Q3 2020 ACADIA Pharmaceuticals Inc Earnings Call
Thursday
6 a.m.
Good day, ladies and gentlemen, and welcome to Acadia Pharmaceuticals third quarter 2020 Financial results conference call. My name is Gigi, and I will be your coordinator for today at this time. All participants are in a listen-only most 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 0. Yep. Coordinator will be happy to assist you will not like to turn the presentation over to Mark Johnson vice president of investor relations at Acadia. Please proceed.
Thank you. Good afternoon. And thank you for joining us on today's call to discuss Acadias third quarter 2020 Financial results joining me on the call today from Acadia for Steve Davis. Our chief executive officer will provide an overview of our Q3 2020 financial performance and a review of our business. Also joining us on today's call is Michael Yang. Our chief commercial officer will provide updates on our commercial initiatives and I think of our president will discuss our pipeline progress our Chief Financial Officer from Red Lobster will then discuss our financial results in more detail before turning it back to Steve for final remarks and opening the call up for your choice. I would also like to point out that we're using supplements lights which are available on the events and presentation section of our website.
Before we proceed I would first like to remind you that during our call today will 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 age or materials these factors and other risks are associated with our business can be found in our filings made with the SEC you are cautioned not to place undue Reliance on these forward-looking statements, which are made only as of today's date on now turn the car off.
Thank you, Mark.
Good afternoon, everyone and thank you for joining us today. Please turn to slide by.
We made important and significant progress on our three strategic pillars.
First we were driving the growth of new plastic for patients with Parkinson's disease psychosis or PDP through a combination of best-in-class virtual engagement and in-person activities are second thoughts delivering on The dementia-related psychosis or DRP opportunity a potential second indication representing a tenfold increase in the addressable Market size for new closet and third we are developing Innovative new treatments by dancing our development Pipeline and acquiring new assets. Let's review in Greater detail starting on slide six.
For the third quarter of 2020 new flies in a 120 point six million dollars in that sales a 27% year-over-year increase driven by strong commercial execution off. This is a direct result of our ability to successfully pivot and execute in these uncertain times as well as a testament to the importance of treating PDP.
As a result of our continued performance in 2020, we're reiterating our full year net sales guidance to be between $430 to $415 representing 30% year-over-year wage growth at the midpoint of the range.
We're well prepared to achieve the long-term Market opportunity for new plans it in PDP and look forward to the addition of the DRP indication. Let's move to the DRP opportunity on slide seven months. We're excited that pimavanserin could be the first and only FDA-approved medicine for the treatment of dementia-related psychosis. Psychosis is associated with serious consequences in patients with dementia such as in a hospital admissions increased likelihood of nursing home placement progression of dementia and increased risk of morbidity and mortality.
Dementia related to loose Nations and delusions represent a high burden for patience and for caregivers.
We are confident in both the efficacy and safety data supporting our supplemental NDA and we'll continue to work with the FDA to facilitate their review with a Paducah date of April 3rd. 2021.
We continue to make important progress in our late-stage development pipeline is shown on slide eight the ongoing phase three studies with them advancing for the treatment of negative symptoms of schizophrenia and with to finish tied for the treatment of redstone. No,
As part of our third strategic color. We remain focused on expanding and diversifying our development pipeline by investing in new treatments.
Earlier this year we brought into very exciting investigational programs with the potential to bring differentiated approach has two areas of significant unmet need in the spring. We in licensed and muscarinic receptors program, including ACP 319 from Vanderbilt University in this program. We are focused on improving cognition and Neuropsychiatric symptoms through an ongoing research collaboration with Vanderbilt home over the summer. We acquired Surfside Therapeutics, which is advancing first-in-class non-opioid candidates for the treatment of acute and chronic pain and a portfolio of earlier stage molecules focused on neurodegenerative disorders. Finally. I'd like to share one more positive update which will be disclosed in the 10-q where you're following later this afternoon.
We're pleased to report that the Department of Justice notified this recently that it is concluded as investigate.
For the company and will not be taking any further action. And with that I will now turn it over to Michael to discuss our commercial performance and highlights.
Thank you Steve today. I would like to review our third-quarter performance which highlights the fundamental strength of our business and gives us confidence in the long-term expectations for the new closet franchise off. Please turn to slide ten.
We have driven positive momentum this quarter growing our base of new prescribers and new patients in both channels in the third quarter. We delivered net sales of 120 point six million dollars driven by a year-over-year volume growth of 14%
This quarter's growth was a result of our best-in-class virtual tactic layered with a mix of opportunistic and covert appropriate in-person interaction. We have been able to return two offices in several instances for physician visits as well as in office promotional programs. All of which have been received. Well our commercial Foundation is solid as we continue to leverage or digital platforms to stimulate patient and caregiver conversations with their Physicians about PDP and treatment with new closet importantly we continue to invest in the ability to prescribe new closet remotely.
Especially Pharmacy Channel contributed to the strong overall performance as new patient growth has remained at expectation in addition monthly fulfillment rates for both new and continuing patience in the quarter of remained consistently High.
As we mentioned on the last call. We observed a temporary code related impact to our growth in the long-term care channel in the third quarter long-term care facilities were able to get back on track from an operational standpoint and reopen their doors for new Admissions. And now we have seen that over the past couple of months in the closet prescriptions in the LTC channel has strep we continue to build a broad range of partnership with professional organizations and National electronic health-record systems and Pharmacy as a result New Jersey continues to perform. Well on a relative basis outperforming a basket of other LTC promoted products according to a few via
Overall, we are well-positioned to serve the needs of PDP patience with me posits wherever they are located.
Let's discuss our dementia-related psychosis initiatives on slide 11.
Our DRP launch preparations including disease awareness and talent recruitment are on track. We are focused on preparing the market through disease data education initiatives and platforms. For example, we have generated over a quarter million views since we launched our disease Education website more than cognition, with several exciting updates including off hand capabilities for our lives virtual expert panel webinars, the introduction of a dementia-related psychosis MD IQ quiz and new key opinion life videos focus on the neurobiology and unmet need and earpiece.
We are also syndicating are content.
from more than cognition on third-party sites such as doximity Thermo health and Medscape
we continue to be very active at Medical congress's with several disease education theaters and presentations on P D P & D R P. In addition. We are generating evidence to back understand the impact of dementia-related psychosis from the perspectives of patients providers and payers.
We recently completed an analysis of Medicare administrative claim data that showed that the average annual all caused costs for a newly diagnosed DRP patient wage compared to a dementia patient without psychosis nearly doubles reaching almost $90,000 during their first year with psychosis. These results were presented in a poster at the Academy of Managed Care pharmacies Nexus conference last month additional awareness opportunities include a disease education film. We sponsored in partnership with a Lewy Body dementia Association titled spark, Robin Williams and his battle with Lewy Body. Dementia Park is adapted from the full length film released this summer Robin Swish and will be available to Major academic research institutions and Center of Excellence to drive awareness and education on dementia, and it's symptoms.
And I'll turn it over to search who will provide an update on a development pipeline.
Operator: Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals' third quarter 2020 financial results conference call. My name is Gigi, and I will be your coordinator for today. At this time, all participants are in listen-only mode.
Thank you, Michael and good afternoon. Please turn to slide 13.
First I'm pleased to report that the review of our supplemental and the for the mesh related psychosis is going well and progressing as we would expect. We are working with the FDA to facilitate the review in a timely fashion and are on track for the April 3rd, but due for a date.
Operator: 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. Good afternoon, and thank you for joining us on today's call to discuss ACADIA's third quarter 2020 financial results. Joining me on the call today from ACADIA is Steve Davis, our Chief Executive Officer, who will provide an overview of our Q3 2020 financial performance and a review of our business. Also joining us on today's call is Michael Yang, our Chief Commercial Officer, who will provide updates on our commercial initiatives, and Dr. Serge Shankovich, our President, who will discuss our pipeline progress.
Our face three studies are also progressing well.
Yeah, the Winston study for the treatment of negative symptoms of schizophrenia is reading on site and enrolling patients the lavender study for the treatment of Rett syndrome controlling well and remains on track for top-line results in the second half of next year.
Operator: Our Chief Financial Officer, Alina Rybakov, will then discuss our financial results in more detail before turning it back to Steve for final remarks and opening the call to your questions. 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. 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 These factors and other risks that are associated with our business can be found in our filings made with the SEC.
We acquired two new promise in clinical assets earlier this year acpo 44 from Surfside an ACP 319 from Vanderbilt and are working diligently to advance them in the clinic next year consistent with our strategy. We remain focused on developing Innovative new treatments with height unmet needs and that is connected in our growing and advancing pipeline.
Mark C. Johnson: Your call should not be placed in reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve. Thank you, Mark. Good afternoon, everyone.
No, I would like to discuss a CPO forty-four which is delete compound. We brought in with the Surfside therapeutic requisition one slide fourteen month. It should be all 44 is reactive species decomposition accelerant or RSD a which represents a first-in-class non-opioid mechanism being the valve for the treatment of acute and chronic pay.
Chronic pain is a major problem and the CDC estimates that it affects approximately 20% of the adult population and has significant health and economic consequences of further more moderate to severe acute pain is prevalent following the vast majority of surgeries in the United States with more severe or extreme paid off in about one-third of the occasion.
Stephen R. Davis: And thank you for joining us. Please turn to slide 5. We've made important and significant progress on our three strategic pillars. First, we are driving the growth of nupliazid for patients with Parkinson's disease psychosis, or PDP, through a combination of best-in-class virtual engagement and in-person activity. Our second pillar is delivering on the Dementia-Related Psychosis, or DRP, opportunity, a potential second indication representing a tenfold increase in the addressable market status for Neuplazid. And third, we're developing innovative new treatments by advancing our development pipeline and acquiring new assets. Let's review in greater detail, starting on slide six. For the third quarter of 2020, New Plaza achieved $120.6 million in net sales, a 27% year-over-year increase driven by strong commercial execution.
H c p o 44 have shown compelling and promising results in several animal models of both acute and chronic pain in Phase 1 clinical testing. We have see favorable tolerability and pharmacokinetics. And in the first half of next year. We will initiate our face to program with clinical studies in models of both Youth and chronic pain.
Flight fifteen highlight some of the exciting use scientific data on T-Mobile being presented at this week's clinical trial on Alzheimer's disease conference or seating package this Friday Doctor Klein Ballard from the University of Exeter medical school will present new analysis of pimavanserin clinical data from 4, perch control studies investigating team of answering impact on cognition in patients with Neuropsychiatric symptoms related to neurodegenerative disease including dementia-related life courses.
Stephen R. Davis: This is a direct result of our ability to successfully pivot and execute in these uncertain times, as well as a testament to the importance of treating PDP. As a result of our continued performance in 2020, we're reiterating our full year net sales guidance to be between $430 to $450 million, representing 30% year-over-year growth at the midpoint of the range. We're well prepared to achieve the long-term market opportunity for Nuplizant and PDP and look forward to the addition of the DRP indication. Let's move to the DRP opportunity on slide 7. We are excited that Pimivanserin could be the first and only FDA-approved medicine for the treatment of dementia-related psychosis. Psychosis is associated with serious consequences in patients with dementia, such as repeated hospital admissions and increased likelihood of nursing home placement. Progression of Dementia and increased risk of morbidity and mortality
You know Edition, dr. Daniel Weintraub from the perelman school of medicine at the University of Pennsylvania will present the poster analyzing the impact on motor function in patients treated with the Lancer in across multiple clinical studies.
The presentations that she continued to support the overall safety profile of people answering in this vulnerable patient populations. We remained encouraged with the breath clinical data, which supports the potential role of them of answering especially in elderly patients with dementia-related free courses.
Stephen R. Davis: Dementia related to hallucinations and delusions represents a high burden for patients and for caregivers. We are confident in both the efficacy and safety data supporting our supplemental NDA and will continue to work with the FDA to facilitate its review with a PDUFA date of April 3, 2021. We continue to make important progress in our late-stage development pipeline, as shown on slide 8, with ongoing Phase III studies with Pimivansir for the treatment of negative symptoms of schizophrenia and with terfinatide for the treatment of Rett syndrome. As part of our third strategic pillar, we remain focused on expanding and diversifying our development pipeline by investing in new treatments. Earlier this year, we brought in two very exciting investigational programs with the potential to bring differentiated approaches to areas of significant unmet need.
Finally, I would like to mention an interesting and encouraging poster that was presented during this year's International Parkinson and movement disorder societies virtual Congress in September on slide sixteen.
Describe the retrospective cohort study conducted in Medicare Parkinson's disease patient treated with either pimavanserin or a group of atypical antipsychotics Premier off the outers which includes members of the usfda the centers for Medicare and Medicaid services and Stanford University conclude not answering treatment was associated with reduced all-cause mortality compared to treatment with atypical antipsychotics.
Stephen R. Davis: In the spring, we enlicensed a muscarinic receptor program, including ACP319 from Vanderbilt University. In this program, we are focused on improving cognition and neuropsychiatric symptoms through an ongoing research collaboration with Vanderbilt. Over the summer, we acquired SIRSAT Therapeutics, which is advancing first-in-class, non-opioid candidates for the treatment of acute and chronic pain and a portfolio of earlier stage molecules focused on neurodegenerative disorders. Finally, I'd like to share one more positive update, which will be disclosed in the 10Q we're filing later this afternoon. We're pleased to report that the Department of Justice notified us recently that it had concluded its investigation of the company and would not be taking any further action.
Figure you see on the slide is the couple of Meijer survival curve for the team of answering and atypical antipsychotics cohort.
The key take away from this graph is that people answering exhibited a higher survival probability through one year of treatment compared to atypical antipsychotics. This separation was just the exhibit in the first hundred and eighty days of treatment and among the 85% of patients who were not in nursing homes.
Stephen R. Davis: And with that, I will now turn it over to Michael to discuss our commercial performance and highlights. Thank you, Steve. Today, I would like to review our third quarter performance, which highlights the fundamental strength of our business and gives us confidence in the long-term expectations for the New Plaza franchise. Please turn to slide 10.
This findings are in line with the way we view people are Street and it's another contribution to the growing body of data supported beam of answering safety profiles.
With that I'll now turn the call over to Atlanta to discuss our financial performance.
Michael Yang: We have driven positive momentum this quarter, growing our base of new prescribers and new patients in both channels. In the third quarter, we delivered net sales of $120.6 million, driven by year-over-year volume growth of 14%. This quarter's growth was the result of our best-in-class virtual tactics layered with a mix of opportunistic and COVID-appropriate in-person interaction. We have been able to return to offices in several instances for physician visits, as well as in-office promotional programs, all of which have been received well. Our commercial foundation is solid as we continue to leverage our digital platform to stimulate patient and caregiver conversations with their physicians about PDP and Treatment with New Plasma. Importantly, we continue to invest in the ability to prescribe Nuplazid remotely.
Thank you search today. I'll discuss our third quarter results and our updated Financial Outlook. Please turn to slide 18 in the quarter. We recorded a hundred twelve point six million dollars and that sales an increase of approximately 27% compared to ninety four point six million dollars net sales in Q3 of 2019. This is driven by a dog personally 40% volume growth year-over-year the gross to net adjustment for Q3 2020 was 13.2% weeks of inventory in the channel the end of the third quarter for consistent with previous quarters moving down the p&l Gap R&D expenses increased to 120.1 million dollars in the quarter compared to sixty two point six million dollars in Q3 2019 gas the expense included the fifty two point eight million dollar upfront consideration and transaction expenses related to the acquisition wage.
Michael Yang: The Specialty Pharmacy Channel contributed to the strong overall performance as new patient growth has remained at pre-COVID expectations. In addition, monthly fulfillment rates for both new and continuing patients in the quarter remained consistently high. As we mentioned on the last call, we observed a temporary COVID-related impact on our growth in the long-term care channel. However, in the third quarter, long-term care facilities were able to get back on track from an operational standpoint and reopen their doors for new admissions.
Therapeutics in August of 2020 Gap sg&a expenses increased to eighty one point six million dollars in a third quarter from 72.7 million dollars in third quarter of last year. This is largely due to increased advertising and promotional costs as well as an increase in personnel and related costs non-cash stock-based compensation expense during the quarter with twenty one point four million dollars compared to $22 for the same period in 2019 cast used in operations during the quarter was 22.8 million dollars compared to eighty thousand nine million dollars for Q3 2019.
Michael Yang: And now, we have seen that over the past couple of months, new closet prescriptions in the LTC channel have stabilized. We continue to build a broad range of partnerships with professional organizations and national electronic health record systems and pharmacies. As a result, New Plaza continues to perform well on a relative basis, outperforming a basket of other LCC-promoted products, according to Acuvia.
Our cash balance at the end of the quarter was 644.4 million dollars. Please turn to slide 19 for the full year twenty-twenty. We are reiterating our own sales guidance to be between $430 and $450 million dollars at the midpoint of this guidance range this represents approximately 30% growth in Revenue year-over-year off as a reminder gross-to-net is sequentially higher in the fourth quarter as a result of accruing for the donut hole obligation associated with urine inventory in the channel on the expense side 4020 be the increased our Gap R&D guidance to be between $325 to $340 million dollars from a previous range of $265 to $280. This is Kris is primarily result of the upfront and transaction expenses associated with the acquisition exercise Therapeutics.
Michael Yang: Overall, we are well-positioned to serve the needs of PDP patients with neposites wherever they are located. Let's discuss our dementia-related psychosis initiatives on slide 11. Our DRP launch preparations, including disease awareness and talent recruitment, are on track. We are focused on preparing the market through disease data education initiatives and platforms. For example, we have generated over a quarter million views since we launched our disease education website, MoreThanCognition.com. We have made several exciting updates, including enhanced capabilities for our live virtual expert panel webinar. The introduction of a dementia-related psychosis MDIQ quiz and new Key Opinion Leader videos focused on the neurobiology and unmet need of DRP.
We are reducing.
Death sg&a Guidance the $385 to $400 from the previous range of $400 to $420. Non-cash stock-based compensation expense is now anticipated to be between eighty to ninety million dollars in 2020 will end 2020 with a strong balance sheet and are reiterating our year-end cash guidance $570 to $590. And with that. I'll turn the call back over to Steve.
Michael Yang: We are also syndicating our content from More Than Cognition on third-party sites such as Doximity, Stermo, HealthCasts, and Medscape. We continue to be very active at Medical Congresses with several disease education theaters and presentations on PDP and DRP. In addition, we are generating evidence to better understand the impact of dementia-related psychosis from the perspectives of patients, providers, and payers. We recently completed an analysis. Medicare Administrative Claims Data, The latest data shows that the average annual all-cause costs for a newly diagnosed DRP patient compared to a dementia patient without psychosis nearly doubled, reaching almost $90,000 during their first year with Psych2Go.
Thank you Elena. Please turn to slide twenty-one.
Red Acadia, we built a strong organization in Neuroscience with best-in-class R&D and Commercial capabilities to fully Leverage The them advancement opportunities today. We are executing on our promise to God and applies it to patients with PDP. We continue to grow the opportunity and PDP while preparing for potential second indication in d r p e and the ability to help a much larger magnet to patients and their caregivers. Look forward to keeping you updated on our progress where continued momentum of our new classic franchise and the breadth and depth of our clients position Acadia for long-term growth wage in closing. I would like to thank our employees for their continued commitment and passion as we advance the business.
Michael Yang: These results were presented in a poster at the Academy of Managed Care Pharmacy's Nexus Conference last month. Additional awareness opportunities include a disease education film we sponsored in partnership with the Lewy Body Dementia Association titled Spark! Robin Williams and his battle with Lewy Body Dementia.
I'll Now open up the call for questions operator.
Ladies and gentlemen. If you wish to ask a question, please press star followed by one on your touch-tone telephone if your question has been answered or you wish to withdraw your question, press the pound key, please limit yourself to one question. I repeat. Please limit yourself to one question, press star One to begin. Please stand by for your first question.
Serge Shankovich: SPARC is adapted from the full-length film released this summer, Robin's Wish, and will be available to major academic research institutions and CenterVax, www.academia.ac.in. I'll now turn it over to Serge, who will provide an update on her development. Thank you, Michael, and good afternoon. Please turn to slide 13.
Your first question comes from the line of an Uber from Cohen your line is now open.
Serge Shankovich: First, I'm pleased to report that the review of our supplemental NDA for dementia-related psychosis is going well and progressing as we would expect. We are working with the FDA to facilitate their review in a timely fashion and are on track for the April 3rd PDUFA date. Our Phase 3 studies are also progressing well. The Advance 2 Study for the Treatment of Negative Symptoms of Schizophrenia is bringing patients on-site and enrolling patients. The Lavender Study for the Treatment of Rett Syndrome is enrolling well and remains on track for top line results in the second half of next year.
Hi guys. Thanks for taking my question. I wanted to just ask about unit growth. You guys noted that you're over a year. You've had 14% volume growth. Can you give us quarter-over-quarter what you're seeing in unit growth? And also if you could just separate the unit growth by the retail Channel and not long-term care Channel. Thanks.
Sure. Thanks be to Elena. You want to take that question?
Sure. Thanks for two. So sequential volume Brooklyn. The quarter was approximately 3% and that was driven. Largely by both from City. Your line is now open.
Serge Shankovich: We acquired two new promising clinical assets earlier this year, ACP-044 from SIRSAI and ACP-319 from Vanderbilt, and are working diligently to advance them in the clinic next year. Consistent with our strategy, we remain focused on developing innovative new treatments with high unmet need, and that is reflected in our growing and advancing pipeline. Now, I would like to discuss ACPO 44, which is the lead compound we brought in with the SIRSCI therapeutic requisition on slide 14. ACPO 44 is a Reactive Species Decomposition Accelerant, or RSDA, which represents a first-in-class non-opioid mechanism being evaluated for the treatment of acute and chronic pain. Chronic pain is a major problem, and the CDC estimates that it affects approximately 20% of the U.S. adult population and has significant health and economic consequences. Furthermore, moderate to severe acute pain is prevalent following the vast majority of surgeries in the United States, with more severe or extreme pain present in about one-third of the cases.
Hey guys. Thanks for taking my question to ask a quick question.
About the DRP review some space on the timelines that you discussed previously. Is it kind of safe to say that we're at the point now where the FDA is probably not going to change their mind on holding an ad come home.
Serge Shankovich: ACPO 44 has shown compelling and promising results in several animal models of both acute and chronic pain. In Phase 1 clinical testing, we have seen favorable tolerability in pharmacokinetics, and in the first half of next year, we will initiate our Phase 2 program with clinical studies in models of both acute and chronic pain. Slide 15 highlights some of the exciting new scientific data on Pimavansuri being presented at this week's Clinical Trial on Alzheimer's Disease Conference, or CTAS. This Friday, Dr. Clyde Ballard from the University of Exeter Medical School will present new analysis of pimavenserine clinical data from four placebo-controlled studies investigating pimavenserine impact on cognition in patients with neuropsychiatric symptoms related to neurodegenerative In addition, Dr. Daniel Weintraub from the Perlman School of Medicine at the University of Pennsylvania will present a poster analyzing the impact on motor function in patients treated with imavanserin across multiple clinical studies.
Search you want to start.
Sergio are you on mute?
Let me go ahead and just give me jump popping in a second. I wouldn't say that, you know, just as a reminder when the FDA indicated the accepted the the submission deadline for filing they indicated to us at that time that they do not plan to have an ad, We don't have any information to the contrary at this juncture, but it is possible they could change their mind and life. If you kind of work backward from the to do the day didn't think about when a con could be and then how much advance notice that they need to give us advance of that. We're not at the point yet where I would say, uh, we could rule out that I'd change the man but at this juncture we do not anticipate having that,
Great. Thanks.
Thank you. Our next question comes in the line of Corey casimo from JPMorgan. Hey, good afternoon guys questions probably for Michael and I appreciate the fact that you made on the disease education you're doing in preparation for the potential DRP launch. I guess. I'm curious what you're learning from all this. I mean, what is your what is your Outreach and market research suggests about the level of disease awareness and and kind of like anticipation or or even pent-up demand for new closet and DRP at this time.
Hey a quick question. I think that we say is there's great Healthcare practitioner in v e as in in part because there's a is a understanding that the disease treatments that they have all have some compromise associated with them particularly in the areas of of cognition a surprisingly more on the motor side UPS, you know other things to the safety profile really rather the efficacy and safety profile together are really knocking the socks off of positions in regards to the potential of the of the closet and and that's fits in well into our platform that we're trying to do to to Really establish with new Cloud, which is efficacy without impairment month. We we were able to do that with PDP as you know, if without impacting motor motor function and then I think ignition is important important safety mechanism that that they don't have that ability.
Serge Shankovich: The presentations at CTAB continue to support the overall safety profile of primavansirine in this vulnerable patient population. We remain encouraged by the breadth of clinical data that supports the potential role of pimivansirin, especially in elderly patients with dementia-related psychosis. Finally, I would like to mention an interesting and encouraging poster that was presented during this year's International Parkinson and Movement Disorder Society's Virtual Congress in September. It described a retrospective cohort study conducted in Medicare-Parkinson's disease patients treated with either primavansirine or a group of atypical antipsychotics, primarily Fotia. The authors, who include members of the U.S. FDA, the Centers for Medicare and Medicaid Services, and Stanford University, concluded that pimavenserine treatment was associated with reduced all-cause mortality compared to treatment with atypical antipsychotics.
Okay, so we're reaching I think a good audience. I think the spark film will help a lot in terms of the consumer side, but on the on the Physicians side, I think we're doing really well and engaging with their awareness month. Okay. Good to hear. Appreciate you taking the question.
Thank you. Our next question comes from the line of Jeff hung from Morgan Stanley. Your line is now open.
Thanks for taking the question. I was trying to talk about what you've seen over the last month or so on a new patient starts and persistence and if you've seen any changes in in Trends, as you know in a case of covet increasing, thanks.
Michael
You want to take down? Sure. Yeah. No, I I mentioned in my prepared remarks on our office space, um, you know Neuroscience side where we're at new patient starts at pre-coated levels and we have not seen uh, any impact to the Fulfillment or persistence and we've seen it consistently high mileage performance their long-term care as we mentioned the stabilizing. We are outperforming a basket of product as I mentioned. I think it's important that I think the pandemic really hasn't aged dated the the symptoms of PDP and unless I think they become even more focal to treat and we've been able to provide a wide variety of mechanisms to prescribe new positive positive patients in a remote digital environment. So we actually think we're catching patients whether they're in the nursing home or in the office or even on the remote side. So from our standpoint birth,
Serge Shankovich: The figure you see on the slide is the Kaplan-Meier survival curve for Pimavanserin, an atypical antipsychotic, cohort. The key takeaway from this graph is that Pimavansirin exhibited a higher survival probability through one year of treatment compared to atypical antipsychotics. This separation was justly exhibited in the first 180 days of treatment and among the 85% of patients who were not in nursing homes.
Alina Rybakov: These findings are in line with the way we view Pimavansirin and is another contribution to the growing body of data supporting Pimavansirin's safety profile. With that, I'll now turn the call over to Elena to discuss our financial performance. Thank you, Serge. Today I'll discuss our third quarter results and our updated 2020 financial outlook. Please turn to slide 18.
I think we're feeling really good about the the potential of capture the patients.
Correct just to clarify. So then was that strictly three Q or does that also pertain to the last month as well?
Well, I would say for long-term care. We've seen the market stabilized there in the last few months. I think persistence at the filming and new starts were for the third quarter page on the Neuroscience side of the retail side.
Alina Rybakov: In the quarter, we recorded $120.6 million in net sales, an increase of approximately 27% compared to $94.6 million in net sales in Q3 of 2019. This was driven by approximately 14% volume growth year over year. The growth to net adjustment for Q3 2020 was 13.2%. Weeks of inventory in the channel at the end of the third quarter were consistent with previous quarters.
Thank you.
Thank you. Our next question comes from the line of Mark Goodman from SV Be lyrics your line is now open. Can you talk about what kind of proof-of-concept data did you look at what you seen? I mean our first in-class so I thought maybe you could just give us a little sense of you know, how confident we have something here.
Alina Rybakov: Moving down the P&L, GAAP R&D expenses increased to $120.1 million in the quarter, compared to $62.6 million in Q3 2019. GAAP R&D expenses included the $52.8 million upfront consideration and transaction expenses related to the acquisition of SurSight Therapeutics in August of 2020. GAAP SG&A expenses increased to $81.6 million in the third quarter from $72.7 million in the third quarter of last year.
Yes happy to do. So HBO 44 has has shown promising results in the animal box of all the waiting variety of different pain models in seasonal pain inflammatory pain robotic pain and also wage we saw in the face Phase 1 clinical pharmacology studies displayed a favorable tolerability and pharmacokinetic properties off. So, we are a fairly confident that you know, as as one can be based on the on the, you know, animal models and particularly variety of animal models addressing both acute in as well as chronic pain.
Alina Rybakov: This was largely due to increased advertising and promotional costs, as well as an increase in personnel and related costs. Non-cash stock-based compensation expense during the quarter was $21.4 million, compared to $22 million for the same period in 2019. Cash used in operations during the quarter was $22.8 million, compared to $18.9 million for Q3 2019. Our cash balance at the end of the quarter was $644.4 million.
Alina Rybakov: Please turn to slide 19. For the full year 2020, we are reiterating our 2020 Net Sales Guidance to be between $430 and $450 million. At the midpoint of this guidance range, this represents approximately 30% growth in revenue year-over-year. As a reminder, growth to net is sequentially higher in the fourth quarter as a result of accruing for the donut hole obligation associated with year-end inventory in the channel. On the expense side for 2020, we've increased our GAAP R&D guidance to be between $325 to $340 million from a previous range of $265 to $280 million. This increase is primarily a result of the upfront and transaction expenses associated with the acquisition of SIRSAI Therapeutics. We are reducing our GAAP SG&A guidance to $385 to $400 million from the previous range of $400 to $420 million. Non-cash, stock-based compensation expense is now anticipated to be between $80 to $90 million in 2020.
that and as well as
The properties of the drug in the clinic in in a phase one studies. We are very confident to move into a phase 2 development. And as long as it is right now, we are planning to initiate our phase two studies program in the first half of next year and current plans include the boat acute and chronic human pain models in for the for the next four for the next stage of development dead animal models. I assume these are you know, standard pain models and so I'm sure that you have a lot of animal model data from what opioids do so I was just kind of curious. Literally is the play here. We're better than opioids or we're just as good but obviously we're not an opioid. So that's a huge Advantage. Yeah, the mechanism of action of birth.
Acpo 44 is is such that it acts in periphery in a in a very different manner than the author is obviously but has a strong analgesic properties that are primarily based in its ability to interfere with multiple pain Pathways and page on the on the animal data. Obviously, you you do comparative studies where we compared with the with the opioid and it displays impressive impressing analgesic potential that we saw in the in the preclinical studies. So that that gives us a level of confidence and optimism to move forward. So no of your Properties by the strong analgesic properties and mode of action that actually dead
Stephen R. Davis: We will end 2020 with a strong balance sheet and are reiterating our year-end cash guidance of $570 to $590 million. And with that, I'll turn the call back over to Elena. Please turn to slide 21.
Operator: At ACADIA, we've built a strong organization in neuroscience with best-in-class R&D and commercial capabilities to fully leverage the Pimivans opportunity. Today, we are executing on our promise to deliver Nuplizid to patients with PDP. We continue to grow the opportunity in PDP while preparing for a potential second indication in DRP and the ability to help a much larger number of patients in their care. We look forward to keeping you updated on our progress for continued momentum in our nucleosid franchise and the breadth and depth of our pipeline position at ACADIA for long-term growth. In closing, I would like to thank our employees for their continued commitment and passion as we advance the business. I'll now open up the call to 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 has been answered or you wish to withdraw your question, press the pound key.
interfere with multiple paying pathways
Mark I would just just just Echo the surgeon thought I would say, you know, one of the things that we found very compelling is the consistency of the results in the animal models Thursday. We all know that animal models, you know, because their animal models and used try to get predictive information for what happens in humans and and and uh in some disease States those are more productive than other wage but in the models that we looked at when they were very consistent to I would say the results that we saw running the list comes characters and those models when they run across buildings were produced, um results that were uh equal to or better than the opioid competitors. And in other models were at least equivalent to other other pain-relieving agents. So so I I think it's too early to say whether the ultimate play would be better pain relief than you get with an opioid or just a pain relief that does not dead.
Operator: Please limit yourself to one question. I repeat, please limit yourself to one question. Press star one to begin.
Ritu Subhalaksmi Baral: Please stand by for your first question. Your first question comes from the line of Ritu Baral from Cowan. Your line is now open. Hi guys, thanks for taking the question. I wanted to just ask about unit growth.
Michael Yang: You guys noted that year over year you've had 14% volume growth. Can you give us quarter over quarter what you're seeing in unit growth? And also, if you could just separate the unit growth by the retail channel and the long term care channel?
have the opioid addictive qualities, but I would just simply say that the consistency of the data in the
Neena Marie Bitritto: Thanks. Sure. Thanks, Ritu.
Stephen R. Davis: Eleni, you want to take that question? Sure, thanks Ritu. So sequential volume growth in the quarter was approximately 3%, and that was driven largely by growth in the SP channel.
In the animal models that we saw was very compelling and very high hopes as we launch into these two.
Corey Casamo: As Michael mentioned in his remarks, we've seen stabilization in the SP channel in the third quarter sequentially. Got it. Thanks for taking the question. I'll hop back into the queue.
Thank you. Our next question comes from the line of Charles Duncan from Cantor. Your line is now open Super. Thanks Steve and team congrats on a good quarter and thanks for taking my question. I'll try to be brief here and and respect the rule for Michael perhaps. Um, do you have any choice of Market penetration and and I think you mentioned consistently High fulfillment rates any any color on on what that means and then and then perhaps for Elena you you guided 4:30 to 4:50 for a year in Revenue. I guess. I'm wondering what triggers have to happen for the aspirational side of that guy off.
Michael Yang: Thank you. Our next question comes from the line of Neena Bitritto-Bark from Citi. Your line is now open.
Jeff Hung: Hey guys, thanks for taking the question. I just wanted to ask a quick question about the DRP review. Based on the timelines that you discussed previously, is it kind of safe to say that we're at the point now where the FDA is probably not going to change their mind on holding an ADCOM? Sir, do you want to start? Sergio, are you on mute?
Michael you want to take the first question then we'll go to a later. Yep. Sure. Hey Charles. The first part of your question is in terms of PDP. I would say that our share in the market place in the high team, which is great and in regards to fulfillment, you know, there's obviously for the patients that are taking the product, you know patients get close to $3 a month in a and that's a fulfillment rate. And so it gives you some sense of what we're seeing. We're seeing very high fulfillment rates based on the potential of the of the number of what you want to call. It took a great bottles per patient per quarter and we track that so that's been very consistent and very high throughout the past really year since since the 34 milligram launch that we've seen that
Michael Yang: Let me go ahead and answer that. I'm sorry; you may jump, hop in, in a second. No, I wouldn't say that, you know, just as a reminder, when the FDA indicated it accepted the submission for filing, they indicated to us at that time that they did not plan to have an adcom, and we don't have any information to the contrary at this juncture. But it is possible they could change their mind. And if you kind of work backward from the PDUFA date and think about when an adcom could be and then how much advance notice they need to give us in advance of that, we're not at the point yet where I would say we could rule out that they could change their minds. But at this juncture, we do not anticipate having that. Great, thanks. Thank you. Our next question comes from the line of Corey Casamo from J.P. Morgan. Your line is now open. Hey, good afternoon, guys. This question's probably for Michael.
Mark Goodman: I appreciate the comments you made on the disease education you're doing in preparation for the Unknown Speaker. I guess I'm curious what you're learning from all this. I mean, what does your outreach and market research suggest about the level of disease awareness and the kind of anticipation or even pent-up demand for Nuplazid and DRP? Hey, hey, Corey, Michael, real quick.
And with regards to the your guidance question around what would need to occur do for us to achieve the high end of our guidance at the high end of a guidance? We that would require us seeing imprints for the edit color bulb. Thank you. Our next question comes from the line.
And up to Xena mod from Bank of America your line is now open.
Hi, thanks for taking my questions. First one. They be related you. Give us a little bit of color on fp&a. You were taking up higher and four Q how long should we expect that Trend in general to continue going forward as you're prepping for the VIP launch and then secondly a question maybe for Michael about updated information you have about targeted positions for DRP. How much overlap is there going to be with the positions that you target for PDP? Thanks.
Serge Shankovich: Okay, thanks, Steve. Hey, Corey, great question. So I think the market research that we see is that there's great healthcare practitioner enthusiasm, in part because there's a understanding that the disease treatments that they have all have some compromise associated with them, particularly in the areas of Cognition, and surprisingly more on the motor side, EPS. The efficacy and safety profile together are really knocking the socks off of physicians in regards to the potential of Neuplazid and thus fits well into our platform that we We were able to do that with PDP, as you know, without impacting motor function, and then I think cognition is an important safety mechanism that they don't have that ability today.
You want to go first?
Sure. So yes that is right to the end. We will see an increase in sg&a in the fourth quarter. There's a few drivers there. As you mentioned. We are investing ahead of launch member of our commercial and medical Affairs. But um and we are as Michael mentioned, uh, more recently shifted to more in-person field activities, which has higher costs associated with it. And in addition we are on are currently with our GTC campaign. And so that that investment is in the fourth quarter as well. And as you look towards next year will will provide guidance in our year-end call but took qualitatively talk about a few things. We will be expanding the field team for DRP in the first part of next year and will also be increasing our marketing Investments for launch both with uh these education as well.
Stephen R. Davis: So we're reaching, I think, a good audience. I think the SPARK film will help a lot in terms of the consumer side, but on the physician side, I think we're doing really well in engaging with their awareness. Okay, good to hear. Appreciate it.
Charles Cliff Duncan: Thank you. Our next question comes from the line of Jeff Hung from Morgan Stanley. Your line is now open.
Michael Yang: Thanks for taking the question. I was wondering if you could talk about what you've seen over the last month or so on new patient starts and persistence and if you've seen any changes in trends as, you know, we hear of cases of COVID increasing. Thanks. Michael, do you want to take that?
Friend Investments including the TC next year as well as our medical Affairs Investments to support the launch and then took a h as in the way, I would answer that question on targeting is is a couple of ways in many ways. We already have a fairly good footprint for an example in the Parkinson's disease area and in long-term care and mostly in long-term care. We also call in geriatric Psychiatry and we will have to go deeper obviously with some Physicians. For example, if they're home in Louis body as an example, that would be an expansion within neurology. And then they were going to be Physicians that we're going to be expanding into Psychiatry and what we call Dimension care specialist Char pseudo specialist Physicians who are treating a lot of elderly patients and act like the the the de-facto specialist dementia care specialist in their in their General location wage.
Tazeen Ahmad: Sure. Yeah, no, as I mentioned in my prepared remarks on our office-based, https://www.academia.com Dr. Douglas W. Kulkarni, Ph. D., Ph.
I would also say from a facility and academic perspective, but we will.
I have to expand a bit in terms of long-term care.
Elena Rybakov: D., U.S. Centers for Disease Control and Prevention, www.academia.ac.in; I think we're feeling really good about the potential to capture the patient. Just to clarify, so then, was that strictly 3Q, or did that also pertain to the last month as well? Well, I would say for long-term care, we've seen the market stabilize there in the last few months. I think persistence, fulfillment, and new starts are for the third quarter on the neuroscience side or the retail side. Thank you. Thank you. Our next question comes from the line of Mark Goodman from SVB Larynx.
Specifically around Memory Care units that they're with in long-term care facilities.
Okay. Thank you.
Thank you. Our next question comes from the line is 12.
Michael Yang: Your line is now open. Surge, can you talk about ACPO44, what kind of proof of concept it is, First in class, so maybe you could just give us a little sense of, you know, how confident you are. Yes, happy to do so. ACP 044 has shown promising results in animal models, evaluating a variety of different pain models, such as incisional pain, inflammatory pain, neuropathic pain, and also what we saw in the phase one clinical pharmacology studies displayed favorable tolerability and pharmacokinetic control.
Serge Shankovich: So, we are fairly confident that, you know, as one can be, based on the animal models and, particularly, the variety of animal models, addressing both acute pain as well as chronic pain, and as well as the properties of the drug in the clinic in phase one studies, we are very confident to move into phase two development. And as it is right now, we are planning to initiate our phase two studies program in the first half of next year. And current plans include both acute and chronic human pain models for the next stage of development. And these animal models; I assume these are, you know, standard pain models.
Serge Shankovich: And so I'm sure that you have a lot of animal model data from what opioids are. I'm kind of curious about the play here: we're better than opioids, or we're just as good, but obviously, we're not an opioid. The mechanism of action of ACPO44 is such that it acts in the periphery in a very different manner than opioids, obviously, but it has strong analgesic properties that are primarily based on its ability to interfere with multiple pain pathways.
Serge Shankovich: And based on the animal data, obviously, you do comparative studies where we compare it with opioids, and it displays an impressive analgesic potential that we saw in the preclinical studies. So that gives us a level of confidence and optimism to move forward. So no opioid properties, but strong analgesic properties and a mode of action that actually interferes with multiple pain pathways.
Stephen R. Davis: Mark, I would just, just to echo the surgeon's thoughts. One of the things that we found very compelling is the consistency of the results in the animal models. Now, we all know that animal models; you go through animal models, and you try to get predictive information for what happens in humans.
Stephen R. Davis: And in some disease states, those are more predictive than others. But in the models that we looked at, one, they were very consistent. Two, I would say the results that we saw running against comparators in those models when they were run against opioids produced results that were equal to or better than the opioid comparators, and other models were at least equivalent to other pain-relieving agents.
Stephen R. Davis: So, I think it's too early to say whether the ultimate goal would be better pain relief than you get with an opioid or just a pain relief that does not have the opioid addictive qualities. But I would just simply say that the consistency of the data in the animal models that we saw was very compelling and gives us very high hopes as we now launch into phase two. Thank you. Our next question comes from the line of Charles Duncan from Cantor.
Stephen R. Davis: Your line is now open. Super. Thanks to Steve and the team. Congratulations on a good quarter and thanks for taking my question. I'll try to be brief here and respect the rule.
Michael Yang: For Michael, perhaps, do you have any estimates of market penetration? And I think you mentioned consistently high fulfillment rates, Any, any color on what that means. And then and then perhaps for Elena, you guided 430 to 450 for year end revenue. I guess I'm wondering what triggers have to happen for the aspirational side of that guide. Michael, you want to take the first question, then we'll go to Elena. Yep, sure. Hey, Charles.
Elena Rybakov: The first part of your question is in terms of PDP, I would say that our share in the market is in the high team, https://www.academia.com. And with regard to your guidance question around what would need to occur for us to achieve the high end of our guidance, at the high end of our guidance, that would require us to see improvements in the LTC channel. As Michael mentioned in his prepared remarks, we've seen stabilization there, And just a reminder, when you think about Q4 revenue and the full year guidance range, we do have higher growth to net sequentially in Q4, so that is a headwind in the fourth quarter. Thanks for the added color.
Tazeen Ahmad: Congratulations. Thank you. Our next question comes from the line of Tazeen Ahmad from Bank of America. Your line is now open. First one, maybe for Elena, can you give us a little bit of color on FG&A? You are ticking up higher in 4Q.
Elena Rybakov: Should we expect that trend in general to continue going forward as you're prepping for the DRP launch? And then secondly, a question, maybe for Michael, about the updated information you have about targeted physicians for DRP. How much overlap is there going to be?
Michael Yang: With the physicians that you target for PDP? Thanks. Okay, Elayna. Would you like to go first, then, Michael?
Elena Rybakov: Sure. So, yes, that is right, Tazeen. We will see an increase in SG&A in the fourth quarter. There are a few drivers there.
Michael Yang: As you mentioned, we are investing ahead of the DRP launch and on both our commercial and medical affairs sides. And we have, as Michael mentioned, more recently shifted to more in-person field activities, which has higher costs associated with it. In addition, we are on air currently with our DTC campaign, and so that investment is in the fourth quarter as well. And as you look towards next year, we'll provide guidance on our year-end call, but just to qualitatively talk about a few things, we will be expanding the field team for DRP in the first part of next year, and we'll also be increasing our marketing investments for launch, both with disease education as well as brand investments, including And then, hey, Tazeen, the way I would answer that question on targeting is in a couple of ways. In many ways, we already have a fairly good footprint. For example, in the Parkinson's disease area and in long-term care, and mostly in long-term care, we also call it geriatric psychiatry, and we will have to go deeper, obviously, with some physicians.
Michael Yang: For example, if they're highly Lewy body, as an example, that would be an expansion within neurology. And then there are going to be physicians that we're going to be expanding into psychiatry and what we call dementia care specialists, which are pseudo-specialist physicians who are treating a lot of elderly patients and act like the de facto specialist in dementia care in their general location. I would also say from a facility and academic perspective, we have good coverage of the key academic centers and the LTC facilities. Obviously, there will be more patients on a magnitude basis that are DRP versus PDP, so the audience and the patient opportunities are going to be larger, but we already do have a group focused on those key academic centers and those key LTC facilities. But we will have to expand a bit in terms of long-term care, specifically memory care units that are within long-term care facilities. Okay, thank you.
Unknown Attendee: Thank you. Our next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open. Hi, everyone. Thanks for taking the question. This is Andrea.
Stephen R. Davis: I'm first solving maybe a question for Steve's big picture. Just, you know, as you think about the two BD transactions you outlined, how are you thinking about additional ones on the forward? And is it likely to be similar for similar stage assets?
Stephen R. Davis: Yeah, great. Thanks for the question. I'm gonna, I'll start, take a little bit of a running start on it. So, growing the company transactionally is an important part of our strategy, as I think we've been really clear. It's important for a couple of reasons.
Stephen R. Davis: One is we built, I think, a really highly competitive capability in both the R&D space and in the commercial space in the CNS therapeutic arena. So, we want to make certain we take advantage of opportunities to further leverage those capabilities and that infrastructure that we have. We started early. We started early for a reason. We wanted to be able to be strategic and judicious, and that's what we did. But I have been very clear that you will see more deals coming from us. You know, sometimes we don't always have the luxury of being able to pick the precise profile for a deal and match it up with timing that, that, that, that, you know, precise timing.
Stephen R. Davis: And so, I can't tell you whether the next deal would be an early-stage deal or a late-stage deal, but I'll simply say we've done both so far. Obviously, with TRIFINITAD, we bought a Phase 3, a program that's in Phase 3. With the Vanderbilt collaboration, we bought a program in Phase 1. And with SERSAT, we bought a program that's Phase 2 ready. So I'll simply say there will be more deals. And the same. Criteria that have driven our deal decisions so far will continue to drive additional deals. One is we start with the science, so there has to be a compelling scientific and medical case. Two, we do a very good job, I think, of doing a cradle-to-grave analysis of assessing assets all the way through a projected life cycle of products. So we do a very full commercial assessment, even when we're looking at very early stage assets. And then, of course, there has to be a good fit for our infrastructure.
Paul Matias: Thank you. Our next question comes from the line of Paul Matias from CFEL. Your line is now open. Hey, great. Thanks so much for taking my question. I thought that the Pimivansirin all-cause mortality poster comparing the drug to atypicals was super interesting.
Serge Shankovich: Are any of the FDA authors on that poster also involved in the DRPSMDA review? I know David Graham is a senior pharmacovigilance guy. Have you spoken to any of these authors, and do you still kind of correspond with them?
Serge Shankovich: Thanks. Sir, do you want to take that question? Unknown Speaker Yeah, the people from the FDA involved in this outreach would come from the Drug Safety and Pharmacovigilance group. We are not aware of anybody from the division being involved in this.
Jason Nicholas Butler: But obviously, this group is involved in any review of the application. So certainly this group has been involved as well in the reviews on the safety of Pimavansirin as it is involved on an ongoing basis. And to your second question, no, we did not have any direct communication. We are looking forward to it. We're obviously encouraged and find it very interesting, and it's in line with how we understand the safety of Pimavansirin. But certainly, we are looking forward to maybe a manuscript or publication where we would have a little better insight into the data and methodology applied for this. So at this point, all our knowledge comes from a simple poster presentation.
Michael Yang: Got it. Great. That's very helpful. Thanks so much.
Yatin Suneja: Thank you. Our next question comes from the line of Jason Butler from JMP. Your line is now open. Hey, it's Royan for Jason.
Serge Shankovich: Thanks for taking our questions. I'm just hoping maybe I missed it, but could you characterize a bit your current level of in-person interactions with healthcare providers? And how do you think it compares to the broader field?
Alan Carr: We've heard that, you know, offices have opened up for patients, but not necessarily for reps. So could you just give a little description around that? Marco, you want to speak to that? Sure, yeah, thanks for the question. No, obviously, it is a hybrid patch of different conditions throughout the country.
Elena Rybakov: So we leverage a sophisticated algorithm with our medical team to look at COVID exposures. We look at local practices that are going on with the facilities and the offices. And so I would only be able to answer that question in general because it varies by region and by channel.
Michael Yang: And when I say that long-term care facilities are one channel and then physician offices are another channel, and I would just characterize them as ranges, I would say between probably 25% to 75%, depending on the territory region channel situation that we look at. Okay, great. Thank you. Thank you. Our next question comes from the line of Yatin Suneja from Guggenheim Partners. Your line is now open. Hey, guys.
Gregory James Renza: Thank you for taking my question. I just wanted to refresh some of the Harmony data with you guys. I think one of the pushback or things that we consistently hear is that, you know, if you look at the 12-week data, I think some might say that not all dementia subsets performed equally well, and then we have not really seen the double-blinded portion. So perhaps could you maybe talk about the consistency of effect among different dementia subtypes that you see in both the open-label and randomized that gives you confidence for a broader label Oh yeah, absolutely. Well, the data that we presented, particularly when you look at the open-label data where the samples or subset of different dementia subtypes are larger, we see over 12 weeks a fairly consistent, actually, response to Pimovanserine treatment.
Stephen R. Davis: You know, the overall response rates, as well as individual subtype response rates, are very cohesive and consistent. And, you know, we presented that data at last year's HITAD. Dr. Ashwini Kulkarni, Dr. Ashwini Verma, Dr. Ashwini Verma, Dr. Ashwini [inaudible] So I would a little bit disagree with the characterization that there is some variability in the response Very helpful. Thank you. Our next question comes from the line of Alan Carr from Needham and Company. Your line is now open. All right, thanks for taking my question. Coming back to marketing, your SG&A budget is going up in 4Q, but you're still bringing in your guys...
Serge Shankovich: I'm wondering to what extent that's related to COVID-19. Michael, I'm curious about your perspective on how much COVID-19 has changed marketing, a specialty drug, and some of the changes. So, Eleni, you want to go first, then Michael? Yeah, so the samings largely reflect the current operating environment.
Danielle Brew: And while we're returning to in-person engagement in the field when possible, congresses, speaker programs, and other engagements continue to be virtual. Michael, do you want to take the second part of the question? Yeah, thanks, Alan. You know, I think the opportunity, the way I would describe it in a COVID environment, is to really shore up the muscles around digital and remote engagement. And so from that standpoint, ACADIA and many other companies are building capabilities that I think are going to be sustainable and leverageable in a future environment. So I think that's a benefit. I'm certainly, Please visit www.academia.com for more information.
Serge Shankovich: Getting back to pre-COVID expectations, and in part, I think that speaks to the, [inaudible] But I think that it's without question a commercial organization is stronger in a face-to-face environment. I think that's clear. And so I think all of us are looking forward to getting back into face-to-face interactions. But I think the mix will be enhanced with digital and remote tactics and telemedicine, virtual engagements, more on the web, and other tactics. So I think the mix is going to shift. But I don't think going away from face-to-face tactics; I don't think that's where our best promotional commercial foot is placed.
Sumant Satchidanand Kulkarni: I think we're better off with a face-to-face interaction. Great, thanks for taking... Thank you. Our next question comes from the line of Gregory Renza from RBC Capital Markets. Your line is now open.
Michael Yang: Hey, Steve and team, thank you for taking my question and congrats on the quarter. Steve, I just wanted to focus on Europe for a moment, and perhaps you could just provide your latest or refreshed views on the plan to unlock value with PimpVenture now that we're getting closer to 2021 and a potential DRP approval here stateside. And perhaps, just analogously, just thinking about the schizophrenia trial that launched this quarter.
Stephen R. Davis: Just curious if you had any thoughts about how that is progressing in Europe and the foresight of any potential impact with cases of COVID-19 there. Thank you very much. Yeah, sure. I'll let Serge answer the second part. So, as it relates to, you know, I always like to say when this topic comes up, that the value pie for Pimivanturin is heavily, heavily weighted to the U.S. There is value outside of the U.S., and we want to make sure that we leverage every element of value that exists.
Stephen R. Davis: And as it relates to launching in Europe, I'll start there. Our view has been that we made a decision a couple of years ago to frameshift things to try to get a better opportunity to get more indications within the same period of exclusivity. We have a global launch strategy that expands beyond Europe and with a certain sequence that we anticipate going through.
Stephen R. Davis: And at this juncture, I would just simply say that we're not quite yet at a point where we're ready to reveal more of that or talk more specifically about timelines for Submissions outside of the U.S., but I would just simply say that we have a coordinated global plan for doing that, and as we progress with this frame-shifted strategy that I described, we'll come back and speak more about that. Sir, do you want to take this question? Yeah, sure. Our second pivotal trial in negative symptoms schizophrenia, ADVANCE 2, is progressing well. It's early in the study; we initiated it in the mid-summer, so these are the early months, but we are seeing very good interest and initial involvement as well as scaling up the sites for the trial.
Stephen R. Davis: It is done in Europe, and to your question related to COVID, obviously, although it's very difficult to make any generalization because there is a certain level of variability from country to country, how they are approaching COVID and to what extent. I think overall, in some countries, obviously, it's slowed down, but overall, in the trial, we are so far pleased with how things are progressing and the progress we are making.
Serge Shankovich: So that's, you know, that's generally the situation with the study. That's right. Thanks, guys. Yeah, good. Thank you. Thank you. Thank you. Our next question comes from the line of Danielle Brew from Raymond James. Your line is now open.
Stephen R. Davis: Good evening. Thanks for the question. So I was just wondering if you could provide some color on any discussions that you've had with the agency on how the black box warning might be addressed for the DRP label, or if those haven't been initiated yet, at what point during the review process do you think those conversations might start taking place?
Thanks. Sir, do you want to address that? Yes. Hi, Danielle. We, you know, it's early in the review process for that sort of a discussion. Usually that occurs toward the end of the review process when the labeling is discussed.
So there were no specific discussions with the FDA related to the box warning, other than us and them discussing the overall extent of the safety data that we will be including in our supplemental NDA. And I do want to repeat here that we feel very comfortable and confident in both the efficacy and safety package that we included in the supplemental NDA. And definitely, it's the largest database of safety data in this patient population that we are aware of. So, you know, we are comfortable with that, but it's too early and obviously mature for those kinds of discussions. So we didn't expect that but will expect that toward the end of the review.
That's it. Thanks for the questions. Thank you. We have time for one more question. Sumant Kulkarni from Canaccord.
Your line is now open. Thanks for taking my question. So, from a commercial perspective, if a disease-modifying product is approved for Alzheimer's disease and is on the market, do you foresee any competitive impact at all for allocation of the payers' reimbursement dollar pie for symptom management products such as Femavancidin when you hit the market next year for DRP? Yeah, thanks for the question. Michael, do you want to start?
Sure, you know, thanks for the question. I think, I think stepping back, it's really important to remember that in the dementia space, caregivers and patients have been waiting for some innovation for a very long time. It's important to note that dementia-related psychosis today is an unmet need with no approved medication. And so, frankly, we take the view that both Pimivansir and the Biogen products are treating different indications, but increasing attention on available treatments for caregivers and patients in this space would be a very good thing. And so I think we don't view this as a takeaway. We view it as a net positive to bring market attention to a disease state that has been underserved for a long time.
Got it. Thank you. Mr. Davis, please proceed to your closing remarks. All right.
Thank you, Operator. I just want to say thanks again, everyone, for joining us today. We very much appreciate your time and look forward to updating you on our progress next. Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.