Financial Analysis

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, reflecti …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

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 (t …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis. December 31, 2025 December 31, 2024 Fair Value Leveling Fair Value Leveling (in millions) Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 713.0 $ 713.0 $ $ 233.0 $ 233.0 $ Available-for-sale debt securities 1,830.4 1,830.4 1,582.6 1,582.6 Equity investments 120.8 120.8 124.8 124.8 $ 2,664.2 $ 833.8 $ 1,830.4 $ 1,940.4 $ 357.8 $ 1,582.6 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The following table presents income from continuing operations before provision for income taxes for domestic and international operations. Year Ended December 31, (in millions) 2025 2024 2023 Domestic $ 845.2 $ 597.5 $ 409.2 Foreign (139.8) (111.5) (77.1) 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, (in millions) 2025 2024 2023 Current: Federal $ 55.5 $ 215.2 $ 115.0 State 50.9 52.5 28.1 Foreign (43.8) Current income taxes 62.6 267.7 143.1 Deferred: Federal 142.5 (104.9) (45.2) State 1.9 (18.1) (15.5) Foreign 19.8 Deferred income taxes 164.2 (123.0) (60.7) Provision for income taxes $ 226.8 $ 144.7 $ 82.4 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): Year Ended December 31, 2025 (dollars in millions) Amount % Federal income taxes at 21% $ 148.1 21.0 % State and local income taxes, net of federal benefit (1) 3.1 0.4 % For …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Legal Matters Legal Proceedings In March 2025, we received a notice from Zydus Lifesciences Global FZE (Zydus FZE) that it had filed an abbreviated new drug application, or ANDA, with the FDA seeking approval of a generic version of INGREZZA SPRINKLE (valbenazine). The ANDA contained a Paragraph IV Patent Certification alleging that certain of our patents covering INGREZZA SPRINKLE are invalid and/or will not be infringed by Zydus FZEs importation, manufacture, use or sale of the medicine for which the ANDA was submitted. We filed suit in the U.S. District Court for the District of Delaware in April 2025 against Zydus Pharmaceuticals (USA) Inc. and its affiliates Zydus FZE, Zydus Worldwide DMCC (entity subsequently dismissed), Zydus Lifesciences Limited, and Zydus Healthcare (USA) LLC (entity subsequently dismissed) (collectively, Zydus). The complaint alleged that by filing their ANDAs, Zydus infringed certain of our patents covering INGREZZA SPRINKLE and sought to prevent Zydus from selling a generic version of INGREZZA SPRINKLE. We also filed suit in the U.S. District Court for the District of New Jersey in April 2025 against Zydus on a similar factual basis seeking to prevent Zydus from selling a generic version of INGREZZA SPRINKLE and this case was dismissed in favor of continued prosecution of the Delaware proceeding against the same entities. From time to time, we may become subject to other legal proceedings or claims arising in the ordinary course of our business. W …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

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, (dollars in millions) 2025 2024 2023 Operating lease cost $ 64.6 $ 43.6 $ 17.1 Sublease income (3.5) (2.0) (0.7) Net operating lease cost $ 61.1 $ 41.6 $ 16.4 Cash paid for amounts included in the measurement of operating lease liabilities $ 37.8 $ 33.1 $ 17.9 December 31, 2025 December 31, 2024 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) Operating Leases Sublease Income Year ending December 31, 2026 $ 56.7 $ (3.9) Year ending December 31, 2027 59.1 (4.0) Year ending December 31, 2028 59.7 (4.0) Year ending December 31, 2029 59.8 (3.6) Year ending December 31, 2030 60.7 (3.5) Thereafter 306.9 (2.0) Total operatin …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

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 StatementReporting Comprehensive IncomeExpense 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 disclosur …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Retirement Plan We have a 401(k) defined contribution savings plan for the benefit of all qualifying employees and permits voluntary contributions by employees up to 60% of base salary limited by the IRS-imposed maximum. Employer contributions were $19.7 million for 2025, $15.5 million for 2024, and $12.5 million for 2023.

PensionAndOtherPostretirementBenefitsDisclosureTextBlock

Segment Reporting and Disaggregation of Relevant Expense Captions Neurocrine Biosciences operates as a single global business segment dedicated to the research and development, commercialization, and sale of pharmaceuticals primarily in the U.S. for the treatment of under-addressed neurological, psychiatric, endocrine, and immunological disorders. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer as chief operating decision maker (CODM) in assessing segment performance and deciding how to allocate resources on a consolidated basis. The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of income and comprehensive income as consolidated net income. The CODM uses net income to monitor budget and forecast versus actual results in assessing segment performance and to evaluate income generated from segment assets in deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The following table presents information about reported segment revenues, segment profit, and significant segment expenses. Year Ended December 31, (in millions) 2025 2024 2023 Revenues: INGREZZA net produ …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

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 mil …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Acquisition of Soleno Therapeutics, Inc. On May 18, 2026 (the acquisition date), we completed our acquisition of Soleno Therapeutics, Inc. (Soleno) through a cash tender offer followed by a merger. Pursuant to the merger agreement, we paid $53.00 per share in cash for each outstanding share of Soleno common stock. Following the merger, Soleno became a wholly owned subsidiary of the Company. Soleno is a commercial-stage rare disease company that markets VYKAT (diazoxide choline) XR for the treatment of hyperphagia in patients with Prader-Willi syndrome. The acquisition expands the Companys rare disease portfolio and commercial product base. We accounted for the acquisition as a business combination using the acquisition method of accounting in accordance with Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed were recognized at their estimated fair values as of the acquisition date. In connection with the merger, the vesting of certain outstanding Soleno equity awards was accelerated as of the acquisition date and each vested Soleno equity award became entitled to receive cash consideration. The purchase price for the acquisition included $67.4 million related to the settlement of outstanding Soleno equity awards attributable to pre-combination service. In addition, we recognized stock-based compensation expense of $60.1 million during the second quarter and first six months of 2026 related to the acceleration of outstanding Soleno equit …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Debt On May 14, 2026, we entered into a credit agreement with the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, providing for a $1.0 billion senior secured revolving credit facility (the 2026 Credit Facility) that matures on May 14, 2031. Subject to the terms of the credit agreement, we may borrow, prepay, and reborrow loans under the 2026 Credit Facility prior to maturity. Borrowings under the 2026 Credit Facility bear interest, at the Company's option, at a rate based on either an alternate base rate plus an applicable margin or a Term Secured Overnight Financing Rate (SOFR), risk-free rate, or other applicable benchmark rate plus an applicable margin, in each case determined under the credit agreement. We are also required to pay a commitment fee on the unused portion of the revolving commitments. The initial Term SOFR borrowing under the 2026 Credit Facility bears interest at an all-in rate of 4.90%, consisting of a Chicago Mercantile Exchange Term SOFR reference rate of 3.65% plus an applicable margin of 1.25%. The initial commitment fee rate is 0.15% per annum. On May 14, 2026, we borrowed $600.0 million under the 2026 Credit Facility. In June 2026, we repaid $600.0 million of principal and paid $2.7 million of accrued interest related to the repayment. In the condensed consolidated statements of cash flows, proceeds from borrowings under the 2026 Credit Facility are presented within financing activities net of debt issuance costs paid to …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Fair Value Measurements The fair value hierarchy consists of the following three levels: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability when there is little, if any, market activity for the asset or liability at the measurement date. The following table presents a summary of certain financial assets, which were measured at fair value on a recurring basis. June 30, 2026 December 31, 2025 Fair Value Leveling Fair Value Leveling (in millions) Level 1 Level 2 Level 1 Level 2 Cash and cash equivalents $ 332.4 $ 332.4 $ $ 713.0 $ 713.0 $ Available-for-sale debt securities 149.3 149.3 1,830.4 1,830.4 Equity investments 147.3 147.3 120.8 120.8 $ 629.0 $ 479.7 $ 149.3 $ 2,664.2 $ 833.8 $ 1,830.4 Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments in available-for-sale debt securities, and accounts receivable. To minimize the risks related to cash and cash equivalents and investments in available-for-sale d …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and Intangible Assets The following table presents the changes in the carrying amount of goodwill. (in millions) Amount Balance as of December 31, 2025 $ 6.1 Foreign currency translation adjustments (0.1) Balance as of March 31, 2026 6.0 Additions in connection with the acquisition of Soleno Therapeutics, Inc. 494.6 Balance as of June 30, 2026 $ 500.6 The following table presents information relating to our recognized intangible assets. June 30, 2026 December 31, 2025 (dollars in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed product rights 1 $ 2,242.8 $ 16.8 $ 2,226.0 $ 5.0 $ 0.3 $ 4.7 Total intangible assets, net $ 2,226.0 $ 4.7 _________________________ (1) Developed product rights have a useful life of 16 years. The following table presents approximate future annual amortization expense for our finite-lived intangible assets as of June 30, 2026. (in millions) Amount 2026 (6 months remaining) $ 70.1 2027 $ 140.2 2028 $ 140.2 2029 $ 140.2 2030 $ 140.2 Thereafter $ 1,595.1

GoodwillAndIntangibleAssetsDisclosureTextBlock

Legal Matters Legal Proceedings In March 2025, we received a notice from Zydus Lifesciences Global FZE (Zydus FZE) that it had filed an abbreviated new drug application, or ANDA, with the FDA seeking approval of a generic version of INGREZZA SPRINKLE (valbenazine). The ANDA contained a Paragraph IV Patent Certification alleging that certain of our patents covering INGREZZA SPRINKLE are invalid and/or will not be infringed by Zydus FZEs importation, manufacture, use or sale of the medicine for which the ANDA was submitted. We filed suit in the U.S. District Court for the District of Delaware in April 2025 against Zydus Pharmaceuticals (USA) Inc. and its affiliates Zydus FZE, Zydus Worldwide DMCC (entity subsequently dismissed), Zydus Lifesciences Limited, and Zydus Healthcare (USA) LLC (entity subsequently dismissed) (collectively, Zydus). The complaint alleged that by filing their ANDAs, Zydus infringed certain of our patents covering INGREZZA SPRINKLE and sought to prevent Zydus from selling a generic version of INGREZZA SPRINKLE. We also filed suit in the U.S. District Court for the District of New Jersey in April 2025 against Zydus on a similar factual basis seeking to prevent Zydus from selling a generic version of INGREZZA SPRINKLE and this case was dismissed in favor of continued prosecution of the Delaware proceeding against the same entities. On March 6, 2026, the City of Pontiac Police and Fire Retirement System, a purported stockholder of Soleno, filed a putative cl …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

Leases Our operating leases that have commenced have terms that expire beginning 2027 through 2036 and consist of office space and research and development laboratories, including our corporate headquarters. Certain of these lease agreements contain clauses for renewal at our option. As we were not reasonably certain to exercise any of these renewal options at commencement of the associated leases, no such options were recognized as part of our right-of-use (ROU) assets or operating lease liabilities. The following table presents supplemental operating lease information for operating leases that have commenced. Six Months Ended June 30, (in millions, except weighted average data) 2026 2025 Operating lease cost $ 31.2 $ 33.0 Sublease income (1.9) (1.7) Net operating lease cost $ 29.3 $ 31.3 Cash paid for amounts included in the measurement of operating lease liabilities $ 27.6 $ 18.7 June 30, 2026 2025 Weighted average remaining lease term 9.4 years 10.4 years Weighted average discount rate 4.9 % 4.9 % Restricted cash related to leases $ 6.3 $ 7.8 The following table presents approximate future non-cancelable minimum lease payments under operating leases and sublease income as of June 30, 2026. (dollars in millions) Operating Leases Sublease Income 2026 (6 months remaining) $ 30.4 $ (2.0) 2027 61.3 (4.0) 2028 62.5 (4.0) 2029 61.3 (3.6) 2030 60.7 (3.5) Thereafter 306.9 (2.0) Total operating lease payments (sublease income) 583.1 $ (19.1) Less imputed interest 121.5 Total operat …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense 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. …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Segment Reporting and Disaggregation of Relevant Expense Captions Neurocrine Biosciences operates as a single global business segment dedicated to the research and development, commercialization, and sale of pharmaceuticals primarily in the U.S. for the treatment of under-addressed neurological, psychiatric, endocrine, and immunological disorders. There were no changes to the accounting policies of the segment as disclosed in the 2025 Form 10-K. The determination of a single business segment is consistent with the consolidated financial information regularly reviewed by the Chief Executive Officer as chief operating decision maker (CODM) in assessing segment performance and deciding how to allocate resources on a consolidated basis. The CODM assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the consolidated statements of income and comprehensive income as consolidated net income. The CODM uses net income to monitor budget and forecast versus actual results in assessing segment performance and to evaluate income generated from segment assets in deciding how to allocate resources. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. The following table presents information about reported segment revenues, segment profit, and significant segment expenses. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Revenues: INGRE …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Stockholders Equity Share Repurchases Our Board of Directors have authorized share repurchase programs, including a share repurchase program for up to $500.0 million of our common stock which was authorized in February 2025 (the 2025 Repurchase Program). The following table presents the shares of our common stock that we repurchased under our share repurchase programs and the cost of such shares, which were retired immediately upon repurchase. Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Number of shares 0.1 0.2 0.5 1.8 Total cost of shares (1) $ 10.0 $ 17.7 $ 66.0 $ 167.7 _________________________ (1) Reflects the total trade-date cost of shares repurchased during the period. As of June 30, 2026, we had $266.3 million remaining under the 2025 Repurchase Program. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing