Neurocrine Biosciences

(NBIX) - Get Report

announced a first-quarter loss that was narrower than a year ago, despite a huge drop in revenue, as the company's core product marches forward in the drug approval process.

Neurocrine had a first-quarter net loss of $12.4 million, or 35 cents a share, which is a penny better than the 36-cent loss expected by analysts and the loss of $13.4 million, or 43 cents a share, a year ago.

The company's revenue took a big hit in the first quarter, coming in at $16.9 million, less than half of the $37.7 million it had a year ago. The nearly $21 million drop in revenue was due to lower sponsored development revenue for its indiplon registration program, especially from

Pfizer

(PFE) - Get Report

. In this quarter, Neurocrine received $14.9 million in development funding and licensing fees from Pfizer, down from $34.4 million a year ago.

With indiplon, Neurocrine's insomnia treatment, entering phase III trials, much of the company's hard work on the drug has been completed. The company said that it reported positive results in seven phase III clinical trials of indiplon and was assembling data to submit a New Drug Application, or NDA, to the FDA.

"Our NDAs for indiplon which will include data from 69 clinical trials and approximately 7,000 subjects, making this one of the largest, most robust clinical programs in the sleep class," said Paul Hawran, CFO, in a statement. "Upon filing, our efforts will then concentrate on building and developing our sales and marketing infrastructure to support our research and development programs."

The timing of the NDA will be announced shortly, once Neurocrine and Pfizer determine the drug's marketing and dosage, paving the way for the drug to hit the marketplace, pending FDA approval. This last step is critical to Neurocrine's future -- as revenue from Pfizer's sponsorship of the drug tails off, income from

The timing of the NDA will be announced shortly, once Neurocrine and Pfizer determine the drug's marketing and dosage, paving the way for the drug to hit the marketplace, pending FDA approval. This last step is critical to Neurocrine's future; as revenue from Pfizer's sponsorship of the drug tails off, income from licensing fees will more than offset the shortfall seen this quarter.

Neurocrine's research and development expenses plunged in the quarter, coming in at $26.4 million, down 45.3% from the $48.3 million it spent a year ago. Total operating expenses came in at $31.7 million, down 40.3%, from $53.1 million a year ago.

In reaction to the report, shares of Neurocrine dropped $1.17, or 1.8%, to $64.47. licensing fees will more than offset the shortfall seen this quarter.

Neurocrine's research-and-development expenses plunged in the quarter, coming in at $26.4 million, down 45.3% from the $48.3 million it spent a year ago. Total operating expenses came in at $31.7 million, down 40.3%, from $53.1 million a year ago.

In reaction to the report, shares of Neurocrine dropped $1.17, or 1.8%, to $64.47.