nbix-20230630

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, 2023

☐ 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)

12780 El Camino Real

San Diego, CA

(Address of principal executive office)

33-0525145

(IRS Employer

Identification No.)

92130

(Zip Code)

(858) 617-7600

(Registrant’s telephone number, including area code)

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 97,652,450 as of July 26, 2023.

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 Operations and Comprehensive Income (Loss)			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			18

Item 3. Quantitative and Qualitative Disclosures About Market Risk			23

Item 4. Controls and Procedures			24

Part II. Other Information			25

Item 1. Legal Proceedings			25

Item 1A. Risk Factors			25

Item 5. Other Information			51

Item 6. Exhibits			52

Signatures			53

Part I. Financial Information

Item 1. Financial Statements

NEUROCRINE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


(in millions, except share data)	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	160.2	$	262.9
Debt securities available-for-sale	816.5		726.4
Accounts receivable	387.6		350.0
Inventories, net	31.7		35.1
Other current assets	100.6		79.1
Total current assets	1,496.6		1,453.5
Deferred tax assets	379.0		305.9
Debt securities available-for-sale	342.6		299.4
Right-of-use assets	83.5		87.0
Equity security investments	173.0		102.1
Property and equipment, net	65.6		58.6
Intangible assets, net	36.9		37.2
Other assets	35.9		25.0
Total assets	$	2,613.1	$	2,368.7

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	391.6	$	347.6
Convertible senior notes	169.7		169.4
Other current liabilities	21.2		20.7
Total current liabilities	582.5		537.7

Noncurrent operating lease liabilities	89.1		93.5
Other long-term liabilities	88.5		29.7
Total liabilities	760.1		660.9

Stockholders’ equity:
Preferred stock, $0.001 par value; 5.0 million shares authorized; no shares issued and outstanding	—		—
Common stock, $0.001 par value; 220.0 million shares authorized; 97.6 million and 96.5 million shares issued and outstanding, respectively	0.1		0.1
Additional paid-in capital	2,241.9		2,122.4
Accumulated other comprehensive loss	(1.1)		(7.9)
Accumulated deficit	(387.9)		(406.8)
Total stockholders’ equity	1,853.0		1,707.8
Total liabilities and stockholders’ equity	$	2,613.1	$	2,368.7

See accompanying notes to the condensed consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share data)	2023		2022		2023		2022
Revenues:
Net product sales	$	446.3	$	352.0	$	861.6	$	657.0
Collaboration revenues	6.4		26.2		11.5		31.8
Total revenues	452.7		378.2		873.1		688.8
Operating expenses:
Cost of revenues	11.5		4.8		20.0		9.4
Research and development	145.8		135.9		285.3		238.1
Acquired in-process research and development	—		—		143.9		—
Selling, general and administrative	221.8		182.8		464.5		383.5
Total operating expenses	379.1		323.5		913.7		631.0
Operating income (loss)	73.6		54.7		(40.6)		57.8
Other income (expense):
Interest expense	(1.3)		(2.2)		(2.4)		(4.8)
Unrealized gain (loss) on equity security investments	37.3		(7.4)		39.5		12.5
Loss on extinguishment of convertible senior notes	—		(70.0)		—		(70.0)
Investment income and other, net	12.0		1.6		21.8		2.6
Total other income (loss), net	48.0		(78.0)		58.9		(59.7)
Income (loss) before provision for (benefit from) income taxes	121.6		(23.3)		18.3		(1.9)
Provision for (benefit from) income taxes	26.1		(6.4)		(0.6)		1.1
Net income (loss)	95.5		(16.9)		18.9		(3.0)
Foreign currency translation adjustments, net of tax	0.9		—		2.1		—
Unrealized gain (loss) on debt securities available-for-sale, net of tax	0.7		(2.9)		4.7		(10.5)
Comprehensive income (loss)	$	97.1	$	(19.8)	$	25.7	$	(13.5)
Earnings (loss) per share:
Basic	$	0.98	$	(0.18)	$	0.19	$	(0.03)
Diluted	$	0.95	$	(0.18)	$	0.19	$	(0.03)
Weighted-average shares outstanding:
Basic	97.6		95.6		97.4		95.4
Diluted	100.2		95.6		100.3		95.4

See accompanying notes to the condensed consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(unaudited)


						Accumulated Other Comprehensive Income (Loss)
	Common Stock			Additional Paid-In Capital				Accumulated Deficit
(in millions)	Shares	$								Total
Balances at March 31, 2023	97.5	$	0.1	$	2,170.5	$	(2.7)	$	(483.4)	$	1,684.5
Net income	—	—		—		—		95.5		95.5
Other comprehensive income, net of tax	—	—		—		1.6		—		1.6
Stock-based compensation expense	—	—		68.5		—		—		68.5
Issuances of common stock under stock plans	0.1	—		2.9		—		—		2.9
Balances at June 30, 2023	97.6	$	0.1	$	2,241.9	$	(1.1)	$	(387.9)	$	1,853.0

Balances at March 31, 2022	95.5	$	0.1	$	1,947.7	$	(9.3)	$	(547.4)	$	1,391.1
Net loss	—	—		—		—		(16.9)		(16.9)
Other comprehensive loss, net of tax	—	—		—		(2.9)		—		(2.9)

Stock-based compensation expense	—	—		49.5		—		—		49.5
Issuances of common stock under stock plans	0.1	—		2.6		—		—		2.6
Balances at June 30, 2022	95.6	$	0.1	$	1,999.8	$	(12.2)	$	(564.3)	$	1,423.4

Balance at December 31, 2022	96.5	$	0.1	$	2,122.4	$	(7.9)	$	(406.8)	$	1,707.8
Net income	—	—		—		—		18.9		18.9
Other comprehensive income, net of tax	—	—		—		6.8		—		6.8
Stock-based compensation expense	—	—		108.4		—		—		108.4
Issuances of common stock under stock plans	1.1	—		11.1		—		—		11.1
Balance at June 30, 2023	97.6	$	0.1	$	2,241.9	$	(1.1)	$	(387.9)	$	1,853.0

Balance at December 31, 2021	94.9	$	0.1	$	2,011.4	$	(1.7)	$	(635.8)	$	1,374.0
Net loss	—	—		—		—		(3.0)		(3.0)
Other comprehensive loss, net of tax	—	—		—		(10.5)		—		(10.5)
Cumulative-effect adjustment due to adoption of ASU 2020-06	—	—		(106.8)		—		74.5		(32.3)
Stock-based compensation expense	—	—		86.5		—		—		86.5
Issuances of common stock under stock plans	0.7	—		8.7		—		—		8.7
Balance at June 30, 2022	95.6	$	0.1	$	1,999.8	$	(12.2)	$	(564.3)	$	1,423.4

See accompanying notes to the condensed consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Six Months Ended June 30,
(in millions)	2023		2022
Cash flows from operating activities:
Net income (loss)	$	18.9	$	(3.0)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Stock-based compensation expense	108.4		86.5
Depreciation	8.3		7.2
Amortization of debt issuance costs	0.4		0.8
Amortization of intangible assets	1.8		—
Changes in fair value of equity security investments	(39.5)		(12.5)
Deferred income taxes	(73.1)		(3.4)
Loss on extinguishment of convertible senior notes	—		70.0
Other	(6.7)		2.3
Change in operating assets and liabilities:
Accounts receivable	(37.5)		(93.5)
Inventories	3.4		1.2
Accounts payable and accrued liabilities	22.9		44.2
Other assets and liabilities, net	47.1		(2.2)
Cash flows from operating activities	54.4		97.6

Cash flows from investing activities:
Purchases of debt securities available-for-sale	(530.0)		(253.7)
Sales and maturities of debt securities available-for-sale	408.6		277.6

Purchases of equity security investments	(31.3)		(7.7)
Capital expenditures	(15.3)		(16.4)

SEC Form 10-Q filed by Neurocrine Biosciences Inc.