Okay. Let's get started. So we stay on time. I'm Brian Abrahams, senior biotech -- one of the senior biotech analysts here at RBC Capital Markets. We're really pleased to have our next featured company, Neurocrine, represented by their CFO, Matt Abernethy; and their Chief Commercial Officer, Eric Benevich. So Matt and Eric, thanks so much for joining us.
Matt, maybe you could start with just some kind of opening comments on the general state of Neurocrine. Obviously, it's been an exciting last 6 months, the launch of CRENESSITY, INGREZZA continuing to do well. Where do we stand? What's the outlook?
Well, I'll say one word. I guess I will say that we will be making forward-looking statements, so I'll direct you to our SEC filings for the related risk factors and uncertainties associated with the company and then also the industry. Sorry, a few things. I was just talking to a gentleman before this meeting and Eric reminded him that I speak Indiana, is my native tongue. I am a Pacers fan. And so I am really looking forward -- okay, I am looking forward to the Pacers versus Knicks series just to see that battle here coming up.
The second more macro comment I'd make is you never know, Brian, what you're going to wake up to every morning these days. You have different headlines swirling, whether they impact your company or not is a question. But it can really drive a lot of uncertainty, obviously, in the investment community. But even within a company, you have all sorts of noise that what does this mean? What's going to happen with biotech? And a couple of quarters ago, Todd Tushla, our Head of IR, got up in front of the company and said, okay, guys, this is what it takes to drive shareholder value. It's help more patients. And fortunately, as we sit here today, we can help more patients. That's something fully within our control. And a lot of companies, I guess, aren't in the same position that we're in today.
In 2017, we had our first approved product, which is INGREZZA, believe it or not. Fast forward 8 years later, we're at $2.5 billion to $2.6 billion in guidance this year. At the time of approval, there was 800,000 patients, but only 2% were diagnosed at that time. You fast forward to today, we're at 40% diagnosis. And Eric and his team have done an excellent job leading and driving that diagnosis, but still only a subset of those patients diagnosed are getting treated, and there's still an ample room for continued growth into the future.
The second piece was in December, we had CRENESSITY approved, and that was the first approved treatment in over 70 years for patients with congenital adrenal hyperplasia. And in the first quarter, Eric has said this, so far, so great with the launch. Over 400 patients received enrollment forms, which is essentially a new script written for patients in the first quarter that exceeded our expectations as well as the expectations of Wall Street. And I think it's really reflective of a patient population who knows they need something more than just taking high-dose steroid, and know they need better androgen control. So, so far, we're learning a ton in that launch. We're going to learn a lot over the next couple of quarters. But overall, CRENESSITY has done tremendous.
So beyond just the commercial products, Brian, we do have two major Phase III programs. The first one that I'd highlight is my favorite. It's osavampator. It's being studied as an inadequate response to major depressive disorder. It's one that we now have in a Phase III trial. Three Phase III trials have been up and running. The reason why it's my favorite, Eric always elbows me. It's a little less expensive to run those trials. It's around $50 million per trial. It's a major indication and it fits incredibly well within our existing sales channels hands if it were to be positive.
In a similar fashion, we have our second major Phase III program, which is the M4 agonist program in schizophrenia. We just got that trial up and running as a Phase III. And so overall, I feel great with where we're at on the product and pipeline front.
Financially, we have $1.8 billion in cash, and that's even reflective of using $750 million over the last 12 months to retire 100% of our convertible debt as well as retire our shares. So we have plenty of financial flexibility. We sit here where we expect tremendous growth over the next several years, both out of CRENESSITY and then also out of INGREZZA, and even in this turbulent market time, we feel fortunate with how we're positioned, Brian. So any -- who -- are you Knicks or Pacers fan?
Knicks fan, I would have thought you would be a Celtics fan actually, but...
And when you wake up in the morning, are you dreading opening that laptop? Or you -- how does the external environment feel for you?
On the Knicks or Nets? Or on the biotech?
On biotech.
So it feels good on the Knicks. Look, I think, the external environment has definitely been volatile, but our view is that it creates opportunities in areas where there may not be -- a lot of times, people paint companies with the same brush when that's not necessarily appropriate, and that's where we see opportunities. And try to find good times to step into companies with good fundamentals.
And so speaking of good fundamentals, the launch of CRENESSITY has been obviously kind of has shot out of the gate, surprised some folks, exceeded many expectations, your own expectations. Or can you maybe provide a little bit more color on the overall launch metrics? Maybe just starting with the prescriber base, like how large is the current prescriber base? And maybe how fragmented is this population? Is there kind of a small -- it's only a small fragment that's kind of treated at these centers of excellence? And where are you kind of initially in terms of your penetration within the key centers and prescribers?
Yes. So I'll take a step back and just remind everyone that we're really happy with the registrational data that we generated for CRENESSITY and the labeling that we got in December. It was a priority review. We got approved a couple of weeks ahead of our PDUFA date. And we had put a team in the field actually last summer, sales team and med affairs team to go out there and start doing disease state education, to profile future customers and to do patient finding work. And I think that was a good decision in retrospect because that allowed us to get off to a quicker start than we would have otherwise.
This is a patient population that we estimate somewhere north of 20,000 classic CAH patients in the U.S. And for the most part, they're carried for by endocrinologists. About 2/3 of the population is adult, about 1/3 is adolescent or pediatric. There's a little over 1,000 pediatric endocrinologists in the U.S. They're obviously an important future prescriber group for us. There's less than 10 centers of excellence that are accredited through the CARES Foundation. The CARES Foundation is the patient advocacy group for CAH, classic CAH. And the balance of these patients are cared for by adult endocrinologists in the community. And as I mentioned, some of these patients aren't even seeing an endocrinologist. They may be under the care of a primary care physician or an OB, for example.
And so our expectation in -- at the time that we got approval based on all the work that we did to prepare for the launch was that we'd probably see earlier adoption in the pediatric patient population because, frankly, the earlier you get started on treatment with CRENESSITY, the more benefit that you'll see over the course of a lifetime and that we would see probably more rapid adoption within those centers of excellence and the adult endocrinologists would sort of come on over the course of the launch.
What we actually saw, and we disclosed this during our earnings call for Q1 was that the adoption exceeded -- the pace of adoption exceeded our expectations. There was 413 treatment forms that were submitted and the treatment form equals an NRx written for that particular patient. So that exceeded, I think, external expectations and the internal expectations.
Okay.
Early on, we saw that there was sort of an equal mix of adult versus pediatric patients and an equal mix of female versus male patients. Over time, we expect it to skew towards younger patients and more females, and it started to do that as we progress through the launch.
And the other part of your question was really around the prescribers. Most of the doctors that have prescribed CRENESSITY have prescribed it for one patient. Now we don't think that this is necessarily one of those medicines where they're going to treat one patient, see how it works and then decide if they want to use it in more. What's really sort of driving the pace of adoption is more of just the flow of patients through practices.
Most of these patients only see their endocrinologists once or twice a year, pediatric, that might be 2 or 3 times a year. But ultimately, almost all of the new patient starts that we've received have come in conjunction with the patient visit. So when the patients flow through then they have the conversation about whether or not they want to be initiating treatment with CRENESSITY, and that's how the process starts.
So obviously, we're really pleased with the adoption thus far. And certainly, I think, 1 quarter doesn't make a trend, so I think, we'll learn a lot more as we progress through the launch. But just really happy with the initial receptivity to the new medicine.
And maybe tell us a little bit more about those 413 patients. I mean it sounds like some of the patient finding efforts really laid the groundwork there. Are these patients -- I guess, to what degree did these patients represent a sort of initial cohort of patients who had maybe been identified in the prelaunch processes and made an appointment to see their clinician in the early days when they expected the drug to be available or maybe represent rollover patients from clinical trials versus -- I guess I'm trying to get a sense of how sustainable that trajectory may be. Do you have any -- are there any metrics you're looking for or are seeing now that may guide you on that?
Yes. So we didn't expect there to be a bolus per se of patients that were warehoused or waiting for CRENESSITY. And as a reminder, we did disease state education to sort of develop the market in advance of our approval. But we couldn't talk about CRENESSITY. And so really, what we talked about was the issues that these patients face in trying to manage their disease, and I'll call it the deficits of the old standard of care, which was high-dose glucocorticoids. So I do think that there was some awareness within the endocrinologist community about a new medication that was potentially going to be coming to market, but less so within the patient community.
So we haven't seen any indication that patients were trying to move up their appointment necessarily to see their doctor. But I do think that some of the very early new patient starts that we got in the last couple of weeks of December or in early January, were from those doctors that were kind of waiting for CRENESSITY to get approved and were eager to go ahead and get their patients started. But for the most part, I think, the pace of adoption has coincided with patient visits and also our team's ability to get in front of these endocrinologists and educate them on the labeling and the data.
So a lot of the work that they did last fall to do disease state education, patient finding work and so on, they are also setting up appointments for Q1 and Q2 in anticipation of approval and being able to go back in and say, okay, now CRENESSITY is approved. Let's talk about the labeling. Let's talk about the reimbursement process and how you can get a new patient started.
The only piece that I'd add is there's a tremendous patient advocacy group. It's called the CARES Foundation, and we actually have the CARES Foundation participate in our R&D Day a few years ago. And this patient advocacy group, it has done a great job informing the community about a potential treatment. But our feedback from clinicians has been even if a patient asks for the therapy over the phone, they just say, let's talk about it next time you come in because these doctors, these clinicians are overcapacity at this time. So I think there's going to be, as Eric said, as patients come in, you're going to ultimately get more prescribing.
The second piece I'd say is we're right now in the very early innings where patients are taking -- are getting their blood draws. And they're seeing what are happening with their biomarkers. And then the clinicians having to decide what are you going to do with glucocorticoid. So I think that there's going to be a significant amount of learning over the next quarter or 2 as patients actually get deeper into their care. They will, of course, inform persistency and compliance. But I think it will also inform how durable is this new patient addition clip. There's 20,000 patients. There's clearly many that can -- we believe can be benefited -- can benefit from this treatment, but it's still such early innings, both in terms of engaging with patients, but then also getting results back.
Now on the flip side, our open-label extension study, we enrolled 95% of patients from our primary study into the open-label extension and pretty much they've all stayed on throughout the course of the last 12 to 18 months. So there does seem to be a nice level of compliance and persistency here. But in terms of commercial use and real-world use, we're just learning a lot right now.
Yes. One other comment I'll tack on is you asked about where some of these early patients from our rollovers from our study. We actually just informed the investigators that we're going to be winding down the adult open-label study in the U.S. And so those patients will be transitioning over to commercial product over the course of Q2 and some of them might trickle into Q3. So none of the new patient starts in Q1 were study patients.
That's only somewhat -- it's between 40 and 50 patients. So it's not a big, big number in terms of adults in the U.S. that would roll over.
Reimbursement has gone maybe a little bit more rapidly than you had initially expected as well. I think you talked about 70% reimbursement for dispensed drug in the first quarter, more formulary reviews going on. What's the latest status of coverage? And how quickly are patients able to get drugs through the exception process?
Yes. So at the time that we launched CRENESSITY, it was essentially a non-formulary drug everywhere. This is primarily a commercially insured patient population. Second biggest segment is Medicaid. Medicare is about 10% or less of the total patient population. So we knew that going into this, that as a non-formulary drug, we'd have to pursue the formulary exceptions process, and all these plans have a defined process.
And so in order to get people started on treatment and to avoid any delays or lags, we put a free goods program in place essentially when the prescription goes to our specialty pharmacy partner, Panther Rare Rx (sic) [ PANTHERx Rare ]. If after a week, they haven't gotten approval from the health plan for reimbursement, then that patient would be eligible for the free goods. And at that point, a month supply of CRENESSITY would be shipped to the patient.
So a priori, our expectation was that most patients would get at least a month of free goods, possibly some would need 2 before getting reimbursement approval from the plan. Actually it didn't work out that way. Most patients were able to get approval for their prescription from their plan within that first week. And so what we shared was that in Q1, 70% of the fills were commercially reimbursed and only 30% ended up needing free goods at all.
So we expect that things will evolve over time. And certainly, as we're in the market longer, more of these plans will take a look and define what their coverage policies are. But so far, it's been very positive, and that's exceeded our expectations on reimbursement. And the plans that have published their coverage policy is generally very reasonable and consistent with the labeling. So for example, a patient has to be at least 4 years of age. They have to have a diagnosis of classic CAH and they have to be on concomitant glucocorticoids because CRENESSITY is an adjunct to GCs. So for the most part, it's working well.
Makes sense. I want to make sure we talk about INGREZZA as well. I think you surprised a lot of folks with what seemed to be more negative than expected outlook for INGREZZA coming out of fourth quarter of last year and then probably better-than-expected performance momentum coming out of first quarter earnings. So can you dive into that a little bit more kind of bigger picture, what's underlying some of these trends? And how should we think about the balance between pricing and contracting versus volumes going forward?
That's a balancing act that we've tried to manage for the past 8 years. So just as a reminder, we estimate and I think Matt touched on this, that there's at least 800,000 people in the U.S. with tardive dyskinesia. And INGREZZA has been on the market now for 8 years. At the time that we launched, it was a low single digit percent of people that had been diagnosed with TD. And now we estimate it's around 40-ish percent of people that have been given a diagnosis for their abnormal movements, but less than 10% are currently being treated with a VMAT2 inhibitor. So there's still a lot of organic growth potential in the VMAT2 market.
Last year, what we saw though was, especially in the second half of last year, partly because of competitive dynamics and also partly because of payer dynamics, it was getting harder to grow new patient starts. And so things flattened out in the middle of the year, and then we started to see even declining rate of new patient starts as we got into Q4. And I think that, that slowdown in momentum colored our commentary when we got to that Q4 earnings call and also shaped our thinking around the guidance for 2025. But we also implemented some interventions last year to sort of address some of these challenges.
I think the biggest one, the big ticket item, so to speak, was the expansion of our field sales team. And we started the work in the summertime, and we're able to get the expanded team deployed in Q4. And so that, I think, led to what we saw in Q1, which was a team that was finding its stride and able to drive a record number of new patient starts in Q1. So we went from a dynamic of slowing down or deceleration of new patient starts in the second half of last year and then a reacceleration in Q1.
And I should point out that Q1 is always a challenging year for our INGREZZA -- quarter for our INGREZZA franchise because so many of our existing patients need to get reauthorized. It's a specialty drug, a lot of them are Medicare beneficiaries, and a lot of them have plan requirements that they get reauthorized at the beginning of the calendar year. So you've got this big bolus of people that are doing well on treatment and all of a sudden, they need their doctor to write a new prescription and go through that prior authorization process all over again.
So for us, as a company, we put a lot of energy into being very proactive, working with the prescribers and the pharmacies to minimize the potential for patients to fall off therapy or to experience treatment gaps. And so the first half of Q1 this year, like prior years, a lot of the focus was on that reauthorization process and trying to keep the continuing patients continuing. And then what we saw was an acceleration of new patient starts, especially in the second half of the quarter. And it's unusual for us to have a record number of new patient starts in Q1. Typically, we would see something like that more like in Q2.
And the sustainability, and we get asked a lot about the overall guidance, and it seems like the guidance presumes pretty steadily increasing volumes over the course of this year, driven by maybe a mix of contracting and/or the sales force expansion. Can you speak to that kind of your level of confidence, given where kind of the net price per patient ended up in 1Q? How do you get to the $2.5 billion to $2.6 billion?
Let me comment really quickly on net price, and then he'll talk on the volume side. So as Eric mentioned, we saw in the second half of last year, the payers tightening a bit. And so we've been working quite heavily on ensuring that we're on contract on certain plants to make sure, number one, existing patients will stay on therapy. And number two, it will allow for new patients to be added in a bit smoother way. We've been very successful over the years of adding patients regardless of formulary position. In this environment and at the scale that we're at, we made the decision to enter into the contracting. So we do take a gross to net hit on day 1, and that is effective April 1. So we would expect from a net revenue per script to be slightly less in 2025 as compared to 2024.
Yes, the other piece of your question, we do expect an acceleration of growth through the balance of this year, and we reaffirmed our guidance of $2.5 billion to $2.6 billion during our last earnings call. So once we saw that record number of new patient starts in Q1, I don't think that our team has hit their full productivity, and we would expect to continue to see growth in new patient starts as we move through the year.
Great. I think -- I feel like I've gotten through maybe less than 1/3 of my questions, but unfortunately, we're out of time. Matt, Eric, great to see you guys. Thanks so much for the update and insights and I appreciate you being here.
Thanks for having us.
Good to see you, thank you.
Thanks, everyone.
