Q2 2021 Intra-Cellular Therapies Inc Earnings Call

August 9, 2021

[music].

Ladies and gentlemen, thank you for standing by and welcome to the intracellular therapies.

Second quarter 2021 earnings conference call.

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After the Speakers' presentation, there'll be a question and answer session.

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I would now like to hand, the conference over to your hosts a day, while I'm Sanchez VP of corporate Communications and Investor Relations. Please go ahead.

Good morning, and thank you all for joining us for today's conference call.

Our earnings press release provides a brief update on details for the company's financial results for the second quarter ended June 32021.

This press release correctly it was for technical and is available on our website.

Therapies book.

Joining me on the call today are Dr. Sharon mates, Chairman and Chief Executive Officer, Mark <unk> Executive Vice President and Chief Commercial Officer Dr.

Doug Long senior Vice President Chief Medical Officer, I am very Heinlein, Senior Vice President and Chief Financial Officer.

As a reminder, during today's call we will be making for some forward looking statements. These statements may include statements regarding among other things the EBITDA.

These safety.

For the use of the complete product development candidates, our clinical or non clinical plans, our plans to prescribe for reported additional data.

We see very conduct Congress also from going in future clinical trials plans regarding regulatory filings future research and development.

Our plans and expectations, we've got the nickel mutual decision.

Potentially but for the Covid pandemic on our business and possible uses of existing cash and investment resources.

These forward looking statements are based on current information assumptions and expectations that are subject to change an important non bigger risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements.

These and other risk are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and 900 ports.

Good question not to pay from Hubert Lam from these forward looking statements and the company disclaims any obligations to update such statements.

I will now turn the call over to Sharon.

Thanks, Juan Good morning, everyone and welcome to today's conference call.

We're pleased with our strong results in the second quarter across all fronts. We are continuing our progress and are excited about what lies ahead, including the potential expansion of our kept light a label for the treatment of bipolar depression due for date for this indication later this year.

If approved this will mark a significant milestone in our plans to move kept light or beyond its first indication for the treatment of schizophrenia into the much larger bipolar depression market and later into major depressive disorder pending ongoing clinical development results.

In addition to our commercial performance will also highlight our progress in the pet Bronx late stage programs and provide a brief update on the rest of our pipeline, which we will cover extensively at our upcoming R&D day in Nepal.

I'll start with an update on kept lightest commercial performance, where we drove a 22% quarter over quarter increase in total prescriptions in Q2 in spite of continuing COVID-19 challenges.

Total revenues in Q2 grew to $20 million kept lightest growth trajectory continued with second quarter net revenues, reaching $19 million compared with $15.6 million in the first quarter of 2021 and $1.9 million in the same period last year.

We expect continued growth in the second half of this year.

Yeah, Hi, Lyne and Mark Newman will provide further detail in a few minutes.

Looking ahead to our potential new indication for cap lighter, we're especially encouraged by the significant progress made in the second quarter.

The FDA accepted our supplemental new drug applications or S. N D. As for kept lighter for the treatment of bipolar depression and has set up to do for action date of December 17th 2021.

Our commercial team is making excellent progress in preparing to launch immediately following FDA approval.

This approval would represent an important milestone for ITC eye and a major advance for patients.

If approved kept litle will be a promising new medicines for more than 11 million adults in the U S living with bipolar 1 or bipolar 2 disorder.

Bipolar depression is a chronic serious condition with 1 of the highest rates of suicide amongst psychiatric disorders.

Okay.

Kept light it is a great product with a compelling clinical profile, having demonstrated efficacy along with a favorable safety and tolerability profile.

In our clinical trials when the cap for an improved depressive symptoms in patients with bipolar disorder.

Results were similar to placebo for changes in weight fasting glucose total cholesterol triglycerides, prolactin and EPS, including akathisia.

Kept blida has the potential to safely treat a broad range of patients with bipolar depression, and a large patient population that remains underserved.

We have advanced our alumina type of Encore program in major depressive disorder or M. D D.

We are very pleased to announce that patient enrollment has initiated in study 5 O..1 evaluating <unk> for the treatment of M D day.

Patient enrollment in our second phase III trial study 5 O..2 is anticipated to begin shortly.

These phase III double blind global studies evaluate when the TERP wrong 42 milligrams versus placebo as adjunctive treatment with anti depressants to treat M. D. D. The primary end point for these trials is changed from baseline at week 6 on the Montgomery Asper Depression rating scale.

<unk> or mattress total score versus placebo.

More than 17 million adults experienced at least 1 major depressive episodes and about half of patients have an inadequate response following initial therapy with only 1 third achieving remission.

Our goal is to provide a new treatment option to meet the needs of these patients.

We're very enthusiastic about the prospects for this program and the possibility to substantially expand the opportunity for kept later.

When the pepper on has already shown efficacy in the treatment of major depressive episodes in patients with bipolar disorder and in the treatment of depressive symptoms in patients with schizophrenia with comorbid depression.

Additionally, we're expanding our efforts in depressive disorders with our ongoing monotherapy study for all 3 in patients with major depression, or bipolar depression, who exhibit next teachers.

An estimated 1 third of these patients exhibit mixed features during their depressive episodes. These patients typically respond poorly to antidepressants suffer greater symptom severity have a higher risk of suicide attempts and experienced severe illness with many comorbidities.

A significant unmet need remains for effective safe and well tolerated medicines.

We anticipate results from study for O 3 in the second half of 2022.

To complete this type of an update we have an ongoing phase 1 safety and pharmacokinetic study with our limit for a long acting injectable formulation and anticipate initial results in the second half of this year.

Finally, I'd like to provide highlights on our additional pipeline programs, which we will further expand upon in our upcoming R&D day in the fall.

We are advancing ITI 12, 84 O D. T S. L. A <unk> form of Luna Taproom. This is an orally disintegrating tablet delivered sublingual <unk>.

We plan to initiate our program for the development of ITI 12, 84 O D. T. S. L for the treatment of behavioral disturbances and dementia in the second half of 2021 and plan additional studies in dementia related psychosis, and certain depressive disorders and the elderly in 2022.

Our phosphodiesterase, 1 or PDE 1 inhibitor program is focused on investigating the therapeutic potential of this mechanism of action across a variety of diseases, including neurological and cardiovascular diseases as well as cancer.

We plan to initiate a phase 2 clinical trial in Parkinson's disease. This year, and we will share with you the trial design details for the upcoming months.

Our objective for the program is to study the drug's ability to improve motor symptoms without causing troublesome dyskinesia improve cognition and preserve underscore neuronal function, which may lead to disease modification.

In Q2, we presented preclinical data at the American Association for Cancer Research annual meeting describing the anti tumor effects of our PD 1 inhibitors when administered in conjunction with checkpoint inhibitor immunotherapy.

We are currently evaluating our PD, 1 inhibitors and other cancer models and are developing potential biomarkers that may assist in the translation of these data to the treatment of human cancers.

Lastly, I T I Triple 3 is a promising assets in our pipeline being developed for the treatment of opioid use disorder.

I T I Triple III Act as a modulator of serotonin and new opioid receptors and has shown efficacy in animal models in both opioid use disorder and acute and chronic pain.

Our phase 1 single sending dose study evaluating the safety Tolerability and pharmacokinetics of ITI Triple 3 in healthy volunteers is underway.

Initial results from this study are anticipated in the second half of this year.

We ended the quarter in a strong financial position with $556.2 million in cash cash equivalents and restricted cash.

In summary, our continued commercial performance and growing portfolio confirmed the strength of our team as well as our long term commitment to developing and commercializing innovative therapeutics to improve the lives of patients with neuropsychiatric and neurological disorders I'm proud of what our team has accomplished during this time.

Mark will now share details of our ongoing commercial activities in schizophrenia and future plants in bipolar depression. Following his remarks, lower Larry will provide additional detail on our Q2 financial performance.

Mark.

Thanks, Sharon, it's a pleasure to be here today with all of you to share our commercial progress.

Sharon noted we're pleased with kept light as market performance in the second quarter, despite continuing COVID-19 marketplace challenges affecting the medical care for patients with schizophrenia.

All of our launch fundamentals are strong and remain on track.

Continued to successfully execute our hybrid commercialization model, combining virtual and in person engagements.

Medical education, DTC, and social media campaigns complement our efforts.

But it continues to have a positive impact on patients and our market research shows that psychiatrists continue to rate kept light a highly on efficacy safety and tolerability and dosing.

As a result calculated total prescriptions increased by 22% over the prior quarter at a time when the overall anti psychotic market grew slightly by about 1 per cent.

Market conditions improved incrementally during the second quarter with increases in patient visits new patient starts and in person detailing.

While these trends have been encouraging we are monitoring the recent increase in Covid cases and are prepared to adjust our commercial strategy if needed.

In summary, we continue to be pleased with capital I just performance in the schizophrenia market and.

We are actively preparing for launch in bipolar depression immediately following FDA approval.

This potential approval would represent an important milestone for ITC.

A major advance for this underserved patient population.

And here's why we're confident that this launch will be significant first kept light it is a great product.

In clinical trials limit pepperoni showed efficacy and safety treating depressive episodes associated with bipolar 1 or bipolar 2 both as a standalone treatment as well as in combination with lithium or valproate.

Results were similar to placebo for changes in weight fasting glucose total cholesterol triglycerides, prolactin and EPS, including akathisia.

Physicians consider efficacy and safety in selecting which drug to prescribe and then deciding to change treatment in bipolar depression.

To this point recent market research and an expert advisory board, both rated lumi chaperone favorably for efficacy and safety, including its low risk of weight gain metabolic changes in movement disorders.

Underscoring the need for new treatments physicians also cited the limited number of approved drugs to treat bipolar depression and noted there is only 1 drug currently approved to treat bipolar depression.

Secondly, bipolar depression represents a significant market opportunity as Sharon noted more than 11 million adults in the U S live with bipolar 1 or bipolar 2 disorder.

These are debilitating conditions with more frequent and longer lasting depressive episodes and manic or hypomanic episodes.

This patient population is well informed and much larger than schizophrenia.

In addition to efficacy patients with bipolar depression are concerned about safety and tolerability, particularly weight gain and movement disorders.

The third reason this launch will be significant we are committed to achieving a competitive share of voice with our promotional activities that will drive <unk> rone awareness and adoption and bipolar depression, we are.

Expanding our sales force and our managed care accounts team continues to successfully educate commercial and other payors on bipolar depression unmet patient needs.

The limited availability of approved treatments.

In short we are on track and this is a very exciting time for our company.

I'll now turn this call over to Larry to deliver further details on our financial results Larry.

Thank you Mark I will review our financial results for the second quarter ending June 32021.

Total revenues in Q2 grew to $20 million compared to $1.9 million of total revenues for the second quarter of 2020 cash.

<unk> and its growth trajectory continued with second quarter net product revenues, reaching $19 million compared to $15.6 million in the first quarter of 2021 and $1.9 million in the same period last year.

Cost of product sales for $2 million in the second quarter of 2021 compared to <unk> $1 million for the second quarter of 2020.

Research and development expenses for the second quarter of 2021 were $17.3 million compared to $25.2 million for the second quarter of 2020. This decrease is due primarily to a decrease in leuna tougher 1 clinical trial cost.

Selling general and administrative expenses were $69.9 million for the second quarter of 2021 compared to $41.4 million for the same period in 2020.

This increase is primarily due to an increase in commercialization and marketing costs.

Net loss for the quarter ended June 32021 was $68.7 million compared to a net loss of $63.7 million for the quarter ended June 32020 cash.

Cash cash equivalents restricted cash and investment securities totaled $556.2 million at June 32021, compared to $658.8 million at December 31, 2020.

This concludes our prepared remarks, operator could you. Please open the line for questions.

Thank you.

As a reminder to ask a question you will need to press Star then 1 on your telephone to withdraw your question. Please press the pound key.

We ask that you limit yourself to 1 question and 1 follow up please standby, while we compile the Q&A roster.

Our first question comes from the line of Brian Abrahams with RBC capital markets. Your line is now open.

Hi, good morning, Thanks for taking my questions and congrats on the continued progress.

I guess first off on schizophrenia would love to learn a little bit more about some of the metrics that you're seeing on the ground and in particular.

Whether you are starting to see pull through in terms of longer persistence from the better tolerability.

Whether the growth is coming from new accounts or re prescribing and then if you could maybe also expand upon how the waxing and waning of Covid has impacted your as well as patients' ability to engage with physicians and how that might influence back half for this year growth.

Great Great questions, Brian Good morning, and thank you for the questions and I'll ask Mark Mark do you want to take that.

Yeah sure Thanks, Sharon and thanks for the question Brian.

So a couple of different components in there of your question I'll try to take them in the order that you had asked them. So from a persistency perspective, we've been pleased since the very early stages of the launch to see that compliance and persistency.

With cap Lidar.

It's been very good.

It has been outpacing the.

Benchmark launches the prior anti psychotic launches and that has continued this was something that we.

We hypothesized for would be the case, given the very favorable safety and Tolerability profile for capital light.

And as we track the T Rx day in our <unk> ratio.

That has continued to look very good and continued into the second quarter from.

The perspective of where we're sourcing our business we.

We continue to source new patients as well as the refills continuing to look very strongly.

Patients come from all lines of therapy, including new patients, where the patient's insurance will allow that newly diagnosed patients with the vast majority of the business coming from switch patients coming from other anti psychotics and they come from a variety of different anti psychotics. So not just from 1 or 2 and <unk>.

<unk>.

So we see that as a very healthy dynamic that capsulitis sourcing patients from <unk>.

A wide variety of lines of therapy as well as prior antipsychotic use.

In terms of the impact of Covid during the second quarter as Sharon noted in her comments, we did see notable improvements in the second quarter. We saw improvements in patient visits we saw improvements in new patient starts.

As well as improvements in.

In person detailing by our sales force. So this is something obviously that we're monitoring very closely with the recent rise in cases.

But we do expect to see continued improvements in the second half of the year and.

And do expect to continue to grow the brand quarter.

Quarter over quarter during that time, so so Brian I hope I hit on all the things that you got to ask if there is something that I missed just let me know.

Yes, Mark I was that was really helpful. Thank you and then maybe just a.

Quick follow up on bipolar as you as you prepare for the launch I know you've talked about a little bit about the sales and marketing strategy in the target audience. I was wondering if you could expand further on that.

How you capitalize on having a potential bipolar to Ah indication included in the label and whether or not you're preparing for a primarily a telemedicine or an in person environment or some sort of hybrid how that might impact that the cadence of SG&A spend as well. Thanks.

Yes.

Yeah, So I'll start there and perhaps Larry or Sharon could comment on the SG&A spend and I'll start with the second part of your question.

In terms of our preparation for the launch our preparations are going very well.

Very much on track.

We have initiated the expansion of our sales force the process for doing so and expect to have.

That expansion in place prior to approval. So we can hit the ground running.

As soon as we're approved.

Hopefully on the Paducah date.

In December.

We've said before that the target audience.

Debt, we will be.

Deployed against is going to growth from approximately 23000 today to about 44000 would.

With the addition of physicians, who treat a lot of bipolar depression.

But do not treat a lot of schizophrenia.

So those plans are very much underway and going according to plan. The second major area of activity has been with our market access team, who have been engaging the payers across Medicare Medicaid and especially in commercial.

To educate payers on the very significant unmet need that continues to exist both in bipolar 1 and bipolar too and the limited availability of approved products for both of those but in particular in bipolar too and I guess, what I would say there is we do expect to.

To be approved for.

For a broad range of patients, including bipolar 1 and bipolar 2 both as monotherapy and as adjunctive therapy.

And bipolar 2 is 1 element of what I consider to be a very strong profile emerging out of the clinical trials in bipolar depression, where we saw robust efficacy.

And a safety and Tolerability profile that essentially replicated what we saw.

In schizophrenia with a favorable.

Results on both the metabolic and weight gain side essentially comparable to placebo as well as on the movement disorder side.

And we do know patients with bipolar depression may even be more sensitive to things like weight gain and movement disorders than even patients with schizophrenia.

And so we feel very confident in the profile that's emerged from the clinical trials in bipolar depression. So.

Again, I hope I answered your questions I don't know, if Larry or Sharon, we'd like to comment on the SG&A expense. Yes. This is Larry Oh Sharon go ahead. Please.

I was just going to.

Add a comment on telemedicine Bryan Bryan asked about telemedicine and Mark do you just want to comment a little bit on what we have found.

From Kols.

Kols and physicians on the differences schizophrenia patients and bipolar patients and then response to and the ability to use telemedicine.

Yes, absolutely, Brian I'm, sorry that I did miss that piece in my response to your questions. So first of all we are planning to continue with the hybrid commercialization model.

We've been operating with pretty much since the beginning of launch where our sales representatives as well as our physician speakers for medical education.

When they can engage physicians in person they do so.

But if physicians are working remotely and non available for in person interactions are representatives and our speakers.

Pivot very definitely to virtual engagements.

They've been doing that very well throughout the launched.

And we'll just have to see what the conditions are as we launch the bipolar depression, we just feel confident that we'll be able to.

Deliver regardless of the conditions that exist at that time.

As Sharon mentioned, we've been doing a lot of market research. We've had several different advisory boards and when you think about the interaction of a bipolar patient with the psychiatrist in the telemedicine setting, it's actually quite different than a patient with schizophrenia in that same telemedicine setting and by that.

The bipolar depression patients.

As a patient who is very well informed of their condition. They are advocates for their own health.

They ask a lot of questions there very communicative.

They are able to articulate any issues that they're having with their current treatments.

And so the physicians that we've spoken to you about this feel that in a telemedicine setting the bipolar depression patients.

Is actually somewhat easier to manage than in.

In general a patient with schizophrenia. So that's something that we've learned in our market research and through discussions and our advisory boards with with psychiatry.

And Larry if you want to comment on E S channel.

Yes, yes, we do expect the SG&A expenses to increase in the second half for the year.

As we continue that schizophrenia commercialization, but also in preparation for the possible approval for our bipolar indication.

Yeah.

Great. Thank you so much for the detailed answers.

Thank you.

Our next question comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is now open.

Yes, thanks for taking the question good morning, and congratulations Sharon and team to progress in the quarter nice script trends.

A commercial question and then 1 pipeline question regarding the commercial question.

In terms of script growth I think Mark mentioned, new patient adds as well as retails and I guess I'm wondering if you could expand on that book.

<unk>, new patient adds coming from broader span of writing.

<unk> or deeper within a practice and then regarding expanding the sales force do you have any quantitative metrics on that what we could expect for its bipolar approval.

Yeah. Thanks for the question Charles.

Thanks, Sharon sorry, I jumped the gun there.

Yeah. So Charles we at this stage of the launch we continue to be pleased with both the breadth of prescribing as well as the depth of prescribing we continue to add new prescribers week over week in a very steady fashion and the prescribers the existing prescribers, we continue to incur.

<unk> their depth of prescribing so.

In a nutshell, we see the new patient starts coming both from improved breadth as well as improved depth.

In terms of the question on the on the sales force will share more details of that as we get closer to the potential approval later in the year, but just to remind the group of what we've said before we are expanding our call panel from the approximately 23000 physicians for schizophrenia.

244000 in bipolar depression, so essentially doubling the size of our call plan.

Call panel, however, we don't expect to.

Double the size of our sales force because of some of the efficiencies that our sales force is gain and some of the conditions that exist.

With telemedicine it will be a significant expansion that.

That expansion is underway.

And at a later date, we will come back to you with some more of the details around that.

Okay. Thanks for that additional information regarding the pipeline I guess, some kind of fast forwarding beyond PPD and.

Considering moving pepperoni and major depression disorder.

I guess I'm wondering if with regard just study sizable 1 and eventually silo too.

What do you think is the best source of rig.

Reducing patient heterogeneity in that in those studies is it perhaps the screening measure of burden or other.

Current approaches.

And given the large number of MPD studies ongoing for some.

How are you.

True that youre working with centers that are going to deliver you paid.

Patients are calm quality patients for those studies.

Yes.

Yeah.

I think we heard your question Charles I'm, sorry, you keep sort of fading in and out.

But I think we heard it and I'm going to ask Suresh if he'd like to start and I can chime in.

As well if you couldnt hear some of that Suresh, yes, I can.

Thank you Sharon.

Regarding the heterogeneity that is true that a patient is not going to hit <unk> in this population.

In order to enroll quite number of patients 1 of the key criteria is to enroll the right patients for the trial so for that we have.

A lot of things included in the protocol in the trial.

The growth from Delek thing that fight.

Also looking at different things within the protocol by including adjudicate.

I'd litigation process that we have as bonds that are involved.

In enrolling every patient and reviewing the <unk> patient is included in the pilots.

And there's also an ongoing.

What have you off every patient that comes into the price.

Regarding including the right patients are you using.

<unk>, alright, or some other screen and.

Certain call it level of burden.

There is a whole range of things.

Good evening.

In the trial from our Doctor is 1 of them that is other scales and other screening things we are including in the trial.

There's also a view from that we review each patient individually.

Yes.

Thank you.

Our next question comes from the line of Andrew Tsai with Jefferies. Your line is now open.

Okay, great. Thanks, Thanks, and good morning.

First question is just on the launch which is great to see you.

We're continuing to see quarterly upticks, but.

My question is despite Covid dynamics do you remain comfortable in seeing a potential sales acceleration in the second half of the year I guess can you talk a little bit about what youre seeing in July August in terms of the trends and how those trends are looking compared to your expectations.

Yeah.

So hi, Hi, Andrew Thanks for the question I'll start and then I'll ask Mark if he.

He has anything.

To add in and really what you're asking is for some color on the landscape. So let me give that to you as an overall first we had a song.

Solid Q2.

And as you heard we had strong execution and solid growth.

The patient experience with <unk> that has been very positive.

We believe it's a great product with a compelling profile performing as expected in a real world setting, which is very important we do expect kept light of prescriptions and revenue to continue to grow quarter over quarter throughout the rest of the year.

Covid has very much impacted the care of patients with schizophrenia.

As we've said before we've seen notable improvement.

In market conditions, and particularly in Q2.

We believe we continue to see improvement throughout the rest of the year.

But to your question the magnitude of these improvements is dependent on the COVID-19 impact and conditions over the next few months.

Mark do you have anything you want to add to that.

Maybe just to continue on with that we have seen notable improvements during the quarter and new patient visits and new patient starts in person detailing.

With the recent wave of increases in cases in particular in some of the central parts of the country, we are seeing geographic pockets where.

Patient visits.

Have slowed and there are some restrictions being placed on representative access in certain offices, but we've seen that throughout the launch where it's sort of waxes and wanes and you get some spots that get more restrictive and then they open back up and so we're just going to have to see what happens with the current COVID-19 situation in the car.

Current conditions, but as Sharon mentioned, we have been encouraged by what we've been seeing we do expect to continue to grow quarter over quarter.

And the commercial team will adapt to whatever conditions are in front of them and we feel confident that we'll be able to continue.

Excellent execution that the team has been doing.

So hopefully that helps Andrew.

Thank you.

Next question comes from the line of Jessica Fye with Jpmorgan. Your line is now open.

Hey, guys. Good morning can you talk about your goals for commercial coverage for <unk> in bipolar depression, and how fast do you think you can get there.

Mark.

Again for your debt.

Yes, sure Sharon Hi, Jessica yes, or.

Our goals for the commercial channel or to have essentially the same broad coverage that we achieved early on in the launch of schizophrenia, and both the Medicare and Medicaid channels.

To that end.

As I mentioned in my prepared remarks, our market access team has been actively engaging payers, particularly in the commercial channel.

And have been in discussions both in educating.

The payers on the unmet need and the limited availability of approved options for bipolar.

Both bipolar 1 or bipolar too.

And are engaged in discussions to broad and the current access that we have.

In commercial.

We will be providing updates on that as we get closer to the launch and immediately following the launch.

And for.

I don't I didn't hear you.

Expand a little on commercial.

On how we are now speaking with those.

Those payers as well do you want to say anything more about that mark.

No just that we're actively.

Aged with the commercial payers to improve the access to capital either.

In a similar fashion that we did with Medicare and Medicaid.

During the schizophrenia launch Jessica Youll recall that in schizophrenia, there too.

2 major channels are Medicare and Medicaid.

We're roughly 70% to 85% of all schizophrenia prescriptions flow through.

With the addition of bipolar depression that mix will begin to shift.

In favor of the commercial channel Medicare and Medicaid will continue to be very important for bipolar depression as well.

But whereas about 15% to 20%.

Patients with schizophrenia prescriptions come through the commercial channel that growth to our estimates of roughly 35% to 45% of.

Bipolar depression prescriptions coming through the commercial channel. So it becomes an increasingly important channel for us and our team is actively engaged with the payers to.

Achieve a level of access that is similar to what we have today in Medicare and Medicaid for calculating.

Thank you.

Our next question comes from the line of Marc Goodman with SBB Leerink. Your line is now open.

Hi, Thanks for taking my question so its Rudy on the line from Mark.

Congrats on the strong quarter I just have 1 question regarding the pipeline. So can you provide some color on upcoming phase III study of ITI 214 in Parkinson, maybe just remind us about the study design and then I have 1 quick follow up question.

Right. Thanks, Judy for the question.

As you know we are developing them.

1 of our PD, 1 inhibitors ITI 214.

For.

Parkinson's disease.

In our phase 1.2 study we saw that motor symptoms of Parkinson's disease improved on top of optimized Parkinson's therapy.

Dyskinesia symptoms improved in patients with <unk>.

Levodopa induced dyskinesia at baseline.

Well sure.

Details of the design of the upcoming trial later this year, but the principal objective of the study is the study parameters of motor symptom improvement without worsening dyskinesia.

The objective of our PD 1 program NPD extends beyond motor symptoms, However, and encompasses the exploration of cognition and.

Potential disease modifying effects that result from the anti inflammatory effect in.

In the CNS.

We've demonstrated occur with this mechanism of action.

PD 1 inhibitors.

Okay.

Now how.

A quick follow up for <unk>.

<unk> just wondering what's the cross night for the quarter and for 2021.

I'm, sorry, I didn't quite grasp for question, what's the what.

So for Us Tonight.

Gross to net.

Gross to net okay, Larry I'll take that.

Yes.

Our gross to net.

Historically has been between the mid Twenty's and low 30 so.

It's in that range and we expect it to continue in that range.

Thank you.

Our next question comes from the line of Omar <unk> with Evercore. Your line is now open.

Hi, guys. Congrats on the quarter. Thanks for taking my question, maybe just to get a little more specific about the trends going into the back half of the year.

With the Covid.

Average increase.

On on new patient adds the new to brand it looks like the trends are fairly consistent.

And of course, youre going off for a bigger base.

My question is.

By our math it does look like you're probably still growing double digits at a lower pace, but still double digits into the third quarter is that consistent with data.

Data youre seeing internally as well number 1 and secondly, as we think about the long acting injectable initial.

Initial data in the back half of the year 1 of the things I was trying to figure out was simply the bioavailability. So I know the oral bioavailability was low and just trying to think through the dose choices you guys decided to go with on the sub Q and a phase 1 trial. Thank you very much.

Yes.

Okay, Hi, Omar thanks for the questions.

Well I'm not sure that we are prepared at this point to.

To give you specific numbers about the growth in the second half for the year, we do agree that.

We expect to see continuing growth.

Mark do you want to comment on that.

No.

I think that I think rumor.

Generally you characterized it well as you go through these different periods of Covid you see some acceleration you'll see some deceleration, but the overall picture is continued growth and we expect that to continue.

In the second half of the year.

Yeah.

Right and then on the bioavailability.

That's why we're doing the study.

As to look at the safety and Tolerability as well as.

The plasma levels.

Drug so I wish I had the answers to give you, but then we probably wouldn't need to be doing the study.

Of course, our animal data, but.

And just a couple of months, we'll be able to tell you in humans. So maybe we could stay tuned.

And we are looking to see sustained plasma levels for 1 month of course, but.

I think.

Rather than speculate let's just wait for the data that will help soon.

Thank you.

Our next question comes from the line of Greg <unk> with Goldman Sachs. Your line is now open.

And pardon me Gregg Lowe Navy. Your line is now open.

Okay, sorry about that I was on mute.

Thanks for taking my questions.

A couple if I could 1 just on the bipolar depression opportunity.

I realize that delta variance for Covid is an unknown at this stage, but.

As we think about.

The launch of that product anything that you can say about the shape of that uptake curve, whether it's relative to kind of shape that we're seeing.

For schizophrenia or relative to the shape that we've seen for other.

Analog drugs.

Debt have gotten the bipolar depression in.

Indication.

So that's my first question and my second question.

Just has to do with your current.

Prescription dynamics and its Scott.

I think comments you made before about having patients who are new to therapy and that are getting kept laid up but youre also getting switches and I'm wondering.

Is that from an intracellular their perspective is there a.

Certain focus.

By the company in terms of which patients you would prefer.

To get on therapy.

And for those that are on therapy are there any differences in.

Persistence and compliance just trying to get a sense of these patients, which a lot and I'm just wondering if its more common that youre seeing switching away. Once they are uncapped played out either from the new patients or from those kind of switched thanks.

Okay, a lot of questions Mark I think that.

Most if not all of them are directly to again.

Yeah, Let me let me let me take a shot at this Greg.

If I Miss something Sharon you can pick me up on those or Greg you could have a <unk>.

Ask a follow up question regarding the.

The potential shape of the curve once we get approved for bipolar depression I think if you look historically at the 2 most recent antipsychotic that were approved in bipolar depression.

Latuda and then more recently <unk>.

You saw a very significant inflection in their prescription uptake.

Immediately upon.

Receiving the approval in bipolar depression.

And we have every reason to believe.

With capital light and the profile that's emerge from the clinical trials.

Debt, we will see a similar inflection.

And so.

We're very excited about the potential to help patients in this area and very excited about.

What that could mean for <unk>.

The potential adoption of capital Ida.

And the business of cap lineup.

In terms of the current prescriptions in the patients.

That are being placed on cap later.

Yes, it is a mix of.

Newly diagnosed patients as well as switch patients with what I would say, it's being the vast majority of patients being.

Being switched patients coming to cap lighter.

We are encouraged to see that there are newly diagnosed patients being placed on capital I know, where the patients insurance will allow that.

But the dynamics in the anti psychotic area and in schizophrenia in particular is that the magnitude of switches.

Is much greater than the number of new patients that are diagnosed each year with schizophrenia.

So we're not surprised to see the majority of patients coming.

A switch from another anti psychotic rather than from newly diagnosed patients. We don't have a preference we believe capital either as great product.

And can be helpful too.

Virtually any patient that the product is indicated for but it's just a matter of the dynamics that there are $2.4 million.

Adults with schizophrenia.

They are frequently.

Discontinuing their existing anti psychotic and moving to a new 1 and.

And whenever they do that that's an opportunity for <unk> with its with its efficacy profile as well as very favorable safety and tolerability profile for the physician to consider capital Ida.

The agent that they go to.

I don't I think you also had mentioned about do we see a compliance and persistency difference depending on the type of patients that is placed on cap line.

Can't say that we do.

It's probably still a little early to understand those dynamics, all the way down to that patient level, but overall, we're very pleased with the compliance and persistency that we see.

From patients that are placed on <unk>. So.

Greg I don't know if I hit on all of the elements of your question, but if I haven't.

Please follow up.

Just to remind you the order of magnitude of newly diagnosed patients is small compared to the overall schizophrenia patient population with only 100000 new patients.

Diagnosed with schizophrenia.

Thanks Sharon.

Thank you.

As a reminder, in the interest of time, we ask that you. Please limit yourself to 1 question.

Our next question comes from the line of Ash, Ronnie Verma with Bank of America. Your line is now open.

Hi, Thanks for taking our questions.

This has been a desperate for have been choking on call. It a U silicon per day will did the kept light of consensus for 2021.

I understand that you expect upside here to growth sequentially, but could the <unk> X growth for example, surpassed the 22% seen in the second quarter.

Yeah, Hi.

Thanks for the question, we did address that.

Earlier and we.

We said that we have seen notable improvements in market conditions and in particular in Q2.

And hence leading to.

Our strong quarter, we do believe that we will continue to see improvement throughout the year.

We've said that the magnitude of these improvements.

Half of the year is really dependent on COVID-19 impacts.

Yeah.

Thank you.

Our next question comes from the line of Sumit Kulkarni with Canaccord. Your line is now open.

Good morning. Thank you for taking my question and nice to see all the progress that the company is making I'll ask my 1 question on your pipeline on your programs related to behavioral disturbances and dementia in dementia related psychosis. It might still be very early but post the organization thinking about approaching specific groups and dementia versus dementia is a whole clinical trial programs and have you received.

Any input from the FDA on the stomach.

Yes, hi.

And thank you for the questions.

We do believe that 12.

<unk> hundred 84 inch and then me that we are.

Flooring behavioral disturbances in patients with dementia with <unk>.

We are in discussions with.

With the FDA right now over the design of these studies and so if you can.

Stay tuned we will have further information.

That we do think just to give you a little more detail on 12.84.

We do think that it is very well suited to studying many populations and we've just started with the elderly population.

We included in the Phase 1 studies that we reported to you.

Earlier.

Carl.

So.

I think we're very excited about 12 months 84 and about.

The development program.

And behavioral disturbances in patients with dementia, as well as psychosis and dementia depressive disorders and the elderly.

And as I mentioned on the first programs we are in discussions.

Right now and we'll get back to you soon.

Got it thank you.

Thank you. This concludes today's question and answer session I will now turn the call over to Sharon mates for closing remarks.

Okay. Thank you operator, and thank you everyone for participating in today's call.

We are very excited about the prospects.

Of kept lighter end of our development pipeline moving forward.

We are excited for the opportunity to be helping patients and we think that we are developing new medicines to help the lives of patients and.

We look forward to updating you as we go forward with that operator, you can now disconnect the call.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

[music].

Yes.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the intracellular therapies.

Second quarter 2021 earnings conference call.

At this time all participant lines are in a listen only mode.

After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press Star then 1 on your telephone we ask that you. Please limit yourself to 1 question and 1 follow up.

Please be advised that today's conference is being recorded if you acquire any further assistance. Please press Star then zero.

I'd now like to hand, the conference over to your host today, Juan Sanchez VP of corporate Communications and Investor Relations. Please go ahead.

Good morning, and thank you all for joining us for today's conference call.

Our earnings press release provides a brief update on details for the company's financial results for the second quarter ended June 32020.

Do you want.

This press release, Covid, where in a short time ago and is available on our website have been from failure.

Therapies Dot com.

Joining me on the call today are Dr. Sharon mates, Chairman and Chief Executive Officer, Mark Newman Executive Vice President and Chief Commercial officer, Dr. Sue that true.

Doug long senior Vice President and Chief Medical Officer, I'm, very hiring senior Vice President and Chief Financial Officer.

As a reminder, during today's.

Today's call, we will be making certain forward looking statements. These statements may include statements regarding among other things the efficacy safety and intended use for the concrete product development candidates, our clinical or non clinical plans our plans to prescribe for reported additional data the anticipated conduct Congress also for going on.

Future clinical trials plans regarding regulatory filings future research and development.

Sure.

Expectations regarding the company's research and look at guidance.

They potentially buy for the Covid pandemic on our business and possible uses of existing cash and investment resources.

These forward looking statements are based on current information from.

It shows our expectations.

Subject to change and important on a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements.

This I know that Scott described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and 900 ports.

Your question about the pay from the reliance on these forward looking statements and the company disclaims any obligations to update such statements.

I will now turn the call over to Sharon.

Thanks, Juan Good morning, everyone and welcome to today's conference call.

If the date for this indication later this year.

If approved this will mark a significant milestone in our plans to move kept lineup beyond its first indication for the treatment of schizophrenia into the much larger bipolar depression market and later into major depressive disorder pending ongoing clinical development results.

In addition to our commercial performance will also highlight our progress in the longer term for late stage programs and provide a brief update on the rest of our pipeline, which we will cover extensively at our upcoming R&D day in Nepal.

I'll start with an update on kept lightest commercial performance, where we drove a 22% quarter over quarter increase in total prescriptions in Q2 in spite of continuing COVID-19 challenges.

Total revenues in Q2 grew to $20 million kept lightest growth trajectory continued with second quarter net revenues, reaching $19 million compared with $15.6 million from the first quarter of 2021 and $1.9 million in the same period last year.

We expect continued growth in the second half of this year.

Very high line of Mark Newman will provide further detail in a few minutes.

Looking ahead to our potential new indication for cap lighter, whereas fish, especially encouraged by the significant progress made in the second quarter.

The FDA accepted our supplemental new drug applications or S. N D. H for kept lighter for the treatment of bipolar depression and has set a paducah action date of December 17th 2021.

Our commercial team is making excellent progress in preparing to launch immediately following FDA approval.

This approval would represent an important milestone for ITC and a major advance for patients.

If approved kept lighter will be a promising new medicines for more than 11 million adults in the U S living with bipolar 1 or bipolar 2 disorder.

Bipolar depression is a chronic serious condition with 1 of the highest rates of suicide amongst psychiatric disorders.

Okay.

Kept light it is a great product with a compelling clinical profile, having demonstrated efficacy along with a favorable safety and tolerability profile.

In our clinical trials when the cap for an improved depressive symptoms in patients with bipolar disorder.

Results were similar to placebo for changes in weight fasting glucose total cholesterol triglycerides, prolactin and EPS, including akathisia.

Kept lighter has the potential to safely treat a broad range of patients with bipolar depression, and a large patient population that remains underserved.

We have advanced our alumina Teflon Park program in major depressive disorder or M D day.

We are very pleased to announce that patient enrollment has initiated in study <unk> hundred 1 evaluating women tap along for the treatment of M. D day.

Patient enrollment in our second phase III trial study 5 O..2 is anticipated to begin shortly.

These phase III double blind global studies evaluate when the TERP, along 42 milligrams versus placebo as adjunctive treatment with anti depressants to treat M. D day. The primary end point for these trials is changed from baseline at week 6 on the Montgomery Asper Depression rating scale.

<unk> or mattress total score versus placebo.

More than 17 million adults experience at least 1 major depressive episodes and about half of patients have an inadequate response following initial therapy with only 1 third achieving remission.

Our goal is to provide a new treatment option to meet the needs of these patients.

We're very enthusiastic about the prospects for this program and the possibility to substantially expand the opportunity for cap later.

And then the pepper on has already shown efficacy in the treatment of major depressive episodes in patients with bipolar disorder and in the treatment of depressive symptoms in patients with schizophrenia with comorbid depression.

Additionally, we're expanding our efforts in depressive disorders with our ongoing monotherapy study for <unk> 3 in patients with major depression, or bipolar depression, who exhibit next teachers.

A significant unmet need remains for effective safe and well tolerated medicines.

We anticipate results from study for O 3 in the second half of 2022.

To complete this limit tap wrong update we have an ongoing phase 1 safety and pharmacokinetic study with our limit for a long acting injectable formulation and anticipate initial results in the second half of this year.

Finally, I'd like to provide highlights on our additional pipeline programs, which we will further expand upon in our upcoming R&D day in the fall.

We are advancing ITI 12, 84 O D. T S. L. A <unk> form of alumina type wrong. This is an orally disintegrating tablet deliberate sublingual <unk>, we plan to initiate our program for the development of ITI 12, 84 O D. T. S. L for the treatment of behavioral disturbances and dementia in the <unk>.

Half of 2021 and plan additional studies in dementia related psychosis, and certain depressive disorders and the elderly in 2022.

Our first of all day yesterday Swan or PDE..1 inhibitor program is focused on investigating the therapeutic potential of this mechanism of action across a variety of diseases, including neurological and cardiovascular diseases as well as cancer.

We plan to initiate a phase II clinical trial in Parkinson's disease. This year, and we will share with you the trial design details in the upcoming months.

Our objective for the program is to study the drug's ability to improve motor symptoms without causing troublesome dyskinesia improve cognition and preserve and restore neuronal function, which may lead to disease modification.

We are currently evaluating our PD, 1 inhibitors and other cancer models and are developing potential biomarkers that may assist in the translation of these data to the treatment of human cancers.

Lastly, ITI Triple 3 is a promising assets in our pipeline being developed for the treatment of opioid use disorder.

I T I Triple 3 act as a modulator of serotonin and new opioid receptors and has shown efficacy in animal models in both opioid use disorder and acute and chronic pain.

Our phase 1 single sending dose study evaluating the safety Tolerability and pharmacokinetics of ITI Triple 3 in healthy volunteers is underway.

Initial results from this study are anticipated in the second half of this year.

We ended the quarter in a strong financial position with $556.2 million in cash cash equivalents and restricted cash.

In summary, our continued commercial performance and growing portfolio confirm the strength of our team as well as our long term commitment to developing and commercializing innovative therapeutics to improve the lives of patients with neuropsychiatric and neurological disorders.

Proud of what our team has accomplished during this time.

Mark.

Okay.

Thanks, Sharon, it's a pleasure to be here today with all of you to share our commercial progress.

Aaron noted, we're pleased with calculated market performance in the second quarter, despite continuing COVID-19 marketplace challenges affecting the medical care for patients with schizophrenia.

All of our launch fundamentals are strong and remain on track.

We continue to successfully execute our hybrid commercialization model, combining virtual and in person engagements.

Medical education, DTC, and social media campaigns complement our efforts.

<unk> continues to have a positive impact on patients and our market research shows that psychiatrists continue to rate kept light a highly on efficacy safety and tolerability and dosing.

As a result calculated total prescriptions increased by 22% over the prior quarter at a time when the overall antipsychotic market grew slightly by about 1 per cent.

Market conditions improved incrementally during the second quarter with increases in patient visits new patient starts and in person detailing.

While these trends have been encouraging we are monitoring the recent increase in Covid cases and are prepared to adjust our commercial strategy if needed.

In summary, we continue to be pleased with Capsulitis performance in the schizophrenia market and we are actively preparing for launch in bipolar depression immediately following FDA approval.

This potential approval would represent an important milestone for ITC and a major advance for this underserved patient population.

And here's why we're confident that this launch will be significant first kept light is a great product.

In clinical trials within the pepperoni showed efficacy and safety in treating depressive episodes associated with bipolar 1 or bipolar 2 both as a standalone treatment as well as in combination with lithium or valproate.

Results were similar to placebo for changes in weight fasting glucose total cholesterol triglycerides, prolactin and EPS, including akathisia.

Physicians consider efficacy and safety in selecting which drug to prescribe and then deciding to change treatment in bipolar depression.

To this point recent market research and an expert advisory board, both rated lumia chaperoned favorably for efficacy and safety, including its low risk weight gain metabolic changes in movement disorders.

Secondly, bipolar depression represents a significant market opportunity as Sharon noted more than 11 million adults in the U S live with bipolar 1 or bipolar 2 disorder.

These are debilitating conditions with more frequent and longer lasting depressive episodes than <unk> and hypomanic episodes.

This patient population is well informed and much larger than schizophrenia.

In addition to efficacy patients with bipolar depression are concerned about safety and tolerability, particularly weight gain and movement disorders.

The third reason this launch will be significant we are committed to achieving a competitive share of voice with our promotional activities that will drive <unk> awareness and adoption and bipolar depression, we are.

Expanding our sales force and our managed care accounts team continues to successfully educate commercial and other payors on bipolar depression unmet patient needs.

And the limited availability of approved treatments.

In short we are on track and this is a very exciting time for our company.

I'll now turn this call over to Larry to deliver further details on our financial results Larry.

Thank you Mark I will review our financial results for the second quarter ending June 32021.

Total revenues in Q2 grew to $20 million compared to $1.9 million of total revenues for the second quarter of 2020.

<unk> growth trajectory continued with second quarter net product revenues, reaching $19 million compared to $15.6 million in the first quarter of 2021 and $1.9 million in the same period last year.

Cost of product sales for $2 million in the second quarter of 2021 compared to $1 million for the second quarter of 2020.

Selling general and administrative expenses were $69.9 million for the second quarter of 2021.

Third to $41.4 million for the same period in 2020.

This increase is primarily due to an increase in commercialization and marketing costs.

Net loss for the quarter ended June 32021 was $68.7 million compared to a net loss of $63.7 million for the quarter ended June 32020 cash.

Cash cash equivalents restricted cash and investment securities totaled $556.2 million at June 32021, compared to $658.8 million at December 31, 2020.

This concludes our prepared remarks, operator could you. Please open the line for questions.

Thank you.

A reminder to ask a question you will need to press Star then 1 on your telephone to withdraw your question. Please press the pound key.

We ask that you limit yourself to 1 question and 1 follow up please standby, while we compile the Q&A roster.

Our first question comes from the line of Brian Abrahams with RBC capital markets. Your line is now open.

Hi, good morning, Thanks for taking my questions and congrats on the continued progress.

I guess first off on schizophrenia would love to learn a little bit more about from the metrics that you're seeing on the ground in particular.

Whether you're starting to see pull through in terms of longer persistence from the better tolerability.

Great Great questions, Brian Good morning, and thank you for the questions and I'll ask Mark Mark do you want to take that.

Yeah sure Thanks, Sharon and thanks for the question Brian.

With cap light.

Has been very good.

It has been outpacing the.

The benchmark launches of prior anti psychotic launches and that has continued this was something that we.

We hypothesize would be the case, given the very favorable safety and Tolerability profile for cap Lidar and as we track the T. Rx day in our <unk> ratio.

That has continued to look very good and continued into the second quarter.

From the perspective of where we're sourcing our business.

We continue to source new patients.

As well as the refills continuing to look very strongly.

Patients come from all lines of therapy, including new patients, where the patients insurance will allow that newly diagnosed patients with the vast majority of the business coming from switch patients coming from other anti psychotics and they come from a variety of different anti psychotics. So not just from 1 or 2.

Pickler ones.

So we see that as a very healthy dynamic that kept light is sourcing patients from <unk>.

A wide variety of lines of therapy as well as prior antipsychotic use.

In terms of the impact of Covid during the second quarter as Sharon noted in her comments.

Did see notable improvements in the second quarter, we saw improvements in patient visits we saw improvements in new patient starts.

As well as improvements in.

In person detailing by our sales force. So this is something obviously that we're monitoring very closely with the recent rise in cases.

But we do expect to see continued improvements in the second half of the year and.

And do you expect to continue to grow the brand quarter over quarter during that time. So so Brian I hope I hit on all the things that you got to ask if there is something that I missed just let me know yes.

Yes, Mark I was that was really helpful. Thank you and then maybe just a quick follow up on bipolar as you.

As you prepare for the launch I know you've talked about a little bit about the sales and marketing strategy in the target audience. I was wondering if you could expand further on that I guess, how you capitalize on having a potential bipolar too.

Ah indication included in the label.

And whether or not you're preparing for primarily a telemedicine or an in person environment or some sort of hybrid how that might impact that the cadence of SG&A spend as well. Thanks.

Yeah, So I'll start there and perhaps Larry or Sharon could comment on the SG&A spend and I'll start with the second part of your question.

In terms of our preparation for the launch our preparations are going very well.

Very much on track.

We have initiated the expansion of our sales force the process for doing so and expect to have.

That expansion in place prior to approval. So we can hit the ground running.

As soon as we're approved.

On the Paducah date.

In December.

We've said before that the target audience.

That we will be deployed against is going to grow from approximately 23000 today to about 44000.

With the addition of physicians, who treat a lot of bipolar depression.

But do not treat a lot of schizophrenia.

Education payers on.

On the very significant unmet need that continues to exist both in bipolar 1 and bipolar too and the limited availability of approved products for both of those but in particular in bipolar too and I guess, what I would say there is we do expect to be approved for.

For a broad range of patients, including bipolar 1 and bipolar 2 both as monotherapy and as adjunctive therapy.

And bipolar 2 is 1 element of what I consider to be a very strong profile emerging out of the clinical trials in bipolar depression, where we saw robust efficacy and a safety and tolerability profile that essentially replicated what we saw.

In schizophrenia with favorable results.

Our results on both the metabolic and weight gain side essentially comparable to placebo as well as on the movement disorder side.

And we do know patients with bipolar depression may even be more sensitive to things like weight gain and movement disorders than even in patients with schizophrenia.

And so we feel very confident in the profile that's emerged from the clinical trials in bipolar depression. So.

Again, I hope I answered your questions I don't know, if Larry or Sharon, we'd like to comment on the SG&A expense yes.

Larry ill.

Sharon go ahead please.

I was just going up.

I have to comment on a telemedicine right, Brian asked about telemedicine and Mark do you just want to comment a little bit on what we have found for.

Tom.

Kols and physicians on the differences schizophrenia patients and bipolar patients and response to and the ability to use telemedicine.

Yes, absolutely, Brian I'm, sorry that I did miss that piece in my response to your questions. So first of all we are planning to continue with the hybrid commercialization model.

That we've been operating with pretty much since the beginning of launch where our sales representatives as well as our physician speakers for medical education.

When they can engage physicians in person they do so but if physicians are working remotely and non available for in person interactions are representatives and our speakers per.

Pivot very definitely to virtual engagements.

<unk> been doing that very well throughout the launched.

And we'll just have to see what the conditions are as we launch the bipolar depression, we just feel confident that we'll be able to.

Deliver regardless of the conditions that exist at that time.

As Sharon mentioned, we've been doing a lot of market research we've had several different advisory board.

And when you think about the interaction of a bipolar patient with the psychiatrist in the telemedicine setting, it's actually quite different than a patient with schizophrenia in that same telemedicine setting and by that the bipolar depression patients.

As a patient who is very well informed of their condition. They are advocates for their own health.

They ask a lot of questions there very communicative.

They are able to articulate any issues that they're having with their current treatments and so the physicians that we've spoken to you about this feel that in the telemedicine setting the bipolar depression patients is actually somewhat easier to manage than.

In general a patient with schizophrenia. So that's something that we've learned in our market research and through discussions and our advisory boards with with psychiatry.

And Larry if you want to comment on the SG&A.

Yeah Yeah.

We do expect SG&A expenses to increase in the second half for the year.

As we continue that schizophrenia commercialization, but also in preparation for the possible approval for our bipolar indication.

Yeah.

Great. Thank you so much for the detailed answers.

Thank you.

Our next question comes from the line of Charles Duncan with Cantor Fitzgerald. Your line is now open.

Yes, thanks for taking the question good morning, and congratulations Sharon and team to progress in the quarter nice growth trends and a quick commercial question and then 1 pipeline question regarding the commercial question.

In terms of script growth I think Mark mentioned, new patient and it's well, it's retails and I guess I'm wondering if you could expand on that where are those new patient adds coming from broader span of writing.

Physicians or deeper within a practice and then regarding expanding the sales force do you have any quantitative metrics on that what we could expect for its bipolar approval.

Yeah. Thanks for the question Charles.

Thanks, Sharon I'm, sorry, I jumped the gun there.

Yeah. Charles we are at this stage of the launch we continue to be pleased with both the breadth of prescribing as well as the depth of prescribing we continue to add new prescribers week over week in a very steady fashion.

And the prescribers.

Listing prescribers, we continue to increase their depth of prescribing so.

In a nutshell, we see the new patient starts coming both from improved breadth as well as improved depth.

244000 in bipolar depression, so essentially doubling the size of our call plan.

Call panel, however, we don't expect to.

Double the size of our sales force because of some of the efficiencies that our sales force is gain and some of the conditions that exist.

With telemedicine it will be a significant expansion that.

That expansion is underway.

And at a later date, we will come back to you with some more of the details around that.

Okay. Thanks.

Thanks for that additional information regarding the pipeline I guess, some kind of SaaS forwarding beyond PPD and considering the movement pepperoni and major depression disorder.

I'm wondering if with regard just study sizable 1 and eventually silo too.

What do you think is the best source of debt, reducing patient heterogeneity in that in those.

Is it that perhaps the screening measure of burden or other.

Oh it approaches.

And given the.

A large number of Mds.

Studies are ongoing.

I'm wondering how are you ensuring that you're working with centers that are going to deliver you.

Patients are calm quality patients for those studies.

Okay.

I think we heard your question Charles I'm, sorry, you keep sort of fading in and out.

But I think we heard it and I'm going to ask Suresh if you'd like to start and I can chime in as.

As well if you couldnt hear some of that Suresh, yes, I can yes.

Yes.

Thank you Sharon.

Regarding the heterogeneity that is true that all patients are very heterogeneous in this population.

In order to enroll quite number of patients 1 of them for key criteria seems to end on the right patient for the trial.

For that we have a lot of things.

Included in the protocol in the trial.

That goes from Delek thing that fight.

And also looking at different things within the protocol by including.

Adjudication process.

We have as bonds that are involved.

In enrolling every patient and reviewing the price patient is included in the Bronx.

And there's also an ongoing.

What have you all for every patient that comes into the trials.

Regarding including the right patients are you using.

<unk>.

Alright.

Some other screen and a certain.

Level of burden.

As a whole range of things.

Moving.

In the trial My book is 1 of them that is our disc scales and other screening things we are including in the trial, but there is also a review from that we review each patient individually.

Yes.

Thank you.

Our next question comes from the line of Andrew Tsai with Jefferies. Your line is now open.

Okay, great. Thanks, Thanks, and good morning for.

First question is just on the launch which is great to see you.

Continuing to see quarterly upticks, but.

So hi, Hi, Andrew Thanks for the question I'll start and then I'll ask Mark if he has anything.

To add on and really what you're asking is for some color on the landscape. So let me give that to you as an overall first we had a solid Q2.

And as you heard we had strong execution and solid growth.

The patient experience with <unk> that has been very positive.

And Covid has very much impacted the care of patients with schizophrenia.

As we've said before we've seen notable improvements.

And market conditions, and particularly in Q2.

We believe we continue to see improvement throughout the rest of the year, but to your question. The magnitude of these improvements is dependent on the COVID-19 impact and conditions over the next few months.

Mark do you have anything you want to add to that.

Maybe just to continue on with that we have seen notable improvements during the quarter and new patient visits and new patient starts in person detailing.

With the recent wave of increases in cases in particular in some of the central parts of the country, we are seeing geographic pockets where.

Patient visits have have slowed and there are some restrictions being placed on representative access in certain offices, but we've seen that throughout the launch where it's sort of waxes and wanes and you get some spots that get more restrictive and then they open back up and so we're just going to have to see what happens with the cash.

Current COVID-19 situation and the current conditions, but as Sharon mentioned, we have been encouraged by what we've been seeing we do expect to continue to grow quarter over quarter.

The commercial team will adapt to whatever conditions are in front of them and we feel confident that we'll be able to continue.

The excellent execution that the team has been doing.

So hopefully that helps Andrew.

Thank you.

Our next question comes from the line of Jessica Fye with Jpmorgan. Your line is now open.

Hey, guys. Good morning can you talk about your goals for commercial coverage for a couple of lighter in bipolar depression, and how fast do you think you can get there.

Mark.

Again for your debt.

Yes, sure Sharon Hi, Jessica Yes R.

Our goals for the commercial channel or to have essentially the same broad coverage that we achieved early on in the launch in schizophrenia, and both the Medicare and Medicaid channels.

To that end.

As I mentioned in my prepared remarks, our market access team has been actively engaging payers, particularly in the commercial channel.

And have been in discussions both in educating.

The payers on the unmet need and the limited availability of approved options for bipolar.

Both bipolar 1 or bipolar too.

And are engaged in discussions to broaden the current access that we have.

In commercial.

We will be providing updates on that as we get closer to the launch and immediately following launch.

And for <unk>.

I don't I didn't hear you.

Expand a little on commercial.

On how we are now speaking with those.

Those payers as well do you want to say anything more about that mark.

I'll just add that we're actively engaged with the commercial payers to improve the access to capital either.

In a similar fashion that we did with Medicare and Medicaid.

During the schizophrenia launch Jessica Youll recall that in schizophrenia.

The 2 major channels are Medicare and Medicaid.

Roughly 70% to 85% of all schizophrenia prescriptions flow through.

With the addition of bipolar depression that mix will begin to shift.

In favor of the commercial channel Medicare and Medicaid will continue to be very important for bipolar depression as well.

But whereas about 15% to 20%.

Patients with schizophrenia prescriptions come through the commercial channel that growth to our estimates of roughly 35% to 45% of bipolar depression prescriptions coming through the commercial channel. So it becomes an increasingly important channel for us.

And our team is actively engaged with the payers to achieve.

Achieve a level of access that is similar to what we have today in Medicare and Medicaid for calculator.

Thank you.

Our next question comes from the line of Marc Goodman with SBB Leerink. Your line is now open.

Hi, Thanks for taking my question. So this is Rudy on the line from Mark.

Congrats on the strong quarter I just have 1 question regarding the pipeline. So can you provide some color on upcoming phase II study of ITI 214 in Parkinson, maybe just remind us about the study design and then I have 1 quick follow up question.

Right. Thanks, Judy for the question.

As you know we are developing.

Yes.

1 of our PD, 1 inhibitors ITI 214.

For.

Parkinson's disease.

In our phase 1.2 study we saw that motor symptoms of Parkinson's disease improved on top of optimized Parkinson's therapy.

Dyskinesia symptoms improved in patients with <unk>.

Levodopa induced dyskinesia at baseline.

We'll share.

Details on the design of the upcoming trial later this year, but the principal objective of the study is the study parameters of motor symptom improvement without worsening dyskinesia.

The objective of our PD 1 program N P. D extends beyond motor symptoms. However encompasses the exploration of cognition.

<unk> potential disease modifying effects that result from the anti inflammatory effects.

The CNS.

Which we've demonstrated a car with this mechanism of action.

In our PD 1 inhibitors.

Okay.

Ben.

A quick follow up for <unk>.

<unk> just wondering what's the cross night for a quarter and for 2.

'twenty 1.

I'm, sorry, I didn't quite grasp the question what's the what.

The growth Tonight.

Gross to net.

Gross to net okay, Larry I'll take that.

Yes.

Our gross to net.

Historically has been between the mid Twenty's and low 30 so.

It's in that range and we expect it to continue in that range.

Thank you.

Our next question comes from the line of Omar <unk> with Evercore. Your line is now open.

Hi, guys. Congrats on the quarter. Thanks for taking my question, maybe just to get a little more specific about the trends going into the back half of the year.

With the Covid.

<unk> increase.

On on new patient adds the new to brand it looks like the trends are fairly consistent.

And of course, youre going off for a bigger base.

Yes My question is.

By our math it does look like you're probably still growing double digits at a lower pace, but it's still double digits into the third quarter is that consistent with.

Data youre seeing internally as well number 1.

And secondly, as we think about the long acting injectable.

Yes.

Okay, Hi, Omar thanks for the questions.

Well I'm not sure that we are prepared at this point to.

To give you specific numbers about the growth.

The second half for the year, we do agree that we expect to see continuing growth.

Mark do you want to comment on that.

No.

I think that I think generally you characterized it well.

Go through these different periods of Covid you see some acceleration you see some deceleration, but the overall picture is continued growth and we expect that to continue.

In the second half of the year.

Yeah.

Right and then on the bioavailability.

That's why we're doing the study.

It's to look at the safety and Tolerability as well as.

The plasma levels.

Of drugs, so I wish I had the answers to give you, but then we probably wouldn't need to be doing the study.

Of course, our animal data, but.

And just a couple of months, we'll be able to tell you in human so maybe we could stay tuned.

And we are looking to see sustained plasma levels for 1 month of course, but.

I think.

Rather than speculate let's just wait for the data that will help soon.

Thank you.

Our next question comes from the line of Greg Suva Navy with Goldman Sachs. Your line is now open.

Yeah.

Yes.

And pardon me Gregg Lowe Navy. Your line is now open.

Okay, sorry about that I was on mute good morning, Thanks for taking my questions.

A couple if I could 1 just on the bipolar depression opportunity and I realize that delta variance for Covid is an unknown at this stage, but.

As we think about.

The launch of that product anything that you can say about the shape of that uptake curve, whether it's relative to kind of the shape that we're seeing.

For schizophrenia or relative to the shape that we've seen for other.

Analog drugs.

That have gotten the bipolar depression.

Vacation.

So that's my first question and then my second question.

Just has to do with your current.

Prescription dynamics and it Scott.

I think comments you made before about having patients who are new to therapy and that are getting capped lay it up but youre also getting switches and I'm wondering.

Is that from an intracellular their perspective is there a.

Certain focus.

By the company in terms of which patients you would prefer.

To get on therapy.

And for those that are on therapy are there any differences in.

Okay, a lot of questions Mark I think that.

Most if not all of them are directly to again please.

Yeah, Let me let me let me take a shot at this Greg.

If I Miss something Sharon you can pick me up on those or Greg you could ask a follow up question regarding the.

The potential shape of the curve once we get approved for bipolar depression I think if you look historically at the 2 most recent anti Psychotics that were approved in bipolar depression.

Latuda and then more recently <unk>.

You saw a very significant inflection in their prescription uptake.

Mediately upon.

Receiving the approval in bipolar depression.

And we have every reason to believe with.

With cap light and the profile that's emerge from the clinical trials.

Debt, we will see a similar inflection.

And so.

We're very excited about the potential to help patients in this area and very excited about.

What that could mean for.

The potential adoption of capital Ida and.

And the business of capital item.

In terms of the current prescriptions in the patients.

Or being placed on cap later.

Yes, it is a mix.

Newly diagnosed patients as well as switch patients with what I would say being the vast majority of patients being.

Being switch patients coming to capital Ita.

We are encouraged to see that there are newly diagnosed patients being placed on <unk>, where the patients insurance will allow that.

But the dynamics in the anti psychotic area and in schizophrenia in particular is that the magnitude of switches.

Is much greater than the number of new patients that are diagnosed each year with schizophrenia.

So we're not surprised to see the majority of patients coming.

As a switch from another anti psychotic rather than.

For newly diagnosed patients we don't have a preference we believe capital either as great product.

And it can be helpful too.

Virtually any patient that the product is indicated for but it's just a matter of the dynamics that there are $2.4 million.

Adults with schizophrenia.

They are frequently.

Discontinuing their existing anti psychotic and moving to a new 1.

And whenever they do that that's an opportunity for cat flight with its with its efficacy profile as well as very favorable safety and tolerability profile for the physician to consider capital either as the agent that they go to.

I don't I think you also had mentioned about do we see a compliance and persistency difference depending on the type of patients that is placed on cap line.

Can't say that we do.

It's probably still a little early to understand those dynamics, all the way down to that patient level, but overall, we're very pleased with the compliance and persistency that we see.

From patients that are placed on <unk>. So.

Greg I don't know if I hit on all of the elements of your question, but if I haven't.

A follow up.

Danielle just to remind you the order of magnitude.

Nearly diagnosed patients is small compared to the overall schizophrenia patient population with only 100000 new patients.

Diagnosed with schizophrenia.

Thanks Sharon.

Thank you.

As a reminder, in the interest of time, we ask that you. Please limit yourself to 1 question.

Our next question comes from the line of Ash, Ronnie Verma with Bank of America. Your line is now open.

Hi, Thanks for taking our question. So I apologize if this has been a desperate for it I have been so keen on call.

Silicon per day will be kept light of consensus for 2021.

I understand that you expect that EBITDA.

For the growth sequentially, but could the Sidoti IDEXX growth for example, surpassed the 22% seen in the second quarter.

Yeah, Hi.

Thanks for the question, we did address that.

Earlier and.

We said that we have seen notable improvement in market conditions and in particular in Q2, and hence leading to.

Our strong quarter, we do believe that we will continue to see improvement throughout the year.

We've said that the magnitude of these improvements.

Half of the year is really dependent on.

On Covid impacts.

Thank you.

Our next question comes from the line of <unk> Kulkarni with Canaccord. Your line is now open.

Good morning. Thank you for taking my question and nice to see all the progress that the company is making I'll ask my 1 question on your pipeline on.

Programs related to behavioral disturbances and dementia in dementia related psychosis, it might still be very early but how is the organization thinking about approaching specific groups and dementia versus dementia is a whole clinical trial programs and have you received any input from the FDA on the stomach.

Yes, hi.

Thank you for the questions.

We do believe that too.

<unk> hundred 80 for is and then me that we are.

Flooring behavioral disturbances in patients with dementia with.

We are in discussions with the FDA.

Now over the design of these studies and so if you can.

Hum.

Stay tuned.

We will have further information.

On that we do think just to give you a little more detail on 12.84.

Do think that it's very well suited to study and many populations and we've just started with the elderly population.

Which we included in the Phase 1 studies that we reported to you.

Earlier.

Carl.

So.

I think we're very excited about 12.84 and about.

The development program.

And behavioral disturbances in patients with dementia, as well as psychosis and dementia depressive disorders and the elderly.

And as I mentioned on the first programs we are in discussions.

Right now and we'll get back to you soon.

Got it thank you.

Thank you. This concludes today's question and answer session I will now turn the call over to Sharon mates for closing remarks.

Okay. Thank you operator, and thank you everyone for participating in today's call.

We are very excited about the prospects.

Of kept lighter end of our development pipeline moving forward.

We are excited for the opportunity to be helping patients and we think that we are developing new medicines to help the lives of patients and.

We look forward to updating you as we go forward with that operator, you can now disconnect the call.

Ladies ladies gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Q2 2021 Intra-Cellular Therapies Inc Earnings Call

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