Q3 2019 Earnings Call
Good day, ladies and gentlemen, and welcome to the Acadia Pharmaceuticals third quarter 2019 financial results Conference call. My name is Daniel and I'll be your coordinator for today.
Daniel: Ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals 3rd Quarter 2019 Financial Results Conference Call. My name is Daniel, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. If at any time during the call you require assistance, please press star followed by zero, and a coordinator will be happy to assist you. I would now like to turn the presentation over to Mark Johnson, Vice President of Investor Relations at ACADIA. Please proceed. Thank you, Daniel.
The final participants are in listen only mode, we will be facilitating a question and answer session towards the end of today's call. If at any time during the call you require assistance. Please press star followed by zero and according to your we'll be happy to assist you Oh now, let's turn the presentation over to Mark Johnson, Vice President Investor Relations at Acadia. Please proceed.
Thank you Daniel good afternoon, and thank you for joining us on today's call Acadias third quarter 2019.
Mark C. Johnson: Good afternoon, and thank you for joining us on today's call to discuss ACADIA's third quarter 2019 financial results. Joining me on the call today from ACADIA are Steve Davis, our Chief Executive Officer, who will review our achievements this quarter. Michael Yang, our Chief Commercial Officer, who will provide updates on our commercial initiatives and plans. Serge Stankovich, our President, who will discuss our pipeline progress. And Elena Ridloff, our Chief Financial Officer, who will discuss our financial results before turning it back over to Steve for his final remarks and opening the call-up. I would also like to point out that we're using supplementary slides, which are available in the events and presentation section of our website.
No.
Joining me on the call time, Acadia or Steve Davis, Chief Executive Officer, and review our achievement this quarter.
Our chief commercial officer, who will provide updates on our commercial initiatives.
It's interesting president who will discuss pipeline progress.
With a lot more chief financial Officer, who will discuss our financial results before turning it back over to Steve for his final remarks, it would be the call them.
And I'll point to point out that we're using supplement flights.
On the events and presentations section of our website.
Mark C. Johnson: Before we proceed, I would first like to remind you that during our call today, we'll be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, or future results, are based on current information, assumptions, and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. Please use caution not to place too much reliance on these forward-looking fees, which remain only as of today's date. I'll now turn the call over to Steve Davis, our Chief Executive Officer.
Before we proceed I would first like to remind you that during our call today, we'll be making a number of forward looking statements within the meaning of the private Securities Litigation Reform Act up 1995.
Forward looking statements included goals expectations plans prospects I potential timing of events more future results are based on current information assumptions and expectations that are inherently subject to change all the numbers uncertainties that may cause actual results to differ material.
These factors and other risks associated with our business can be found in our filings.
No caution not to fight underlying.
Jeremy only on the same thing.
I will turn the call over to ski Davis, our Chief Executive Officer.
Stephen R. Davis: Thank you, Mark. Good afternoon, everyone, and thank you for joining us today.
Thank you Mark good afternoon, everyone and thank you for joining us today.
Stephen R. Davis: I'm extremely pleased by the high quality of execution our team delivered on this course. In the past few months, our team has made great strides in helping us fulfill our promise to improve the lives of patients and caregivers with new and innovative medicines for neurological disorders. Today, more people are receiving treatment with Duplazid for their Parkinson's disease psychosis than ever before. The number of patients being treated continues to grow, as well as the number of physicians who are prescribing this important treatment option. The stories we hear from patients, caregivers, and physicians are incredibly rewarding and reinforce our passion to continue to educate the community on PVP and the potential of new classes.
I'm extremely pleased by the high quality execution, our team has delivered the sport.
In the past few months argues made great strides in helping us fulfill our promise to improve the lives of patients and caregivers with new and innovative medicines for neurological disorders.
Today more people are receiving treatment when he buys it for their Parkinson's disease psychosis than ever before.
Never patients being treated continues to grow as well as the number of physicians are prescribing this important treatment option.
The stories, we hear from patients.
[noise] caregivers acquisitions are incredibly rewarding and reinforce our passion to continue to educate the community on GDP in the potential deposit.
It's unwavering commitment and execution from our team is reflected in our strong financial performance this quarter.
Stephen R. Davis: This unwavering commitment and execution from our team is reflected in our strong financial performance this quarter. We delivered third quarter net sales of $94.6 million, a 62% increase year over year. As a result, we've raised our full year 2019 net sales guidance to $330 to $340 million. This represents a 50% increase over a year at the midpoint of the range.
We delivered third quarter net sales of $94.6 billion.
62% increase year over year.
As a result, we've raised our full year 2019 net sales guidance.
$230 million to $340 million.
This represents a 50% increase year over here at the midpoint of the range.
For the past 12 months, our R&D team that's reported significant an impactful results from a number of late stage trials, helping us to more completely understand the potential clinical utilities have come up to answer.
Based on the robustly positive phase three marketing results. We believe that it was answering has the potential to be one of the first new treatments approved.
Stephen R. Davis: Over the past 12 months, our R&D team has reported significant and impactful results from a number of late-stage trials, helping us to more completely understand the potential clinical utility of Pumavansir based on its robustly positive phase 3 harmony results. We believe that Pimivantran has the potential to be one of the first new treatments approved for people with dementia in over 15 years and the first ever FDA-approved treatment for dementia-related psychosis. The positive results announced for dementia-related psychosis and depression in the third quarter have only increased our confidence that Pimivansir may become a very important new treatment option beyond PVP. In addition, we look forward to announcing results from the Phase 2 Advanced Study, evaluating PIVAvancer for the negative symptoms of schizophrenia this quarter.
People with dementia in over 15 years, and the first ever empty approved treatment or dementia related psychosis.
The positive results announced furniture would psychosis and depression in the third quarter have only increased our confidence that they would mantra may become a very important new treatment option beyond PDP.
In addition, we look forward to announcing results from the things to advance study evaluating pimavanserin for the negative symptoms of schizophrenia. This corner.
Finally, I'm very pleased to announce that we've initiated the pivotal phase three lavender study evaluating tryphena tied as potential treatment Rett syndrome.
Right, it's a devastating neurological disease, we don't approved treatments.
For a pretty tight as a key new program, helping us achieve our mission, which you do medicines to address significant unmet needs in CNS disorders.
I'll now turn it over to Mike will discuss in greater detail our strong commercial performance.
Thank you, Steve and good afternoon to everyone on the call. Please turn to slide seven.
Stephen R. Davis: Finally, I'm very pleased to announce that we've initiated the Pivotal Phase III Lavender Study, evaluating turpinetide as a potential treatment for Rett syndrome. RET is a devastating neurological disease with no approved treatments. Tropinotide is a key new program helping us achieve our mission to develop new medicines to address significant unmet needs in CNS disorders. I'll now turn it over to Michael to discuss in greater detail our strong commercial performance. Thank you.
This is an exciting time at Acadia and I'm proud to report the commercial teams efforts led to net sales of $94.6 million, representing sequential volume growth of approximately 6% and year over year volume grows at approximately 38%.
As shown on the graph on slide seven.
Has now delivered two strong quarters of revenue and volume growth.
Direct result of the commercial initiatives, we've been executing on.
I'm extremely proud that we had caught back up to the growth trajectory. We anticipated launch. This is a testament to the benefits of Newport, and we're confident in the future growth opportunity BTD.
Michael Yang: Thank you, Steve, and good afternoon to everyone on the call. Please turn to slide 7.
Our focus on core commercial initiatives and strong execution in the third quarter extend our reach continuing to add new PD psychosis patients starting already by the treatment.
Michael Yang: This is an exciting time at ACADIA, and I'm proud to report that the commercial team's efforts led to net sales of $94.6 million, representing sequential volume growth of approximately 6% and year-over-year volume growth of approximately 38%, as shown on the graph on slide 7. We have now delivered two strong quarters of revenue and volume growth, a direct result of the commercial initiatives we've been executing on. I'm extremely proud that we have caught back up to the growth trajectory we anticipated at launch. This is a testament to the benefits of New Plaza, and we are confident in the future growth opportunity in PDP. Our focus on core commercial initiatives and strong execution in the third quarter expanded our reach, continuing to add new PD psychosis patients starting on new positive treatment.
From a prescriber perspective, we saw an increase in demand.
From both new prescribers as well as prescribers expanding use within their practice.
We continue to increase demand for it implies in both specialty pharmacy, and especially distribution channels.
And continuing for the second quarter, we again observed a high sustained rate of compliance and fulfillment.
For established patients in this board.
We believe this is related to a better brand experience with a single 34 milligram council compared to the previous dosing of to 17 milligram tablets.
Turning to slide eight.
We see continued opportunity to drive future growth and deposit for patients with PD psychosis.
Currently we're in the mid to high teens in terms of market penetration.
Which provides a lot of opportunity to continue to grow.
Hi, good strategies are focused on the high need for continued disease awareness.
Michael Yang: From a prescriber perspective, we saw an increase in demand from both new prescribers as well as prescribers expanding use within their practice. We continue to increase demand for NEPLAS in both specialty pharmacy and the specialty distribution channels. Continuing from the second quarter, we again observed a high sustained rate of compliance and fulfillment for established patients in this quarter. We believe this is related to a better brand experience with a single 34 milligram capsule compared to the previous dosing of two 17 milligram tablets. Turn to slide 8.
Dynamic patient population.
Elements to build on and gain market share include educating physicians on the recently updated evidence based guidelines from the movement disorder Society.
Recognizing you positive both efficacious and clinically useful for PDP.
Continuing to close the awareness gas for PDP and deposited with our integrated direct to consumer strategy, which includes digital print and in office assets and our recently deployed television commercials.
Longsight. These efforts Acadia sponsoring Michael J Fox Foundation, Parkinson's Ionkey, when you education series.
Which recently held its first event. These events are designed to educate our patients with TD and [laughter].
Michael Yang: We seek continued opportunity to drive future growth of Neuplaza for patients with PD psychosis. Currently, we're in the mid to high teens in terms of market penetration, which provides a lot of opportunity to continue to grow. Our growth strategies are focused on the high need for continued disease awareness in a dynamic patient population. The key elements to build on and gain market share include educating physicians on the recently updated evidence-based guidelines from the Movement Disorder Sustainability
We are dedicated to serving patients and educating healthcare practitioners about PD psychosis any plan.
We look forward to building on our success and carrying this positive momentum into 2020.
As Steve mentioned, we are very excited about the recent clinical results in the harmony study and the potential FDA approval for de or Pete.
First let's review the potential to your P. opportunity on slide nine.
I'd be approximately 2.4 million patients suffering from GRP in the United States that have are being treated for it.
Roughly two thirds of the patients receiving treatment.
Our on off label and I think items.
As we contemplate the potential of becoming the first empty approved treatment for developing and leveraging our learnings for the PDP launch.
Michael Yang: and the National Cancer Society, recognizing Uplazud is both efficacious and clinically useful for PDPs. Continuing to close the awareness gaps for PDP and deposit with our integrated direct-to-consumer strategy, which includes digital, print, and in-office assets, and our recently deployed television commercials. Alongside these efforts, ACADIA is sponsoring the Michael J.
Believe it's critical to implement disease education and awareness earn efforts early in a pre launch preparation.
On slide 10, we outlined some of our disease awareness and education initiatives already in place.
We launched a new disease awareness and education Viper site called more than cognition dot com, which is dedicated to educating healthcare professionals on the neurobiology in prevalence of the disease.
Michael Yang: The Fox Foundation's Parkinson's IQ&U Education Series, which recently held its first event. These events are designed to educate and empower patients with PD and endocarditis. We are dedicated to serving patients and educating healthcare practitioners about PB psychosis and Neuplasma. We look forward to building on our success and carrying this positive momentum into 2020.
Symptoms as well as providing background on the large unmet need.
In addition, we are sponsoring symposiums at major medical Congresses. One recent example in the disease awareness Symposium, we sponsored in conjunction with the Alzheimer's Association International Conference in July . This event provided an overview of beauty, we focus on the impact and consequently, the delusions.
And those nations.
Joining the Cana wells on the panel the caregiver, providing her experiences and difficulties carrying for lagoon with ERP.
Michael Yang: As Steve mentioned, we are very excited about the recent clinical results in the HARMONY study and a potential FDA approval for DRP. First, let's review the potential DRP opportunity on slide 9. Of the approximately 2.4 million patients suffering from DRP in the United States, about half are being treated for it, and roughly two-thirds of the patients receiving treatment are on off-label antipsychotics.
I'll now turn over to search to provide R&D updates on our pipeline.
Thank you Michael.
This quarter, our clinical development for Pimavanserin took a major step forward.
Reported positive results into demand sort of related say close is people don't harmonious study.
These results opened up a potentially significant opportunity for pimavanserin to address a large unmet needs.
Slide 12 highlights all of our pipeline programs in total we have four programs in late stage clinical development that could lead to potentially for new drug.
Serge Stankovich: As we contemplate the potential of becoming the first FDA-approved treatment for DRP and leveraging our learnings for the PDP long-term, we believe it's critical to implement disease education and awareness efforts early in the pre-launch preparation. On slide 10, we outline some of our disease awareness and education initiatives already in place. We launched a new disease awareness and education microsite called MoreThanCognition.com, which is dedicated to educating healthcare professionals on the neurobiology and prevalence of the disease and its symptoms, as well as providing background on the large unmet need. In addition, we are sponsoring symposiums at major medical congresses. One recent example is the Disease Awareness Symposium we sponsored in conjunction with the Alzheimer's Association International Conference in July. This event provided an overview of DRP with a focus on the impact and consequences of delusions and hallucinations. Joining the KOL on the panel was a caregiver providing her experiences and difficulties caring for a loved one with DRP. I'll now turn it over to Serge to provide R&D updates on our pipeline.
New drug application over the next few years.
Starting with the RP on slide 13.
There is nowhere FDA approved treatment for de RP. In fact, there have been no treatments approved into the mental space since 2003.
Say causes is among the major problems for dementia patients and their caregivers.
Serious consequences have been associated with severe or persistency closes in patients with dementia, such as repeated hospital admissions increased likelihood of nursing home placement progression of the mantra and increased risk of morbidity and mortality.
Turning to slide 14.
We were very excited to announced last month that doesn't phase three harmony study was stopped for positive efficacy.
Study achieved the primary endpoint with one sided P value less than 0.0033.
We will be presenting additional topline results from the harmony study during go late breaking oral presentation at the clinical trials on Alzheimer disease meeting or seat that on December four.
Serge Stankovich: Thank you, Michael. This quarter, our clinical development for Pimavansirin took a major step forward. We reported positive results in the dementia-related psychosis pivotal harmony study. These results opened up a potentially significant opportunity for Pimavansurin to address a large unmet need. Slide 12 highlights all of our pipeline programs. In total, we have four programs in late stage clinical development that could lead to potentially four new drug applications over the next few years. Starting with DRP on slide 13. There is no FDA-approved treatment for DRP. In fact, there have been no treatments approved in the dementia space since 2003. Psychosis is among the major problems for dementia patients and their caregivers. Serious consequences have been associated with severe or persistent psychosis in patients with dementia, such as repeated hospital admissions, increased likelihood of nursing home placement, progression of dementia, and increased risk of morbidity and mortality. Turning to slide 14.
In addition, we blend to host.
The Investor event with key opinion leaders and management to review and discuss these results following the data presentation.
Please turn to slide 15.
<unk> dollar interface to meeting with the F.D.A., we confirmed that statistically and clinically persuasive results from the phase three Carmody study would support supplemental in da submission.
In the first couple of 2020 , we blend to meet with the FDA to discuss our submission.
This sndk we plan to include not only our Harman is study data, but also results from the two previous acute efficacy studies in Alzheimers disease, psychosis, and Parkinson disease psychosis, and additional safety data from our completed let's see well controlled studies.
As well as our ongoing placebo controlled post marketing commitments study in frail and elderly subjects.
Turning to our major depressive disorder or M.D. program on slide 16.
There remains significant unmet need in depression, and based on the positive and robust study results from our phase two clarity study. We believe Pimavanserin made represents an important newer drunk did therapy for patients struggling with them to de who have an inadequate response to their SSL right.
Serge Stankovich: We were very excited to announce last month that the Phase 3 Harmony Study was stopped for positive effects. The study achieved the primary endpoint with a one-sided p-value less than 0.0033. We will be presenting additional top-line results from the Harmony Study during a late-breaking oral presentation at the Clinical Trials on Alzheimer's Disease meeting, or CTAD, on December 4th. In addition, we plan to host an investor event with key opinion leaders and management to review and discuss these results following the data presentation. Please turn to slide 50.
Orrison I write therapy.
Slide 17 highlights important recent presentations and bread publication from our depression program.
Our positive phase two clarity if the results were recently published in the journal of clinical Psychiatry.
Second we presented the additional positive data from the clarity study.
The 2019, Psychiatry Congress, which showed that pimavanserin significantly improved symptoms of sexual dysfunction, when compared to placebo in patients, taking guesses or IRS isn't that right therapy for major depressive disorder.
Serge Stankovich: At our end of Phase 2 meeting with the FDA, we confirmed that statistically and clinically persuasive results from the Phase 3 Harmony Study would support a supplemental NDA submission. In the first half of 2020, we plan to meet with the FDA to discuss our submission. For this SNDA, we plan to include not only our Harmony study data but also results from the two previous acute efficacy studies in Alzheimer disease psychosis and Parkinson disease psychosis, and additional safety data from our completed placebo-controlled studies, as well as our ongoing placebo-controlled post-marketing commitment study in frail and elderly subjects. Turning to our major depressive disorder or MDD program, on slide 16. There remains significant unmet need in depression, and based on the positive and robust study results from our Phase 2 Clarity Study, we believe Pimavansirin may represent an important new adjunctive therapy for patients struggling with MDD who have an inadequate response to their SSRI or SNRI therapy.
Third we presented positive Xplore authority data would be my been sitting at the 2019 movement disorder Society Congress showing improvement of depressive symptoms in Parkinson's disease patients struggling with depression.
In this open label study, we observed a response rate of 60% and remission rate of 44%.
Turning to slide 18, our U.S. phase three study clarity to continues to enroll well as does our international phase three study clarity three we've started more recently.
If we're successful our phase two clarity study combined with at least one of the phase three trials would be the bases over supplemental in D.A. submission for him to the indication.
Turning to our schizophrenia program on slide 19.
There are no way of D.A. approved drugs, specifically indicated for the treatment of negative symptoms of schizophrenia currently available anti psychotics three or three primarily positive symptoms.
Serge Stankovich: Slide 17 highlights important recent presentations and publications from our depression program. For example, our positive Phase II Clarity results were recently published in the Journal of Clinical Psychiatry. Second, we presented additional positive data from the Clarity Study at the 2019 Psychiatry Congress, which showed that pimavanserin significantly improved symptoms of sexual dysfunction when compared to placebo in patients taking SSRI or SNRI therapy for major depressive disorders. And third, we presented positive exploratory data with pimavanserin at the 2019 Movement Disorders Society Congress, showing improvement of depressive symptoms in Parkinson's disease patients struggling with depression. In this open-label study, we observed a response rate of 60% and a remission rate of 44%. Turning to slide 18, our U.S.
On slide 20, we have a high level illustration of the advance study.
This is up 26 weeks phase two study evaluating pimavanserin as a three month for schizophrenia patients with predominance negative symptoms, while controlling for their positive symptoms on a stable onto say quoted background therapy.
Primary endpoint is the change from baseline on the negative symptom assessment 16 item scale.
We have fully enrolled the advanced study and expect to announce results.
For the end of the year.
We're also excited about our throw phenotype program for it seems there I'm starting on slide 21.
Rett syndrome is a debilitating neurodevelopmental disorder they'll go course predominantly in females following apparently normal development for the first six to 18 months of life.
Serge Stankovich: The Phase 3 study, Clarity 2, continues to enroll well, as does our international Phase 3 study, Clarity 3, which started more recently. If we are successful, our Phase 2 Clarity Study, combined with at least one of the Phase 3 trials would be the basis of a supplemental NDA submission for MDD indication. Turning to our schizophrenia program on slide 19. Although there are no FDA-approved drugs specifically indicated for the treatment of negative symptoms of schizophrenia, available antipsychotics treat primarily positive symptoms.
Mentally there are no approved medicines for these rare disease.
Today, we announced that we had been issue they love under our pivotal phase three study for through a phenotype in Rett syndrome.
These 12 week study, we live always approximately 180 female patients with Rett syndrome age five to 20.
There are co primary endpoints for this study.
Rett syndrome behavior questionnaire caregiver assessment.
Serge Stankovich: On slide 20, we have a high-level illustration of the advanced study. This is a 26-week phase 2 study evaluating Pimavansirin as a treatment for schizophrenia patients with predominant negative symptoms while controlling for their positive symptoms on a stable antipsychotic background therapy. The primary endpoint is the change from baseline on the negative symptom assessment, 16-item scale. We have fully enrolled the advanced study and expect to announce results before the end of the year. We're also excited about our trophinatite program for Rett syndrome, starting on slide 21. Rett syndrome is a debilitating neurodevelopmental disorder that occurs predominantly in females following apparently normal development for the first 6 to 18 months of life. Currently, there are no approved medicines for this rare disease.
And the clinical global impression scale for improvement a physician assessment.
Both of these endpoints were positive in the previous phase two study.
Based on the end of phase two meeting with the FDA.
The results from love and there and the extension study will be based the basis of the N D. A submission.
Slide 23 highlights our clinical milestones for the year.
Her made an excellent progress.
For the remainder of the year, we look forward to presenting topline results from the phase three Harman is studying see Ted as well as announcing the results from our phase to advance study later this year.
I'll now turn the call over to Atlanta to discuss our financial performance.
And he's marriage today I'll discuss our third quarter 2019 years now I know you need 2019 I need.
Serge Stankovich: Today, we announce that we have initiated Lavender, our Pivotal Phase III study for Trophinatide in Rett Syndrome. This 12-week study will evaluate approximately 180 female patients with Rett syndrome, age 5 to 20. There are co-primary endpoints for this study: the Rett Syndrome Behavior Questionnaire, a caregiver assessment, and the Clinical Global Impression Scale for Improvement, a physician assessment.
Please turn to slide 25.
And then third quarter 2019 airports $94.6 million <unk> increased approximately.
First time compared to $53 million [laughter] 28.
[laughter].
8% buying from year over year in Q3.
Gross to net Q3 was 11% compared to 13% in Q3 20 team.
Serge Stankovich: Both of these endpoints were positive in the previous phase 2 study. Based on the end of phase 2 meeting with the FDA, positive results from Lavender and the extension study will be the basis of the NDA submission. Flight 23 highlights our clinical milestones for the year. We have made excellent progress. For the remainder of the year, we look forward to presenting top-line results from the Phase III Harmony Study at CTAD, as well as announcing results from our Phase II Advanced Study later this year. I'll now turn the call over to Elena to discuss our financial performance.
Presenting for Internet, primarily you didn't adjust our GTSP <unk> other Medicare along for the first half between 18, resulting in increasing net now approximately $2.2 million every player.
[noise] letting that benefits net sales in Q3 gross to net would've been approximately 13%.
And then between the channel, yes or whatever.
Three players.
Yeah, PNM R&D and <unk> decreased.
You point $6 million in Q3, 2019, I'm $53.1 million.
Elena Ridloff: Thank you, Serge. Today, I'll discuss our third quarter 2019 results and our updated 2019 financial outlook. Please turn to slide 25. In the third quarter of 2019, we reported $94.6 million in net sales, an increase of approximately 62% compared to the $58.3 million in net sales in the third quarter of 2018. This is driven by approximately 38% volume growth year over year in Q3. Growth to net in Q3 was 11% as compared to approximately 13% in Q3 of 2018. The improvement in growth to net was primarily due to an adjustment for a change in estimates of our Medicare accrual for the first half of 2019, resulting in increasing net sales by approximately $2.2 million in the third quarter. Excluding this benefit-to-net sales, Q3 growth-to-net would have been approximately 13%. Weeks of inventory in the channel at the end of the third quarter were consistent with previous quarters.
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Recent primarily due to development cost for true anytime and additional clinical study costs from today.
Yes, he nice N easy 72.7, $9 in Q3 tiny 19.
The $1.1 million and her on her last year.
Increased markedly largely due to higher direct to consumer advertising expense charitable contribution now.
Noncash stock compensation expense during the quarter $22 million compared to 20.2, $9 and the same period when he.
Cash used in operations during the winter was $18.9 billion compared to $42.3 million third quarter 28.
We ended the quarter with $683.8 million in cash and investments on our balance sheet compared to 473.5 million hearing on the team.
This increase reflects their successful equity offering with net proceeds of 271.9 dollars.
And proceeds from employee option exercises $55.1 million.
Please turn to March 2019, dining I'm fine funny.
We are increasing our net delgatti TB between 330.
Elena Ridloff: Moving down the P&L, GAAP R&D expenses increased to $62.6 million in Q3 2019 from $53.1 million in Q3 2018. The increase was primarily due to development costs for terfinitide and additional clinical study costs for pimivansirin. Gap SG&A expenses increased to $72.7 million in Q3 2019, from $61.1 million in the third quarter of last year. This increase is largely due to higher direct-to-consumer advertising expenses, charitable contributions, and personnel costs.
$40 million from the previous Threed 320 $339.
We know that you've got in three age. This represents approximately 50% growth in revenue year over year and approximately 32% buying back your over here.
We also represent similar sequential volume growth in Q4 as either in Q3.
Given the favorable question that you are any we now anticipate the full year gross to nets in the range of 15% to 16% I was just prior to the patient 17, 18%.
Favorability in Egypt impairment and a greater proportion of bottles from continuing teach him as a result in a higher compliance element I mean, you're observing.
Elena Ridloff: Non-cash, stock-based compensation expense during the quarter was $22 million, compared to $20.2 million for the same period in 2018. Cash used in operations during the quarter was $18.9 million, compared to $42.3 million for the third quarter of 2018. At the end of the quarter, we had $683.8 million in cash and investments on our balance sheet compared to $473.5 million at year-end 2018. This increase reflects our successful equity offering with net proceeds of $271.5 million and proceeds from employee option exercises of $55.1 million. Please turn to our 2019 guidance on slide 26.
For Q4, we forecast for Internet in the mid teen.
Reminder, friends Tonight in the fourth Larry typically higher than Q3, and you're involved that swings.
And the donut hole obligation associated your inventory in the channel.
Turning to expenses, we now forecast GAAP R&D expense need between 40 and $50 million.
In a pretty good speech attention and 8200 $55 million.
The decrease is really good evening [laughter], even early stopping them the army trial positive back.
And timing of M.D. interested in height.
Yeah, Okay, yeah, he makes sense to be between 315 and $325 million from the previous reach a 300 $315 million.
This is really you take salaried you can best be in preparation of potential PRP launch.
We can can you didnt noncash stock based compensation expense between 80 $90 million.
Our 20 Nineteenx equity offering we ended Q3, even approximately 953.9 shares outstanding.
Elena Ridloff: We are increasing our net sales guidance to be between $330 and $340 million from the previous range of $320 to $330 million. At the midpoint of this new guidance range, this represents approximately 50% growth in revenue year-over-year and approximately 32% volume growth year-over-year. The midpoint also represents a similar sequential volume growth in Q4 as we observed in Q3. Given the favorable growth to net year-to-date, we now anticipate the full-year growth to net to be in the range of 15-16% versus prior expectations of 17-18%. Disfavorability is due to changes in payer mix and a greater proportion of bottles from continuing patients as a result of the higher compliance and fulfillment rates we are observing.
I'll turn the call back already.
And your later, please turn to slide 20.
We're very pleased with our strong quarterly financial performance and outlook for the remainder of the.
Well, so very excited and motivated by the positive clinical results, we announced this past quarter ended future potential of our development pipeline.
Looking ahead, we will continue to execute on all three of our strategic pillars.
Gross sales of new positive de.
Leverage the potential of our pipeline programs and expand our pipeline through focused business development.
I'd like to thank our employees, whose dedication and hard work, but rather a company's continued success and execution of our three pillars strategy.
I'll now open call for questions operator.
Ladies and gentlemen, if you wish to ask a question. Please press star followed by one on your Touchtone telephone. If your question hasn't answered what do you wish withdraw your question press the pound key please limit yourself to one question Press Star one to begin please standby for your first question.
Your first question comes from reach Hooper, all with Cowen. Your line is now open.
Elena Ridloff: For Q4, we forecast growth to net to be in the mid-teens. As a reminder, growth to net in the fourth quarter is typically higher than Q3 as a result of accruing for the donut hole obligation associated with year-end inventory in the channel. Turning to expenses, we now forecast GAAP R&D expenses to be between $240 and $250 million dollars, from the previous range of $250 to $265 million dollars. The decrease is related to savings associated with the early stopping of the Harmony trial for positive efficacy and timing of MVD intrafinatide clinical study costs. We now forecast GAAP FTA expense to be between $315 and $325 million dollars from the previous range of $300 to $315 million dollars, due to increases related to accelerating investments in preparation of a potential DRP launch. We continue to expect non-cash stock-based compensation expenses to be between $80 and $90 million. Inclusive of our 2019 equity offering, we ended Q3 with approximately 153.5 million shares outstanding. And with that, I'll turn the call back over to Steve.
[noise] because we're hoping to question my my questions on the degree RP commercial opportunity as you have indicated to ramping up as you know how is your I guess or.
Your commercial effort going to change specifically is there.
More call points are there different types of call point, but no already keeping up with Salesforce are you on pool Swanson and further just doesn't talk about how the label will translate into the commercial opportunity. How do you think you'll reconcile the oh published mortality.
He Blackrock whipkey indication that you'll be going back from it.
Okay.
Thanks for the question, which I think there's two parts that question I'm going to ask Michel to answer the first part in surge Africans Duncan engines.
Thanks begs the question.
We're very excited about the potential of the DMP indication and it represents a very large opportunity I think it's important to understand that we'll be able to leverage our existing approach with PDP and that is to say that we call. It currently call on neurology and psychiatry and long term care and all of.
Those are important channels and all points for us for DRD. However, as you could expect the number of targets and the number of patients are substantially larger, which but makes it a very exciting opportunity.
Stephen R. Davis: Thank you, Elena. Please turn to slide 28. We're very pleased with our strong quarterly financial performance and outlook for the remainder of the year. We're also very excited and motivated by the positive clinical results we announced this past quarter and the future potential of our development pipeline.
So in terms of you know the approach at the end the planning for our commercial build out. It's it's obvious that we will need to build out and expand our our footprint and you could expect a kind of a standard approach a base I see an especially Sarah Salesforce and field force that just give you some ground on that.
The benchmarks and when you look at other CNS specialties field forces, you're typically in a range of about 400 500 people. So that would be the expansion kind of framework that we're looking to kind of optimized as we look into your game.
Stephen R. Davis: Looking ahead, we will continue to execute on all three of our strategic pillars. Pro, sales, and new clients at MPB. Leverage the potential of our pipeline programs and expand our pipeline through focused business development. I'd like to thank our employees whose dedication and hard work are driving our company's continued success in the execution of our three pillar strategy. I'll now open the call for questions. Operator?
Great. Thanks Sergio.
Yes, I agree to [noise].
We in the context of our application, we intend to discuss with of D.A.D. existing collect a class back box warning as it relates to our targeting deer be indication and in context are obviously over the extensive clinical trials safety data would be my bonds.
Operator: Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your touchtone telephone. If your question has been answered or you wish to withdraw your question, press the pound key. Please limit yourself to one question. Press star one to begin.
And as well as as a post marketing experience with Pimavanserin.
Just as to remind you end up and award and go over the bulk of class warning. There is a D. R. P mentioned, so we will obviously, we feel very comfortable comfortable and confident with the safety data in real bad.
Operator: Please stand by for your first question. Your first question comes from Ritu Baral, with Cowan. Your line is now open. Hey guys, thanks for taking the question. My questions on the DRP commercial opportunity. As you have indicated, you're ramping up SG&A
If it.
Based on the on the a number off placebo controlled trials as well as a as well as our post marketing or safety trials.
Ritu Subhalaksmi Baral: How is your, I guess, your...
To be able to provide us sufficient information forever D.A. to evaluate potential modification or even or <unk> or removal of the box, but obviously we cannot.
Ritu Subhalaksmi Baral: Your commercial effort is going to change.
Ritu Subhalaksmi Baral: Specifically, are there more call points? Are there different?
Ritu Subhalaksmi Baral: https://www.facebook.com
Ritu Subhalaksmi Baral: you'll reconcile the Alzheimer's
Ritu Subhalaksmi Baral: Alzheimer's Mortality Black Box with the indication that you'll be going after with CRP. Thanks.
Thanks, guys.
Stephen R. Davis: Thanks for the question, Ritu. I think there are two parts to that question. I'm going to ask Michael to answer the first part, and Serge, after Michael has answered, if you could answer the second part.
I'll only one question.
Thank you. Our next question comes from Cory Kasimov with JP Morgan Your line is not with them.
Hey, good afternoon, guys. Thanks for taking my question. So I guess not acknowledging up front dissolved very recent but in a month or so since you've had de RP top line results I'm curious, whether you've seen any noticeable shift in physician desire or intent to prescribe for PDP you know in other words.
Michael Yang: Okay, yeah, thanks for the question. We're very excited about the potential of a DRP indication, and it represents a very large opportunity. I think it's important to understand that we'll be able to leverage our existing approach with PDP, and that is to say that we currently call on neurology, psychiatry, and long-term care, and all of those are important channels and call points for us with DRP. However, as you would expect, the number of targets and the number of patients are substantially larger, which is what makes it a very exciting opportunity. So in terms of, you know, the approach and the planning for our commercial build-out, it's obvious that we will need to build out and expand our footprint, and you could expect a kind of a standard approach, appropriately sized CNS specialty sales force and field force. So just to give you some grounding on that, the benchmarks, when you look at other CNS specialty field forces, you're typically in the range of about 400 to 500 people So that would be the expansion kind of framework that we're looking to kind of optimize as we look into DRP.
Actually the topline data sort of validate the product if at all in the eyes, a physician or do you think you need to see tad or even the actual approval label to kind of take that to the next level.
Thanks for the question Corey Michael you want to take US yeah. Thanks, Corey I think it's worth noting that we don't communicate in the community in the commercial field anything to do with the GRP results. So any knowledge that a position or customer would have would have to be on their own through the media.
In other awareness avenues and as such we don't you know I don't think it's a thing that physicians bring up to us in the field. So I think as the data unfolds and more is known about that you know that that may be somebody that has a positive halo on the brand in total but in terms of our herb tea approach.
It's all basically what worked meeting with the position within the existing label and the enriched benefits that we communicate with with the physicians.
Okay. Thank you.
Thank you. Our next question comes from Marc Goodman with SVB Leerink. Your line is now open.
Yes, two things one is can you give us a sense of coverage at all if there's any changes any country anything that's going on that we just need to be thinking about from a managed care perspective, it would impact the gross to net as we move into next year.
Michael Yang: Special thanks to Michael and Serge.
You know, how you're thinking about that and then second of all I'm just give us a sense of the spend on DTC and how that's evolved I know we're at our so I guess I want to call. It a second program is this a.
Serge Stankovich: Yes, hey Ritu, we, in the context of our application, intend to discuss with FDA the existing class back box warning as it relates to our targeting DRP indication and, obviously, in context of the extensive clinical trial safety data with Pimavansirin as well as the post-marketing experience with Pimavansirin. Just as to remind you, in the wording of the box of class warning, there is a DRP mentioned, so we will obviously feel very comfortable and confident with the safety data and risk benefit based on a number of placebo-controlled trials as well as our post-marketing safety trials to be able to provide sufficient information for FDA to evaluate potential modification or even removal of the box. But obviously, we cannot make any assumptions in that respect until we get to those discussions in the review process.
A higher level of DTC than what was before on a quarterly basis, just trying to get a sense of that and and if you're committed to that throughout 2020, and just to confirm you were saying that you're going to add an additional four to 500 reps on top of the reps you already have today. Thanks.
Yes, Mark let me just clarify the last a little bit escalated thick does your questions no that's not what Michael was saying.
When you look at other sales forces a similar nature, they usually or a total of about 500. So just trying to give them, but I guess, a little bit a directional guidance. There in terms of how we're thinking about just wanted to make sure thing.
Yeah, Thanks for asking.
Thank you and your questions on your first question with regard to operating rates that.
We have fraud and very good coverage.
For 5 million PDP in <unk> and overtime.
Ritu Subhalaksmi Baral: Thanks guys, but that was still only one question.
With regards to gross and net.
Operator: Thank you. Our next question comes from Corey Casamon with JP Morgan. Your line is now open. Hey, good afternoon, guys. Thanks for taking my question. So I guess, look, acknowledging upfront is all very recent, but
And looking into next year as I mentioned her two variables that had benefited right now one being the payer mix shift.
Good I'm reduction in different parts of the piece in who are on Medicare an hour and eligible and subjects is done at all that's been or be enhanced that'd be premature at this point if that will be seen long term.
Corey Casamon: But in the month or so since you've had the DRP top-line results,
Now I mean is we've seen continued growth in the beef and establish me Keith can we can even from you patients as well.
Corey Casamon: I'm curious whether you've seen any noticeable shift in physician desire or intent to prescribe PDP. In other words, how much did the top line data sort of validate the product, if at all, in the eyes of physicians? Or do you think you need CTAD or even the actual approval label to kind of take that to the next level?
You know.
Established piece in growing that that is a benefit.
And I'm sure.
Please proceed.
One point I would mention now like when we get an additional indication.
They are the pair mix.
And then of course you'd be teaching first continuing meaningful pain.
Corey Casamon: Thanks for the question, Corey. Michael, do you want to take that? Yeah, thanks, Corey.
Right and wrong.
With regards to me.
Michael Yang: I think it's worth noting that we don't communicate in the commercial field anything to do with the DRP results, so any knowledge that a physician or customer would have would have to be on their own through the media and other awareness avenues, and as such, I don't think it's a thing that the physicians bring up to us in the field, so I think as the data unfolds and more is known about that, that may be something that has a positive halo on the brand in total, but in terms of our current PDP approach, it's all basically what we're communicating with a physician within the existing label and the risk benefits that we communicate with a physician. Okay, thank you.
We don't break that out specifically, we we've had a effort this year, which.
Good morning, and by a very positive ROI and so we will easily Stephens investment.
And invest appropriately.
In DTC, but we haven't broken out specific dollars.
But you don't have to break out the dollar shots just asking for a sense of you know that's the number going up is that your progress or we assuming should we assume into 2020. We're also going to have the same level.
What Mark this is Pete I think as is typically the case with any DTC campaign.
We have a number components.
[noise] that we that were that we that make up the TARP program. The television portion is just the ism is one of those components in the television portion you would be.
Operator: Our next question comes from Mark Goodman with SBB Lyrinc. Your line is now open.
Marc Harold Goodman: Yes, two things. One is, can you give us a sense of coverage at all, if there's any changes, any contracts, anything that's going on that we just need to be thinking about from a managed care perspective that would impact the gross net as we move into next year? You know, how you're thinking about that. And then, second of all, just give us a sense of the spend on DTC and how that's evolved. I know we're in our, I guess, I want to call it a second program. But is this a higher level of DTC than what was before on a quarterly basis? Just trying to get a sense of that and if you're committed to that throughout 2020. And just to confirm, you were saying that you're going to add an additional 400 to 500 reps on top of the reps you already have today. Thanks.
Common for a company to run that 24, seven a year round and so on the television portion of it.
I think is we're really trying to get at we.
Try to make strategic investments to produce very high ROI and so bar very happy with the results but its.
I don't think it I don't think we could draw front line for you to give you guidance on what to expect quarter to quarter, because it really depends on what we're seeing interview.
Hi, Thanks.
Thank you. Our next question comes on to Xen Ahmad with Bank of America. Your line is now.
Hi, Good afternoon. Thanks for taking my question. This is either for for third or fourth Steve I'm looking forward to seeing your data presented at the pad on the fourth of December and ahead of that I'm. Just wondering if you could give us an idea of what additional details from the study you plan on show.
Marc Harold Goodman: Yeah, Mark, let me just clarify the last point, and then I'm going to ask Elaine to take a few questions. No, that's not what Michael was saying. When you look at other sales forces of a similar nature, they usually have a total of about 500. So we're just trying to give them, I guess, a little bit of directional guidance there in terms of how we're thinking about these.
Selling so should we expect to see a breakout of the different subsets of patients that were thought it as part of that the ERP indication and I guess related to that is your expectation that you would get a label just simply saying PRP or would it be specific to maybe the sub groups that seems to be most responsive if there.
Stephen R. Davis: [inaudible]
Stephen R. Davis: Yeah, yeah, no, thanks for asking.
Elena Ridloff: www.academia.ac.in
Elena Ridloff: I will take care of the two questions.
Elena Ridloff: So on your first question with regard to coverage and growth to net, we have broad and very good coverage for Neuplazid and PDP, and that has been consistent over time. With regard to growth to net and looking into next year, as I mentioned, there are two variables that have benefited growth to net. One being the payer mix shift, where we've seen a reduction in the proportion of patients who are on Medicare and eligible and subjects that don't at all. That's been a recent shift, so it would be premature to comment at this point if that will be sustained long term. The second element is we've seen continued growth in the base of established patients. We continue to grow new patients as well, but as the proportion of established patients grows, that is a benefit to growth to net and should be sustained.
Whereas sub groups that were more responsive another thing.
Great. Thanks for the question to these two part question Surgibot I'll, let you take both of them.
Yes, sure let me first start gold the what data will we plan to present that seat that we will be sharing oh, all material topline results from the study, meaning efficacy data from the open label portion of the trial.
Primary and key secondary endpoint details.
In the trial.
Particularly obviously didn't randomized withdrawal portion as well as overall safety data so as part of that too specifically to your question we will be presenting.
The data related to a.
Different sub types of diminish as well.
To your second question all discussions that we had with the F.D.A.
And our initial intention a war where related to us pursuing indication all of the.
Elena Ridloff: One point I would just mention, though, is when we get to additional indications, the payer mix, and the proportion of new patients versus continuing patients will play an important role. With regard to DTC spend, we don't break that out specifically. We've had an effort this year that has been supported by a very positive ROI, and so we will continue to assess those investments and invest appropriately in DTC, but we haven't broken out the specific dollars.
Oh treatment of hallucinations and delusions in dementia related say closes. So yes. Indeed that is what we are pursuing and that is what we had a discussed with the of D.A.
Okay perfect. Thanks for that.
Thank you.
Our next question comes from Salveen Richter with Goldman Sachs. Your line is now open great. Thanks for taking my questions. The Sandri on for something maybe our first why now well. It is still early days for your second DTC campaign are you seeing any trends are similarities to first one and in particular, if you expect a similar benefit I'm free or long term.
Marc Harold Goodman: www.academia.ac.uk
Stephen R. Davis: But you don't have to break out the dollars. I was just asking for a sense of, you know, is the number going up as the year progresses? Are we assuming, should we assume, into 2020 we're also going to have the same level? Mark, this is Pete.
Chris I think you've mentioned that was a bit unexpected from the first line.
Yeah, Thanks, Andrew Mcwilliams picked up yeah. Thanks. Thanks for the question. So on the current campaign, we are seeing it very strong and similar or set of early indicators.
Stephen R. Davis: I think, as is typically the case with any BTC campaign, we have a number of components that make up the entire program. The television portion is just one of those components. In the television portion, it would be uncommon for a company to run that 24-7, year round. And so on the television portion of it, which I think is where you're really trying to get at, we go to www.facebook.com or www.instagram.com
We website traffic.
Expressions of interest.
And Ah Ah physician enthusiasm from what we hear from patients in the opposite is a little early yet to talk about LTC just yet so we haven't had enough time that kind of.
To see that get if that's a breast cancer.
Benefit yet so I can't comment just yet on long term care bottles.
Got it I'm and then maybe just one question on the on the prior phase three enhance study I'm. Just if you have any color could provide additional clarity on whether you've looked at that post talk analysis, yet and if you see a potential correlation between a your negative symptom patients and the study responders there.
Tazeen Ahmad: Thank you. Our next question comes from Tazeen Ahmad with Bank of America. Your line is now open. Hi, good afternoon. Thanks for taking my question. This is either for Serge or for Steve.
Yeah, So of course.
Tazeen Ahmad: We're looking forward to seeing your data set presented at CTAD on the 4th of December. And ahead of that, I'm just wondering if you could give us an idea of what additional details from the study you plan on showing. So should we expect to see a breakout of the different subsets of patients that were studied as part of the DRP indication? And I guess related to that, is your expectation that you would get a label just simply saying DRP, or would it be specific to maybe the subgroups that seem to be most responsive if there were subgroups that were more responsive than others? Thanks.
We of course.
I have been looking good a analyzing data to a and and and conducting the number of false calc analysis.
We had whereas we previously reported we did see a better efficacy outcomes on the negative symptom scale, adding to patients that have a there is more problem in a negative symptoms. However, it is very difficult.
Uhhuh.
Or make any correlation to our advanced study because there are substantive differences in this patient population. That's number one and enhance study we have people that have a positive symptoms and a moderate to severe.
Serge Stankovich: Great, yeah, thanks for the questions. These two-part questions, Serge, I'm going to let you take both of them.
Serge Stankovich: Yes, sure. Let me first tackle what data we plan to present at CTAD. We will be sharing all material top-line results from the study, meaning efficacy data from the open-label portion of the trial, primary and key secondary endpoint details from the trial, particularly obviously in the randomized withdrawal portion, as well as overall safety data. So as part of that, specifically to your question, we will be presenting data related to different subtypes of dementia as well. To your second question, all discussions that we had with the FDA and our initial intention were related to us pursuing indications for the treatment of hallucinations and delusions in dementia-related psychosis. So yes, indeed, that is what we are pursuing, and that is what we discussed with the FDA. Okay.
Is positive symptoms wildly now or.
Advent study and the negative symptoms study Ddos positive symptoms are controlled with their heart current honestly say psychotic medication.
Medication. So two from that perspective does or to do for in population another element in.
Interpreting.
And and reading through the data from a enhanced to advance is that enhances a six week study while a advances.
As a six months study so duration of Triesman plays plays a in important role here. So a in short I would say, while we see we what we see in terms of the response on negative subscales in a enhanced study we find.
Tazeen Ahmad: Okay, perfect. Thanks for that. Thank you. Our next question comes from Salveen Richter with Goldman Sachs. Your line is now open. Great. Thanks for taking our questions. This is Andrea on behalf of Salveen. Maybe our first one, while it is still early days for your second DTC campaign, are you seeing any trends or similarities to the first one? And, in particular, if you expect a similar benefit?
That's encouraging we certainly are north reading through a from those data to our advanced study.
Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald. Your line is now open.
[noise], Thanks, guys for taking the questions and congrats on a good quarter I wanted to ask a quick question of Michael appreciate the mid teens penetration rate with within patients, but I'm I'm wondering if you could characterize or provide any color on Brett.
Unknown Attendee: I think you've mentioned that it was a bit unexpected from the first one.
Unknown Attendee: Yeah, thanks, Gregory. Mark, will you want to take that? Yeah, thanks.
Michael Yang: Thanks for the question. So, in the current campaign, we are seeing a very strong and similar set of early indicators, specifically website traffic, expressions of interest, and physician enthusiasm from what we hear from the patients in the office. It's a little early yet to talk about LTC just yet, so we haven't had enough time to see that yet, if that's a replicant benefit yet, so I can't comment just yet on long-term care
Persist depth in terms of prescribers.
And then I had a quick follow up for a surge.
Sure. Thanks, Charles for the for the question. So you know obviously at this juncture, we're focused on both we have a good cohort of physicians.
That have what I've called Britain apart from a bustling or we would want to try and drive greater depth with them, but we're also trying to drive or you know build radar loyalty amongst the broader set of physicians are they have so I think that are probably focused on both but I think a big focus in there.
Unknown Attendee: Got it. And then maybe just one question on the prior Phase 3 Enhanced Study. Just if you have any color or could provide additional clarity on whether you've looked at that post-talk analysis yet and whether you see a potential correlation between your negative symptom patients and the study respondents.
I mean are coming quarters will be to drive more positions with a deeper loyalty. We've acquired a lot of new physicians recently as a result, DTC and and then new data that are the information we have with the guideline I think there's an opportunity to broaden or you know enhance build.
Serge Stankovich: Yes, of course. We, of course, have been looking at analyzing data and conducting a number of post hoc analyses. As we previously reported, we did see better Efficacy Outcomes on the Negative Symptom Scale and in the patients that had these more prominent negative symptoms. However, it is very difficult to make any correlation to our advanced study because there are substantive differences in this patient population. That's number one. In the hand study, we have people that have positive symptoms and moderate to severe positive symptoms, while in our advanced study, in the negative symptoms study, those positive symptoms are controlled with their current antipsychotic medication. So from that perspective, these are two different populations. Another element in interpreting and reading through the data from enhanced to advanced is that enhanced is a six-week study, while advanced is a six-month study. So duration of treatment plays an important role here. So, in short, I would say what we see in terms of the response on negative subscales in the enhanced study is encouraging, but we certainly are not reading through from those data to our advanced study.
Or death with our physician days.
Okay. That's cell phone quickly first surge in the face to advance study a yet to read out. This this year.
I'm wondering as you look at and I say 16, if you could provide a little bit of thought on the hurdle for clinical value that you'd like to see and then you're probably tracking on a blinded basis that dropout rate and is that consistent with your expectations better or worse.
And when you design this study.
Let me take the second question first and then I'll go to the first one Charles and thanks for the question.
We continue this it to see a quite a good retention rate India advanced trial.
Even if this trial these six months long so in terms of the.
Lower dropout rates that we saw in the enhanced trial.
Continue for us continuing to in these longer trial, usually in schizophrenia trials over the half year duration of trials, you tend to lose quite a bit of patients in 40% to 50%.
Charles Cliff Duncan: Thank you. The next question comes from Charles Duncan with Cantor Fitzgerald. Your line is now open. Thanks guys for taking the questions and congrats on a good quarter. I wanted to ask Michael a quick question. I appreciate the mid-teens penetration rate with inpatients, but I'm wondering if you could characterize or provide any color on breadth versus depth in terms of prescribers. And then I had a quick follow-up with Serge.
And we are not seeing those attrition rates, which is very good for oh in terms of preserving the power a in the trial. So we're very pleased with that trend and continue the overall trend or <unk> quite a good retention that we see with pimavanserin across.
Across clinical trials.
Michael Yang: Sure. Thanks, Charles, for the question. So, you know, obviously, at this juncture, we're focused on both. We have a good cohort of physicians that have, what I would call, written the product robustly, and we would want to try and drive greater depth with them. But we're also trying to drive or, you know, build greater loyalty amongst the broader set of physicians that we have. So I think we're appropriately focused on both, but I think a big focus in the coming quarters will be to drive more physicians with deeper loyalty. We've acquired a lot of new physicians recently as a result of PTC and the new data, the information we have with the guidelines. I think there's an opportunity to broaden or, you know, enhance, build more depth in our physician base.
No in regard to what the what Oh clinical meaningfulness over the results. We obviously first let me just to remind everybody. There is nothing approved.
For treatment of negative symptoms of schizophrenia.
And they're not very many successful studies in negative symptoms of schizophrenia, so to be able to to draw. Some historical precedence from that we will be looking forward. The results that are statistically significant and and me.
Meaningful in terms of the.
Per cent reduction on the on the and if say on the primary endpoint scale as well.
Serge Stankovich: Okay, that's helpful. And quickly for Serge, the Phase II Advanced Study you had to read out this year, I'm wondering, as you look at NSA16, if you could provide a little bit of thought on the hurdle for clinical value that you'd like to see, and then you're probably tracking on a blinded basis the dropout rate, and is that consistent with your expectations better or worse than when you designed this study?
As the consistency across different scale and.
Based on death, we will be evaluating the overall consistency of response was a response and the benefit risk assessment.
Thank you. Our next question comes from Paul Matteis with Stifel. Your line is now open.
I think shaking the question this Alex on for Paul just just one from US today on could you remind us how you're thinking about pricing as as you think about the potential expansion from PDP that the RP and even beyond towards depression schizophrenia. Thanks.
Serge Stankovich: Let me take the second question first and then I'll go to the first one, Charles, and thanks for the question. We continue to see quite a good retention rate in the advanced trial, even if this trial is six months long. So in terms of the lower dropout rates that we saw in the enhanced trial, for us, these lower rates will continue in these longer trials. Usually, in schizophrenia trials, over the half-year duration of the trial, you tend to lose quite a bit of a patient, 40 to 50 percent, and we are not seeing those attrition rates, which is very good in terms of preserving the power in the trial. So we are very pleased with that trend and continue the overall trend of quite good retention that we see with pimivanserin across clinical trials.
Okay, great. Thanks, much when the question Michael Yeah. Thanks, Thanks for the question I think it [noise].
Too early to talk about our approach for for the payers. We don't have you know the entire GRP dated back is just yet.
But as we've discussed and search outlined there is a significant unmet need I'm speaking specifically geared piece and set the next indication will have potentially conversations with and payers for I think it's important to note that today is Atlanta outline we already enjoyed very broad access and coverage with GDP type of patient that isn't dear.
He is very similar men perspective he.
And I think it's important to note that has significant a delay in relapses of psychosis is a very significant outcome and there is evidence that shows the patients with immense related psychosis or two times more likely to progress to severe dementia and a one and a half times more higher mortality rate.
Serge Stankovich: Now, in regard to the clinical meaningfulness of the results, we obviously first, let me just remind everybody there is nothing approved for the treatment of negative symptoms of schizophrenia, and there are not very many successful studies in the treatment of negative symptoms of schizophrenia. So to be able to draw some historical precedent from that, we will be looking for results that are statistically significant and meaningful in terms of the percent reduction on the NSA on the primary endpoint scale, as well as the consistency across different scales. And based on that, we will be evaluating the overall consistency of response and the benefit-risk assessment.
And there's a significant unmet a significant burden caregiver burden and a large part of that is due to unresolved or relapsing cencosud. So well make that argument I think to the payers I think it will be presents wasted and in terms of the value proposition well wait to the data to see how we can position that bears.
Great. Thanks.
Thank you.
Our next question comes from Jason Butler with JMP Securities. Your line is now.
Hi, it's right for Jason Thanks for taking my question I, just a quick on the phase three fruit for credit tide, how many sites you guys planning and how quickly do you think you might enrolled that trial. Thanks.
I think yeah question sorry.
HM.
Paul Matisse: Thank you. Our next question comes from Paul Matisse with Stiefel. Your line is now open. Hi, thanks for taking the question. This is Alexandre for Paul. Just one from us today. Could you remind us how you think about pricing as you think about the potential expansion from PDP to DRP and even beyond to depression and schizophrenia? Thanks.
<unk> that trial, a we we plan to enroll about hundred 80 girls. So the number of sites is correspondent to dad and it's not so much bigger than what was done in the phase two trial. We planned initially to have about 16.
Sites or thereabout, and we will be a evaluating as we move forward in terms of the number of sides, but that's that's where we said in terms of the recruitment period. Obviously, you know we will be a assessing the base over.
Paul Matisse: Great, thanks so much for the questions. Michael? Yeah, thanks. Thanks for the questions.
Michael Yang: I think it's a little too early to talk about our approach for payers. We don't have the entire DRP data package just yet, but as we've discussed in the search outline, there's a significant unmet need. I'm speaking specifically of DRP since that's the next indication we'll potentially have conversations with the payers for. I think it's important to note that today, as Elena outlined, we already enjoy very broad access and coverage with PDP. The type of patient that is in DRP is very similar from that perspective to PDP. There is a significant caregiver burden, and a large part of that is due to unresolved or relapsing psychosis. We'll make that argument to the payers. I think it will be persuasive. In terms of the value proposition, we'll wait for the data to see how we can position that with the payers.
Recruitment as we progress in the trial, we just initiated the trial, but initially we anticipate that it may take between 12 and 18 months to complete enrollment into trial.
Okay. Thank you.
Thank you and our next question comes from Daniel Brims with Piper Jaffray. Your line is now.
Hi, guys. Thanks, but the question are you said it caught back up because the growth trajectory expected at launch. So I'm curious is growth now more balanced across channels and what was the sequential volume growth in Threeq, you and then quickly IDR P I see or something quite a few disease awareness initiatives and engaging like hell out a curious that their initial.
Feedback has been particularly pertaining to the relapse prevention study design bank.
Michael was effective right. So as we outlined on that graph you can see the revenues and we are contacting the last couple of quarters, where we have got back at that same curve that we established early in the launch.
Michael Yang: Our next question comes from Jason Butler with JMP Securities. Your line is now open. Hi, it's Ryan on behalf of Jason. Thanks for taking our question. Just a quick one, the Phase 3 for Trophinitide, how many sites are you guys planning, and how quickly do you think you might enroll that trial?
We think thats, a great reflection as I mentioned to the benefits it implies that brings to patients and a response to the kind of messages, both we and the FDA and get them to consumers and physicians on confidence and any plaza.
We had 38% volume growth or so that gives you context aware what we saw in the third border and I think we are again it said in the mid to high teens in terms of penetration is we have a lot of opportunity to grow a brand.
Jason Nicholas Butler: Okay, I think we're good.
Serge Stankovich: Thank you for asking the question, sir. Yes, in that trial, we plan to enroll about 180 girls, so the number of sites is correspondent to that, and it's not much bigger than what was done in the Phase 2 trial. We plan initially to have about 16 sites or thereabouts, and we will be evaluating as we move forward in terms of the number of sites, but that's where we stand. In terms of the recruitment period, obviously, you know, we will be assessing the pace of recruitment as we progress in the trial. We have just initiated the trial, but initially, we anticipated it may take between 12 and 18 months to complete enrollment in the trial.
I think anything.
I'm still volume Rose Richmond, 6% Hunter I mean do.
<unk> channel that P M E channel in tone.
And then Daniela as to your second question regarding GRP into medical education work, we're doing there.
Just to be completely clear.
We're only approved in Parkinson's disease psychosis today. So that's the only thing that the commercial organization is engaged on and having said that our medical Affairs group and broader organization is doing a fair amount of work already.
On medical education for GRP, that's really important work to do there's a there's a there's a.
Significant opportunity there and at a significant gap that we need to fill ins were beginning to lay the foundation today that would you simply say that the interactions Weve had.
Very much support our view that we think there's a very significant unmet need and a great opportunity if we're.
Serge Stankovich: Thank you. Thank you. And our next question comes from Danielle Brill with Piper Jaffray. Your line is now open.
Just one getting linear being.
Got it thank you.
Thank you. Our next question comes from Alan Carr with Needham Your line now.
Danielle Brill: Hi guys, thanks for the questions. You said you've caught back up to the growth trajectory you expected at launch, so I'm curious, is growth now more balanced across channels and what was the sequential volume growth in 3Q? And then quickly on DRP, I see you're sponsoring quite a few disease awareness initiatives and engaging with KOLs. Curious what their initial feedback has been, particularly pertaining to the relapse prevention study design. Thanks.
Thanks for taking my questions.
I guess to follow up on Daniels, you mentioned that there was growth in both those channels, but it's one growing anymore faster growing anymore than any other then.
A couple other questions around how.
[noise] traditional antipsychotics are being used in India P.
Can you.
Label. He is key can you tell so there's about that how they're being used as it anymore any parent intermittent tour.
Is there a compliance any better that sort of thing versus.
On label is just like in schizophrenia, and then you have any more resolution on the NDA submission timing for de or P. or for the phase three clarity trials. Thanks.
Michael Yang: Michael, would you like to take this?
Danielle Brill: Right, so, as we outlined in that graph, you can see the revenues, and we are approaching the last couple of quarters where we've kind of got back to that same curve that we established early in the launch. We think that's a great reflection, as I mentioned, of the benefits IndyPlazid brings to patients and a response to the kind of messages both that we and the FDA have given to consumers and physicians about confidence in IndyPlazid. We had 38 percent volume growth, so that gives you context for what we saw in the third quarter, and I think we're, again, as I said, in the mid-to-high teens.
Right. So a alan thanks for the question on the channel question, we saw growth.
Both in the SD Andy SP channels are both growing consistent with our expectation so not really seen any dramatic shifts or deltas between one versus the other.
I'm studying it so that's a good thing for the total franchise in regards I think your question was how does the market.
Currently tree.
CRP with off label.
And then.
I think we elucidate that a little bit more going forward, but just club quantitatively or qualitatively the challenges that there's different channels and different prescribers that have different behaviors and so the neurologists do things a little differently than the psychiatrists and I do think it's a little differently than they do it.
Michael Yang: I think
Danielle Brill: https://www.academia.org
Danielle Brill: Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES www.verbalink.com
Long term care, so each channel when each kind of specialty and their own kind of flavor, but in general I think one thing I just want to say for all of them.
Stephen R. Davis: And then Danielle, as to your second question regarding DRP and the medical education work we're doing there, just to be completely clear, we're only approved for Parkinson's disease psychosis today, so that's the only thing that the commercial organization is engaged in. Having said that, our medical affairs group and broader organization are doing a fair amount of work already on medical education for DRP. That's really important work to do. There's a significant opportunity there and a significant gap that we need to fill, so we're beginning to lay that foundation today. That very much supports our view that there is a very significant unmet need and a great opportunity if we're successful in getting approval into your program.
The off labels awfully Lennon Psychotics present, a pair of getting challenge for physicians because they carry.
Compromises, so they're trying to fix the psychosis, but they're also warnings against using them any other limitation for a wide variety of different regions. So we think that the promise of deposit in that opportunity is is the more precise targeting a in terms of its neurobiology ER.
Yes, well get benefit to physicians and Latin treat them without that compromise.
[noise] Intel and you get a question on submissions or do you want to pick up.
Yes, absolutely let me start with the idea he as we mentioned earlier.
We plan to meet we'd have D.A. in the first half of 2020 to discuss the format than contact of our supplement the land is submission and once we have.
Danielle Brill: Got it, thank you. Thank you. Our next question comes from Alan Carr with Needham. Your line is now open.
Alan Carr: Hi, thanks for taking my questions. I guess to follow up on Danielle's, you mentioned that there was growth in both of those channels, but is one growing any faster or growing any more than the other? And a couple other questions around how...
That a under our belt, we will be in a position to more precisely guide on the timing of submission because there are certain dependency in that three good respect, but that's that's where we stand right now in regard to depression.
Alan Carr: Traditional antipsychotics are being used in DRP and for off-label use. Can you tell us a little bit about that, how they're being used? Is it any more intermittent, or is there any better compliance, that sort of thing, versus on-label uses like in Schizophrenia. And then, do you have any more resolution on NDA submission timing for DRP or for the Phase 3 Clarity Trials? Thanks.
As you know we initiated our phase three program a U.S. study started to I believe some or sometime in May and international study started sometime in August . We currently guy that does it will take approximately around two years to complete.
Michael Yang: Michael? Right. So, Alan, thanks for the question on the channel question. We saw growth both in the SD and the SP channels. They're both growing consistent with our expectations, so not really seen any dramatic shifts or deltas between one versus the other. So I think that's a good thing for the total franchise. In regards, I think your question was, how does the market currently treat DRP with off-label guys that kind of can... I think we need to elucidate that a little bit more going forward, but just quantitatively or qualitatively, the challenge is that there's different channels and different prescribers that have different behaviors, and so the neurologists do things a little differently than the psychiatrists, and they do things a little differently than they do in long-term care, so each channel and each kind of specialty has their own kind of flavor, but in general, I think one thing I just want to say for all of them, will be a benefit to physicians and allow them to treat them without that compromise.
The enrollment and get to topline results of the studies and obviously, a once we have a little bit more.
More or more a time with recruitment.
We will be able to some time you know you know or beginning of next year or first half of next year to guide more precisely is on the timing call completion of this studies as well as the.
The timing go about supplemental in D.A. submission I do want to say that recruitment is going very well.
And we're quite pleased qawi these going but its you know to develop some more trends more trends with more confidence, we'll we'll we would like to put a few months under our belts again.
With respect to their San Diego It sounds like it's possible that it might be into each 20.
I'm, which one are you referring to.
Yeah <unk> for de RP.
Sounds like you're being open to the whole year.
And at this point like I said, you know, where it's it's hard to say, but you know we're nowhere.
Serge Stankovich: And again, a question on submission, sir. Do you want to take that?
Serge Stankovich: Yes, absolutely. Let me start with DRP. As we mentioned earlier, we plan to meet with FDA in the first half of 2020 to discuss the format and context of our supplemental NDA submission. And once we have that under our belt, we will be in a position to more precisely guide the timing of submission because there are certain dependencies in that respect. But that's where we stand right now.
We will we will be able later into 2020 in the first half after the meeting to be more precise about that.
Thanks for taking my questions <unk>.
Thank you. Our next question comes from Bode Miller with RBC capital markets. Your line is now.
Hey, everyone. Thanks for taking my questions I have one quick one on other see Tad data and then one on on Lavender I guess first on C. Tad.
Unknown Attendee: Unknown Attendee
Serge Stankovich: Depression, as you know, we initiated our Phase 3 program; the U.S. study started, I believe, sometime in May, and the international study started sometime in August. We currently estimate that it will take approximately around two years to complete enrollment and get the top-line results of this study. And obviously, once we have a little bit more time with recruitment, we will be able sometime in the beginning of next year or the first half of next year to give more precisely the timing of completion of these studies, as well as the timing of supplemental NDA submission. So we do want to say that recruitment is going very well, and we are quite pleased with how it is going. But to develop some more trends, more trends with more confidence, we would like to put a few months under our belts.
When you when you speak about some of the secondary measures you're gonna be presenting I guess, how important is showing efficacy on those like agitation.
And caregiver burden and contextualizing, the the value proposition and potential commercial opportunity.
Yeah. Thanks for the question, though surge I'm going to let you 60 feet away.
No.
<unk> Ah well first of all let me just to make sure that we don't have a misunderstanding in in our de Rps study, we did not a measure of patients Oh outcomes are measure on the hallucinations and delusions. So.
In terms of secondary outcome measure I would say the most important the outcome and if you will is the in this study will be a hazard ratio because that directly tells us or how much treatment with getting my my answer it reduces probability that somebody will experience exists or basin looks like.
Unknown Attendee: With respect to the SNDA, it sounds like it's possible that it might be in 2H20.
Unknown Attendee: I'm, which one are you referring to? The SNDA for DRP. It sounds confusing.
Unknown Attendee: It sounds like you're keeping it open for the whole year.
Serge Stankovich: At this point, like I said, it's hard to say, but we will be able later in 2020, in the first half after the meeting, to be more precise about that.
Arctic symptoms or let's say for drug so how's that ratio is 0.55 death means that the.
Bo Miller: All right, thanks for taking my question. Thank you. Our next question comes from Bo Miller with RBC Capital Markets. Your line is now open. Hey, everyone.
Taking a drug your would Ah Ah you reduce the chances of Ah experiencing psychotic symptoms.
For about 45% and so on in addition to that obviously, we will be measuring the severity of symptoms into cores. Both of the open label study as well as a open label a portion of the study as well as a randomized withdrawal portion of the study.
Bo Miller: Thanks for taking my questions. I have one quick one on the CTAD data and then one on Lavender. I guess first on CTAD. When you speak about some of the secondary measures you're going to be presenting, how important is showing efficacy for those like agitation and caregiver burden in contextualizing the value proposition and potential commercial opportunity?
And severity of Ah overall, hallucinations, and delusions as well as other indicators of Ah sleep quality of life would be.
Serge Stankovich: Yeah, thanks for the question. So, Serge, I'm going to let you speak on this if you don't mind.
Information that is will be invaluable to to vote or patients and prescribers.
Serge Stankovich: No, absolutely not. Well, first of all, let me just make sure that we don't have a misunderstanding.
Okay. Thanks, that's that's really helpful.
Serge Stankovich: In our DRP study, we did not measure agitation. The outcomes are measured on the hallucinations and delusions. So in terms of secondary outcome measure, I would say the most important outcome, if you will, in this study will be a hazard ratio because that directly tells us how much treatment with Pima-Marceri reduces the probability that somebody will experience exacerbation of psychotic symptoms, uh... let's say if a drug uh... it's a hazard ratio is point five five that means that uh... uh... taking a drug you would uh... uh... uh... you uh... reduce the chances of uh... experiencing psychotic symptoms uh... for about forty five percent and so on in addition to that obviously we will be measuring uh... uh... severity of symptoms in the course both of the open label study as well as uh... open label uh... portion of the study as well as uh... uh... uh... randomized withdrawal portion of the study and uh... severity of uh... overall hallucinations and delusions as well as other indicators of uh... sleep quality of life would be uh... information that is will be valuable to uh... to both uh... patients and uh... prescribers
I'm sorry, if I start just a follow up on the second part of your question a little bit you were asking important.
Education or caregiver burden in the context, a meaningful listen musicians and.
To be clear the work that we've done we've done a lot of market research.
Really.
Clearly understand that need in the medical community.
And it's very clear that market research psychosis is a significant issue that impacts these patients.
In a very [noise] profound way and so and much like PDP any these patients are cared for by a spouse or family member and so is it.
It creates a very significant burden on a on them as well.
So we're very confident when faced with the results we've seen at our phase three program that that investor can have a very significant impact on them and Andy and can be an important neutral and addressing that there's going to government need education is a busy.
Bo Miller: Okay, thanks. That's really helpful. Um, I'm sorry.
Your friend dynamic that these patients deal with and of course, a surgeon describe where don't seeking an indication and agitation. However, what we have seen is win in based on the clinical trials. We thought it was when we resolve agitation in a diminishing patients whose resolve psychosis.
Stephen R. Davis: Just to follow up on the second part of your question a little bit, you were asking the importance of education or caregiver burden in the context of how meaningful this would be to physicians. And just to be clear, the work that we've done, and we've done a lot of market research to really clearly understand the need in the medical community, and it's very clear from that market research that psychosis is a significant issue that impacts these patients in a So, we're very confident, based on the results that we've seen in our Phase III program, that hemoglansin can have a very significant impact on them and can be an important new tool in addressing that very significant element of need.
In a dimension patient we also positively impact education, there. So that's all midway, saying we're very.
Excited about the profile that we've seen and the ability to address when we think is a very significant.
Okay Yep. Thanks for the helpful color there and then I guess quickly on on COFINA tied you just remind us of or co primary endpoints and whether or not both of those are required for approval or how the statistical hierarchy works, there and I guess overall, how do you kind of plan to manage the.
Patient heterogeneity in this population just given it encompasses five year old the 20 year olds and it can be quite a variable and inter patient. Thanks.
Stephen R. Davis: Agitation is a different dynamic that these patients deal with, and of course, as Serge described, we're not seeking an indication for agitation. However, what we have seen is when, based on the clinical trials that we've done, when we resolve agitation in a dementia patient, excuse me, when we resolve psychosis in a dementia patient, we also positively impact agitation there. So, that's a long way of saying we're very excited about the profile that we've seen and the ability to address what we think is a very significant element of need.
Yes, Oh, the first part Oh, we have a co primary.
And points, one is rett syndrome, behavioral questionnaire, which is Oh caregiver assessment and then the second is clinical global impression and all the improvement which is a physician assessment. So we need to wind on boat in order for trial to be pause.
That's a as being a co primary measures.
Bo Miller: Okay, yep. Thanks for the helpful color there. And then, I guess quickly on profinitide, could you just remind us of the co-primary endpoints and whether or not both of those are required for approval or how the statistical hierarchy works there? And I guess overall, how do you kind of plan to manage patient heterogeneity in this population, just given it encompasses 5-year-olds to 20-year-olds, and it can be quite variable and interpatient? Thanks.
To your second part of your question in terms of Ah heterogeneity, both measures I mean, rett syndrome behavioral questionnaire is afraid it fairly broad assessment of the a variety of of symptoms that a core within the.
Rett syndrome. So it's up it's a it's kept her because there are certainly a number of individual differences. It its particular patient this the scale capture a fairly wide array.
Serge Stankovich: The first part, we have co-primary endpoints. One is the Rett Syndrome Behavioral Questionnaire, which is a caregiver assessment. And then the second is the Clinical Global Impression of Improvement, which is a physician assessment. So, we need to win on both in order for trials to be positive, as these are the co-primary measures.
A range of these symptoms and there will be able to assess patients on the individual basis vis-a-vis there a baseline see me literally with clinical global impression obviously, it's a physician assessment of the totality of symptoms. So we believe that we dose so scale, we will be able to account for.
Serge Stankovich: To your second part of your question, in terms of heterogeneity, both measures, I mean the Rett Syndrome Behavioral Questionnaire is a fairly broad assessment of the variety of symptoms that occur within the Rett Syndrome. So it captures, because there are certainly a number of individual differences in each particular patient, this scale captures a fairly wide range of these symptoms and will be able to assess patients on an individual basis vis-a-vis their Similarly, with clinical global impression, obviously, it's a physician assessment of the totality of symptoms. So we believe that with those two scales, we will be able to account for the variability of symptoms, inter-subject variability, so to speak, measuring individual changes.
The variability of symptom inter subject flurry of really do sort to speak.
Measuring individual changes on the patients.
Thank you. Our next question comes from Sumant Kulkarni.
From Canaccord. Your line is now open.
Thanks for taking my questions I have two quick ones, who as you know almost exactly six month, Oh from first genetics potentially fighting back up or challenges and blended what lifecycle management plans. If any are you going to bidding on the product and secondly, given no products have been approved yet for negative symptoms of schizophrenia. What did you said about the potential for the advanced trying to positive to be considered sufficient.
The board and FNB finding in that indication.
Thank you.
Sorry did you hear those questions.
Sumant Satchidanand Kulkarni: Thank you. The next question comes from Sumant Kulkarni. From Canaccord, your line is now open. Thanks for taking my questions. I have two quick ones. So as you're almost exactly six months out from first generics potentially filing Paragraph 4 challenges on NEPLEZID, what lifecycle management plans, if any, are you contemplating for the product? And secondly, given no products have been approved yet for negative symptoms of schizophrenia, what have you said about the potential for the advanced trial, if positive, to be considered sufficient to support an SNDA filing for that indication?
Yes, yes, okay. Great you go ahead.
Yeah Okay.
And starts with the second part of the question.
Related to negative symptoms.
Where we are right now obviously, we are looking going to nominate a variety of scenarios, depending on what outcome of our advanced trial will be regulatory requirements for approval in the schizophrenia in all of the different names.
Occasion, including negative symptoms schizophrenia has been to well controlled trials, Oh, obviously, a <unk> based on the data that we see and the strength of the data that we see now where advanced trial, we will evaluate what's the best.
Serge Stankovich: Great. Serge, did you hear those questions?
Serge Stankovich: Yes.
Serge Stankovich: Yes. Okay, great.
Serge Stankovich: Do you go ahead? Okay, let me start with the second part of the question related to negative symptoms. Where we are right now, obviously, we are looking at a variety of scenarios, depending on what the outcome of our advanced trial will be. Regulatory requirements for approval in schizophrenia, in all different indications, including negative symptoms of schizophrenia, have been two well-controlled trials. Obviously, based on the data that we see and the strength of the data that we see in our advanced trial, we will evaluate what is the best regulatory pathway for us and approach FDA to discuss that. So at this point, we are not commenting further on that. There are precedents for a single study approval, obviously, in a variety of indications, but the regulatory requirement, as I said, is two well-controlled trials.
Regulatory pathway for us and approach of D.A. to discuss though so at this point, we're not a commenting further on that there are precedence for a single study approval, obviously in a variety of indications, but a regulatory requirement as I said is that two well controlled trials and once.
We didn't have the data topline results and I've always thought or data, we will formulate our regulatory pathway to an approach of D.A. to discuss that.
In in terms of the lifecycle and Oh, you know of Pimavanserin exclusivity.
We have a obviously threw out development process of Pimavanserin, we have been ER.
Uh huh.
Defining variety of Ah lifecycle opportunities and as we accumulate data and as we accumulate knowledge about pimavanserin, we have been a building our states leading death respect so Ah that's at this point.
Serge Stankovich: And once we have the data, top-line results, and evaluated our data, we will formulate our regulatory pathway and approach FDA to discuss. In terms of the life cycle and, you know, Pimavansurin Exclusivity, we have obviously throughout the development process of Pimavansurin, we have been, We are finding a variety of life cycle opportunities, and as we accumulate data and as we accumulate knowledge about pimavenserine, we have been building our estate in that respect. So at this point, that's as far as I can comment.
That's as far as I can comment on that.
Thank you.
Just to add to that on the composition of matter coverage with flat and <unk>.
Uh huh.
Pension in pediatric entity.
We.
And then turned to be covering.
I'm sorry.
Right I mean, we always.
So even with this topic comes up that there's some litigation in the industry that doesn't involve us.
There could have the potential moving it back to as early as a first step in 2028, but the extraction etch waxman he or she is we have on composition of matter exist between 30, and then we have other patents that surge was alluding to regarding utility.
Serge Stankovich: Thank you.
Stephen R. Davis: And just to add to that, the composition of MATTER coverage with the Hatch-Waxman extension and pediatric exclusivity; we expect some of that to be covered into 2030.
Stephen R. Davis: That's right. We always say when this topic comes up that there's some litigation in the industry that doesn't involve us that could have the potential of moving it back to as early as, for example, 2028. But the Hatch-Waxman extension we have on composition of matter takes us to 2030. And then we have other patents that Serge was alluding to regarding utility in certain cases, formulations, etc. that go well beyond 2030
He in certain cases formulations et cetera, they go well beyond 23.
Thank you.
Thank you. Our next question comes from Jay Olson with Oppenheimer. Your line is open.
Oh, Hey, congrats on a quarter and thanks for taking my questions I had.
Two quick ones. My first question is about the D. R. P patient segments that you described.
Can you compare the opportunity to switch the our patients from sorry switched ERP patients from atypical antipsychotics to new placid versus capturing some of the 1.2 million deer P. patients who are currently untreated and then my second question is a financial question with regards to capital allocation priorities.
Jay Olson: Thank you. Our next question comes from Jay Olson with Oppenheimer. Your line is now open. Oh hey, congrats on the quarter and thanks for taking my questions. I had two quick ones.
Jay Olson: My first question is about the DRP patient segment that you described. Can you compare the opportunity to switch DRP patients from atypical antipsychotics to nuplacid versus capturing some of the 1.2 million DRP patients who are currently untreated? And my second question is a financial question with regard to capital allocation priorities and whether or not you're actively considering any new business development opportunities. Thank you.
And whether or not you're actively considering any new business development opportunities. Thank you.
Yeah, Michael I'll ask you take the first question. Thank you Sir Frank Good Great question. So from regards to the untreated population there could be a wide variety of reasons why folks are underfeeding you could be no lack of awareness, we see that a lot.
He and I would expect insane be someone.
Somewhat the same endear needs our efforts there.
I think ROE if you will be treated population so penetrating the untreated.
Michael Yang: Michael, I'll ask you to take the first question; I'll take the second. All right, good.
Relation and those would be kind of like say therapeutically naive patients in regards to the anti psychotics that are being used off label as I mentioned earlier easier. These are patients where physicians are making compromises and some this some respect because of the the nature of their disease.
Michael Yang: Great question. So, in regards to the untreated population, there could be a wide variety of reasons why folks are untreated. It could be, you know, lack of awareness. We see that a lot with PDP, and I would expect the same to be somewhat the same in DRP. So our effort there, I think, could grow, if you will, the treated population and penetrate the untreated population. So I think the data that we will generate and the label that will be granted if we get it from the FDA will be powerful educational opportunities for us to change and shift that behavior, and I would expect us to win both new patients and switched patients in the future with that data.
And then the data.
And then side of things that potentially could be occurring with me and I are Atlanta Psychotics. So I think data that we will generate and the label that would be granted isn't getting from I mean, he will be powerful educational opportunities for us choose change and should that be.
Hey, here and I would expect as to when both new patient and switch patients.
In the future with that that data.
Michael Yang: Great. Thanks, Michael.
Great.
Stephen R. Davis: And in terms of the second part of your question, business development is one of our three strategic pillars that we've publicly discussed for some time. We focus on building our pipeline through focused transactions. An example of that is our deal to acquire North America Rods to triphenatize. And we're beginning to see some of the fruits of that as we now commence our phase three program there. That kind of deal is an ideal strategic fit for us because it leverages both our development and commercial capabilities. So we'll continue to pursue those kinds of opportunities as we go.
Thanks, Michael in terms of the second part of your question.
[noise] business development is one of our three strategic pillars, we publicly discussed for sometime our focus on building a pipeline through focused transactions. As an example that is our deal to acquire North American rights to turn the tide and would you can see some of the fruits of that as we've done.
I missed our phase three program, there that kind of deals not deal strategic fit for us and Leverages, both our development and commercial capabilities. So we'll continue to.
To pursue those types of opportunities Chris.
Stephen R. Davis: ACADIA Pharmaceuticals Inc. Great, thank you very much. Thank you. Mr. Davis, please proceed to close.
Great. Thank you very much.
Thank you Mr. Davis. Please proceed to closing remarks.
Stephen R. Davis: Thank you, Operator. And thanks, everyone, for your time and questions. We look forward to updating you on our progress.
Great. Thank you operator, and thanks, everyone for your time any questions. We look forward to updating you on <unk>.
Thank you for your participation in today's conference call. This concludes the presentation you may now disconnect good day.
Operator: Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.
[noise].