $ 36.9  $ 18.5 
as a % of total revenues 2.4  % 1.6  % 2.1  % 1.5  %

Compared with the comparable periods last year, the increase primarily reflected increased total net product sales, increased royalties on net product sales of CRENESSITY, $3.0 million of expense related to the amortization of the acquisition-date fair value step-up of VYKAT XR inventory acquired through the acquisition of Soleno in May 2026 and $2.0 million of acquisition related expenses, including $1.8 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026. The acquired fair value step-up is expected to be recognized in cost of revenues as the acquired inventory is sold over approximately four to six years following the acquisition date.

Research and Development
We support our drug discovery and development efforts through the commitment of significant resources to discovery, research and development programs, and business development opportunities. Costs are reflected in the applicable development stage based upon the program status when incurred. Therefore, the same program could be reflected in different development stages in the same reporting period. For several of our programs, the research and development activities are part of our collaborative arrangements.

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Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions) 2026 2025 2026 2025
Late stage $ 71.5  $ 38.8  $ 137.3  $ 74.1 
Early stage 30.1  16.7  56.0  38.4 
Research and discovery 66.9  65.1  123.2  116.0 
Milestones 0.3  15.1  22.9  60.5 
Payroll and benefits 115.4  72.2  199.9  147.2 
Facilities and other 42.5  36.4  83.6  71.3 
Total research and development $ 326.7  $ 244.3  $ 622.9  $ 507.5 
as a % of total revenues 34.1  % 35.5  % 35.1  % 40.3  %

Late Stage. Late stage consists of costs incurred for product candidates in Phase 2 registrational studies and all subsequent activities.
Compared with the comparable periods last year, the increase primarily reflected the progression of the Phase 3 programs for osavampator in major depressive disorder (MDD) and direclidine in schizophrenia.
Early Stage . Early stage consists of costs incurred for product candidates after the approval of an investigational new drug application by the applicable regulatory agency through Phase 2 non-registrational studies.
Compared with the comparable periods last year, the increase primarily reflected increased investments in the Phase 1 program for NBIP-01435 in CAH, the Phase 2 program for NBI-1065890 in TD, and our early-stage obesity and immunology programs, partially offset by decreased investments in certain early-stage psychiatry and neurology programs.
Research and Discovery . Research and discovery consists of costs incurred prior to the approval of an investigational new drug application by the applicable regulatory agency.
Compared with the comparable periods last year, the increase primarily reflected continued investments to expand our discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, and expanding our capabilities in biologics (including peptides and antibodies) and gene therapy.
Milestones. Milestones consists of costs incurred in connection with the achievement of development milestones under collaborative arrangements. The following table presents milestones expense by collaboration partner.

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions)
2026 2025 2026 2025
Nxera Pharma UK Limited
$ —  $ 15.0  $ 22.5  $ 15.0 
Takeda Pharmaceutical Company Limited
—  —  —  37.5 
Xenon Pharmaceuticals Inc.
—  —  —  7.5 

Other
0.3  0.1  0.4  0.5 
Total milestones
$ 0.3  $ 15.1  $ 22.9  $ 60.5 

Refer to Note 10 to the condensed consolidated financial statements for additional information regarding our significant collaboration and license agreements.
Payroll and Benefits. Payroll and benefits consist of costs incurred for salaries and wages, payroll taxes, benefits, and stock-based compensation associated with employees involved in research and development activities. Stock-based compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates stock-based grants are issued.
Compared with the comparable periods last year, the increase primarily reflected higher headcount to support our expanded discovery and preclinical programs across therapeutic areas and modalities, including endocrinology and metabolic disease (including obesity) and immunology, expanding our capabilities in biologics (including peptides and antibodies) and gene therapy, and $23.1 million of acquisition-related expenses, including $18.1 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026.

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Facilities and Other. Facilities and other consists of indirect costs incurred for the benefit of multiple programs, including facility-based expenses (such as rent expense) and other overhead allocations.
Compared with the comparable periods last year, the increase primarily reflected increased facility-based expenses related to our new campus facility.

Acquired In-Process Research and Development (IPR&D)

  Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions)
2026 2025 2026 2025
Acquired in-process research and development $ 1.5  $ —  $ 22.7  $ 0.1 
as a % of total revenues 0.2  % —  % 1.3  % —  %

Compared with the comparable periods last year, the increase reflected increased payments for upfront fees in connection with our collaborations.

Selling, General, and Administrative (SG&A)

  Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions)
2026 2025 2026 2025
Selling, general, and administrative $ 439.7  $ 286.3  $ 758.2  $ 562.8 
as a % of total revenues 45.8  % 41.6  % 42.8  % 44.7  %

Compared with the comparable periods last year, the increase primarily reflected continued investment in our commercial organization, including the recent expansion of our INGREZZA and CRENESSITY sales teams in the first quarter of 2026, and $96.8 million of acquisition-related expenses, including $40.2 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026.

Amortization of Acquired Intangible Assets

  Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions)
2026 2025 2026 2025
Amortization of acquired intangible assets $ 16.4   $ 1.0   $ 16.5   $ 2.0  
as a % of total revenues 1.7  % 0.1  % 0.9  % 0.2  %

Compared with the comparable periods last year, the increase primarily reflected amortization of intangible assets acquired through the acquisition of Soleno in May 2026. The estimated fair value of the acquired intangible assets, which relates to developed product rights for VYKAT XR and is being amortized straight line over a useful life of 16 years, was $2.24 billion as of the acquisition date.

Gain on Sale of Business, Net of Transaction Costs

  Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions)
2026 2025 2026 2025
Gain on sale of business, net of transaction costs
$ —  $ —  $ (28.6) $ — 

Compared with the comparable periods last year, the change reflected a pre-tax gain, net of transaction costs, recognized on the sale of Neurocrine Group Limited in January 2026.

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Other Income (Expense)

Three Months Ended
June 30, Six Months Ended
June 30,
(in millions) 2026 2025 2026 2025
Interest expense $ (2.9) $ —  $ (2.9) $ — 
Unrealized gain (loss) on equity investments
1.2  (6.7) 26.5  (37.3)
Investment income and other, net 12.4  20.6  40.5  42.3 
Total other income, net $ 10.7  $ 13.9  $ 64.1  $ 5.0 

Compared with the comparable periods last year, the change primarily reflected periodic fluctuations in the fair values of our equity investments and decreased interest income on lower investment balances due to the liquidation of a significant portion of our debt security investments to fund the acquisition of Soleno in May 2026.

Provision for Income Taxes

Three Months Ended
June 30, Six Months Ended
June 30,
(dollars in millions)
2026 2025 2026 2025
Provision for income taxes
$ 17.8  $ 52.0  $ 66.7  $ 58.8 
Effective tax rate 11.0  % 32.6  % 16.3  % 33.8  %

For the second quarter and first six months of 2026, the effective tax rate varied from the federal and state statutory rates primarily due to foreign tax effects, including the impact of net CFC tested income (NCTI), credits generated for research activities, excess tax benefits related to stock-based compensation, certain nondeductible expenses and state income tax effects which include fluctuations in state effective tax rates and a discrete tax benefit from the release of a portion of the valuation allowance against certain state deferred tax assets.
For the second quarter and first six months of 2025, the effective tax rate varied from the federal and state statutory rates primarily due to credits generated for research activities, certain nondeductible expenses, excess tax benefits related to stock-based compensation, fluctuations in state effective tax rates, and losses in foreign and domestic jurisdictions for which no tax benefit was recorded as management cannot conclude that it is more likely than not that the tax benefit of such losses will be realized in the future.

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Liquidity and Capital Resources
Sources of Liquidity
We believe that our existing capital resources, funds generated by anticipated net product sales of our commercial products, available borrowing capacity under our 2026 Credit Facility, and investment income will be sufficient to satisfy our current and projected funding requirements for at least the next 12 months. However, we cannot guarantee that our existing capital resources and anticipated revenues will be sufficient to conduct and complete all of our research and development programs or commercialization activities as planned. We may seek to access the public or private equity markets whenever conditions are favorable or pursue opportunities to obtain additional debt financing in the future. We may also seek additional funding through strategic alliances or other financing mechanisms. However, we cannot provide assurance that adequate funding will be available on terms acceptable to us, if at all.
In May 2026, we completed our acquisition of Soleno. Preliminary consideration transferred was $2.83 billion, and cash paid to acquire Soleno, net of cash acquired, was $2.36 billion. Refer to Note 2 to the condensed consolidated financial statements for additional information.
On May 14, 2026, we entered into a credit agreement that provides for a five-year, $1.0 billion senior secured revolving credit facility, which we refer to as the 2026 Credit Facility. The 2026 Credit Facility provides us with an additional source of liquidity for general corporate purposes. In May 2026, we borrowed $600.0 million under the 2026 Credit Facility, and in June 2026, we repaid $600.0 million of principal. As of June 30, 2026, no amounts were outstanding under the 2026 Credit Facility and we had $1.0 billion of available borrowing capacity, subject to continued compliance with the covenants and other conditions to borrowing under the credit agreement. The credit agreement contains customary affirmative and negative covenants and financial covenants requiring us to maintain a maximum total net leverage ratio and a minimum consolidated interest coverage ratio. Refer to Note 5 to the condensed consolidated financial statements for additional information regarding the 2026 Credit Facility.
Information Regarding Our Financial Condition

(in millions) June 30,
2026 December 31,
2025
Total cash, cash equivalents, and marketable securities $ 481.7  $ 2,543.4 
Working Capital:
Total current assets $ 1,637.5  $ 2,522.7 
Less total current liabilities 874.5  743.4 
Total working capital $ 763.0  $ 1,779.3 

Information Regarding Our Cash Flows

Six Months Ended
June 30,
(in millions) 2026 2025
Cash flows from operating activities $ 282.2  $ 166.8 
Cash flows from investing activities (641.6) (14.8)
Cash flows from financing activities (22.7) (121.2)
Effect of exchange rate changes on cash and cash equivalents —  0.2 
Change in cash, cash equivalents, and restricted cash $ (382.1) $ 31.0 

Cash Flows from Operating Activities
Compared with the comparable period last year, the increase primarily reflected increased total net product sales, partially offset by acquisition and divestiture-related expenses of $125.6 million, including $60.1 million of stock-based compensation expense related to Soleno equity awards for which vesting was accelerated in connection with the acquisition of Soleno in May 2026 and which were settled in cash, and continued investments in our commercial organization, including the recent expansion of our CRENESSITY and INGREZZA sales teams in the first quarter of 2026 and expanded pre-clinical and clinical portfolio. The increase in accounts receivable was primarily driven by higher total gross product sales. The increase in income tax assets and liabilities was primarily due to timing of income tax payments.

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Cash Flows from Investing Activities
Compared with the comparable period last year, the decrease reflected $2.36 billion in cash paid, net of cash acquired, to acquire Soleno in May 2026, partially offset by increased sales and maturities of debt security investments, net of purchases, to fund the Soleno acquisition and $63.2 million in proceeds from our sale of Neurocrine Group Limited in January 2026.
Cash Flows from Financing Activities
Compared with the comparable period last year, the change reflected decreased repurchases of our common stock under the $500.0 million 2025 Repurchase Program that was authorized by our Board of Directors in February 2025, decreased proceeds from issuances of our common stock, and increased taxes paid related to net share settlement of equity awards (shares withheld for taxes). In addition, in May 2026, we borrowed $600.0 million under the 2026 Credit Facility, and in June 2026, we repaid $600.0 million of principal under the 2026 Credit Facility.

Material Cash Requirements
In the pharmaceutical industry, it can take a significant amount of time and capital resources to successfully complete all stages of research and development and commercialize a product candidate, which ultimate length of time and spend required cannot be accurately estimated as it varies substantially according to the type, complexity, novelty and intended use of a product candidate.
The funding necessary to execute our business strategies is subject to numerous uncertainties and we may be required to make substantial expenditures if unforeseen difficulties arise in certain areas of our business. In particular, our future capital requirements will depend on many factors, including:
• the success of our commercial products;
• continued scientific progress in our research and clinical development programs;
• the magnitude and complexity of our research and development programs;
• progress with preclinical testing and clinical trials;
• the time and costs involved in obtaining regulatory approvals;
• the costs involved in filing and pursuing patent applications, enforcing patent claims, or engaging in interference proceedings or other patent litigation;
• costs associated with securing adequate coverage and reimbursement for our products;
• competing technological and market developments;
• developments related to any future litigation;
• the cost of commercialization activities and arrangements, including our advertising campaigns; and
• the cost of manufacturing our product candidates.
In addition to the foregoing factors, we have significant future capital requirements, including:
External Business Developments
In addition to our independent efforts to develop and market products, we may enter into collaboration and license agreements or acquire businesses from time-to-time to enhance our drug development and commercial capabilities. With respect to our existing collaboration and license agreements, we may be required to make potential future payments of up to $15.35 billion upon the achievement of certain milestones. Refer to Note 10 to the condensed consolidated financial statements for additional information regarding our significant collaboration and license agreements.
In May 2026, we completed our acquisition of Soleno. Cash paid for the acquisition, net of cash acquired, was approximately $2.36 billion and was funded from available liquidity, including cash on hand and proceeds from sales and maturities of available-for-sale debt securities. Following the acquisition, our future capital requirements may include costs associated with integrating Soleno and supporting commercialization and development activities related to the acquired business. Refer to Note 2 to the condensed consolidated financial statements for additional information regarding the acquisition.

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Share Repurchase Program
In addition to the foregoing future capital requirements, in February 2025, our Board of Directors authorized the 2025 Repurchase Program under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. The 2025 Repurchase Program is in addition to the $300.0 million 2024 Repurchase Program that was announced in October 2024 and completed in February 2025. Under the 2025 Repurchase Program, we repurchased 0.5 million shares on the open market for a cost of $66.0 million during the first six months of 2026. As of June 30, 2026, we had $266.3 million remaining under the 2025 Repurchase Program.

Critical Accounting Policies and Estimates
There were no changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Interest Rate Risk
We maintain a diversified investment portfolio consisting of low-risk, investment-grade debt securities with maturities of up to three years, including investments in commercial paper, securities of government-sponsored entities and corporate bonds that are subject to interest rate risk. The primary objective of our investment activities is to preserve principal and maintain liquidity. If a 1% unfavorable change in interest rates were to have occurred on June 30, 2026, it would not have had a material effect on the fair value of our investment portfolio as of that date.

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. Although our forward-looking statements reflect the good faith judgment of our management, these statements can only be based on facts and factors currently known by us. Consequently, these forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in the forward-looking statements.
Forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “hopes,” “may,” “will,” “plan,” “intends,” “estimates,” “could,” “should,” “would,” “continue,” “seeks,” “proforma,” or “anticipates,” or other similar words (including their use in the negative), or by discussions of future matters such as the development of new products, technology enhancements, possible changes in legislation and other statements that are not historical. These statements include but are not limited to statements under the captions “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as other sections in this report. You should be aware that the occurrence of any of the events discussed under the heading in Part II titled “Item 1A. Risk Factors” and elsewhere in this report could substantially harm our business, results of operations and financial condition and that if any of these events occurs, the trading price of our common stock could decline and you could lose all or a part of the value of your shares of our common stock.
The cautionary statements made in this report are intended to be applicable to all related forward-looking statements wherever they may appear in this report. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we assume no obligation to update our forward-looking statements, even if new information becomes available in the future.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
A discussion of our exposure to, and management of, market risk appears in Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading “Interest Rate Risk” and is incorporated into this Part I, Item 3 by reference.

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Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports required by the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level for the period covered by this report.
Changes in Internal Control over Financial Reporting
An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any changes to our internal control over financial reporting that occurred during the quarter ended June 30, 2026, and that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
There were no significant changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings
For a description of our legal proceedings, refer to Note 13 to the condensed consolidated financial statements, which is incorporated herein by reference.
From time to time, we may become subject to other legal proceedings or claims arising in the ordinary course of our business. We currently believe that none of the claims or actions pending against us is likely to have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations. Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters.

Item 1A. Risk Factors
The following information sets forth risk factors that could cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time. If any of the following risks actually occur, our business, operating results, prospects or financial condition could be harmed. Additional risks not presently known to us, or that we currently deem immaterial, may also affect our business operations. The risk factors set forth below with an asterisk (*) contain changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Summary Risk Factors
We face risks and uncertainties related to our business, many of which are beyond our control. In particular, risks associated with our business include:
• We may not be able to continue to successfully commercialize our commercial products, INGREZZA, CRENESSITY and VYKAT XR, or any of our product candidates if they are approved in the future.
• If healthcare providers and patients do not continue to accept our commercial products, or our sales and marketing efforts are not effective, we may not generate sufficient revenue.
• We face intense competition, and if we are unable to compete effectively, the demand for our products may be reduced.
• Government and third-party payors may impose sales and pharmaceutical pricing controls on our products or limit coverage and/or reimbursement for our products or impose policies and/or make decisions regarding the status of our products that could limit our product revenues and delay sustained profitability.
• We may not successfully integrate Soleno Therapeutics. Inc. (Soleno) or realize the anticipated benefits of the acquisition. which could adversely affect our business and financial condition.
• Because the development of our product candidates is subject to a substantial degree of technological uncertainty, we may not succeed in developing any of our product candidates, which could adversely affect our business and financial condition.
• Our clinical trials may be delayed for safety or other reasons, or fail to demonstrate the safety and efficacy of our product candidates, which could prevent or significantly delay their regulatory approval.
• Enacted healthcare reform, drug pricing measures and other recent legislative initiatives, including the Inflation Reduction Act of 2022 (IRA), could adversely affect our business.
• We have increased the size of our organization and will need to continue to increase the size of our organization. Such increases may not be sufficient and we may encounter difficulties with managing our growth, which could adversely affect our results of operations.
• We are transforming our research and development strategies to include the development of biologics, which requires substantial investment, including in personnel and facilities. We may encounter difficulties as we expand and may fail to successfully develop or commercialize our biologic product candidates, which could adversely affect our results of operations.
• If we are unable to retain and recruit qualified scientists and other employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of our commercial products or any product candidate approved by the FDA in the future.
• Use of our approved products or those of our collaborators could be associated with side effects or adverse events.

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• We currently depend on a limited number of third-party suppliers. The loss of these suppliers, or delays or problems in the supply of our commercial products or product candidates, could materially and adversely affect our ability to successfully develop or commercialize our commercial products or any of our product candidates.
• We depend on our current collaborators for the development and commercialization of several of our products and product candidates and may need to enter into future collaborations to develop and commercialize certain of our product candidates.
• We currently have no manufacturing capabilities. If third-party manufacturers of our commercial products or any of our product candidates fail to devote sufficient time and resources to our concerns, or if their performance is substandard, our ability to commercialize existing products, conduct clinical trials and develop new products could be impaired and our costs may rise.
• We license some of our core technologies, drug leads, products, and product candidates from third parties. If we default on any of our obligations under those licenses, or violate the terms of these licenses, we could lose our rights to those technologies, drug leads, products, and product candidates, or be required to pay damages.
• If we are unable to protect our intellectual property, our competitors could develop and market products based on our discoveries, which may reduce demand for our products.
• Our customers are concentrated and therefore the loss of a significant customer may harm our business.
• We may need additional capital in the future. If we cannot raise additional funding, we may be unable to fund our business plan and our future research, development, commercial and manufacturing efforts. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
• Our credit facility imposes operating and financial restrictions, and our failure to comply with its covenants or satisfy our obligations under the facility could adversely affect our business and financial condition.
• We expect to increase our expenses for the foreseeable future, and we may not be able to sustain growth and profitability.
Risks Related to Our Company
* We may not be able to continue to successfully commercialize our commercial products, INGREZZA, CRENESSITY and VYKAT XR, or any of our product candidates if they are approved in the future.
We launched INGREZZA in the U.S. as the first FDA-approved drug for the treatment of TD in May 2017 and for the treatment of chorea associated with Huntington's disease in August 2023. We announced FDA approval and launched CRENESSITY capsules and oral solution as an adjunctive treatment to glucocorticoid replacement to control androgens in adult and pediatric patients four years of age and older with classic CAH in December 2024 and, in the second quarter of 2026, acquired Soleno and its commercial product, VYKAT XR (diazoxide choline) extended-release tablets, which is indicated for the treatment of hyperphagia in adults and pediatric patients four years of age and older with Prader-Willi syndrome (PWS). Our ability to produce product revenues consistent with expectations ultimately depends on our ability to continue to successfully commercialize our commercial products, INGREZZA, CRENESSITY and VYKAT XR, and secure and maintain adequate third-party reimbursement. Our experience in marketing and selling pharmaceutical products began with INGREZZA’s approval in 2017, when we hired our sales force and established our distribution and reimbursement capabilities, all of which are necessary to successfully commercialize our current and future products. We have continued to invest in our commercial infrastructure, including the recent expansion of our sales teams for INGREZZA in the first quarter of 2026. While our team members and consultants have experience marketing and selling pharmaceutical products, we may face difficulties related to managing the rapid growth of our personnel and infrastructure, and there can be no guarantee that we will be able to maintain the personnel, systems, arrangements and capabilities necessary to continue to successfully commercialize our commercial products or any product candidate approved by the FDA, or equivalent foreign authorities, in the future.
* We may not be able to successfully commercialize CRENESSITY.
In December 2024, we announced FDA approval and launched CRENESSITY capsules and oral solution as an adjunctive treatment to glucocorticoid replacement to control androgens in adult and pediatric patients four years of age and older with classic CAH. We have also established our commercial team and hired our U.S. sales force for CRENESSITY. The successful commercialization of CRENESSITY depends on the extent to which patients and healthcare providers accept and adopt CRENESSITY as a treatment for CAH, and we do not know whether our expectations or estimates in this regard, or those of investors or securities analysts, will be accurate. Healthcare providers may not prescribe CRENESSITY and patients may be unwilling to use CRENESSITY. In addition, patients may be unwilling to use CRENESSITY if reimbursement is not

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provided or reimbursement is inadequate to cover a significant portion of the cost to the patient. CRENESSITY is a first-in-class therapy for children and adults with classic CAH and will therefore require us to expend substantial time and resources to educate healthcare providers about the benefits of CRENESSITY. If we are unable to provide our sales force with effective materials, including medical and sales literature to help them inform and educate potential customers about the benefits of CRENESSITY, our efforts to commercialize CRENESSITY may not be successful. Further, any negative publicity related to CRENESSITY, or negative development for CRENESSITY in our post-marketing commitments or in regulatory processes in other jurisdictions, may adversely impact the potential of CRENESSITY and our commercial results. If the commercialization of CRENESSITY and future sales are less successful than anticipated by us or our investors or securities analysts, our stock price could decline and our business may be harmed.
* We may not be able to successfully commercialize VYKAT XR.
In the second quarter of 2026, we acquired Soleno and its commercial product, VYKAT XR, which was approved by the FDA in March 2025 for the treatment of hyperphagia in adults and pediatric patients four years of age and older with PWS. The successful commercialization of VYKAT XR depends on the extent to which healthcare providers, patients and payors accept and adopt VYKAT XR, and we do not know whether our expectations or estimates in this regard, or those of investors or securities analysts, will be accurate. To generate demand for VYKAT XR, we will need to continue to educate healthcare providers on its clinical utility, benefits, risks, dosing and monitoring. Our ability to generate revenue from VYKAT XR will also depend on our ability to obtain and maintain coverage and adequate reimbursement from payors. PWS is a rare disease, and if our estimates of the prevalence of PWS, the number of patients who may benefit from treatment with VYKAT XR, the number of healthcare providers willing to prescribe VYKAT XR, or the number of patients willing to stay on treatment prove to be incorrect, the market opportunity for VYKAT XR may be smaller than we believe it is. VYKAT XR may also compete with therapeutic products in various stages of clinical development for the treatment of PWS, including hyperphagia, as well as drugs approved for other indications, such as appetite suppression. In addition, adverse events, safety concerns, product complaints or other safety-related reports regarding VYKAT XR, including serious adverse events reported after commercialization, could adversely affect market acceptance, result in regulatory scrutiny, require changes to the approved labeling for VYKAT XR, or cause patients or caregivers to discontinue use of VYKAT XR or healthcare providers to be reluctant to prescribe or continue prescribing VYKAT XR. If commercialization of VYKAT XR and future sales are less successful than anticipated by us or our investors or securities analysts, our stock price could decline and our business may be harmed.
* If healthcare providers and patients do not continue to accept our commercial products, or our sales and marketing efforts are not effective, we may not generate sufficient revenue.
The commercial success of our commercial products, INGREZZA, CRENESSITY and VYKAT XR, will depend upon the acceptance of these products as safe and effective by the medical community and patients.
The market acceptance of our commercial products could be affected by a number of factors, including:
• the timing of receipt of marketing approvals for additional indications;
• the safety and efficacy of the products;
• the pricing of these products;
• the availability of healthcare payor coverage and adequate reimbursement for the products;
• public perception regarding these products;
• the success of existing competitor products addressing our target markets or the emergence of equivalent or superior products; and
• the cost-effectiveness of the products.
Patient advocacy organizations and other patient communities are important across our commercial portfolio in supporting disease awareness and patient and caregiver education. These activities may be particularly significant for CRENESSITY and VYKAT XR given the rare disease nature of those indications, where education and awareness among relatively small patient and caregiver communities can affect patient identification and access to information about available treatments.
If the medical community, patients and payors do not continue to accept our products as being safe, effective, superior and/or cost effective, we may not generate sufficient revenue.

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* We face intense competition, and if we are unable to compete effectively, the demand for our products may be reduced.
The biotechnology and pharmaceutical industries are subject to rapid and intense technological change. We face, and will continue to face, competition in the development and marketing of our products and product candidates from academic institutions, government agencies, research institutions and biotechnology and pharmaceutical companies.
Competition may also arise from, among other things:
• other drug development technologies;
• methods of preventing or reducing the incidence of disease, including vaccines; and
• new small molecule or other classes of therapeutic agents.
Developments by others (including the development of generic equivalents) may render our product candidates or technologies obsolete or noncompetitive.
We are commercializing and performing research on or developing products for the treatment of several disorders, including TD, chorea associated with Huntington's disease, classic congenital adrenal hyperplasia, hyperphagia in PWS, endometriosis, pain, Parkinson’s disease, schizophrenia, epilepsy, and other neurology, psychiatry, endocrinology, obesity and related metabolic diseases, and immunology-related diseases and disorders, and there are a number of competitors to our products and product candidates. If one or more of our competitors’ products or programs are successful (including the development of generic equivalents), the market for our products may be reduced or eliminated.
• INGREZZA competes with AUSTEDO (deutetrabenazine), marketed by Teva Pharmaceuticals Industries, for the treatment of TD in adults and chorea associated with Huntington's disease. A once-daily dosing of AUSTEDO (AUSTEDO XR) was introduced in February 2023. Additionally, there are a number of commercially available medicines used to treat TD off-label, such as XENAZINE (tetrabenazine) and generic equivalents, and various antipsychotic medications (e.g., clozapine), anticholinergics, benzodiazepines (off-label), and botulinum toxin. In addition, there are several programs in clinical development by other companies targeting Huntington's disease.
• CRENESSITY competes with high dose corticosteroid monotherapy which is the current standard of care to both correct the endogenous cortisol deficiency as well as reduce the excessive adrenocorticotropic hormone levels for patients with CAH. In the U.S. alone, there are more than two dozen companies manufacturing steroid-based products. In addition, there are several programs in clinical development by other companies targeting CAH.
• VYKAT XR is the first FDA-approved treatment for hyperphagia in patients with PWS. Other FDA-approved therapies indicated for patients with PWS in the United States are limited to growth hormone (somatropin) products approved for the treatment of growth failure associated with PWS. We expect VYKAT XR to compete with product candidates currently in clinical development for the treatment of PWS, including hyperphagia, as well as with therapies approved for other indications that may be used to manage appetite, weight, or other symptoms associated with PWS.
• Our investigational treatments for potential use in schizophrenia and depression may in the future compete with several development-stage programs being pursued by other companies. In addition, there are a number of different anti-psychotic, including the muscarinic agonist COBENFY, and anti-depressant medications currently used in these patient populations.
• Our investigational treatments for potential use in neurology, psychiatry, endocrinology, obesity and related metabolic diseases, and immunology may in the future compete with numerous approved products and development-stage programs being pursued by several other companies.
Compared to us, many of our competitors and potential competitors have substantially greater:
• capital resources;
• sales and marketing experience;
• research and development capabilities and capacity, including personnel and technology;
• regulatory experience;
• preclinical study and clinical testing experience;
• manufacturing, marketing and distribution experience; and
• production facilities.

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Moreover, increased competition in certain disorders or therapies may make it more difficult for us to recruit or enroll patients in our clinical trials for similar disorders or therapies.
* Government and third-party payors may impose sales and pharmaceutical pricing controls on our products or limit coverage and/or reimbursement for our products or impose policies and/or make decisions regarding the status of our products that could limit our product revenues and delay sustained profitability.
Our ability to continue to commercialize our products, INGREZZA, CRENESSITY and VYKAT XR, will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available. The continuing efforts of government and third-party payors to contain or reduce the costs of healthcare and the price of prescription drugs through various means may impact our revenues. These payors’ efforts could decrease the price that we receive for any products we may develop and sell in the future.
Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement rates may not be adequate or may require co-payments that patients find unacceptably high. Patients who are prescribed medications for the treatment of their conditions, and their prescribing healthcare providers, generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs. Patients are unlikely to use our products unless coverage is provided and reimbursement is adequate to cover all or a significant portion of the out-of-pocket cost of our products. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available regardless of whether they are approved by the FDA for that particular use. Coverage decisions by payors for our competitors' products may also impact coverage for our products.
Government authorities and other third-party payors are developing increasingly sophisticated methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications. Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payors in the U.S. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. In addition, communications from government officials, media outlets, and others regarding healthcare costs and pharmaceutical pricing could have a negative impact on our stock price, even if such communications do not ultimately impact coverage or reimbursement decisions for our products.
There may also be significant delays in obtaining coverage and reimbursement for newly approved drugs or indications, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacturing, sale and distribution. In addition, we could also be subject to amendments in our rebate agreements with pharmaceutical benefit managers that require us to pay larger rebate amounts or modify our formulary position, which could have a material adverse effect on our business. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. For example, government authorities could make a decision that adversely impacts the status of one of our products, which could impact the eligibility and/or the amount of government reimbursement for that product.
As a pharmaceutical manufacturer, we are subject to various federal statutes and regulations requiring the reporting of price data and the subsequent provision of concessions to certain purchasers/payors, including state Medicaid programs. Federal agencies issue guidance to manufacturers related to the interpretation of laws and regulations, and this guidance has changed and may change or be updated over time. In interpreting these laws, regulations and guidance, manufacturers may make reasonable assumptions to fill gaps, and these reasonable assumptions may need to be updated upon issuance of additional agency guidance.
If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may be unable to successfully commercialize our commercial products or any of our product candidates for which we obtain marketing approval in the future. Our inability to promptly obtain coverage and profitable reimbursement rates from both government-funded and private payors for any approved products that we develop or acquire could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products, and our overall financial condition. Further, a majority of our current revenue is derived from federal healthcare program payors, including Medicare and Medicaid. Thus, changes in government reimbursement policies, government negotiation of the price of any of our products, reductions in payments and/or our suspension or exclusion from participation in federal healthcare programs could have a material adverse effect on our business.

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Further, the use of clinician telehealth services remains elevated, fueled by expansion of coverage and reimbursement for telehealth services across public and private insurers. The limitations that telehealth places on the ability to conduct a thorough physical examination may impact the ability of providers to screen for TD or chorea associated with Huntington’s disease, leading to fewer patients being diagnosed and/or treated.
Outside the U.S., reimbursement and healthcare payment systems vary significantly by country, and many countries, including EU Member States, restrict the range of medicinal products for which their national health insurance systems provide reimbursement and control the prices of medicinal products for human use.
To obtain reimbursement for our products in some European countries, including some EU Member States, we may be required to compile additional data comparing the cost-effectiveness of our products to other available therapies. If we are unable to obtain favorable pricing and reimbursement status in EU Member States for our products or product candidates for which we may obtain regulatory approval, any anticipated revenue from and growth prospects for those products in the EU could be negatively affected.
Legislators, policymakers, and payors may continue to propose and implement cost-containing measures to keep healthcare costs down. For example, in April 2025, the President issued an executive order that, among other things, directed specified agency heads to develop a Center for Medicare and Medicaid Innovation (CMMI) model that enables the Medicare program to obtain better value for high-cost prescription drugs and biological products. In May 2025, the President issued another executive order directing the administration to take immediate steps to end global freeloading and take additional aggressive action should drug manufacturers fail to offer American consumers the Most-Favored Nation (MFN) price. In December 2025, the Centers for Medicare & Medicaid Services (CMS) issued proposed regulations that, if finalized, would create CMMI demonstrations that would institute MFN-level pricing in the Medicare Part D and Part B markets. At present, given that the demonstrations are proposed rules that may or may not be finalized or implemented , there is uncertainty as to how these and other potential legal and regulatory changes may impact our business. However, if implemented, t hese policies could reduce or limit the prices we are able to charge for our products and product candidates that we may successfully develop and for which we may obtain regulatory approval or the level of reimbursement available for our products from governmental authorities or third-party payors. Further, in January 2026, the President released The Great Healthcare Plan, a proposal which calls on Congress to codify the administration’s MFN drug-pricing agreements with manufacturers and potentially extend MFN pricing to additional manufacturers. In addition, the One Big Beautiful Bill Act (OBBBA) is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding and limiting provider taxes used to fund the program. The OBBBA also narrowed access to the Patient Protection and Affordable Care Act (ACA) marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits, which expired at the end of 2025. These changes, along with other provisions of the OBBBA, are anticipated to reduce the number of Americans with health insurance. Further, an increasing number of countries use prices for medicinal products established in other countries as “reference prices” to help determine the price of the product in their own territory. Consequently, a downward trend in prices of medicinal products in some countries could contribute to similar downward trends elsewhere, including in the U.S.
* We may not successfully integrate Soleno or realize the anticipated benefits of the acquisition, which could adversely affect our business and financial condition.
In the second quarter of 2026, we completed the acquisition of Soleno. Our ability to realize the anticipated benefits of the acquisition depends on our ability to integrate Soleno’s business, personnel, operations, systems, controls, commercial capabilities, supply, distribution and patient-support arrangements and regulatory activities into our existing business in a timely and efficient manner. Integration activities may require significant management attention, time and resources and may disrupt our ongoing business.
We may encounter difficulties integrating Soleno, retaining key employees, maintaining relationships with healthcare providers, patients, payors, suppliers, specialty pharmacies, distributors and other business partners, or maintaining the commercialization and regulatory strategy for VYKAT XR.
We also have assumed, and may become responsible for, liabilities and risks relating to Soleno that may not have been identified or fully quantified in due diligence, including product liability, regulatory, commercial, employment, contract, tax, intellectual property, securities and other claims or proceedings. For example, on March 6, 2026, a purported stockholder of Soleno filed a putative federal securities class action against Soleno and certain members of Soleno’s management alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 on behalf of a putative class of purchasers of Soleno stock during a purported class period of March 26, 2025 through November 4, 2025, inclusive. Defense of or any adverse resolution of this action or any similar or related matters could result in substantial costs, damages, indemnification obligations, settlement payments or diversion of management's attention.

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If we do not integrate Soleno successfully or realize the anticipated benefits of the acquisition, our business, financial condition or results of operations could be adversely affected.
* Because the development of our product candidates is subject to a substantial degree of technological uncertainty, we may not succeed in developing any of our product candidates, which could adversely affect our business and financial condition.
Only a small number of research and development programs ultimately result in commercially successful drugs.
Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons. These reasons include the possibilities that the potential products may:
• be found ineffective or cause harmful side effects during preclinical studies or clinical trials;
• fail to receive necessary regulatory approvals on a timely basis or at all;
• be precluded from commercialization by proprietary rights of third parties;
• be difficult to manufacture on a large scale; or
• be uneconomical to commercialize or fail to achieve market acceptance.
If any of our product candidates encounters any of these potential problems, we may never successfully market that product candidate. Because we believe our continued growth and success depend in part on our ability to identify (by internal development, in-license or acquisition), develop and ultimately commercialize a steady number of additional product candidates, our failure or perceived failure to achieve that plan could adversely affect our business, results of operations and future growth prospects, and could cause the market price of our common stock to decline .
* Our clinical trials may be delayed for safety or other reasons, or fail to demonstrate the safety and efficacy of our product candidates, which could prevent or significantly delay their regulatory approval.
Before obtaining regulatory approval for the sale of any of our potential products, we must subject these product candidates to extensive preclinical and clinical testing to demonstrate their safety and efficacy for humans. Clinical trials are expensive, time consuming and may take years to complete and the outcomes are uncertain.
This risk is particularly significant for our late-stage product candidates, including our Phase 3 clinical programs for osavampator (NBI-1065845) in major depressive disorder and direclidine (NBI-1117568) in schizophrenia, because delays, failures, inconclusive results or safety concerns in these programs could materially and adversely affect our pipeline, business, financial condition, and the market price of our common stock.
In connection with the clinical trials of our product candidates, we face the risks that:
• the FDA or similar foreign regulatory authority may not allow an IND or foreign equivalent filings required to initiate human clinical studies for our drug candidates or the FDA or similar foreign regulatory authorities may require additional preclinical studies as a condition of the initiation of Phase 1 clinical studies, or additional clinical studies for progression from Phase 1 to Phase 2, or Phase 2 to Phase 3, or for NDA approval;
• the product candidate may not prove to be effective or as effective as other competing product candidates;
• we may discover that a product candidate may cause harmful side effects or results of required toxicology or other studies may not be acceptable to the FDA or similar foreign regulatory authorities;
• clinical trial results may not replicate or improve upon the results of previous trials;
• we or the FDA or similar foreign regulatory authorities may suspend or vary the trials;
• the results may not be statistically significant;
• clinical site initiation or patient recruitment and enrollment may be slower or more difficult than expected;
• the FDA or similar foreign regulatory authorities may not accept the data from any trial or trial site outside of the U.S.;
• a study is compromised due to patients dropping out and not completing the trials;
• unforeseen disruptions or delays may occur, caused by geopolitical and macroeconomic developments, man-made or natural disasters, public health pandemics or epidemics, armed conflicts, trade restrictions, tariffs, government shutdowns and the resulting effects on regulatory agencies, or other business interruptions; and
• regulatory requirements may change.

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These risks and uncertainties impact all of our clinical programs and any of the clinical, regulatory or operational events described above could change our planned clinical and regulatory activities. Geopolitical tensions could also affect our ability to obtain supplies of our investigational products, which could cause delays or otherwise disrupt our clinical trials and research and development efforts. Some of our suppliers and research and development collaborators are located in China, exposing us to the possibility of supply disruption in the event of changes to the laws, rules, regulations, and policies of the governments of the U.S. or China. Any such changes to laws or the adoption of tariffs, export controls, investment, licensing or procurement restrictions or other restrictions could impact our ability to contract with or maintain relationships with certain Chinese biotechnology companies, cause delays, or have other adverse effects on the development of certain of our research programs.
In addition, late-stage clinical trials are often conducted with patients having the most advanced stages of disease. During the course of treatment, these patients can die or suffer other adverse medical effects for reasons that may not be related to the pharmaceutical agent being tested but which can nevertheless adversely affect clinical trial conduct, completion and results. Any failure or substantial delay in completing clinical trials for our product candidates may severely harm our business.
Even if the clinical trials are successfully completed, we cannot guarantee that the FDA or similar foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval. The FDA and similar foreign regulatory authorities have substantial discretion in the approval process and may either refuse to accept an application for substantive review or may form the opinion after review of an application that the application is insufficient to allow approval of a product candidate. To the extent that the FDA or similar foreign regulatory authorities do not accept our application for review or approve our application, we may be required to expend significant additional resources, which may not be available to us, to conduct additional trials in support of potential approval of our product candidates. Depending on the extent of these additional trials or any other studies that might be required, approval of any applications that we submit may be significantly delayed. It is also possible that any such additional studies, if performed and completed, may not be considered sufficient by the FDA or similar foreign regulatory authorities and we may be forced to delay or abandon our applications for approval.
* We have increased the size of our organization and will need to continue to increase the size of our organization. Such increases may not be sufficient and we may encounter difficulties with managing our growth, which could adversely affect our results of operations.
Since 2017, the number of our full-time employees has grown from approximately 200 to over 2,500. Although we have substantially increased the size of our organization, we may need to add additional qualified personnel and resources, especially with the recent increase in the size of our sales force. Our current facilities, infrastructure and systems may be inadequate to support our development and commercialization efforts and expected growth. Future growth will impose significant added responsibilities on our organization, including the need to identify, recruit, maintain and integrate additional employees and implement and expand managerial, operational, and financial systems and may be costly and take time away from running other aspects of our business, including development and commercialization of our product candidates.
Our future financial performance and our ability to commercialize our commercial products or any of our product candidates that receive regulatory approval in the future, will partially depend on our ability to manage any future growth effectively. In particular, as we commercialize our commercial products we will need to support the training and ongoing activities of our sales force and will likely need to continue to expand the size of our employee base for managerial, operational, financial and other resources. To that end, we must be able to successfully:
• manage our development efforts effectively;
• integrate additional management, administrative and manufacturing personnel;
• manage increased operational complexity from employees and functions operating across multiple office locations and facilities;
• further develop our marketing and sales organization;
• compensate our employees on adequate terms in an increasingly competitive, inflationary market;
• attract and retain personnel; and
• maintain sufficient administrative, accounting and management information systems and controls.
We may not be able to accomplish these tasks or successfully manage our operations and, accordingly, may not achieve our research, development and commercialization goals. Our failure to accomplish any of these goals could harm our financial results and prospects.

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* We are transforming our research and development strategies to include the development of biologics, which requires substantial investment, including in personnel and facilities. We may encounter difficulties as we expand and may fail to successfully develop or commercialize our biologic product candidates, which could adversely affect our results of operations.
We are transforming our research and development strategies to include the development of biologics, including peptides, proteins, antibodies, conjugates, gene therapies and nucleic acid-based therapeutics. As a company, we do not have experience successfully developing and commercializing biologics and our current infrastructure may be inadequate to support the expected growth and transformation of processes, personnel, and technologies required for these new programs. We have hired employees with expertise in these modalities, but we will need to hire additional qualified personnel and expand our management, administrative, and technical staff to support the research and development organization. If we are unable to identify, recruit and integrate additional employees with the requisite skills, or effectively manage our transformation activities, the development of our biologic product candidates may not be successful, or be delayed or paused indefinitely. Gene therapies, in particular, may entail additional safety and development risks because they often require specialized administration (including intravenous administration) and may cause serious adverse events, including immune or inflammatory reactions, which could delay, suspend or terminate clinical development. Pre-existing immunity or immunity that develops after dosing may limit eligible patients and may prevent repeat dosing, which could reduce effectiveness and limit commercial adoption. Additionally, the manufacture of biologics and cognate devices are more complex than the manufacture of small molecule therapies. We currently have no manufacturing capabilities for biologic product candidates and devices and rely on third-party manufacturers. We may encounter delays in production and delivery of our biologic product candidates and devices by our third-party manufacturers or other vendors, which would result in corresponding delays to our development and commercialization of such biologic candidates. In addition, the regulatory requirements in the U.S. and in other countries governing biologics are evolving and the FDA or comparable foreign regulatory authorities may change the requirements, or identify different regulatory pathways, for approval for any of our biologic candidates. As a result, we may be required to change our regulatory strategy or to modify our applications for regulatory approval, which could delay and impair our ability to complete the preclinical and clinical development and manufacture of, and obtain regulatory approval for, our biologic candidates. We have made, and expect to continue making, substantial investments in our research and development personnel and facilities, as well in external innovation to support our expansion into the development of our biologics. If any of these risks occur and we fail to successfully develop or commercialize our biologic product candidates, we may not realize a return on our investments which could have an adverse effect on our results of operations and financial condition.
* If we are unable to retain and recruit qualified scientists and other employees or if any of our key senior executives discontinues his or her employment with us, it may delay our development efforts or impact our commercialization of our commercial products or any product candidate approved by the FDA in the future.
We are highly dependent on the principal members of our management, commercial, and scientific staff. The loss of any of these people could impede the achievement of our objectives, including the successful commercialization of our commercial products or the commercialization of any product candidate approved by the FDA in the future. Furthermore, recruiting and retaining qualified scientific personnel to perform research and development work in the future, along with personnel with experience marketing and selling pharmaceutical products, is critical to our success. We may be unable to attract and retain personnel on acceptable terms given the competition among biotechnology, pharmaceutical and healthcare companies, and universities and non-profit research institutions for experienced scientists and individuals with experience marketing and selling pharmaceutical products. We may face particular retention challenges in light of the recent rapid growth in our personnel and infrastructure and the perceived impact of those changes upon our corporate culture, including as we integrate employees and operations from Soleno. In addition, we rely on a significant number of consultants to assist us in formulating our research and development strategy and our commercialization strategy. Our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.
* Use of our approved products or those of our collaborators could be associated with side effects or adverse events.
As with most pharmaceutical products, use of our approved products or those of our collaborators could be associated with side effects or adverse events which can vary in severity (from minor adverse reactions to death) and frequency (infrequent or prevalent). Side effects or adverse events associated with the use of our products or those of our collaborators may be observed at any time, including after a product is commercialized, and reports of any such side effects or adverse events may negatively impact demand for our or our collaborators’ products or affect our or our collaborators’ ability to maintain regulatory approval for such products. With respect to VYKAT XR, since it became commercially available, serious adverse events in patients taking VYKAT XR have been reported to FDA through the FDA Adverse Event Reporting System

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(AEMS), formerly the FDA Adverse Event Reporting System (FAERS). Although reports in AEMS do not establish that a drug caused an adverse event and may be attributable to the patient’s underlying disease, other medications or other factors, these reports could negatively impact demand for VYKAT XR, result in regulatory scrutiny or cause patients or caregivers to discontinue use of VYKAT XR or healthcare providers to be reluctant to prescribe or continue prescribing VYKAT XR. Side effects or other safety issues associated with the use of our approved products or those of our collaborators could require us or our collaborators to modify or halt commercialization of these products or expose us to product liability lawsuits which will harm our business. We or our collaborators may be required by regulatory agencies to conduct additional studies regarding the safety and efficacy of our products which we have not planned or anticipated. Furthermore, there can be no assurance that we or our collaborators will resolve any issues related to any product related adverse events to the satisfaction of the FDA or any regulatory agency in a timely manner or ever, which could harm our business, prospects and financial condition.
* We currently depend on a limited number of third-party suppliers. The loss of these suppliers, or delays or problems in the supply of our commercial products or our product candidates, could materially and adversely affect our ability to successfully develop or commercialize our commercial products or any of our product candidates.
The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of process controls required to consistently produce the active pharmaceutical ingredients (API), the finished drug product and packaging in sufficient quantities while meeting detailed product specifications on a repeated basis. Manufacturers of pharmaceutical products may encounter difficulties in production, such as difficulties with production costs and yields, process controls and validation, quality control and quality assurance, including testing of stability, impurities and impurity levels and other product specifications by validated test methods, compliance with strictly enforced U.S., state and non-U.S. regulations, and disruptions or delays caused by geopolitical and macroeconomic developments, man-made or natural disasters, public health pandemics or epidemics, armed conflicts, trade restrictions, tariffs, government shutdowns and the resulting effects on regulatory agencies, or other business interruptions. We depend on a limited number of suppliers for the production (including API) of our commercial products and product candidates and for the packaging of our commercial products. If our third-party suppliers for our commercial products or any of our product candidates encounter these or any other manufacturing, quality, or compliance difficulties, our ability to successfully develop or commercialize our commercial products or any of our product candidates could be materially and adversely affected.
In addition, if our suppliers fail or refuse to supply us with our commercial products or any of our product candidates, or their APIs for any reason, or terminate our supply agreements or do not perform as agreed, it would take a significant amount of time and expense to qualify a new supplier. The FDA and similar foreign regulatory authorities must approve manufacturers of the active and inactive pharmaceutical ingredients and certain packaging materials used in pharmaceutical products. The loss of a supplier could require us to obtain regulatory clearance and to incur validation and other costs associated with the transfer of the API or product manufacturing processes. If there are delays in qualifying new suppliers or facilities or if a new supplier is unable to meet FDA or a similar foreign regulatory authority’s requirements for approval, there could be a shortage of our commercial products or any of our product candidates, which could materially and adversely affect our ability to successfully develop or commercialize our commercial products or any of our product candidates. These risks may be heightened for arrangements that rely on sole-source or limited-source suppliers, including certain arrangements for VYKAT XR, because qualifying an alternative supplier could take significant time and expense and could result in supply constraints or other product availability issues.
* We may be unable to successfully pursue, complete or integrate strategic acquisitions, including our recently completed acquisition of Soleno, which could adversely affect our business and financial condition.
Our ability to execute on our long-term strategy depends in part on our ability to pursue strategic business development when complementary opportunities arise, including through acquisitions, collaborations and other investments. We may continue to seek attractive opportunities to acquire businesses, enter into collaborations and make other investments that are complementary to our existing strengths. There can be no assurance, however, that any such opportunities will arise or, if they do, that they will be identified, consummated or successfully integrated. Strategic acquisitions and similar transactions involve numerous risks, including difficulties in identifying and consummating suitable transactions on acceptable terms, satisfying closing conditions, obtaining antitrust and/or other regulatory approvals, potential disputes or litigation, integrating acquired businesses, realizing anticipated benefits, retaining key employees and avoiding disruption to our ongoing business and diversion of management’s attention. For risks related specifically to the integration of Soleno and the realization of anticipated benefits from the acquisition, see the risk factor titled “We may not successfully integrate Soleno or realize the anticipated benefits of the acquisition, which could adversely affect our business and financial condition.”

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* We depend on our current collaborators for the development and commercialization of several of our products and product candidates and may need to enter into future collaborations to develop and commercialize certain of our product candidates.
We depend on our current collaborators for the development and commercialization of several of our products and product candidates and may need to enter into future collaborations to develop and commercialize certain of our product candidates. We collaborate with TPC for the commercialization of DYSVAL in Japan and for the continued development and commercialization of valbenazine for movement disorders in other select Asian markets. Some of our other collaborators include Nxera Pharma UK Limited (formerly Sosei Heptares), Takeda Pharmaceutical Company Limited, Voyager Therapeutics, Inc., and Xenon Pharmaceuticals Inc. Additionally, we depend on collaborators for the development of some of our biologics leads and candidates.
Our current and future collaborations and licenses could subject us to a number of risks, including:
• strategic collaborators may sell, transfer or divest assets or programs related to our partnered product or product candidates;
• we may be required to undertake the expenditure of substantial operational, financial and management resources;
• we may be required to assume substantial actual or contingent liabilities;
• we may not be able to control the amount and timing of resources that our strategic collaborators devote to the development or commercialization of our products or product candidates;
• we may not be able to influence our strategic collaborator’s decisions regarding the development and collaboration of our partnered product and product candidates, and as a result, our collaboration partners may not pursue or prioritize the development and commercialization of those partnered products and product candidates in a manner that is in our best interest;
• strategic collaborators may select indications or design clinical trials in a way that may be less successful than if we were doing so;
• strategic collaborators may not conduct collaborative activities in a timely manner, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing;
• strategic collaborators may not pursue further development and commercialization of products resulting from the strategic collaboration arrangement or may elect to discontinue research and development programs;
• disagreements or disputes may arise between us and our strategic collaborators that result in delays or in costly litigation or arbitration that diverts management’s attention and consumes resources;
• strategic collaborators may experience financial difficulties;
• strategic collaborators may not properly maintain, enforce or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation;
• we or strategic collaborators could terminate the arrangement (in whole or in part) or allow it to expire, which would delay the development and commercialization, result in disagreements or disputes or may increase the cost of developing and commercializing our products or product candidates;
• strategic collaborators could develop, either alone or with others, products or product candidates that may compete with ours; and
• our strategic collaborator’s decisions regarding the development and commercialization of a partnered product or product candidate within their territory(ies) could negatively impact us in the territories where we have development and commercialization rights for such product or product candidate.
If any of these issues arise, it may delay and/or negatively impact the development and commercialization of drug candidates and, ultimately, our generation of product revenues.

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* We currently have no manufacturing capabilities. If third-party manufacturers of our commercial products or any of our product candidates fail to devote sufficient time and resources to our concerns, or if their performance is substandard, our ability to commercialize existing products, conduct clinical trials and develop new products could be impaired and our costs may rise.
We have in the past utilized, and intend to continue to utilize, third-party manufacturers to produce the drug compounds we use in our clinical trials and for the commercialization of our products. We have limited experience in manufacturing products for commercial purposes and do not currently have any manufacturing facilities. Establishing internal commercial manufacturing capabilities would require significant time and resources, and we may not be able to timely or successfully establish such capabilities. Consequently, we depend on, and will continue to depend on, several contract manufacturers for all production of products for development and commercial purposes. If we are unable to obtain or retain third-party manufacturers, we will not be able to develop or commercialize our products.
The manufacture of our products for clinical trials and commercial purposes is subject to specific FDA and equivalent foreign regulations, including current good manufacturing practice (cGMP) regulations. Our third-party manufacturers might not comply with FDA or equivalent foreign regulations relating to manufacturing our products for clinical trials and commercial purposes or other regulatory requirements now or in the future. Our reliance on contract manufacturers also exposes us to the following risks:
• contract manufacturers may encounter difficulties in achieving volume production, quality control or quality assurance, and also may experience shortages in qualified personnel or materials and ingredients necessary to conduct their operations. As a result, our contract manufacturers might not be able to meet our clinical schedules or adequately manufacture our products in commercial quantities when required;
• switching manufacturers may be difficult because the number of potential manufacturers is limited. It may be difficult or impossible for us to find a replacement manufacturer quickly on acceptable terms, or at all;
• our contract manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to successfully produce, store or distribute our products or product candidates; and
• drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the U.S. Drug Enforcement Administration, equivalent foreign regulatory authorities, and other agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards. Any delay, interruption, or other issue that arises in the manufacture of our products or product candidates as a result of a failure of a third-party manufacturer to pass regulatory inspections or maintain cGMP compliance could significantly impair our ability to develop our product candidates or to obtain approval for or successfully commercialize our products.
Further, changes in federal policy could affect the geopolitical landscape and could give rise to circumstances that negatively affect our business. The third parties that manufacture our products have manufacturing facilities located in Europe. The U.S. has implemented, and has proposed to further implement, tariffs that may increase the costs of our third-party manufacturers and the expense to us to produce the drug compounds we use in our clinical trials and for the commercialization of our products. If such actions were to materially affect us or our third-party manufacturers, we may not be able to successfully develop our product candidates or commercialize our products.
Our current dependence upon third parties for the manufacture of our products may reduce our profit margin, if any, on the sale of our commercial products or our future products and our ability to develop and deliver products on a timely and competitive basis.

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