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Neurocrine Biosciences Inc  (NASDAQ:NBIX)
Q4 2018 Earnings Conference Call
Feb. 05, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day everyone, and welcome to Neurocrine Biosciences Reports Fourth Quarter and Year End 2018 Results. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions, during a Q&A session. (Operator Instructions) Please note, today's call is being recorded and I will be standing by should you need any assistance.

It is now my pleasure to turn the conference over to Kevin Gorman, CEO. Please go ahead.

Kevin C. Gorman -- Chief Executive Officer

Thank you very much operator, and welcome everyone to our Q4 earnings call. I'm joined in the room today by Matt Abernethy, our CFO; Eiry Roberts, our CMO; Eric Benevich, our Chief Commercial Officer and Kyle Gano, our Chief Business Development Officer.

Before we get started, Jane could you please read our Safe Harbor.

Jane Sorensen -- Head, Investor Relations

Yes. Certain statements made in the course of this conference call that are not historical statements may be forward-looking statements, which are subject to risks and uncertainties. information concerning factors that could cause actual results to differ materially from both contained in or implied by forward-looking statements is contained in the company's SEC filings, including but not limited to, the company's third quarter 2018 Form 10-Q and in today's press release. Copies may be obtained by visiting the Investor Relations page on the company's website. Any forward-looking statements are made only as of today's date, and we disclaim any obligation to update these forward-looking statements. Kevin?

Kevin C. Gorman -- Chief Executive Officer

Thank you very much. Hard to believe we're just in the beginning of February, it seems like there's been so much going on both in the company and in our industry and in just the very first five weeks of this year.

I'd like to take this opportunity as we normally do in this Q4 earnings call to look back at the accomplishments of the company in 2018. And it really was a very, very good year for us. Once again, we saw INGREZZA offering tremendous benefit to patients and it's widespread acceptance by the medical community and that's resulted in over $400 million in sales in its first full year on the market. We are also very pleased to see that ORILISSA was launched by our partner AbbVie.

And then third, our research group added two more compounds into the clinic. And one of those being a new VMAT2 inhibitor, and we also finished the year with over $800 million in cash. Now that cash is important because that allowed us to invest in our business. And when you look at 2018, we invested heavily in INGREZZA, expanding not only our sales force and sales management, but all of our field teams. Medical Sciences lies on its national account teams and patient access specialists.

We recognize that the opportunity to treat TD patients was great and that the educational effort was equally large. We expect to see the benefit of the sales force expansion over the coming quarters. But our investments didn't stop there. We also began the expansion of our research, preclinical development, manufacturing and clinical groups in 2018.

These are the teams that discovered and developed INGREZZA and ORILISSA. Our investment will continue to add to the unique discovery platform that we've developed and taken over the past 10 years. We work to expand our small molecule capabilities, not just internally but also externally. An example of this is our recent collaboration with Jnana Pharmaceuticals to discover small molecules targeting CNS soluble carrier transporters. These are very important mediators in the CNS, however, historically, they've been extremely difficult to drug. But we think Jnana's technology is compelling.

We have numerous academic and industrial collaborations that don't make the news, but have great value, as it allows us to partner with some of the leading labs in the world to share expertise and technology to identify and validate novel targets in neurological diseases.

Now in 2019, we will continue to invest in our science and in our patients. We will continue the expansion of our R&D groups to allow us to work on more program simultaneously, thus increasing our chances of success in bringing novel medications in the clinic. We are also investing in our TD patients with the launch of our nationwide unbranded educational television and Internet campaign. The goal of this campaign is to help patients and their family members engage their healthcare professionals, if they are experiencing involuntary movements. And in addition, we're going to continue in earnest our educational initiatives with physicians and allied health professionals to facilitate recognition in appropriate diagnosis of tardive dyskinesia.

We will also continue our pre-clinical and clinical activities to expand the indications addressable by both valbenazine and the new VMAT2 inhibitor we introduced in the clinic. Now while investing in our historical areas of strength, small molecule drug development, we understand that there are targets that can change the course of neurological diseases or even be potentially curative. These targets have been on our radar for years, but they are not amenable to small drug development. Two of those are Parkinson's disease and Friedreich's ataxia. We have surveyed the landscape of new therapeutic modalities and technologies for years and Kyle can talk about that later on.

We've watched a number of exciting young companies as they've grown and matured. Last month, we entered into an extensive and deep collaboration with Voyager. A company that we believe has the best technology and expertise in gene therapy for CNS diseases and disorders. We are very excited to begin this collaboration to bring forward their existing programs and two more targets that we will select. This will build on the expertise that Neurocrine has in neuro psychiatry, neurology and neuro endocrinology.

In 2019, we anticipate significant progress with our pipeline. First, later this quarter, we will be releasing initial results of our congenital adrenal hyperplasia trial and Eiry will be discussing this in a moment. Second, we are on track to submit the NDA for a pickup on for the treatment of Parkinson's disease next quarter. We've begun the pre-commercialization work to be launched ready next year. And third, our partner AbbVie plans on submitting elagolix for the treatment of uterine fibroids later this year. This is going to be a very full and busy year for the company.

So at this point, I'd like to turn the call over to Matt. So he can go over our quarter and full year financials. Matt?

Matthew C. Abernethy -- Chief Financial Officer

Good afternoon and thank you for joining our fourth quarter 2018 earnings conference call. As highlighted in our preliminary sales announcement in early January, our fourth quarter sales reflects the continued momentum of our INGREZZA launch, adoption by patients and physicians, and counts off a significant 2018 for Neurocrine Biosciences.

During the fourth quarter of 2018, INGREZZA saw script volume increase to approximately 22,900 scripts resulting in a $130.3 million in net product sales. This compares to 19,400 scripts and $111.3 million in net product sales for the third quarter of 2018. For the full year 2018, INGREZZA net product sales were $409.6 million compared to $116.6 million for 2017. The increase of 3,500 prescriptions from Q3 to Q4 reflects continued strong demand for INGREZZA with increasing new patient flow and overall study adherence rates. From an inventory perspective, we did not see any significant stocking activity leading to an overall material increase on days on hand inventory within our channel. Net revenue per script for Q4 was fairly consistent with Q3. Around $5,700 per script, reflecting a 4% price increase introduced in early December. Offset by incremental accounting reserves taken associated with year-end channel inventory.

As we look forward to Q1 2019, we expect there to be a more significant impact to our gross to net as a result of the Medicare Part D doughnut hole and commercial copay assistance. We estimate that impacts will be between $6 million to $8 million comparing to Q4 2018 results versus our expectations for Q1 2019.

Moving now to our financial results for the fourth quarter of 2018. During the quarter, we recognized a profit of $18.1 million or $0.19 earnings per diluted share. Our operating expenses increased to a $109.6 million during the fourth quarter due to our field sales team expansion. Regarding cash investments, we are exiting 2018 with $866.9 million, which is sufficient capital to execute our near-term strategy including covering the $165 million upfront payment for the recently announced Voyager Therapeutics collaboration, which we expect to close during the first quarter.

Now onto a few comments about our 2019 revenue outlook. Specific to the first quarter of 2019, we expect continued growth of INGREZZA TRx. But do expect some impact on net revenue as a result of seasonal factors that impact demand across our industry. In addition, as I mentioned earlier, we expect there would be a $6 million to $8 million impact comparing Q4 2018 to Q1 2019 as a result of the gross to net impact from Medicare Part D doughnut hole in commercial copay reset.

For 2019, our priority is very clear for INGREZZA. Increased the number of patients diagnosed with TD and provide patients with INGREZZA to alleviate their often debilitating symptoms that come with having TD. Our expanded sales team and our recently announced Talk About TD disease state awareness campaign aims to our patients and caregivers understand TD and have a conversation with their healthcare providers about ways to manage their TD. We do expect continued growth throughout 2019, but expect there will be natural ebbs and flows quarter-to-quarter as you would expect in a market building activity like this. We would also expect quarter-to-quarter results to be influenced by seasonal dynamics in natural progression of long-term patient compliance.

Looking back on 2018, we are quite proud of achieving over $400 million in INGREZZA sales in the positive impact on patients during our first full year of launch. We look forward to benefiting more patients as our launch continues throughout 2019. Regarding SG&A and R&D expenses as announced in our press release, we expect our expenses for 2019 to be in the range of $550 million to $600 million including approximately $80 million of share-based compensation.

Specific to the recently announced Voyager Therapeutics' collaboration, our expense guidance range includes $40 million to $50 million of estimated operational costs for 2019. But excludes the expense impact from the $165 million upfront payment due upon closing. Specific to SG&A, and operating expenses for 2019, we're making investments to position us for long-term commercial success including our recent sales force expansion, our talk about TD educational awareness campaign and our pick up on marketing investments to prepare for anticipated 2020 launch.

Moving to R&D. We see significant opportunities to enhance our pipeline and advance our current programs to drive long-term value for patients and investors. Our increased investment in R&D in 2019 include advancing our CAH program, assuming positive results from our study, completing our ticked up on NDA submission, which will result in a $10 million milestone payment to to be out and making progress on our early clinical stage programs.

In addition, we have planned to increase the investment in INGREZZA surrounding our Phase IV studies, health economics outcomes research, investigator-initiated trials and other clinical development programs to expand the impact of valbenazine for patients. In regards to our T-Force PLATINUM Study, we have not made a formal decision whether to continue the study or not. Should we choose to discontinue the study, we would expect our operating expenses to fall toward the bottom half of our spending guidance range.

We expect 2019 to be another year of tremendous progress, helping many more patients impacted by TD and advancing medicines which are important to helping those with significant unmet clinical needs.

With that I will now hand the call over to our Chief Medical Officer. Eiry Roberts.

Eiry W. Roberts -- Chief Medical Officer

Thank you, Matt, and good afternoon to everyone on the call. I'm pleased to provide an update on our clinical pipeline and a few thoughts on the programs associated with our collaboration with Voyager Therapeutics. As part of our extensive medical educational program and ongoing commitment to support patients with tardive dyskinesia, we continue to collect important data from the ongoing real world study called RE-KINECT.

RE-KINECT is the largest real world screening study of patients with possible TD. One year follow-up for patients included in the study was recently completed. And we intend to present data in Q3 of this year. Additional data including an index analysis of quality of life impact, and an assessment of the burden placed on caregivers will also be included in upcoming publications.

Valbenazineb in pediatric patients with Tourette syndrome as previously announced the T-Force GOLD study did not meet its primary endpoint. We are currently analyzing the complete dataset from this recently completed study and intend to make a decision regarding next steps for the clinical development program in this indication later this quarter.

For Opicapone, we continue to make excellent progress in completing the NDA package. And remain on track for a submission to the FDA in Q2 2019. For CAH, the Phase II proof-of-concept study, examining the pharmacokinetics , pharmacodynamics and tolerability of NBI-74788 in adult patients with Classic 21 hydroxylase deficiency continues to progress. We anticipate sharing initial results of this compound later this quarter. In the event of positive results, we plan to meet with the FDA to discuss the path forward for the evaluation of NBI-74788 as a novel treatment for patients with Classic congenital adrenal hyperplasia. In addition, we are working to initiate clinical development in pediatric patients with CAH later this year.

Turning now to our novel internally discovered Vesicular Monoamine Transporter 2, VMAT2 inhibitor, with potential for use in the treatment of a range of neuroscience disorders. We recently completed dosing in the single ascending dose portion of our first Phase 1 study for this compound and successfully initiated dosing in the multiple ascending dose portion of the same study. This study is designed to assess safety, tolerability and pharmacokinetics of the compound in healthy subjects. We anticipate the dosing in this study will be complete in Q2 2019.

As you can see, we continue to make progress with our clinical programs here at Neurocrine Biosciences. Now, let me share with you a few thoughts around our collaboration with Voyager Therapeutics. We are excited to engage in this partnership with Voyager to advance the Parkinson's disease, Friedreich's ataxia and two other gene therapy based programs. These programs are all targeting to the release states where gene therapy has a real opportunity to make a difference, in providing much needed treatment options for people with serious neurological diseases.

Voyager Therapeutics has extensive experience in the field of gene therapy, and I believe that the scientific rationale for their programs in both Parkinson's disease and Friedreich's ataxia is very strong. In addition, I am confident that Voyager scientific expertise, coupled with Neurocrine's clinical development, regulatory and commercial capabilities were a result in the effective advancement of these programs over the coming years. We are currently jumping into these programs with our partner to learn more and create formal development plans. We look forward to providing program updates in the coming quarters as these plans and activities develop. 2019 will be a very exciting year for Neurocrine and our clinical development program and I look forward to keeping you updated.

With that I will now hand the call back over to Kevin for some closing remarks.

Kevin C. Gorman -- Chief Executive Officer

Thank you very much Eiry. So those -- those are introductory statements. What I'd like to do is open it up for your questions now, please.

Questions and Answers:

Operator

(Operator Instructions) Our first question comes from Brian Skorney with Baird. Please go ahead.

Trevor -- Robert W. Baird -- Analyst

Hi, this is Trevor on for Brian. Thanks for taking my question. So just relating to your guidance, we're curious why you haven't provided guidance for INGREZZA sales, for the coming year. And what sort of factors would go into providing you with enough confidence to provide us the range? Thanks.

Kevin C. Gorman -- Chief Executive Officer

Yes. Excellent question. And as a company where we've landed is to not provide revenue guidance at this time. We're very focused on the launch of INGREZZA and really bridging that gap between the prevalent population and the diagnosed population. There are still many things to be understood with the launch and we're focused on INGREZZA from a long-term perspective. So we will be providing qualitative quarter-to-quarter color, but right now where we've landed is not to provide guidance from a revenue perspective at this time.

Operator

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad -- Bank of America Merrill-Lynch -- Analyst

Hi guys. Thanks for taking my question. On the brand for INGREZZA, Kevin, you've talked in detail in the past about how you feel you're still in the early innings of this launch. You've talked to us about some factors that could help give us color on how to model the year for 2019. But as mentioned you haven't provided sales guidance. So how are you thinking about the tender of the launch this year, maybe relative to last year, obviously you came up well above expectations, but is there anything that could potentially change the cadence of this launch this year, given that you're still early. So there's still a lot of patients that could go on therapy? Thanks.

Kevin C. Gorman -- Chief Executive Officer

Yeah Tazeen. I'll give you a little bit of my thoughts and I'm going to turn your question over to Eric then to answer a little bit more. I don't see anything that is going to stand in our way in 2019 in order to continue to bring the drug to patients. What we continued to experience in the market is something that we've had from day one and it's that dramatic gap that's between the prevalent population and the diagnosed population, and that's really what we need to tackle in this market in 2019, just as it was in 2018 and 2017. Eric, what do you -- what would you like to add?

Eric Benevich -- Chief Commercial Officer

Yes. Thanks for the question Tazeen. So I'll start by saying that we feel really good about our position as we enter 2019. And as a team -- as a commercial team our focus remains on executing our plan. As Kevin said the vast majority of TD patients remain undiagnosed, and therefore we continue to invest in TD disease state education to really improve recognition and appropriate diagnosis. And so we're going to continue to also leverage the clinical data that we've been developing and Eiry touched on the RE-KINECT study and the long-term follow-up data that will be coming this year.

And furthermore, really being able to see the benefit of our recently completed sales force expansion. So all of those factors make us feel good about the growth prospects, Kevin said and I believe Matt said in his comments that growth will likely vary from quarter-to-quarter, we've seen that over the course of this launch. But it's still early days yet, the vast majority of these patients are undiagnosed. And we very focused on building this market and we continue to be very optimistic about 2019.

Tazeen Ahmad -- Bank of America Merrill-Lynch -- Analyst

Okay. And as a follow-up, any kind of anecdotal data you could share with us on expectations from competition from Teva? Is it, as it was last year expecting any changes to that dynamic. Thanks.

Eric Benevich -- Chief Commercial Officer

Tazeen, I think that Teva is continuing on with their plans. And it's really hard for us to talk about what they might be doing in the future.

Tazeen Ahmad -- Bank of America Merrill-Lynch -- Analyst

Is that part of the reason why you're not issuing guidance?

Kevin C. Gorman -- Chief Executive Officer

No, no. Teva didn't have any input to us not providing guidance, Tazeen.

Tazeen Ahmad -- Bank of America Merrill-Lynch -- Analyst

Okay. Thank you.

Operator

Thank you. Our next question comesfrom Paul Matteis with Stifel. Please go ahead.

Benjamin Burnett -- Stifel, Nicolaus & Company -- Analyst

Hi, this is Ben Burnett on for Paul. I had a question about your CAH program. I guess what do you need to see in terms of 17 OHP lowering to move this program into ultimately into a pivotal study. And then just secondly, I guess, do you have a sense at this point in the game as to what primary endpoints would ultimately be approvable with 17 OHP be enough in its own right or would you also consider things like the level of steroids bearing. Love to hear your thoughts on that. Thank you.

Eiry W. Roberts -- Chief Medical Officer

Thanks for the question and I'm very happy to provide a little bit more color there. I think we have stated before and very consistently believe that the best thing for us to look at in terms of understanding the data from this current ongoing proof-of-concept study to really refer back to studies that we performed some years ago, which was a single dose study with a different CRF1 antagonist. And in that study after single doses of the compound administered to female subjects, we saw about a 50% reduction in 17-hydroxyprogesterone levels after that single dose and about 60% of the population, and so that will be our starting point in what we're thinking about going into, as we look at these data.

Having said that, however, we know that the -- there are a significant need -- broader number of biomarkers that were important in the disease as CAH. And so in addition to the 17-hydroxyprogesterone levels in our study, we'll be looking at androgen levels, the ACTH and the markets and we'll be looking at those markers in totality, in terms of the data to understand the PK TD relationships for the medication more broadly.

In terms of the discussion with the agency and our next steps toward the pivotal program, pending obviously the outcome of the ongoing study currently. The biomarkers are really very, very fundamental way in which physicians manage this disease in patients and as you know, it's a lifelong disorder and as a result, we believe that a pivotal program that is built on the significant foundation of looking at biomarkers will be critical and will be the fundamental core of any program moving forward.

That said, efforts such as the trial designs that would allow us to look at steroid optimization and the ability to return glucocorticoid treatment back to more physiological levels in these patients without seeing an increase in androgen levels obviously is very important and something will be considering.

Operator

Thank you. Our next question comes from Biren Amin with Jefferies. Please go ahead.

Biren Amin -- Jefferies -- Analyst

Yes. Thanks guys for taking my questions. Can you just talk a little bit about the seasonal impact in Q1 that you're expecting, I think it's exclusive of the doughnut hole impact and how much of this impact was experienced in 2018. Can you just quantify that for us for last year?

Matthew C. Abernethy -- Chief Financial Officer

Yes. Hi Biren, this is Matt. I can take that. So, one is just the impact on the gross to net, which I think we are pretty clear on that. We would expect a $6 million to $8 million headwind as compared -- comparing Q1 to Q4. As a result of the result of the commercial copay and then also the doughnut hole, and just a reminder for those who may not followed as closely the doughnut hole participation from manufacturers actually increased from 50% of the rebates to 70% in 2019.

From a seasonal demand perspective, it's really tough to Biren to tease out, how much did we actually feel in Q1 of last year, because we're so early in the launch, but as we've talked about before, some of the proxies that we've booked out are or what happens within the long-acting injectable LAI universe and you see a pretty clear trend within LAI that you have a slowdown, moving from Q4 to Q1, picks back up in Q2, slows back down again in Q3 and picks back up again in Q4 and that sort of sequential deviation is around 3% or so when you look back over a handful of years.

So we do know, there's just a natural dynamic of seasonality, how much did we experience last year, how much will we experience this year? It is till difficult for us to tell.

Biren Amin -- Jefferies -- Analyst

So just want to follow up given you think that you're going to experience some seasonality in Q1, wouldn't that be offset by the sales force expansion that took place in the September-October time period.

Kevin C. Gorman -- Chief Executive Officer

Yes. No Biren that's there. We've really look forward to the impact of the sales force expansion, as well as the possible benefit from our Talk About TD campaign, that does take a while for that to kick in and Eric to maybe given up an update on where we're at from our expansion perspective and how we think about that through 2019.

Eric Benevich -- Chief Commercial Officer

Yes, Berin, the other thing I was going to mention in addition to those variables that impact the gross to net that Matt discussed, is that in January, that's a month, where a lot of plan switching happens, especially in Medicare Part D. We've said previously that even though we haven't given the specific numbers that are substantial proportion of patients on INGREZZA government pay. And this is a specialty medication and so what happens when patients switch from one Medicare Part D plan to another, and there are on INGREZZA or other specialty medications, typically, they're going to have to go through a reauthorization process. And so that tends to be disruptive for patients.

We do have a specialty pharmacy network and the pharmacies work with the patients and they contact them proactively to determine if they are changing plans. But, bottom line is that in addition to the doughnut hole impact and the reset of out-of-pocket contributions you do have a lot of plan switching and you have some disruptions, in terms of, timing of getting refills and things like that, for those patients.

With regards to the -- sort of the second part of your question about the benefit of the sales force expansion, I think it's really happening on kind of two levels. One is that we've now gotten past the heavy lifting, I'd like to say in terms of the recruiting, the training, the deployment and it's allowed our legacy team to really refocus on calling on their accounts. The new hires, the newer sales team members, I have been in the field for a few months now and they've gotten around they've met their customers, and they're still on this deeper part of the learning curve in terms of understanding the TD opportunity and how to really sell in this market, which may be different from their prior experience.

So, Kevin said earlier that it would take a few quarters for us to see the true benefit of the expanded field sales team. But I do think that just looking at Q4, once we got past the specific expansion-related activities, we did see an uptick in terms of call activity, in terms of peer-to-peer program activity and so on, which I think we're contributors to the acceleration of growth that we saw in Q4.

Kevin C. Gorman -- Chief Executive Officer

Yes, so the only thing I can add to this, this is Kevin. This is only our second Q1 to go to. The first Q1 in 2018 that we went through was pretty early in our launch. And so there's a lot of moving parts, as you've heard from Matt and Eric. And so, this is one of the reasons why we hesitate to give guidance, in addition, because we're going through this learning from this each and every time.

Biren Amin -- Jefferies -- Analyst

Great. Thank you.

Operator

Our next question comes from Jay Olson with Oppenheimer. Please go ahead.

Jay Olson -- Oppenheimer -- Analyst

All right,. Thanks for taking the questions. I was curious about your vision for the organization, in terms of, the Voyager deal being a worldwide deal. Does that signal Neurocrine's intention to build an integrated global organization, including ex-U.S. commercial infrastructure?

Kevin C. Gorman -- Chief Executive Officer

Jay, our vision for Neurocrine is to be the world-leading neuroscience company. And so, in order to do that, you have to not only be dominant in the United States, but also bringing therapies to the rest of the world. I think our -- in the more near term, our best opportunity to globalize Neurocrine comes from our CAH program. What you'll see there as we move forward is that we hope to be able to have the pivotal programs being worldwide programs.

And particularly in Europe, they have approximately the same number of CAH patients, and so as the United States, so what we would look at is we would look at commercializing ourselves over in Europe with CAH. They have a great registry of these patients, just a handful of centers of excellence where these patients are identified, diagnosed get them on their treatment paradigms and then send them back to their -- their treating endocrinologist. So it wouldn't be a heavy lift for us to start a globalization of Neurocrine with that.

Jay Olson -- Oppenheimer -- Analyst

Great. And maybe just as a related question. Since you still have a strong cash position with $700 million in cash on your balance sheet. Will -- should we expect Neurocrine to continue pursuing deal similar to the Voyager deal? Or are you satisfied with the current portfolio you have following this deal and your own internal pipeline assets?

Kevin C. Gorman -- Chief Executive Officer

Well. So I'll turn that question over to the guy who did the Voyager deal, the Jnana deal and actually almost all the deals that Neurocrine as active right now. Kyle?

Kyle Gano -- Chief Business Development Officer

Yes, that's a great question. I think that the short answer is yes, we continue to look for other types of technologies and programs that we think fit nicely into what we want to become here and achieve at Neurocrine in terms of being a global neuroscience company. So, I would expect us to continue down that route, moving forward, we continue our continuing to look as we speak, now, talking about the portfolio. But I would say it's always done in combination with what our R&D organization is doing as well. They're adding programs to the pipeline and likewise to business development, we want to grow the pipeline as well.

Jay Olson -- Oppenheimer -- Analyst

Great. Thanks for taking the questions.

Kevin C. Gorman -- Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Geoff Meacham with Barclays. Please go ahead, your line is open. And Geoff, your line is open. Do you have us on mute?

Kevin C. Gorman -- Chief Executive Officer

We can move onto the next operator and come back to Geoff when he is available.

Operator

Certainly. Our next question comes from Charles Duncan with Cantor. Please go ahead.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Hi guys. First of all things for taking my questions and congrats on a great year of progress. I had question for Kevin or Eric and then one follow-up for Eiry. For Kevin or Eric regarding the talk about TD awareness campaign, kicking that off now, is that, really a function of the progress you've made in the market and prescribers being ready for this campaign or is it a function of you feel like you've kind of passed out the early adopters in terms of prescribers and or patients?

Kevin C. Gorman -- Chief Executive Officer

Yes. Thanks for the question, Charles. I think it's much more of the former versus the latter. Certainly, when we were preparing for the launch and we were learning about the TD opportunity and having discussions with thought leaders and psychiatry and neurology, we learned that the TD was an area that was -- we'd like to say forgotten but not gone, meaning is that we needed to do work to raise the prominence of TD to bring it to the forefront once again in those communities, in those healthcare provider communities because was a condition that over the years, a certain nurture (ph) had built up and a inability to really face the condition and to address that due to a lack of effective treatment options.

And so we then started investing in disease education and disease awareness on the HCP side or about a year leading up to the launch. And we wanted to make sure that we were sequencing our educational efforts, first with HCPs and then eventually with patients and caregivers. And our initial efforts with patients and caregivers came through some of the partnerships that we develop with patient advocacy organizations. To introduce the idea of tardive dyskinesia, a movement disorder that was a consequence of treatment with opamine blocking drugs primarily antipsychotics and other psychiatric medications.

And we feel like, we got to a point in 2018, where it was time to talk about TD with frankly with patients. And start to encourage those conversations between the patients, the family members and their psychiatrist or the neurologist. And so I think you see that if you see in the add or you visited the Talk About TD website. So for us, it was really about staging, it was about making sure that we had appropriately educated the provider audience, before we encouraged patients to come in and start asking about their involuntary movements, and so we wanted to make sure that we did it in a thoughtful manner, and that we did it in the appropriate way and we feel really good about the campaign, that we've developed.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Okay. That's helpful. And I appreciate the added color quickly to Eiry. I had a question about the VMAT2 inhibitor program. I know it's earlier days, but I'm still stuck on the T-Force GOLD results. And I guess I'm wondering what are some of the ways to think through the potential approach for the second-generation VMAT2 inhibitor, in terms of, the types of indications that you may consider developing it in?

Eiry W. Roberts -- Chief Medical Officer

Thanks Charles. So it's a very good question. The -- first just as a comment, a couple of comments about T-Force GOLD. I mean we were very disappointed with the results that T-Force GOLD particularly for patients with Tourette syndrome, who clearly have a need for additional and different therapeutic options. What we learned from the top line data that we released was that valbenazine was clearly active in terms of visibility to suppress in patients with Tourette syndrome. It just was the magnitude of the activity was not as great as we had hoped for or expected. And as the results, obviously that led to this study being negative.

As I mentioned in my comments, we are still digging very deeply into the data from the T-Force GOLD study and that will use the -- our learnings from that, to inform not only the decision for T-Force PLATINUM in the remainder of our Tourette program, but also to inform our thinking around the second-generation VMAT2 inhibitor. We have not talked openly about the potential indications for that, follow on medication as yet. It's too early for us and we're just pleased with the progress that we're making in the clinic in Phase 1 right now.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Okay. Appreciate the in read (ph) information, Eiry.

Operator

Thank you. Our next question comes from Geoff Meacham with Barclays. Please go ahead. Geoff, your line is open. Do you have us on mute?

Kevin C. Gorman -- Chief Executive Officer

Okay. We can move to the next. I think it's David.

Operator

Certainly. Our next question comes from David Amsellem with Piper Jaffray. Please go ahead.

David Amsellem -- Piper Jaffray -- Analyst

Thanks. So two quick ones. First regarding M&A. You talked about adding clinical stage assets, development stage assets, I guess the question is, looking at your sales organization which have used a leverageable asset. What's your interest level in adding commercial stage, a market ready asset in neuropsychiatry, that's number one. The number two, regarding opicapone, just wanted to get your thoughts on underlying market dynamics, bearing in mind that you have dopamine agonist that are generically available, you have COMT inhibitors generically available. So how do you think about that that dynamic in terms of payor challenges for that product? Thanks.

Kevin C. Gorman -- Chief Executive Officer

Yes, thanks. I'll take the first question and Eric will take the second question. And Kyle you chime in here also. First and foremost, I would say that our commercial organization is really 100% focused on INGREZZA, right now. I think to add anything in the near term, certainly to add anything prior to a opicapone, coming available next year into the salesforces hands, would probably not be beneficial to INGREZZA. So in looking at it, in that way, we ideally and you don't often get the chance to really choose your times, when you would -- when you would do this, but I would think ideally, it would be later that we would look for another commercial asset.

But probably even more important than that is in looking out there, finding a compelling commercial asset to bring in to the company. There are, some really novel interesting drugs that are out there, but that's just not available. Those that are available, are not ones that we would be interested in at this time. Kyle, do you have anything to add to that?

Kyle Gano -- Chief Business Development Officer

No, I think you captured the dynamics what we're seeing out there now and we've chosen to go into clinical development even earlier to look at some the novel technologies and programs that we can develop ourselves over time and then bring into our own commercial organization.

Kevin C. Gorman -- Chief Executive Officer

Yes. The bottom line is just that we are dedicated to discover, develop and commercialize important medicines. Medicines that are going to have a true fundamental change in the way patients are treated. And so that is what guides us in all the deals that we do. Eric, you want to take the second one on the opicapone?

Eric Benevich -- Chief Commercial Officer

Yes. So the second half of the question was really sort of why we're excited about opicapone and where it fits in potentially into the current treatment paradigm in Parkinson's disease. So, certainly we are aware at the time that we were doing diligence and license opicapone that's there are alternatives for the treatment of motor fluctuations in these Parkinson's patients on levodopa therapy. Both within the COMT class and there are other classes of drugs. But when attracted to opicapone, it was really the opportunity to bring improved COMT inhibitor to markets that addresses the deficiencies of currently available treatments.

And so historically two COMT inhibitors have been approved and launched in the US, the first one tolcapone it had good efficacy, but unfortunately not long after it launched, a signal came to light of hepatotoxicity. And I was subsequently hold (ph) from the market. Entacapone was the second product that was launched in the class, and certainly the feedback that we've gotten from our advisors in movement disorder neurology is that, it leaves a lot to be desired in terms of its profile. It's doesn't have a significantly large magnitude of benefit in terms of the efficacy, it has to be taken up to 6 to 8 times a day with levodopa dose.

And there are some tolerability issues specifically most commonly with diarrhea. So opicapone really addresses a lot of these deficiencies with the existing COMT inhibitors, strong efficacy as well tolerated, its once daily, and we think that it delivers on hundreds of promise of COMT inhibition. In addition, we've heard from our advisors about some of the challenges with the other classes of medications, including the dopamine agonist as well as the MAOB inhibitors. And so we think there's an opportunity not only to be the best-in-class COMT inhibitor, but to be the best adjunct of therapy period and certainly the feedback we've gotten from the KOLs in the movement disorder Parkinson's area is that they're very excited about the clinical profile of opicapone. And we're working with them to make sure that we're appropriately positioning this medication, putting the best foot forward in terms of the data and looking forward to the opportunity to launch it in 2020.

David Amsellem -- Piper Jaffray -- Analyst

That's helpful, thanks.

Operator

Thank you. Our next question comes from Laura Christensen with Cowen. Please go ahead.

Laura Christensen -- Cowen and Company -- Analyst

Hi guys, congrats on a great year. Just a quick one on how you're thinking about the CAH indication, and specifically whether you're targeting mostly pediatric patients. And if you think you'll be able to garner orphan drug pricing? Thanks.

Eiry W. Roberts -- Chief Medical Officer

I'll take the beginning of that question. And then maybe, Kevin or Eric can help on the second part. As I mentioned earlier, CAH is a congenital disorder which presents early in life and it requires continuous therapy throughout life. So, we do believe that having the opportunity to treat both adults and pediatric patients with CAH, as part of our program is very important. Obviously, as I mentioned earlier as well the biomarker levels that we're looking at within our current proof-of-concept study are incredibly important to the management of the disease throughout, and will form an important part of any broader clinical program, both in pediatrics and in adult patients.

And so our goal is to provide therapeutic that can be available as broadly as possible for patients with CAH from early in their life and being able to support them throughout the course of that disease.

Eric Benevich -- Chief Commercial Officer

And also on answering the part of your question about pricing there about 20,000 to 30,000 patients both here and the same number in Europe, but it's a little too early for us to talk about pricing at this point in time.

Laura Christensen -- Cowen and Company -- Analyst

Okay. That's helpful. Thanks.

Operator

Thank you. Our next question comes from Anupam Rama with JP Morgan. Please go ahead.

Kathy -- JP Morgan -- Analyst

Hi, this is Kathy (ph) on for Anupam this evening. Thank you for the updates here on the quarter and for taking our questions. One from us on what the Elagolix royalty was for 4Q, we see $1.166 million in collaboration revenue and is this all the royalty? And then maybe more broadly on ORILISSA can you remind us of what the potential milestones to anticipate in 2019? Thanks so much guys.

Matthew C. Abernethy -- Chief Financial Officer

Yes. Thanks, thanks for the question. This is Matt. So, yeah, that is correct. Collaboration revenue for the quarter reflects the ORILISSA royalty that we did receive. As it relates to 2019, I believe on AbbVie's call last week, they mentioned the expectation of around $200 million in net product sales for ORILISSA is the expectation for 2019. And then the related milestone as we highlighted in our press release is $20 million this year upon the submission of the FDA's acceptance of our NDA, which should be sometime mid year. So it's a $20 million milestone in 2019. Thank you.

Kathy -- JP Morgan -- Analyst

Thank you.

Operator

Thank you. Our next question comes from Paul Choi with Goldman Sachs. Please go ahead.

Paul Choi -- Goldman Sachs -- Analyst

Hi. Good afternoon and thanks for taking our question. I wanted to ask about Voyager. And I know the collaboration has yet to close this quarter but can you maybe provide or if you're willing to some guidepost as to what you might be able to disclose over the course of 2019? And secondly, with your greater resources and incremental spend that you able to put into these programs. How do you think about the possibility of accelerating development of the various programs including either Parkinson's or Friedreich's ataxia? Thank you.

Kevin C. Gorman -- Chief Executive Officer

Yeah, Paul, you're right, it is a little early for us to talk about this. It hasn't closed and therefore we cannot collaborate with Voyager at this time. There certainly will be news flow out of our collaboration with Voyager once we get together, once we define some guideposts. I would say that there is a lot of learning still left on our part and there are a lot of -- there are a lot of attributes that we can bring to Voyager right now particularly in (inaudible) group and helping with the recruitment and the clinical trials that that are ongoing and then planning for the second pivotal there. So there's going to be quite a bit that we're going to be doing. But right now until this closes such that we can actually collaborate, there's not a whole lot I can say.

Matthew C. Abernethy -- Chief Financial Officer

I would add Paul, just to make sure you got it in the prepared remarks, we did highlight that we would be investing. Our estimate is between $40 million and $50 million. So I know Kevin highlighted sort of the pipeline progression and we're obviously very excited on the Friedreich's ataxia and be able to obtain a clearer path there for ourselves as well as for you, but I did want to make sure I've highlighted that.

Paul Choi -- Goldman Sachs -- Analyst

Great, Thanks for that guys.

Operator

Thank you. Our next question comes from Jeff Hung with Morgan Stanley. Please go ahead.

Jeff Hung -- Morgan Stanley -- Analyst

Thanks for taking the questions. Maybe if I can follow-up on a couple of questions on Voyager. Can you talk about your confidence in the regulatory path forward for the ADC program following their recent meeting with the FDA? And then can you remind us what aspects of the statistical plan remain outstanding? Thanks.

Kevin C. Gorman -- Chief Executive Officer

Yeah, Jeff, they are, they are good questions. But again, these are the types of questions that we are not able to answer right now. And so we're going to, put off those questions until we've actually engaged Voyager and then we'll be -- be speaking as a joint collaborator on all these questions in the near future.

Jeff Hung -- Morgan Stanley -- Analyst

Okay. Thanks.

Operator

Thank you. We'll go next to Marc Goodman with SVB Leerink. Please go ahead.

Marc Goodman -- SVB Leerink -- Analyst

Yes. A few questions. First of all on the expenses, can you help us with SG&A versus R&D, should we be thinking about split evenly $300 million, $300 million. And did I hear you say the T-Force GOLD was the difference between the high end and the low end, so that's $50 million. So if you cancel that program after, let's say, one quarter, we should go to the low-end. And then second question is, can you talk about your expectations for gross to net for INGREZZA for 2019, just in for the full year. Thanks.

Matthew C. Abernethy -- Chief Financial Officer

Yeah. Thanks, Marc, good to hear from you. This is Matt. So from a from a dollar split perspective as you can see from our 2018 results we had around $250 million in SG&A and around $160 in R&D. So from a ratio perspective, you wouldn't assume a 50-50 split, some significant investments are going behind SG&A. Number one, is the sales force expansion in the full year impact of that expense.

The second piece is the disease state awareness campaign, which is around a $20 million type investment that would also be within SG&A. And then lastly, the opicapone marketing preparation costs for 2020 launch is also a significant investment. But outside of Tourette we do have significant investments going behind R&D programs that we highlighted earlier.

From a -- how do you get from the middle of the range to the bottom or to the top. No, really to get toward the bottom one aspect is Tourette's program if we did discontinue the Tourette T-Force PLATINUM Study. Also to get to the bottom, and I give a range on Voyager and then also it comes down the clinical -- the other clinical program execution like CAH. So I wouldn't assume that the Tourette decision is a $50 million spread, what I tried to highlight in my comments is it would likely put us into the bottom half of our guidance, OpEx guidance range.

Marc Goodman -- SVB Leerink -- Analyst

And then can you remind me the second of the growth on the ...

Kevin C. Gorman -- Chief Executive Officer

Yes. The biggest aspect right now pertains to the donught hole impact in Q1. The largest long-term impact on gross to net is going to come down to contracting and at this time, we've been very, very thankful for the access of patients have had based on our relationships with the payors at this point. So, should that change dramatically into the future, we would have a more dramatic impact on our gross to net. But that's not something that we're highlighting as far as 2019 is concerned.

Marc Goodman -- SVB Leerink -- Analyst

So it sounds like gross to net comes up a little bit because of the donught hole, but that's the only thing?

Kevin C. Gorman -- Chief Executive Officer

Yes. Q1 will be the highest discount rate and that gradually improves throughout the year as that is less than less of an impact of your overall gross to net. That's fair. Marc.

Marc Goodman -- SVB Leerink -- Analyst

Thanks.

Operator

Thank you. There are no further questions at this time, I'll turn it back to Kevin Gorman for any additional or closing remarks.

Kevin C. Gorman -- Chief Executive Officer

Yes, thank you very much. And I really appreciate as we all do. The questions that you've presented us this afternoon. We're going to be looking forward to seeing you at several meetings over the next, few months. I'm going to leave you with three things. For this year as we look forward, we're going to expanding and advancing our pipeline and clearly the Voyager deal has already expanded that pipeline substantially. And with that Voyager deal and with everything else that I told you about the investments that we're making, we're building on our strengths, while we are expanding our scientific and clinical reach. And so what you're seeing from us as we're investing not only for today, but also for tomorrow.

I look forward to meeting you all and talking to you in the very near future. Thank you very much.

Operator

Thank you. This does conclude today's conference. We appreciate your participation. You may disconnect at any time and have a great day.

Duration: 56 minutes

Call participants:

Kevin C. Gorman -- Chief Executive Officer

Jane Sorensen -- Head, Investor Relations

Matthew C. Abernethy -- Chief Financial Officer

Eiry W. Roberts -- Chief Medical Officer

Trevor -- Robert W. Baird -- Analyst

Tazeen Ahmad -- Bank of America Merrill-Lynch -- Analyst

Eric Benevich -- Chief Commercial Officer

Benjamin Burnett -- Stifel, Nicolaus & Company -- Analyst

Biren Amin -- Jefferies -- Analyst

Jay Olson -- Oppenheimer -- Analyst

Kyle Gano -- Chief Business Development Officer

Charles Duncan -- Cantor Fitzgerald -- Analyst

David Amsellem -- Piper Jaffray -- Analyst

Laura Christensen -- Cowen and Company -- Analyst

Kathy -- JP Morgan -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Jeff Hung -- Morgan Stanley -- Analyst

Marc Goodman -- SVB Leerink -- Analyst

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