Item 7. 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 pertaining to, among other things, the commercialization of our product and product candidates, the expected continuation of our collaborative agreements, the progress, timing, results or implications of clinical trials and other development activities, our plans and timing with respect to seeking regulatory approvals, the period of time that our existing capital resources will meet our funding requirements, and our financial results of operations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various risks and uncertainties, including those set forth in this Annual Report on Form 10-K under the heading “Item 1A. Risk Factors.” See “Forward-Looking Statements” in Part I of this Annual Report on Form 10-K.

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), 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 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, and that CAH affects at least 20,000 people in the U.S. Key elements of our commercial strategy include maximizing the opportunities in INGREZZA and CRENESSITY through consistent and effective commercial execution, 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. Net product sales of INGREZZA were $2.51 billion for 2025, $2.31 billion for 2024, and $1.84 billion for 2023 and accounted for a significant portion of our total net product sales during each of these years. Net product sales of CRENESSITY were $301.2 million for 2025 during its first full-year of launch.

2025 Business Highlights

•Total net product sales for 2025 increased $503.3 million, or 21.6%, to $2.83 billion, 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, and INGREZZA, driven by record total prescriptions on strong patient demand, partially offset by a lower net price due to new market access investments to support long-term growth.

•In October 2025, we announced the planned expansion of the INGREZZA and CRENESSITY sales teams to maximize our commercial momentum. The expansion is expected to be completed by the end of the first quarter of 2026.

•Appointed Sanjay Keswani, M.D., as Chief Medical Officer (CMO) and member of our executive management team, effective June 2, 2025.

•In February 2025, our Board of Directors authorized a new share repurchase program (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 accelerated repurchase program (the 2024 Repurchase Program) that was announced in October 2024 and completed in February 2025. During 2025, we repurchased 1.5 million shares on the open market under the 2025 Repurchase Program and received an additional 0.3 million shares upon settlement of the 2024 Repurchase Program in February 2025.

•In January 2025, we received Centers for Medicare and Medicaid Services (CMS) notification that INGREZZA qualifies for the small biotech exception under the Medicare Drug Price Negotiation Program, which provides exemption from selection until 2027 for initial price applicability in 2029. In addition, we expanded formulary access for INGREZZA, significantly improving coverage to include approximately 70% of TD and Huntington's disease Medicare beneficiaries to support long-term growth.

2025 Pipeline Highlights

•Announced the initiation of a Phase 2 clinical study of investigational compound NBI-1065890 in adults with TD. NBI-1065890 is a next-generation, selective inhibitor of VMAT2.

•Initiated a comprehensive Phase 3 clinical program for direclidine (NBI-1117568) in schizophrenia, including studies evaluating efficacy in acutely psychotic hospitalized patients and long-term safety. In addition, we initiated a Phase 2 study evaluating direclidine in bipolar mania in the fourth quarter of 2025.

•Initiated a comprehensive Phase 3 clinical program for osavampator (NBI-1065845) in major depressive disorder (MDD), including three acute randomized, double‐blind, placebo‐controlled studies, a randomized‐withdrawal maintenance‐of‐effect study, and a long‐term open‐label safety extension.

•Initiated a Phase 1 clinical study for NBIP-01435, an investigational, long-acting corticotropin-releasing factor type 1 (CRF-1) receptor antagonist administered as a subcutaneous injection for the potential treatment of CAH.

•Initiated a Phase 1 clinical study for NBI-921355, an investigational, selective inhibitor of voltage-gated sodium channels Nav1.2 and Nav1.6 in development for the potential treatment of certain types of epilepsy.

•Initiated a Phase 1 clinical study for NBI-1140675, an investigational, oral, selective second-generation small molecule VMAT2 inhibitor in development for the potential treatment of certain neurological and neuropsychiatric conditions.

•Announced top-line data from a Phase 4 study, KINECT-PROTM, demonstrating clinically meaningful and sustained effects of INGREZZA capsules on the physical, social, and emotional impacts experienced by patients living with TD, irrespective of TD severity or underlying psychiatric condition.

•Presented new data from a post-hoc analysis of the Phase 4 KINECT-PRO open-label study confirming that robust rates of symptomatic remission of TD were achieved with once-daily INGREZZA capsules. The analysis also showed sustained improvements in patient-reported outcomes among participants who achieved symptomatic remission.

•Presented new data from the Phase 2 SAVITRITM study, which showed statistically significant and clinically meaningful improvement in depression severity at Day 28 and Day 56 with once-daily oral administration of 1 mg osavampator.

•Announced the Phase 3 studies of valbenazine in schizophrenia and dyskinesia due to cerebral palsy (DCP) and Phase 2 study of NBI-1070770 in major depressive disorder (MDD) did not meet their primary endpoints.

Results of Operations

Year Ended December 31,

Earnings per share, diluted $ 4.67 $ 3.29 $ 2.47

Weighted average common shares outstanding, diluted 102.5 103.7 101.0

Revenues

Year Ended December 31,

Net Product Sales

For 2025 compared to 2024, the increase primarily reflected 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, and INGREZZA, driven by record total prescriptions on strong patient demand, partially offset by a lower net price due to new market access investments to support long-term growth.

For 2024 compared to 2023, the increase primarily reflected increased net product sales of INGREZZA driven by strong underlying patient demand and improved gross-to-net dynamics.

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

Year Ended December 31,

as a % of total revenues 1.8 % 1.4 % 2.1 %

For 2025 compared to 2024, the increase primarily reflected increased net product sales of INGREZZA and increased royalties payable on net product sales of CRENESSITY. In addition, cost of revenues for 2025 excluded costs that were charged to R&D expense prior to FDA approval of CRENESSITY. As a result, this lower-cost drug product reduced our cost of revenues and improved related product gross margins for 2025. In future periods, we expect to incur a higher cost of revenues that includes the cost of CRENESSITY active pharmaceutical ingredients produced following FDA approval.

For 2024 compared to 2023, the decrease primarily reflected decreased net product sales of ONGENTYS® (opicapone) and decreased ONGENTYS inventory reserves in connection with the termination of our license agreement with BIAL, which became effective in December 2023, partially offset by increased net product sales of INGREZZA.

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.

Year Ended December 31,

Late Stage. Late stage consists of costs incurred for product candidates in Phase 2 registrational studies and all subsequent activities.

For 2025 compared to 2024, the increase primarily reflected increased investments in the Phase 3 programs for osavampator in MDD and direclidine in schizophrenia, partially offset by lower spend on crinecerfont in CAH.

For 2024 compared to 2023, the decrease primarily reflected the successful completions of the Phase 3 programs for crinecerfont in CAH, partially offset by increased investments in the Phase 3 programs for osavampator in 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.

For 2025 compared to 2024, the decrease primarily reflected the progression of the Phase 2 program for direclidine in schizophrenia to late-stage in the fourth quarter of 2024 and lower spend on certain early-stage psychiatry programs, partially offset by increased investment in our early-stage muscarinic portfolio and the advancements of NBI‐921355, NBI-1140675, and NBIP-01435 into Phase 1 development.

For 2024 compared to 2023, the decrease primarily reflected lower spend on certain early-stage epilepsy and psychiatry programs, including the successful completions of the Phase 2 programs for osavampator in MDD and direclidine in schizophrenia, partially offset by increased investments in certain early-stage psychiatry programs and our early-stage muscarinic portfolio.

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, including discovery research and preclinical development activities (such as lead optimization, nonclinical studies, preclinical manufacturing, and toxicology).

For 2025 compared to 2024, the increase primarily reflected increased 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.

For 2024 compared to 2023, the increase primarily reflected increased investments in gene therapy and other preclinical development programs.

Milestones. Milestones consist of costs incurred in connection with the achievement of development milestones under collaborative arrangements. The following table presents milestones expense by collaboration partner.

Year Ended December 31,

Nxera Pharma UK Limited $ 15.0 $ 50.0 $ —

Takeda Pharmaceutical Company Limited 37.5 7.5 —

Xenon Pharmaceuticals Inc. 7.5 — —

Voyager Therapeutics, Inc. 3.0 11.0 —

See Note 11 to the consolidated financial statements for more information on 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.

For 2025 compared to 2024, the increase primarily reflected higher headcount (including an increase of $22.2 million in non-cash stock-based compensation expense) to support our expanded 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.

For 2024 compared to 2023, the increase primarily reflected higher headcount.

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.

For 2025 compared to 2024 and 2024 compared to 2023, the increases primarily reflected increased facility-based expenses related to our new campus facility.

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

Year Ended December 31,

Acquired in-process research and development $ 17.4 $ 12.5 $ 143.9

as a % of total revenues 0.6 % 0.5 % 7.6 %

For 2025 compared to 2024, the increase primarily reflected higher upfront payments under licensing agreements for early-stage development candidates.

For 2024 compared to 2023, the decrease primarily reflected the payment of a $143.9 million upfront fee in 2023 pursuant to the expansion of our collaboration with Voyager.

Selling, General, and Administrative (SG&A)

Year Ended December 31,

For 2025 compared to 2024, the increase primarily reflected continued investment in our commercial organization (including the expansion of our psychiatry and long-term care sales teams completed in September 2024 and CRENESSITY-related headcount and commercial launch activities), partially offset by decreased impairment charges associated with our vacated legacy campus facilities.

For 2024 compared to 2023, the increase primarily reflected continued investment in our commercial organization (including the expansion of our psychiatry and long-term care sales teams completed in September 2024 and CRENESSITY-related pre-launch activities), increased facility-based expenses related to our new campus facility, and impairment charges of $14.0 million associated with our vacated legacy campus facilities.

Other Income (Expense)

Year Ended December 31,

Unrealized (loss) gain on equity investments $ (4.0) $ (37.1) $ 28.4

Charges associated with convertible senior notes — (138.4) —

Investment income and other, net 90.3 91.0 52.8

Total other income (expense), net $ 86.3 $ (84.5) $ 81.2

For 2025 compared to 2024, the change primarily reflected prior year charges associated with the convertible senior notes that matured in May 2024 and periodic fluctuations in the fair values of our equity investments.

For 2024 compared to 2023, the change primarily reflected $138.4 million of expense associated with the convertible senior notes that matured in May 2024, periodic fluctuations in the fair values of our equity investments, and increased interest income on our debt security investments.

Provision for Income Taxes

Year Ended December 31,

For 2025, the effective tax rate differed from the federal and state statutory rates primarily due to foreign tax effects, including the impact of global intangible low-taxed income (GILTI), credits generated for research activities, excess tax benefits related to stock-based compensation, certain nondeductible expenses, and state income tax effects including fluctuations in state effective tax rates.

For 2024 and 2023, 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, and losses incurred in foreign 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. Additionally, in 2024, we incurred a loss on the extinguishment of debt that was nondeductible for tax purposes.

Liquidity and Capital Resources

Sources of Liquidity

We believe that our existing capital resources, funds generated by anticipated INGREZZA and CRENESSITY net product sales, 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 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.

Information Regarding Our Financial Condition

December 31,

Total cash, cash equivalents and marketable securities $ 2,543.4 $ 1,815.6

Working Capital:

Less total current liabilities 743.4 507.7

Information Regarding Our Cash Flows

Year Ended December 31,

Cash flows from financing activities (38.3) (486.7) 65.3

Effect of exchange rate changes on cash and cash equivalents — — 0.3

Change in cash, cash equivalents and restricted cash $ 480.0 $ (18.1) $ (11.6)

Cash Flows from Operating Activities

For 2025 compared to 2024, the increase primarily reflected increased total net product sales, partially offset by continued investments in our commercial organization (including the expansion of our psychiatry and long-term care sales teams completed in September 2024 and CRENESSITY-related headcount and commercial launch activities) and expanded pre-clinical and clinical portfolio. The increase in accounts receivable was driven by higher total gross product sales. The increase in accounts payable and accrued liabilities was driven primarily by higher revenue-related reserves for discounts and allowances attributed to higher gross product sales combined with expanded formulary access for INGREZZA. In addition, the change in income tax assets and liabilities primarily related to timing of foreign tax expense recognition, partially offset by the federal tax benefit on current income taxes payable from the enactment of the OBBBA.

For 2024 compared to 2023, the increase primarily reflected increased total net product sales and decreased total payments for upfront fees and development milestones achieved in connection with our collaborations, partially offset by increased payments for income taxes and continued investments in our commercial organization (including CRENESSITY-related pre-launch activities) and expanded pre-clinical and clinical portfolio.

Cash Flows from Investing Activities

For 2025 compared to 2024 and 2024 compared to 2023, the changes primarily reflected timing differences related to the purchases, sales, and maturities of debt security investments and changes in our portfolio-mix.

For 2024 compared to 2023, the change also reflected a $31.3 million equity investment in Voyager in 2023.

Cash Flows from Financing Activities

For 2025 compared to 2024, the change primarily reflected decreased share repurchases under the 2025 Repurchase Program compared to the 2024 Repurchase Program and decreased cash payments associated with the convertible senior notes that matured in May 2024.

For 2024 compared to 2023, the change reflected $300.0 million of share repurchases under the 2024 Repurchase Program, $308.8 million in cash payments to settle the convertible senior notes that matured in May 2024, and increased proceeds from issuances of our common stock.

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 commercial success of INGREZZA and CRENESSITY;

•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 $14.87 billion upon the achievement of certain milestones.

See Note 11 to the consolidated financial statements for more information on our significant collaboration and license agreements.

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 1.5 million shares on the open market for a cost of $167.7 million during 2025. As of December 31, 2025, we had $332.3 million remaining available for additional repurchases under the 2025 Repurchase Program.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon financial statements that we have prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses, and related disclosures. On an on-going basis, we evaluate these estimates, including those related to revenue recognition. Estimates are based on historical experience, information received from third parties and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Historically, revisions to our estimates have not resulted in a material change to the financial statements.

The items in our financial statements requiring significant estimates and judgments are as follows:

Reserves for Government Rebates

We recognize revenues from product sales of INGREZZA net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, payors, and other third parties. Such reserves include estimates for government rebates that we are obligated to pay for discounts including under the Medicaid Drug Rebate Program. The liability for such rebates consists of invoices received for claims from prior quarters that remain unpaid, or for which an invoice has not been received, and estimated rebates for the current applicable reporting period. Such estimates require us to project the magnitude of our sales that will be subject to such rebates and are based on actual historical rebates by state, estimated payor mix, state and federal regulations, and relevant contractual terms, as supplemented by management’s judgement. There is a significant time-lag in our receiving rebate notices from each state (generally, several months or longer after a sale is recognized). To date, actual government rebates have not differed materially from our estimates.

Income Taxes

Our income tax provision is computed under the asset and liability method. Significant estimates are required in determining our income tax provision. Some of these estimates are based on interpretations of existing tax laws or regulations. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (temporary differences) at enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets, including net operating losses and tax credits, will not be realized. We periodically reassess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration. Significant judgment is required in making this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred tax assets is deemed appropriate, a tax benefit will be recognized against our income tax provision in the period of such reversal.

We recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority, based on the technical merits of the position. The tax benefit recognized in our consolidated financial statements for a particular tax position is measured as the largest amount of benefit that is more likely than not to be realized upon settlement with the relevant taxing authority. We reevaluate uncertain tax positions and related unrecognized tax benefits as appropriate for changes in facts and circumstances, including significant changes in tax law, regulations or interpretations, new information obtained during a tax examination, the resolution of tax examinations and appeals, and the expiration of statutes of limitations. We recognize accrued interest and penalties, when appropriate, related to uncertain tax positions in income tax expense. An adverse resolution of one or more uncertain tax positions, or changes in our assessment of the recognition or measurement of such positions, could have a material impact on our results of operations in the period in which the change occurs.

See Note 10 to the consolidated financial statements for information on our income taxes.

Additional Information

See Note 1 to the consolidated financial statements for information on accounting pronouncements that have impacted or are expected to materially impact our consolidated financial condition, results of operations, or cash flows.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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 December 31, 2025, it would not have had a material effect on the fair value of our investment portfolio as of that date.

Item 8. Financial Statements and Supplementary Data

NEUROCRINE BIOSCIENCES, INC.

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 66

Consolidated Balance Sheets 68

Consolidated Statements of Income and Comprehensive Income 69

Consolidated Statements of Stockholders’ Equity 70

Consolidated Statements of Cash Flows 71

Notes to the Consolidated Financial Statements 72

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Neurocrine Biosciences, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Neurocrine Biosciences, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income and comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 11, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Reserves for Medicaid rebates related to product sales

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1992.

San Diego, California

February 11, 2026

NEUROCRINE BIOSCIENCES, INC.

CONSOLIDATED BALANCE SHEETS

December 31,

(in millions, except per share data) 2025 2024

Assets

Current assets:

Cash and cash equivalents $ 713.0 $ 233.0

Available-for-sale debt securities 767.4 843.1

Available-for-sale debt securities 1,063.0 739.5

Property and equipment, net 89.8 82.6

Other noncurrent assets 59.5 52.0

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable and accrued liabilities $ 674.3 $ 461.6

Other current liabilities 69.1 46.1

Noncurrent operating lease liabilities 415.3 455.1

Stockholders’ equity:

Accumulated other comprehensive income 13.1 5.8

Total liabilities and stockholders’ equity $ 4,631.5 $ 3,718.7

See accompanying notes to consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

Year Ended December 31,

Revenues:

Operating expenses:

Acquired in-process research and development 17.4 12.5 143.9

Other income (expense):

Unrealized (loss) gain on equity investments (4.0) (37.1) 28.4

Charges associated with convertible senior notes — (138.4) —

Investment income and other, net 90.3 91.0 52.8

Total other income (expense), net 86.3 (84.5) 81.2

Foreign currency translation adjustments, net of tax 3.8 (1.1) 2.4

Earnings per share, basic $ 4.81 $ 3.40 $ 2.56

Earnings per share, diluted $ 4.67 $ 3.29 $ 2.47

Weighted average common shares outstanding, basic 99.5 100.4 97.7

Weighted average common shares outstanding, diluted 102.5 103.7 101.0

See accompanying notes to consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions) Shares $

Other comprehensive income, net of tax — — — 14.9 — 14.9

Stock-based compensation expense — — 194.3 — — 194.3

Issuances of common stock under benefit plans 2.2 — 65.3 — — 65.3

Other comprehensive loss, net of tax — — — (1.2) — (1.2)

Stock-based compensation expense — — 195.5 — — 195.5

Issuances of common stock under benefit plans 2.7 — 122.1 — — 122.1

Other comprehensive income, net of tax — — — 7.3 — 7.3

Stock-based compensation expense — — 217.9 — — 217.9

Issuances of common stock under benefit plans 2.5 — 127.3 — — 127.3

See accompanying notes to consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash from operating activities:

Charges associated with convertible senior notes — 138.4 —

Impairment charges associated with leased properties 0.7 14.0 —

Amortization of acquired intangible assets 4.1 3.6 3.5

Changes in fair values of equity investments 4.0 37.1 (28.4)

Changes in operating assets and liabilities:

Accounts payable and accrued liabilities 160.2 43.4 49.0

Income tax assets and liabilities (18.8) 50.3 91.6

Other assets and liabilities, net (44.4) (54.0) (28.5)

Cash flows from investing activities:

Purchases of available-for-sale debt securities (1,319.8) (1,056.1) (1,379.9)

Sales and maturities of available-for-sale debt securities 1,089.4 967.5 972.4

Purchases of equity investments — — (31.3)

Cash flows from financing activities:

Issuances of common stock under benefit plans 129.4 122.1 65.3

Repurchases of common stock (167.7) (300.0) —

Payments to settle convertible senior notes — (308.8) —

Cash flows from financing activities (38.3) (486.7) 65.3

Effect of exchange rate changes on cash and cash equivalents — — 0.3

Change in cash and cash equivalents and restricted cash 480.0 (18.1) (11.6)

Supplemental Disclosure:

Accrued capital expenditures $ 2.2 $ 2.2 $ 2.5

Right-of-use assets acquired through operating leases $ — $ 271.6 $ 200.8

Cash paid for interest $ — $ 1.6 $ 3.8

See accompanying notes to consolidated financial statements.

NEUROCRINE BIOSCIENCES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Business Overview and Summary of Significant Accounting Policies

Nature of Operations

Neurocrine Biosciences, Inc. and its subsidiaries (Neurocrine Biosciences, the Company, we, our, or us) is a neuroscience-focused global biopharmaceutical company focused on discovering, developing, and commercializing life-changing treatments for patients with under-addressed neurological, psychiatric, endocrine, and immunological disorders.

Use of Estimates

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), which requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.

Basis of Consolidation

The consolidated financial statements include the accounts of Neurocrine Biosciences as well as our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to previously reported amounts to conform to the current period presentation.

Revenue Recognition

We recognize revenue when the customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for such goods or services. Revenue is recognized using a five-step model: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product Revenue

We sell INGREZZA® (valbenazine) exclusively in the U.S. through a limited specialty network. Our customers include select specialty pharmacy providers, wholesale distributors, and specialty distributors. In addition, we sell CRENESSITY® (crinecerfont) in the U.S. through a single specialty pharmacy provider. Net product sales of INGREZZA were $2.51 billion for 2025, $2.31 billion for 2024, and $1.84 billion for 2023 and accounted for a significant portion of our total net product sales during each of these years. Net product sales of CRENESSITY were $301.2 million for 2025.

Product revenue is recorded net of reserves for variable consideration, including discounts and allowances offered within contracts with our customers, payors, and other third parties. These reserves, classified as reductions of accounts receivable or liabilities, are based on estimates and include the following categories:

•Product discounts represent estimated obligations for trade term discounts and other incentives offered to our customers. We accrue for product discounts based on actual historical discounts, including the timing of customer payments.

•Distributor and other fees represent fees for inventory management, data, and distribution services and are generally recorded as a reduction of revenue or expensed as selling, general, and administrative to the extent we can demonstrate a separable benefit and fair value for these services.

•Government rebates represent estimated obligations to government agencies under the Medicaid Drug Rebate Program and Medicare Part D and are recorded as a reduction of revenue in the period the related revenue is recognized. We accrue for government rebates based on estimated claims for the current quarter, estimated claims for prior quarters for which an invoice has not been received, and claims for prior quarters for which an invoice has been received but not paid.

•Chargebacks represent estimated obligations to our customers for differences between list and contract prices. We accrue for chargebacks as a reduction of revenue based on estimated contractual discounts on product inventory levels on-hand in our distribution channel.

•Payor and pharmacy rebates represent estimated obligations to payors and pharmacies for contract discounts on product sales and are recorded as a reduction of revenue in the period the related revenue is recognized. We accrue for payor and pharmacy rebates based on actual historical rebates, contractual rebate percentages, sales made through the payor channel, and purchases made by pharmacies.

•Copay assistance represents financial assistance to qualified patients with prescription drug copay requirements. We accrue for copay assistance as a reduction of revenue based on estimated claims and the cost per claim we expect to receive in connection with inventory that exists in the distribution channel at period end.

•Product returns represent estimated obligations for return rights offered to our customers due to shipment errors and damaged product and are recorded as a reduction of revenue in the period the related revenue is recognized. We accrue for product returns based on actual historical returns, benchmarking data, and industry experience.

Collaboration Revenues

We have entered into collaboration and license agreements under which we out-license certain rights to our product candidates to third parties. For arrangements that include sales-based royalties, and under which the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Each quarterly period, sales-based royalties are recorded based on estimated quarterly net sales of the associated collaboration products. Differences between actual results and estimated amounts are adjusted for in the period in which they become known, which typically follows the quarterly period in which the estimate was made. To date, actual royalties received have not differed materially from our estimates.

Cash Equivalents

We consider all highly liquid investments that are readily convertible into cash without penalty and have an original maturity of three months or less at the time of purchase to be cash equivalents.

Accounts Receivable

Accounts receivable are recorded net of customer allowances for prompt payment discounts, chargebacks, and any allowance for credit losses. Our estimate for the allowance for credit losses, which has not been significant to date, is determined based on existing contractual payment terms, actual payment patterns of our customers, and individual customer circumstances.

Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, or other customer-specific factors.

Debt Securities

Debt securities consist of investments in certificates of deposit, corporate debt securities, and securities of government-sponsored entities. We classify debt securities as available-for-sale. Available-for-sale debt securities are recorded at fair value, with unrealized gains and losses included in other comprehensive income or loss, net of tax. We exclude accrued interest from both the fair value and amortized cost basis of debt securities. A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a debt security placed on nonaccrual status is reversed against interest income.

Interest income includes amortization (accretion) of purchase premiums (discounts). Premiums (discounts) on debt securities are amortized (accreted) using the effective interest rate method. Gains and losses on sales of debt securities are recorded on the trade date in investment income and other, net, and determined using the specific identification method.

Allowance for Credit Losses

For available-for-sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through earnings. For available-for-sale debt securities that do not meet the aforementioned criteria, we

evaluate whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes in interest rates, and any changes to the rating of the security by a rating agency, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income or loss, as applicable.

Accrued interest receivables on available-for-sale debt securities were $20.5 million and $14.4 million, respectively, as of December 31, 2025 and 2024. 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. No accrued interest receivables were written off during 2025, 2024, or 2023.

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.

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 and total accounts receivable for each of our customers who individually accounted for 10% or more of total gross product sales and/or 10% or more of total accounts receivable.

Percent of Percent of

Total Gross Product Revenues Accounts Receivable

Year Ended December 31, December 31,

Equity Investments

We account for certain equity investments subject to the equity method of accounting, or through which we have the ability to exercise significant influence (but not control) over the operating and financial policies of an investee, under the fair value option. In assessing whether we exercise significant influence, we consider the nature and magnitude of such an investment, the voting and protective rights we hold, any participation in the governance of the investee and other relevant factors, such as the presence of a collaborative or other business relationship. Such investments in publicly traded companies are currently classified within Level 1 of the fair value hierarchy and carried at fair value, with any changes in the fair value of such investments recognized in earnings.

Fair Value of Financial Instruments

We record cash equivalents, debt securities available-for-sale, and equity security investments at fair value based on a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs). 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.

Investments in debt securities available-for-sale are classified as Level 2 and carried at fair value. We estimate the fair value of debt securities available-for-sale by utilizing third-party pricing services. These pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. Such inputs include market pricing based on real-time trade data for similar instruments, issuer credit spreads, benchmark yields, broker/dealer quotes and other observable inputs. We validate valuations obtained from third-party pricing services by understanding the models used, obtaining market values from other pricing sources and analyzing data in certain instances.

We deem transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period during which the event or change in circumstances that caused the transfer occurred.

Inventory

Inventory is valued at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on the first-in, first-out method. We perform an assessment of the recoverability of our inventory on a quarterly basis and write down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. When future commercialization is considered probable and the future economic benefit is expected to be realized, based on management’s judgment, we capitalize pre-launch inventory costs prior to regulatory approval.

Prior to U.S. Food and Drug Administration (FDA) approval of CRENESSITY in December 2024, all costs related to its manufacturing were expensed as research and development (R&D) in the period incurred. As a result, our physical inventory as of December 31, 2025 and 2024 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 value as of December 31, 2025 and 2024.

Leases

We determine if an arrangement is a lease at contract inception. Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. When determining the lease term, we include options to extend or terminate the lease when it is reasonably certain that such options will be exercised.

As none of our operating leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease.

The lease payments used to determine our ROU assets may include prepaid or accrued lease payments and any lease incentives received and are recognized in ROU assets on our consolidated balance sheets.

Our lease agreements may include both lease and non-lease components, which we account for as a single lease component when the payments are fixed. Variable payments included in lease agreements are expensed as incurred.

Our operating leases are reflected in ROU assets, noncurrent operating lease liabilities, and other current liabilities on our consolidated balance sheets. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Impairment of ROU Assets

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

Corporate ROU assets that are actively being marketed for sublease in connection with excess leased capacity are tested for impairment individually when the cash flows related to the ROU asset are determined to be independent from the cash flows of other assets and liabilities. Corporate ROU assets are otherwise tested for impairment on a consolidated level with consideration given to all cash flows of the company as corporate functions do not generate cash flows and are funded by revenue-producing activities at lower levels of the entity.

Property and Equipment

Property and equipment are stated at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Equipment is depreciated over an average estimated useful life of 3 to 7 years. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the remaining lease term. Depreciation expense was $26.0 million for 2025, $23.5 million for 2024, and $17.8 million for 2023.

Share Repurchases

Shares repurchased pursuant to our share repurchase program are immediately retired upon purchase. Repurchased common stock is reflected as a reduction of stockholders' equity by reducing our common stock for the par value of the shares repurchased and reducing our capital surplus for the excess of the repurchase price over the par value. The excess over the par value of the shares repurchased is recorded as a reduction to retained earnings to the extent available, with any remainder recorded as a reduction to additional paid-in capital.

Cost of Revenues

Cost of revenues primarily consists of third-party manufacturing, transportation, freight, and indirect overhead costs for the manufacture and distribution of INGREZZA and CRENESSITY drug product sold, royalties on net product sales of CRENESSITY, amortization of intangible assets, manufacturing costs in connection with our supply of valbenazine drug product under our collaboration with Tanabe Pharma Corporation (TPC) (formerly Mitsubishi Tanabe Pharma Corporation), and adjustments for excess and obsolete inventory to the extent management determines that the cost cannot be recovered based on estimates about future demand.

A portion of the costs associated with the manufacture of CRENESSITY sold to date was expensed as R&D prior to the FDA’s approval of CRENESSITY and is therefore excluded from cost of sales during this period.

Research and Development

R&D expenses primarily consist of preclinical and clinical trial costs, payroll and benefits costs, including stock-based compensation associated with employees involved in R&D activities, certain costs associated with our collaborative arrangements, and certain facility-based expenses (such as rent expense) and other overhead allocations. All such costs are expensed as R&D when incurred.

Collaborations and Other Arrangements

We enter into collaborative agreements with third parties to develop and commercialize drug candidates. Collaborative activities may include joint R&D and commercialization of new products. We generally receive certain licensing rights under these arrangements. These collaborations often require upfront payments and may include additional milestone, R&D cost sharing, royalty, or profit share payments, contingent upon the occurrence of certain future events linked to the success of the assets in development and commercialization. Upfront payments associated with collaborative arrangements are generally expensed as in-process research and development (IPR&D) when incurred. Milestone payments that are contingent upon the achievement of specified development, regulatory, or commercial events are recognized when the applicable contingency is resolved and the consideration is paid or becomes payable. Milestone payments that are paid or payable prior to regulatory approval are expensed as R&D, and milestone payments that are paid or payable subsequent to regulatory approval are capitalized as intangible assets and amortized to cost of revenues over the estimated useful life of the related asset. Royalties are expensed as cost of revenues when incurred.

Asset Acquisitions

We account for acquisitions of assets (or groups of assets) that do not meet the definition of a business using the cost accumulation method, whereby the cost of the acquisition, including certain transaction costs, is allocated to the assets (or group of assets) acquired on the basis of their relative fair value(s) on the measurement date. No goodwill is recognized in an asset acquisition. Intangible assets acquired in an asset acquisition for use in R&D activities which have no alternative future use are expensed as IPR&D on the acquisition date. Amounts paid to acquire such assets are classified as operating cash outflows on the consolidated statements of cash flows. Future costs to develop these assets are expensed as R&D when incurred.

Advertising

Costs associated with advertising are expensed as incurred and are included in selling, general, and administrative on the consolidated statements of income. Advertising expenses were $226.8 million for 2025, $191.0 million for 2024, and $159.9 million for 2023.

Stock-Based Compensation

We grant stock options to purchase our common stock to eligible employees and directors and also grant certain employees restricted stock units (RSUs) and performance-based restricted stock units (PRSUs). Additionally, we allow employees to participate in an employee stock purchase plan (ESPP).

We estimate the fair value of stock options and shares to be issued under the ESPP using the Black-Scholes option-pricing model on the date of grant. RSUs are valued based on the closing price of our common stock on the date of grant. The fair value of equity instruments expected to vest is recognized and amortized on a straight-line basis over the requisite service period of the award, which is generally three to four years; however, certain provisions in our equity compensation plans provide for shorter vesting periods under certain circumstances. The fair value of shares to be issued under the ESPP is recognized and amortized on a straight-line basis over the purchase period, which is generally six months. PRSUs vest upon the achievement of certain predefined company-specific performance-based criteria. Expense related to PRSUs is generally recognized ratably over the expected performance period once the predefined performance-based criteria for vesting becomes probable.

Income Taxes

Our income tax provision is also affected by intercompany transfer pricing arrangements, including the allocation of income related to intellectual property held by foreign affiliates. These arrangements are intended to reflect arm’s-length pricing and require management judgment in their application.

We have elected to account for Global Intangible Low-Taxed Income (GILTI) as a current period tax expense in the period incurred in accordance with its accounting policy under ASC 740.

We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities based on the technical merits of the position. An adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period.

Earnings Per Share

Basic earnings per share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed using the treasury stock and if-converted methods and reflect the weighted average number of common and potentially dilutive shares outstanding during the period, excluding those whose effect would be anti-dilutive. PRSUs for which the performance condition has not been achieved are excluded from the calculation of diluted earnings per share.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and should be applied on a prospective basis. We adopted ASU 2023-09 on January 1, 2025. Our adoption of ASU 2023-09 did not have a material impact on our consolidated financial statements (since the requirements of this ASU are disclosure-specific) and will not affect our quarterly income tax disclosures.

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. Available-for-Sale Debt Securities

The following table presents a summary of available-for-sale debt securities, aggregated by major security type and contractual maturity.

Commercial paper 0 to 1 years $ 22.6 $ — $ — $ 22.6 $ 37.1 $ — $ — $ 37.1

Unrealized losses on available-for-sale debt securities were primarily due to 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. No allowance for credit losses was recognized as of December 31, 2025 or 2024.

The following table presents available-for-sale debt securities that were in an unrealized loss position as of December 31, 2025, aggregated by major security type and length of time in a continuous loss position.

Less Than 12 Months 12 Months or Longer Total

Corporate debt securities $ 298.2 $ (0.5) $ — $ — $ 298.2 $ (0.5)

The following table presents available-for-sale debt securities that were in an unrealized loss position as of December 31, 2024, aggregated by major security type and length of time in a continuous loss position.

Less Than 12 Months 12 Months or Longer Total

Corporate debt securities $ 334.9 $ (1.1) $ — $ — $ 334.9 $ (1.1)

3. Fair Value Measurements

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

Fair Value Leveling Fair Value Leveling

(in millions) Level 1 Level 2 Level 1 Level 2

4. Leases

Our operating leases 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 ROU assets or operating lease liabilities.

The following table presents supplemental operating lease information for operating leases that have commenced.

Year Ended December 31,

Sublease income (3.5) (2.0) (0.7)

December 31,

Weighted average remaining lease term 9.9 years 10.8 years

Weighted average discount rate 4.9 % 4.9 %

Restricted cash related to leases $ 7.8 $ 7.8

The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of December 31, 2025.

(in millions) OperatingLeases SubleaseIncome

Total operating lease payments (sublease income) 602.9 $ (21.0)

Less imputed interest 131.6

Total operating lease liabilities 471.3

Noncurrent operating lease liabilities $ 415.3

Impairment of ROU Assets

During 2024, we reassessed the asset groupings for corporate ROU assets that are actively being marketed for sublease in connection with leased office space that was vacated to occupy our new campus facility. For asset groups where impairment was triggered, we used discounted cash flow models (an income approach) with Level 3 inputs to estimate the fair values of the asset groups and recognized corresponding impairment charges totaling $14.0 million in 2024, of which $11.3 million and $2.7 million, respectively, was related to the ROU assets and tenant improvements associated with the underlying leased properties. The significant assumptions used in the discounted cash flows models included projected sublease income over the remaining lease term, expected downtime prior to the commencement of executed or future subleases, and discount rates that reflected a market participant's assumptions in valuing the asset groups. Impairment charges were not significant for 2025 or 2023.

5. Convertible Senior Notes

In May 2017, we issued $517.5 million in aggregate principal amount of 2.25% fixed-rate convertible senior notes due May 15, 2024 (the 2024 Notes) and entered into an indenture in May 2017 with U.S. Bank National Association, as trustee, with respect to the 2024 Notes. From 2020 through 2022, we repurchased $347.0 million in aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $465.9 million in cash.

In January 2024, we provided notice to the holders of the 2024 Notes electing to settle all conversions of the 2024 Notes which occur on or after January 15, 2024 in cash. Consequently, the embedded conversion option of the 2024 Notes (the conversion feature) required bifurcation and separate accounting from the 2024 Notes as it no longer qualified for the equity scope exception under ASC 815, Derivatives and Hedging. Upon bifurcation of the conversion feature, we recorded a derivative liability at a fair value of $126.6 million (Level 3) and a corresponding debt discount that was accreted over the remaining term of the 2024 Notes using the straight-line method. Subsequent changes in the fair value of the derivative liability and accretion of the associated debt discount were recorded in other income (expense), net on the consolidated statements of income and comprehensive income.

During 2024, holders of the 2024 Notes converted $169.8 million in aggregate principal amount of the 2024 Notes for $308.2 million in cash, reflecting a conversion premium of $138.4 million. The 2024 Notes were settled in full upon maturity on May 15, 2024.

The following table presents a summary of charges recognized in connection with the bifurcation of the conversion feature of the 2024 Notes and conversions of the 2024 Notes by holders during 2024.

(in millions) Amount

Accretion of debt discount associated with derivative liability $ 126.6

Change in fair value of derivative liability 9.6

Loss on extinguishment of convertible senior notes 2.2

Total charges associated with convertible senior notes $ 138.4

6. Supplemental Financial Information

Prepaid expenses consisted of the following:

December 31,

Prepaid income taxes $ 94.0 $ —

Prepaid development costs 55.6 32.1

Other prepaid expenses 21.1 16.4

Total prepaid expenses $ 170.7 $ 48.5

Inventory consisted of the following:

December 31,

Less inventory reserves (0.2) —

Property and equipment, net, consisted of the following:

December 31,

Furniture and fixtures 20.3 18.6

Less accumulated depreciation (118.3) (106.5)

Total property and equipment, net $ 89.8 $ 82.6

Accounts payable and accrued liabilities consisted of the following:

December 31,

Sales rebates and reserves $ 226.0 $ 144.2

Accrued employee related costs 128.8 107.5

Accrued development costs 101.3 50.8

Current income taxes payable 68.0 10.0

Current branded prescription drug fee 45.3 49.2

Accounts payable and other accrued liabilities 104.9 99.9

Total accounts payable and accrued liabilities $ 674.3 $ 461.6

Other noncurrent liabilities consisted of the following:

December 31,

Noncurrent income taxes payable $ 214.5 $ 160.7

Other noncurrent liabilities 5.2 5.5

Total other noncurrent liabilities $ 219.7 $ 166.2

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

December 31,

Cash and cash equivalents $ 713.0 $ 233.0

Restricted cash included in other noncurrent assets 8.0 8.0

Total cash, cash equivalents, and restricted cash $ 721.0 $ 241.0

7. Stockholders’ Equity

Share Repurchases

In February 2025, our Board of Directors authorized a new share repurchase program (the 2025 Repurchase Program) under which we may repurchase up to $500.0 million of our common stock, subject to market conditions. Under the 2025 Repurchase Program, we repurchased 1.5 million shares on the open market for a cost of $167.7 million during 2025. As of December 31, 2025, we had $332.3 million remaining available for additional repurchases under the 2025 Repurchase Program.

Under the 2025 Repurchase Program, share repurchases may be made from time to time at management's discretion through a variety of methods, such as open-market transactions including pre-set trading plans, privately negotiated transactions, accelerated share repurchases, and other transactions in accordance with applicable securities laws. Shares repurchased under the 2025 Repurchase Program are retired immediately, resulting in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares for both basic and diluted earnings per share, and included in the category of authorized but unissued shares. The excess of the purchase price over the par value of the common shares was recorded as reductions to retained earnings and additional paid-in capital.

In November 2024, we entered into an accelerated share repurchase transaction (the 2024 Repurchase Program) with a third-party financial institution to repurchase an aggregate of $300.0 million of our common stock. Shares repurchased under the 2024 Repurchase Program were retired immediately upon receipt, resulting in an immediate reduction of the outstanding shares used to calculate the weighted-average common shares for both basic and diluted earnings per share in the period received, and included in the category of authorized but unissued shares. At inception, we paid the financial institution $300.0 million using cash on hand and took initial delivery of 2.0 million shares in November 2024. The fair market value of the 2.0 million initial shares received was $240.5 million, with the excess of the fair market value over the par value of the initial shares received recorded as reductions to retained earnings and additional paid-in capital. The remaining $59.5 million of the repurchase price was recorded as a reduction to additional paid-in capital. The 2024 Repurchase Program was completed in February 2025, at which time we received an additional 0.3 million shares upon settlement, with the excess of the fair market value over the par value of the settlement shares received recorded as an increase to additional paid-in capital and a reduction to retained earnings. In total, we repurchased 2.3 million shares under the 2024 Repurchase Program at an average price of $131.83 per share, which represents the daily volume-weighted average price of our common stock over the term of the transaction, less a negotiated discount.

8. Earnings Per Share

Earnings per share were calculated as follows:

Year Ended December 31,

Weighted-average common shares outstanding:

Effect of dilutive securities 3.0 3.3 3.3

Earnings per share:

9. Stock-Based Compensation

2025 Equity Incentive Plan

In May 2025, our stockholders approved the 2025 Equity Incentive Plan (the 2025 Plan). The 2025 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards, and other awards. As of December 31, 2025, 7.4 million shares of common stock remain available for future grant under the 2025 Plan.

Under the terms of the 2025 Plan, the number of shares of common stock available for issuance will be: (i) reduced by (a) one share for each share issued pursuant to an appreciation award (as defined in the 2025 Plan) and (b) 2.43 shares for each share issued pursuant to a full value award (as defined in the 2025 Plan); and (ii) increased by (a) one share for each share subject to an appreciation award that becomes available again for issuance under the terms of the 2025 Plan and (b) 2.43 shares for each share subject to a full value award that becomes available again for issuance under the terms of the 2025 Plan.

2020 Equity Incentive Plan

In May 2020, we adopted the 2020 Equity Incentive Plan (as amended, the Amended 2020 Plan). The Amended 2020 Plan was a stockholder-approved plan pursuant to which no additional awards will be granted following the effective date of the 2025 Plan. Outstanding awards under the Amended 2020 Plan will continue to be governed by its terms.

2011 Equity Incentive Plan

In May 2011, we adopted the 2011 Equity Incentive Plan (the 2011 Plan). The 2011 Plan was a stockholder-approved plan pursuant to which outstanding awards have been made, but from which no further awards can or will be made.

2018 Employee Stock Purchase Plan

In May 2022 and 2025, our stockholders approved amendments and restatements of the 2018 Employee Stock Purchase Plan (as so amended and restated, the Amended 2018 ESPP). As of December 31, 2025, 1.0 million shares of common stock remain available for future issuance under the Amended 2018 ESPP.

Stock-Based Compensation Expense

The effect of stock-based compensation expense on the consolidated statements of income and comprehensive income by line-item follows:

Year Ended December 31,

Total stock-based compensation expense $ 217.9 $ 195.5 $ 194.3

Stock-based compensation expense by award-type follows:

Year Ended December 31,

Total stock-based compensation expense $ 217.9 $ 195.5 $ 194.3

As of December 31, 2025, unrecognized stock-based compensation expense by award-type and the weighted-average period over which such expense is expected to be recognized, as applicable, was as follows:

(dollars in millions) Unrecognized Expense Weighted-Average Recognition Period

Stock options $ 95.3 2.4 years

Stock Options

Typically, stock options have a 10-year term and vest over a three to four-year period. The exercise price of stock options granted is equal to the closing price of our common stock on the date of grant. We estimate the fair value of stock options using the Black-Scholes option-pricing model on the date of grant. The Black-Scholes option-pricing model incorporates various and highly sensitive assumptions including expected volatility, term and interest rates. The weighted-average grant-date fair values of stock options granted were $49.66 for 2025, $55.74 for 2024, and $45.19 for 2023.

The fair value of each stock option granted was estimated on the date of grant using the Black-Scholes option-pricing valuation model with the following weighted-average assumptions:

Year Ended December 31,

Risk-free interest rate 4.4 % 4.3 % 3.9 %

Expected volatility of common stock 37.6 % 37.2 % 40.8 %

Dividend yield 0.0 % 0.0 % 0.0 %

Expected option term 5.4 years 5.5 years 5.5 years

The weighted-average valuation assumptions were determined as follows:

•The expected volatility of common stock is estimated based on the historical volatility of our common stock over the most recent period commensurate with the estimated expected term of our stock options.

•The expected option term is estimated based on historical experience as well as the status of the employee. For example, directors and officers have a longer expected option term than all other employees.

•The risk-free interest rate for periods within the contractual life of a stock option is based upon observed interest rates appropriate for the expected term of our employee stock options.

•We have not historically declared or paid dividends and do not intend to do so in the foreseeable future.

The following table presents summary of activity related to stock options.

The total intrinsic value of stock options exercised was $96.2 million for 2025, $122.5 million for 2024, and $39.9 million for 2023. Cash received from stock option exercises was $115.5 million for 2025, $110.8 million for 2024, and $55.5 million for 2023.

Restricted Stock Units

RSUs typically vest over a four-year period and may be subject to a deferred delivery arrangement at the election of eligible employees. The fair value of RSUs is based on the closing sale price of our common stock on the date of issuance. The total fair value of RSUs that vested was $116.1 million for 2025, $116.7 million for 2024, and $101.0 million for 2023.

The following table presents a summary of activity related to RSUs.

Performance-Based Restricted Stock Units

PRSUs vest based on the achievement of certain predefined Company-specific performance criteria. Any unvested PRSUs will expire if it is determined the related performance criteria has not been met during the applicable three to four-year performance period. The fair value of PRSUs is estimated based on the closing sale price of our common stock on the date of grant. The fair value of PRSUs that vested was $34.4 million during 2023. No PRSUs vested during 2025 or 2024.

The following table presents a summary of activity related to PRSUs.

Employee Stock Purchase Plan

Under the Amended 2018 ESPP, eligible employees may purchase shares of our common stock at a discount semi-annually based on a percentage of their annual compensation. The discounted purchase price is equal to the lower of 85% of (i) the market value per share of the common stock on the first day of the offering period or (ii) the market value per share of common stock on the purchase date.

10. Income Taxes

The following table presents income from continuing operations before provision for income taxes for domestic and international operations.

Year Ended December 31,

Income before provision for income taxes $ 705.4 $ 486.0 $ 332.1

The following table presents the components of income tax expense for continuing operations.

Year Ended December 31,

Current:

Foreign (43.8) — —

Deferred:

Foreign 19.8 — —

As discussed in Note 1, we adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on January 1, 2025 on a prospective basis. As a result, our rate reconciliation for 2025 is presented in accordance with the new disclosure requirements, while the reconciliations for 2024 and 2023 continue to be presented under disclosure requirements in effect for those periods.

The provision for income taxes on earnings subject to income taxes differed from the statutory federal rate due to the following (after the adoption of ASU 2023-09):

(dollars in millions) Amount %

State and local income taxes, net of federal benefit (1) 3.1 0.4 %

Foreign tax effects

Switzerland

Statutory tax rate difference between Switzerland and U.S. 16.4 2.3 %

Changes in valuation allowances (18.8) (2.7) %

Undistributed earnings 19.8 2.8 %

Other foreign jurisdictions 3.7 0.5 %

Effect of cross-border tax laws

Global intangible low-taxed income, net 52.9 7.5 %

Foreign tax credits (7.9) (1.1) %

Other effects of cross-border tax laws total - below 1.05% (0.5) (0.1) %

Tax credits

Research and development tax credits (35.6) (5.0) %

Changes in valuation allowance 7.7 1.1 %

Nontaxable or nondeductible items

Officer compensation 13.6 1.9 %

Branded prescription drug fee 7.5 1.1 %

Other non-deductible and non-taxable total - below 1.05% 8.3 1.2 %

Other

Stock-based compensation expense (windfall/shortfall) (13.7) (1.9) %

Basis difference in subsidiary held for sale (15.7) (2.2) %

Changes in unrecognized tax benefits 49.1 7.0 %

Provision for income taxes $ 226.8 32.2 %

_________________________

(1) 50% or more of our state tax provision relates to the Tennessee and Kentucky state jurisdictions.

The provision for income taxes on earnings subject to income taxes differed from the statutory federal rate due to the following (prior to the adoption of ASU 2023-09):

Year Ended December 31,

State income tax, net of federal benefit 34.6 17.5

Branded prescription drug fee 7.5 8.7

Loss on extinguishment of convertible senior notes 29.1 —

Stock-based compensation expense (20.4) (3.9)

Officer compensation 3.3 9.6

Foreign rate differential 7.2 3.4

Change in tax rate (0.6) (5.5)

Change in valuation allowance 23.9 22.0

Provision for income taxes $ 144.7 $ 82.4

The following table presents income taxes paid for 2025:

(in millions) Amount

U.S. Federal $ 72.7

Aggregated state and local jurisdictions (1) 8.7

Total income taxes paid, net $ 81.4

_________________________

(1) The amount of income taxes paid during 2025 did not meet the 5% disaggregation threshold.

The following table presents the significant components of our deferred tax assets:

December 31,

Deferred tax assets:

Net operating losses $ 8.4 $ 50.5

Research and development credits 74.6 62.8

Capitalized research and development 85.7 255.7

Stock-based compensation expense 59.7 61.4

Deferred tax liabilities:

Operating lease liabilities (96.9) (112.8)

Total deferred tax liabilities (121.8) (128.3)

Net of deferred tax assets and liabilities 417.6 597.9

As of December 31, 2025 and 2024, we recorded a valuation allowance of $97.3 million and $112.2 million, respectively, against our gross deferred tax asset balance.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its assessment of the future realizability of our deferred tax assets. As of December 31, 2025, management determined there was sufficient positive evidence to conclude that it is more likely than not deferred tax assets of $320.3 million are realizable. The recorded valuation allowance of $97.3 million consisted primarily of unrealized capital losses, state net operating losses, and state research credit carryforwards for which management cannot conclude it is more likely than not to be realized.

As of December 31, 2025, we had state income tax net operating loss carryforwards of $279.0 million. We had no federal or foreign income tax operating loss carryforwards as of December 31, 2025. California net operating losses and net operating losses related to other states will begin to expire in 2032 and 2041, respectively, unless previously utilized.

As of December 31, 2025, we had state R&D tax credit carryforwards of $114.7 million. California R&D tax credits carry forward indefinitely, while R&D tax credits related to other states will begin to expire in 2034 unless previously utilized.

Additionally, the future utilization of our state net operating loss and R&D tax credit carryforwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Sections 382 and 383, as a result of ownership changes that could occur in the future. No ownership changes have occurred through December 31, 2025.

As of December 31, 2025, we have recorded a U.S. deferred income tax liability of $12.0 million on the unremitted earnings of certain foreign subsidiaries as we cannot assert these earnings are indefinitely reinvested in foreign operations.

The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

We recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2025 and 2024, we had accruals for interest related to income tax matters of $24.9 million and $10.9 million, respectively. In addition, we had accruals for penalties related to income tax matters of $3.8 million and $2.2 million, respectively, as of December 31, 2025 and 2024.

We are subject to taxation in the U.S. and various state and foreign jurisdictions. Our tax years for 2002 for federal, 2000 for California, 2015 for other significant state jurisdictions, and 2019 and forward for foreign jurisdictions are subject to examination by tax authorities due to the carryforward of net operating losses and R&D tax credits.

The IRS is currently examining the 2023 tax year. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust the provision for income taxes in the period such resolution occurs.

The following table presents a summary of activity related to unrecognized tax benefits:

Year Ended December 31,

(Decrease) increase related to prior year tax positions (11.2) 4.0 3.4

Increase related to current year tax positions 51.3 54.8 36.7

Decrease related to prior year tax positions — — (3.6)

As of December 31, 2025, we had $177.6 million of unrecognized tax benefits that, if recognized and realized, would affect the effective tax rate, subject to changes in the valuation allowance.

On July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was signed into law. The OBBBA includes significant changes to U.S. tax and related laws. Some of the provisions of the OBBBA affecting us include the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act (TCJA), changes to the treatment of research and development expenditures under Internal Revenue Code Section 174, modifications to the Global Intangible Low-Taxed Income (GILTI) and Foreign-Derived Intangible Income (FDII) international tax provisions, and reinstatement of 100% bonus depreciation deduction from the TCJA for eligible property acquired after January 19, 2025. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA’s financial reporting implications have been recognized in our income tax provision for 2025.

Swiss Cantonal Tax Relief

In August 2025, the Company received approval from Swiss tax authorities granting cantonal tax relief to its Swiss subsidiary, Neurocrine Switzerland GmbH. The tax relief applies for a period of 10 tax years beginning with the 2024 tax year through 2033.

The Swiss cantonal tax relief had a minimal impact on the Company’s earnings per share for the year ended December 31, 2025.

11. 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.

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 2025, we expensed a milestone payment of $15.0 million to Nxera as R&D in 2025. In connection with the successful completions of a long-term toxicity program for direclidine and Phase 2 clinical study for direclidine in schizophrenia in 2024, we expensed milestone payments totaling $50.0 million to Nxera as R&D in 2024.

Under the terms of the agreement, Nxera may be entitled to receive potential future payments of up to $2.50 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).

NBIX US Equity

NBIX · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

NBIX US Equity☆

NBIX · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

NBIX US Equity