The FDA has approved two drugs for tardive dyskinesia, the involuntary jaw, tongue and limb movements that some patients develop on antipsychotic medication. In the second quarter of 2026, they sold almost the same amount. Neurocrine Biosciences’ INGREZZA brought in $716 million. Teva Pharmaceutical’s AUSTEDO generated $676 million in the United States.
The similarity ends with the growth rates. AUSTEDO’s U.S. sales rose 33% from a year earlier, more than double INGREZZA’s 15%. And on Jan. 1, 2027, AUSTEDO will become the first of the two to sell to Medicare at a government-negotiated price.
What happens next in that market will shape the finances of Neurocrine, a company that depends on INGREZZA for most of its revenue and is using that revenue to fund an expanding research program, including a new Phase 2 trial in Alzheimer’s disease.
Two Drugs, One Mechanism
INGREZZA (valbenazine) and AUSTEDO (deutetrabenazine) both inhibit vesicular monoamine transporter 2, or VMAT2, a protein that packs dopamine into storage vesicles inside nerve cells. Reducing that loading dampens the involuntary movements of tardive dyskinesia and the chorea associated with Huntington’s disease. Both drugs carry approvals for both conditions.
INGREZZA became the first approved tardive dyskinesia treatment in April 2017. Its 2025 net product sales were $2.51 billion, according to Neurocrine’s annual report. For 2026, Neurocrine raised its INGREZZA forecast after the second quarter to $2.825 billion to $2.875 billion, from $2.7 billion to $2.8 billion. The company reported double-digit growth in total prescriptions and a record number of new prescriptions in the quarter.
Teva has been gaining ground. Total AUSTEDO prescriptions rose 14% in the second quarter and milligrams dispensed grew 21%, helped by AUSTEDO XR, a once-daily version that accounted for more than 60% of new patient starts. Teva raised its 2026 AUSTEDO forecast to $2.45 billion to $2.6 billion, a range whose midpoint already meets the $2.5 billion target the company had set for 2027, and has said it expects peak sales above $3 billion. Global AUSTEDO revenue rose 40% in the quarter.
The Price Gap Medicare Will Create
The Centers for Medicare and Medicaid Services selected AUSTEDO and AUSTEDO XR in January 2025 as part of the second round of the Medicare drug price negotiation program created by the Inflation Reduction Act. The negotiated price, effective Jan. 1, 2027, is $4,093, compared with a 2024 list price of $6,623 on the same basis, a reduction of about 38%.
The 15 drugs chosen in that round accounted for $42.5 billion, or 15%, of gross covered Part D drug costs in 2024, and CMS expects the negotiated prices to save Medicare $12 billion.
INGREZZA was not on that list. In January 2025, CMS notified Neurocrine that INGREZZA qualified for the law’s small biotech exception, which shields it from selection until 2027, according to the company’s annual report. If CMS selects it after that, a negotiated price would take effect no earlier than 2029. INGREZZA was also absent from the 15 drugs CMS named on Jan. 27, 2026, for the third cycle, with prices effective in 2028. Those drugs, which include Botox, Trulicity and Xolair, accounted for about $27 billion in combined Part B and Part D spending. “For too long, seniors and taxpayers have paid the price for skyrocketing prescription drug costs,” CMS Administrator Mehmet Oz said when the list was announced.
The timing gives AUSTEDO roughly two years at a lower Medicare price while INGREZZA keeps its own. Neurocrine has flagged the risk directly. Its annual report says AUSTEDO’s lower negotiated prices may increase pricing and formulary pressure on INGREZZA.
INGREZZA is reimbursed under Medicare Part D, and because CMS classified Neurocrine as a “specified small manufacturer,” the company’s obligation under the program’s new manufacturer discount is being phased in. The company describes the overall effect of that discount on INGREZZA revenue as “inherently uncertain.”
Patent Protection Runs Longer
INGREZZA’s exclusivity extends well beyond the Medicare question. The drug is covered by 22 Orange Book-listed U.S. patents expiring between 2027 and 2040, and the compound patent, after a 552-day term extension, runs to 2031. Neurocrine settled all patent litigation with generic manufacturers in 2023. Under those settlements, generic versions may launch beginning March 1, 2038, or earlier in certain circumstances.
A franchise with a protected horizon of more than a decade gives Neurocrine time to build other revenue. That process is already visible in the second-quarter numbers. INGREZZA’s $716 million represented about three-quarters of the company’s $959 million in revenue, down from about 91% a year earlier, as CRENESSITY and the newly acquired VYKAT XR added $238 million between them. CRENESSITY, a congenital adrenal hyperplasia treatment approved in December 2024, grew 247% from a year earlier, and VYKAT XR, a Prader-Willi syndrome drug acquired with Soleno Therapeutics, produced $54 million in six weeks.
What INGREZZA Pays For
Neurocrine expects GAAP research and development expense of $1.275 billion to $1.325 billion in 2026, after raising its earlier range. Against that, INGREZZA alone is forecast to bring in about $2.85 billion.
The pipeline it funds is broad. Neurocrine has two Phase 3 readouts scheduled for 2027: direclidine, a muscarinic agonist for schizophrenia, and osavampator, an AMPA receptor potentiator for major depressive disorder. Chief Executive Kyle Gano described “multiple important clinical milestones in 2027” in the second-quarter release.
The newest program is in Alzheimer’s. On Aug. 26, the FDA accepted Neurocrine’s application for a Phase 2 trial of NBI-1117567, an oral drug that preferentially activates the M1 muscarinic receptor, in Alzheimer’s cognition. The acceptance triggered a $10 million payment to Nxera Pharma, which designed the molecule and licensed it to Neurocrine in 2021 under a deal worth up to $2.6 billion in milestones and research funding.
“We are delighted to report that NBI-‘567 has become the third compound in the muscarinic agonist portfolio to receive approval to proceed to a Phase 2 study,” Nxera Chief Executive Christopher Cargill said.
The trial targets symptoms of cognitive decline rather than the underlying disease. Disease-modifying approaches have a poor record. Jeffrey Cummings, then at the Cleveland Clinic, calculated in 2014 that Alzheimer’s candidates tested from 2002 to 2012 failed 99.6% of the time. A 2022 paper in the Journal of Alzheimer’s Disease listed 98 compounds that failed in Phase 2 or 3 between 2004 and 2021, and two that succeeded. The amyloid antibodies that later reached patients slow progression without improving memory.
Interest in muscarinic drugs rose after the FDA approved Bristol Myers Squibb’s Cobenfy for schizophrenia in 2024, and Neurocrine now has four muscarinic programs in the clinic, including direclidine in Phase 3 and NBI-1117570 in Phase 2 for schizophrenia. Symptomatic cognition drugs make up 18% of the 158 Alzheimer’s drugs in development this year, according to the annual pipeline review led by Jeffrey Cummings of the University of Nevada, Las Vegas.
Spending Down the Cash
Neurocrine’s balance sheet changed sharply in 2026. The $2.9 billion cash acquisition of Soleno Therapeutics, which closed May 18, reduced cash, equivalents and marketable securities to $482 million at June 30 from $2.54 billion at the end of 2025. Neurocrine also arranged a $1 billion revolving credit facility in May, which was undrawn at quarter-end.
Operating costs climbed with the larger business. Neurocrine raised its 2026 GAAP selling, general and administrative forecast to $1.575 billion to $1.6 billion, from $1.375 billion to $1.4 billion, and added $85 million to $90 million in amortization of acquired intangibles. On a non-GAAP basis, which excludes items such as stock-based compensation, research spending is expected at $1.14 billion to $1.19 billion.
Second-quarter earnings show the cash-generating capacity behind those choices. GAAP net income rose to $144 million, or $1.39 a share, from $108 million. Non-GAAP net income climbed to $297 million, or $2.85 a share, from $166 million.
Institutional Positioning
Institutions hold about 92.6% of Neurocrine’s shares, according to MarketBeat. State Street reported 4,385,598 shares at the end of June, worth about $739 million. AQR Capital Management held about 3.8 million shares and Two Sigma Investments about 2.1 million, while Invesco built a new position of roughly 1.08 million shares during the quarter.
Armistice Capital, a New York hedge fund that concentrates on healthcare, reported 535,838 Neurocrine shares worth about $90.3 million on June 30, according to GuruFocus. The stake accounted for 1.1% of the $8.17 billion the fund disclosed across 333 holdings. StockZoa data show that two index hedges, put options on the S&P 500 and Russell 2000 exchange-traded funds, account for over 50% of that figure. Engineers Gate, a quantitative manager, raised its own Neurocrine stake 64% during the quarter. Analysts tracked by MarketBeat rated the stock a “Moderate Buy” on average as of mid-September, with a consensus price target of $201.09.
Teva expects AUSTEDO sales of at least $2.45 billion this year, before its Medicare price takes effect. The top of Neurocrine’s INGREZZA range sits $275 million above the top of Teva’s. The first full year of a two-tier Medicare price for VMAT2 inhibitors begins in January.
