NBIX - Ingrezza's Potential To Dominate The Huntington's Chorea Market: A Boost For Neurocrine Investors

Summary

• Neurocrine Biosciences is a pharmaceutical company specializing in the treatment of neurological, neuroendocrine, and neuropsychiatric disorders.
• The company recently submitted a proposal for the use of Ingrezza as a treatment for Huntington's chorea.
• Ingrezza, with its clinical advantages and existing popularity in the treatment of tardive dyskinesia, is expected to take a leading role in the treatment of chorea related to Huntington's disease.
• While approval, alone, is unlikely to provide immediate upside, Neurocrine continues to make progress and investors can feel confident in the company's future.

Introduction

Neurocrine Biosciences ( NBIX ) is a pharmaceutical company that aims to improve the lives of people with medical needs and limited treatment options. Over the past 30 years, the company has utilized its expertise in neuroscience to develop treatments for neurological, neuroendocrine, and neuropsychiatric disorders. This has led to the FDA's approval of their treatments for tardive dyskinesia (Ingrezza) and Parkinson's disease (Ongentys). The company also collaborates with other pharmaceutical companies and receives royalties for FDA-approved products.

Recently, Neurocrine submitted a proposal to the FDA for the use of Ingrezza (valbenazine) as a treatment for chorea associated with Huntington's disease. The decision from the FDA is expected to be announced in August 2023. In this article, we will explore the potential of Ingrezza as a treatment option for chorea related to Huntington's disease and its implications for investors.

Financials

Before we start, let's review the company's most recent financial highlights . Neurocrine reported that Ingrezza net product sales reached $376 million in the third quarter of 2022, an increase of 31% from the previous year. This growth was attributed to a record number of new patients and high refill rates among existing patients. Additionally, the company reported GAAP net income of $69 million and non-GAAP net income of $107 million, both showing significant growth compared to Q3 2021. At September 30, 2022, the Company had cash, cash equivalents and marketable securities of approximately $1.2 billion. As of February 3, 2023, Neurocrine is valued at a market capitalization of $10.38 billion.

Huntington pathophysiology

Huntington's disease , or HD, is caused by the expansion of a CAG trinucleotide repeat in the huntingtin gene on chromosome 4. This leads to the production of a toxic protein that accumulates in the brain, causing a progressive and, eventually, deadly loss of cognitive and motor function, including chorea. Chorea is a movement disorder that is characterized by rapid, irregular, and unpredictable movements, particularly in the basal ganglia, which plays a crucial role in movement control.

Huntington treatments

Unfortunately, there is no cure for Huntington's disease, and treatment options are limited to symptom management. This includes medication for chorea control, cognitive and behavioral therapies for cognitive decline, and creating a calm and structured environment. The presence and severity of chorea should be evaluated to determine if treatment is necessary. VMAT2 inhibitors, such as tetrabenazine and Austedo, are typically the first-line therapy for most HD patients with interfering chorea, with Ingrezza expected to achieve FDA-approval later this year. Although VMAT2 inhibitors can cause reversible parkinsonism, they have a lower risk of tardive dyskinesia compared to antipsychotics. For HD patients with depression, agitation, or psychosis, a second-generation antipsychotic drug is usually the first-line therapy.

Ingrezza for HD chorea

Ingrezza, Neurocrine's flagship product, is a selective vesicular monoamine transporter 2 (VMAT2) inhibitor. It works by inhibiting VMAT2, which decreases the availability of monoamines for neurotransmission, and has been shown to improve chorea in some patients. Ingrezza is taken orally and has a favorable safety and tolerability profile. The KINECT-HD study was a randomized, double-blind, placebo-controlled trial conducted in the US with 120 patients with HD chorea. The study aimed to assess the efficacy, safety, and tolerability of Ingrezza and met its primary endpoint by reducing chorea symptoms as measured by changes in the Unified Huntington's Disease Rating Scale and the total maximal chorea score. Patients taking Ingrezza experienced a placebo-adjusted mean reduction of 3.2 units in the TMC score at weeks 10 and 12, as well as positive results in multiple secondary endpoints. Importantly, the study showed that Ingrezza does not worsen suicidality, which is a key benefit as the development of psychiatric and cognitive symptoms is a common occurrence in HD patients.

Market for HD chorea

In the United States, two drugs have been approved for the treatment of chorea associated with Huntington's disease: tetrabenazine and Austedo. Both of these drugs belong to the class of VMAT2 inhibitors. Tetrabenazine, as a generic drug, is cheaper, but its three-times-a-day dosing and warning about suicidality may not make it the preferred choice. Austedo, favored for its twice-a-day dosing, also comes with a warning about depression and suicidality . Ingrezza is, therefore, expected to primarily compete with Austedo.

Ingrezza, however, has two key advantages over Austedo, making it a likely favored option for HD chorea. Firstly, unlike Austedo, Ingrezza does not increase the risk of suicidality. Secondly, Ingrezza is a preferred choice among healthcare providers for tardive dyskinesia, another movement disorder. These same providers are expected to show a similar preference for Ingrezza in the treatment of HD chorea.

The estimated number of Huntington's patients in the US ranges from 20,000 to 40,000, with the majority expected to experience disruptive chorea. GlobalData predicts that Ingrezza, with its clinical advantages, will become a first-line treatment for HD chorea and gain significant market share upon its US launch later this year. The approval of Ingrezza for HD chorea is expected to bring in an additional revenue increase of over $300 million, in addition to its existing sales for tardive dyskinesia.

Conclusion

Neurocrine Biosciences has submitted a proposal to use Ingrezza as a treatment for chorea related to Huntington's disease. With its established clinical benefits and popularity in treating tardive dyskinesia, Ingrezza is poised to become a top treatment option for HD chorea. If approved, this is expected to result in an additional yearly revenue of over $300 million for the company. While the approval may not come as a shock to investors, Neurocrine continues to maximize the potential of its flagship product, Ingrezza. With a market capitalization of over $10 billion, a strong financial track record, advancing pipeline, and expanding market, investors can have confidence in the company's future prospects. The current recommendation for shares of Neurocrine is "hold".

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