Q1 2022 Neurocrine Biosciences Inc Earnings Call

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Operator: Biosciences Inc. Biosciences Inc. Good day everyone and welcome to today's Neurocrine Biosciences reports its first quarter results. At this time, all participants are in a listen only mode.

Good day, everyone and welcome to today's Neurocrine Biosciences reports first quarter results. At this time all participants are in a listen only mode. Later, you will have an opportunity to ask questions. During the question and answer session. You May Register to ask a question at any time by pressing the star and one on your Touchtone phone. Please note this call maybe Rick.

Got it and I'll be standing by should you need any assistance. It is now my pleasure to turn today's program over to Todd Tusa V P of Investor Relations.

Operator: Later, you will have an opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. Please note this call may be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn today's program over to Todd Tushla, VP of Investor Relations. Thank you, operator. Good morning, everyone.

Thank you operator, good morning, everyone and thanks for joining our first quarter 2022 earnings call with me as usual are Kevin Gorman, Our Chief Executive Officer, Matt Abernethy, Our Chief Financial Officer, I read Roberts, our Chief Medical Officer, Eric benefits, our Chief commercial officer, and Kyle Gano, our chief business development and strategy Officer.

Todd Tushla: And thanks for joining our first quarter 2022 earnings call. With me as usual are Kevin Gorman, our Chief Executive Officer, Matt Abernethy, our Chief Financial Officer, Eiry Roberts, our Chief Medical Officer, Eric Benevich, our Chief Commercial Officer, and Kyle Gano, our Chief Business Development and Strategy Officer. Before we get going, I'll remind everyone that during today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially.

Before we get going I'll remind everyone that during today's call we will be making forward looking statements. These statements are subject to certain risks and uncertainties and our actual results may differ materially I encourage you to review the risk factors discussed in our way.

Todd Tushla: I encourage you to review the risk factors discussed in our latest SEC filings. After our prepared remarks, we'll be happy to address your questions. Now, I'll hand the call over to Kevin Gorman. Thank you, Todd. Good morning, everyone.

SEC filings after our prepared remarks, we'll be happy to address your questions.

Now I'll hand, the call over to Kevin Gorman.

Thank you Todd Good morning, everyone I'm sure you saw our press release this morning, and I have to say I'm very pleased with the work of our entire commercial and medical organizations.

Kevin Gorman: I'm sure you saw our press release this morning, and I have to say I'm very pleased with the work of our entire commercial and medical organization in educating health care professionals on TD, which resulted in a record number of TD sufferers being treated with Ingressa last quarter. However, while the external environment has improved, it is not back to normal, and there are still challenges. However, I believe we are adapting well to the remote delivery of health care, which we know will persist at some level moving forward.

And educating healthcare professionals on TD resulted in a record number of TD sufferers being treated with congrats on last quarter.

Now while the external environment has improved it does not back to normal and there are still challenges.

However, I believe we are adapting well to them so the remote delivery of health care.

We know will persist at some level moving forward.

Kevin Gorman: So we have now seen our fourth consecutive quarter of sequential growth. We're not only making progress on our commercial. As you may recall, at the beginning of the year, we updated you on the portfolio of clinical programs that we had started, what we were anticipating starting this year, and the data. It was very aggressive.

So we have now seen our fourth consecutive quarter of sequential.

Yes sequential growth.

We're not only making progress on our commercial business.

As you might recall at the beginning of the year. We updated you on the portfolio of clinical programs that we have started.

What we are anticipating starting this year and the data readouts.

That was very aggressive.

Kevin Gorman: I'm pleased that we remain on track for most of these programs, importantly, including filing the FNDA for Ingressa in Huntington's disease and our two data readouts in Essential Tremor and CSWS. Now, as I will share with you, there are two programs that have been impacted by the invasion of Ukraine, and we are currently mitigating the impact of the loss of those potential clinical sites. But aside from that, we have handled this growing and complex pipeline extremely well, and I'm looking forward to sharing data with you later this year. Now, I'd like to hand it over to Matt.

I'm pleased that we remain on track for most of these programs importantly, including filing the NDA for <unk> in Huntington's disease.

And our two data readouts in essential tremor and see CFW S.

Now as I, we will share more with you. There are two programs that have been impacted by the invasion of Ukraine.

And we are currently mitigating the impact of the loss of those potential clinical sites.

But aside from that we have handled this growing and complex pipeline extremely well and I'm looking forward to sharing data with you later this year.

With that I'd like to hand, it over to Matt.

Good morning, as you saw in our earnings release, we delivered strong Q1 performance with aggressive sales totaling $303 million in what is typically the most challenging quarter of the year.

Matt Abernethy: Good morning. As you saw in our earnings release, we delivered strong Q1 performance with aggressive sales totaling $303 million in what is typically the most challenging quarter of the year. Our team did a very nice job managing through the Q1 pair-related seasonal dynamics and also rectifying the Q4 pharmacy distribution challenges we experienced. These two items ultimately benefited our refill rate for patients as compared to the previous first quarter.

Our team did a very nice job managing through the Q1 payer related seasonal dynamics and also rectifying with Q4 R&D distribution challenges we experience.

These two items ultimately benefited our refill rate per patient as compared to the previous first quarters. In addition, we exited Q1 with a record number of new patients, reflecting an improving external environment and benefits from our commercial initiatives.

Matt Abernethy: In addition, we exited Q1 with a record number of new patients, reflecting an improving external environment and benefits from our commercial initiative. As you think about Q2, we do expect sequential growth. However, the dollar growth will likely not be as strong as prior years, given the benefit we saw in Q1 from our team's improvement in managing through the seasonal dynamic.

As you think about Q2, we do expect sequential growth.

However, the dollar growth will likely not be as strong as prior year given the benefit we saw in Q1 from our team's improvement managing through that seasonal dynamic.

Eric Benevich: On the financial front, we continue to have plenty of flexibility with a strong balance sheet and an attractive P&L profile to continue to invest in Ingresa and advance our pipeline. With that, I'll now hand the call over to Eric Benevich, our Chief Commercial Officer. Thanks, Matt.

On the financial front, we continue to have plenty of flexibility with a strong balance sheet and attractive P&L profile to continue to invest in growth and advance our pipeline.

With that I will now hand, the call over to Eric benefit our Chief commercial Officer Eric.

Thanks, Matt.

Eric Benevich: I'm pleased to provide an update for everyone regarding our Q1 commercial progress. With our Ingresa franchise, Q1 has always been a tale of two half-quarters, with the first half of the quarter impacted by seasonal pair dynamics largely related to the prescription reauthorization process. The second half of Q1 is when we usually see an uptick in new patients start. So with more than 30% year-over-year growth in Q1 this year, what were the drivers of our growth?

I'm pleased to provide an update for everyone regarding our Q1 commercial progress.

With our aggressive franchise Q1 has always been a tale of two half quarters with the first half of the quarter impacted by seasonal payer dynamics largely related to the prescription reauthorization process.

The second half of Q1 is when we usually see an uptick in new patient starts.

More than 30% year over year growth in Q1 this year.

What are the drivers of our growth.

Despite the surge in the <unk> variant early in Q1, we did see a general improvement in the external environment translating into improved HCP assets and a favorable conditions to mitigate the typical Q1 payer dynamics.

Eric Benevich: Despite the surge in the Omicron variant early in Q1, we did see a general improvement in the external environment, translating into improved HCP access in favorable conditions to mitigate the typical Q1 payer dynamic. We knew the key to a successful Q1 was the focus on execution, and our field teams did a phenomenal job delivering not only strong rates of compliance but also record levels of new patients. These results were accomplished while we recruited, trained, and onboarded an additional 140 sales representatives to complete our sales force expansion at the end of the quarter.

The key to a successful Q1 was to focus on execution and our field teams did a phenomenal job delivering not only on strong rates with some clients, but also record levels of new patients.

These results were accomplished while we recruited trained and Onboarding and the incremental 140 sales representatives to complete our salesforce expansion at the end of the quarter.

Eric Benevich: We expect to see the benefit of the expanded sales force as we get into the back half of the year. As for the second quarter, as Matt mentioned, given our strong performance in Q1, we do expect to see continued growth in Q2 over Q1, but at a slightly lower percentage increase compared to prior years, given the stronger-than-expected growth in Q1. This past Sunday was the five-year anniversary of the launch of Ingressa; few expected us to achieve the level of success we've had given the effort required to diagnose and treat Tardive Dyskinesia. From a regulatory perspective, Ingressa was designated a breakthrough medicine by the FDA.

We expect to see the benefit of the expanded sales force as we get into the back half of the year.

As it relates to the second quarter as Matt mentioned, given our strong performance in Q1, we do expect to see continued growth from Q2 over Q1, but at a slightly lower percentage increase compared to prior years, given the stronger than expected growth in Q1.

This past Sunday was the five year anniversary of the launch of the Brexit.

You expected us to achieve the level of success, we've had given the effort required.

A related to diagnosis and treatment of tardive dyskinesia.

From a regulatory perspective, congrats it was designated a breakthrough medicine by the FDA.

It's also been a breakthrough in the sense of completely changing the paradigm of TV treatments.

Eric Benevich: It's also been a breakthrough in the sense of completely changing the paradigm of TD treatment. What was once an untreatable condition is now viewed as treatable. What was once a stigmatizing condition is now becoming more mainstream. What was once a dramatically underdiagnosed condition is now more systematically being diagnosed and managed. We've worked hard to change the historical paradigm, and our results speak for themselves.

What was once an untreatable condition is now viewed as treatable.

What was once a stigmatizing condition and it's now becoming more mainstream.

What was once a dramatically under diagnosed condition is now more systematically being diagnosed to manage.

We've worked hard to change the historical paradigm and our results speak for themselves.

Eric Benevich: However, our work remains largely unfinished, with approximately 85% of the estimated 600,000 people living with TD either still undiagnosed or not being treated with a BMAT2 inhibitor like Ingresa. So we've made significant commercial investments to accelerate the diagnosis and treatment of PD, not just this year, but for years to come. The expansion of our field sales team and continuation of our direct-to-consumer campaign give evidence of our conviction to help many more TD patients.

However work remains largely finished with approximately 85% of the estimated 600000 people living with TD, either still in diagnosed or not being treated with a <unk> inhibitor like congrats.

So we've made significant commercial investments to accelerate the diagnosis and treatment of PD.

This year, but for years to come.

The expansion of our field sales team the continuation of our direct to consumer campaign.

Evidence to our conviction to help many more TD patients.

Lastly, I'd like to share that the month of May has been designated as mental health awareness month.

Eric Benevich: Lastly, I'd like to share that the month of May has been designated as Mental Health Awareness Month, and this week in particular is recognized as Tardive Dyskinesia Awareness Week, or TDAW for short. Five years ago, most people living with mental health conditions were unaware that TD existed. Today, TDOT is now officially recognized across the entire United States. We've made great progress raising awareness in the mental health community. I'm awed by what our team has been able to achieve in these past five years.

This week in particular is recognized as tardive dyskinesia awareness week or <unk> for short.

Five years ago, most people living with mental health conditions were unaware that PD existed.

Peter is now officially recognized across the entire United States.

We've made great progress raising awareness and mental health community.

I am awed by what our team has been able to achieve in these past five years and I'm humbled by the scope of what we aim to accomplish in the years ahead.

Eiry Roberts: And I'm humbled by the scope of what we aim to accomplish in the years ahead as we improve the lives of the many thousands of patients still suffering from TD. So with that, I'll turn the call over to my colleague, Eiry Roberts, our Chief Medical Officer. Thank you, Eric, and good morning to everyone. I'm happy to provide a brief update regarding a selection of our clinical programs, beginning with Valbenazine. In March, we received very good news from our partner, the Mitsubishi Tanabe Pharma Corporation, regarding the regulatory approval of Valbenazide in Japan for the treatment of target dyskinesia.

As we improve the lives of the many thousands of patients still suffering from TD.

So with that I'll turn the call over to my colleague <unk> Roberts, our Chief Medical Officer.

Thank you, Eric and good morning to everyone.

I'm happy to provide a brief update regarding our selection of our clinical program, beginning with Bob and his team.

In March we received very good news from our partner Mitsubishi Tanabe Pharma Corporation regarding the regulatory approval of <unk> in Japan for the treatment of tardive dyskinesia.

Eiry Roberts: We were very impressed with the data that was generated from the JConnect Phase 3 study, and we look forward to supporting our Japanese partner as they proceed with the launch plans for DysPAL, the Japanese brand name of Balbeniz. Turning to valbenazine for the treatment of chorea in Huntington's disease.

We were very impressed with the data that was generated from the Jason next phase three study and we look forward to supporting our Japanese partner as they proceed with launch Bob It's Bob.

The Japanese brand name.

Turning to Bob <unk> for the treatment of chorea in Huntington's disease in collaboration with the Huntington's disease study group, we were pleased to present additional safety and efficacy data at the American Academy of Neurology meeting earlier this month.

Eiry Roberts: In collaboration with the Huntington's Disease Study Group, we were pleased to present additional safety and efficacy data at the American Academy of Neurology meeting earlier this month. You will recall from the Connect HD study that valbenazine met the primary endpoint of significant improvement in career severity versus placebo, as measured by the Unified Huntington's Disease Rating Scale Total Maximal Career Score, with improvement beginning as early as week two of treatment. In addition, the percentage of study participants with clinician or self-rated global improvement was significantly higher at 12 weeks with valbenazine treatment than with placebo. Importantly, also, the safety profile was consistent with Val Benazir's known safety profile in TD, with no suicidal behavior or ideation.

You will recall in the Kinect HD study that <unk> met the primary endpoint of significant improvement in Korea severity business placebo as measured by the unified Huntington's disease rating scale total maximal Korea score with improvement beginning as early as week too.

Treatment.

In addition, the percentage of study participants with clinician or self rated global improvement with significantly higher at 12 weeks, we saw balancing treatment with placebo.

Importantly, also the safety profile was consistent with <unk> known safety profile and TD with no suicidal ideation.

<unk>.

We remain on track to submit a supplemental NDA to the FDA in the second half of this year.

Eiry Roberts: We remain on track to submit the supplemental NDA to the FDA in the second half of this year. But I would be remiss if I did not mention the humanitarian crisis occurring in Ukraine. Our thoughts are with everyone tragically impacted by the current situation in Ukraine, including our contract research organization and political research partners in the region. Like many in our industry, several of our recently initiated clinical programs in psychiatry and neurology are intended to involve sites located in Ukraine and Russia.

I'd be remiss, if I did not mention the humanitarian crisis occurring in Ukraine.

Also as always everyone tragically impacted by the current situation in Ukraine, including a contract research organization clinical research partnership in the region.

Like many in our industry several of our recently initiated clinical program in psychiatry and neurology intended to involve sites located in Ukraine and Russia.

Eiry Roberts: While we've pivoted to contingency plans across our portfolio, the war has already impacted the timeline for the phase three study for valbenazine in media related to cerebral palsy and the initiation timing for the second phase three study of valbenazine for the adjunctive treatment of schizophrenia. We now expect to have top-line data for the treatment of dyskinesia due to cerebral palsy in 2024. While for ATS, top-line data for the first phase 3 study of valbenazine for the adjunctive treatment of schizophrenia remains on track for 2023. Initiation of the second phase 3 study, however, has been delayed to 2023. All other clinical programs remain on track at this time. Now, turning to NBI-104, our selective T-type calcium channel antagonist in license from Eidosia.

While we've pivoted to contingency plans across our portfolio. The wall has already impacted the timeline for the phase III study football benzene media related cerebral palsy, and the initiation timing for the second phase III study of <unk> for the <unk>.

<unk> treatment of schizophrenia.

We now expect to have top line data for the treatment of dyskinesia due to cerebral palsy in 2024, well for Acs topline data for the first phase III study about Tennessee for the adjunctive treatment of schizophrenia remains on track for 2023.

Initiation of the second Phase III study, however has been delayed to 2023.

All of these clinical programs remain on track at this time.

Turning to MBIA window for our selective T type calcium channel antagonists in license from Baidu.

Eiry Roberts: Mid-year, we will read out the data from our Phase 2 proof-of-concept study in essential tremor, and then in the second half of 2022, we'll complete our ongoing trial in epilepsy with continuous spike and wave during sleep. Based on the review of the totality of data generated for NBI-104, we will then determine potential next steps for 104 in each of these indications. In closing, I'm very pleased with the progress of our clinical pipeline and want to thank the teams working on each of these programs for their hard work and dedication. With that, I'll hand it back to Kevin. Kevin?

Midyear, we will read out the data from our phase II proof of concept study in essential tremor.

Then in the second half of 2022, we'll complete our ongoing trial in epilepsy with continuous spike in waves during sleep.

Based on the review of the totality of data generated for MDI Windows for we will then determine potential next steps.

In each of these indications.

In closing I am very pleased with the progress of our clinical pipeline I want to thank the teams working on each of these programs for their hard work and dedication.

With that I'll hand back to Kevin Kevin.

Thanks, Irina operator, we are now ready for questions.

Kevin Gorman: Thanks, Eiry. Operator, we are now ready for questions. At this time, if you would like to ask a question, please press the star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing the pound key.

At this time, if you would like to ask a question. Please press the star and one on your Touchtone phone you may remove yourself from the queue at any time by pressing the pound key will once again that is star. One if you would like to ask a question. We will take our first question from Paul Matteis with Stifel.

Operator: Once again, that is star and one. If you would like to ask a question, we'll take our first question from Paul Matias with Stiefel. Hey, thanks so much and congrats on the quarter. As it relates to your improvement with compliance this quarter, right. I was wondering if you could just add a little bit of context around that.

Hey, thanks, so much and congrats on the quarter.

As it relates to your improvement with compliance this quarter I was wondering if you could just add a little bit of context around that so I think historically, you've said something like a 7% to 8% headwind can happen in <unk> with refill delays what does this look like relative to prior years and then maybe can you just comment a little bit on your expectations for gross to net this year and if theres going to be any.

Paul Matias: I think historically you've said something like a seven to eight percent headwind can happen in one queue with refill delays. What does this look like relative to prior years? And then maybe can you just comment a little bit on your expectations for gross net this year and if there's going to be any increased impact of contracting? Yeah, hi, Paul.

Increased impact of contracting.

Yes, Hi, Paul for the gross to net side of the equation, we have guided that the first quarter should be around $5300 per script, and then for the full year around $5400 per <unk>.

Matt Abernethy: For the growth net side of the equation, we've guided that the first quarter should be around $5,300 per script, and then for the full year around $5,400 per TRX. And that implies around a 2% headwind in the first quarter. As it relates to the seasonal dynamics, I'm not going to get into the specifics here.

That implies around a 2% headwind in the first quarter.

As it relates to the seasonal dynamics not going to get into the specifics here, but we did see I guess less of a decline moving from refill rate per patient from Q4 to Q1.

Matt Abernethy: But we did see, I guess, less of a decline moving from refill rate per patient from Q4 to Q1, and that was a good thing. It was a good thing we were able to manage through the reauthorization process much more effectively, I think, between experience and an improving environment from an access perspective that afforded us to be able to do that. So historically, you've seen that recovery from Q1 to Q2 that added a very nice bump. And, you know, what we're saying is we do expect to grow sequentially into Q2, but it might not be as high of a cliff as what you've seen historically. Anything to add, Eric? Thanks, Paul.

And that was a good thing it was a good thing we were able to manage through the reauthorization process much more effectively I think between experience and improving environment from an access perspective that afforded us to do.

To be able to do that so.

Historically, you've seen that recovery from Q1 to Q2 that added a very nice bump.

And what we're saying is we do expect to grow.

Sequentially into Q2, but it might not be as quick as what you've seen.

Historically.

Anything to add or.

Thanks, Paul Alright, Thank you.

Eric Benevich: All right. Thank you. We will take our next question from Nina Bertaro-Garge with Citi. Your line is open.

We will take our next question from Matt.

Neena <unk> garg with Citi. Your line is open.

Hey, guys. Thanks for taking my question.

Nina Bertaro-Garge: Hey guys, thanks for taking my question. I was just wondering, first, if you could comment on whether there was any impact from inventory during the quarter, and then also thinking about the guidance, the reiterated guidance. Maybe if you could talk a little bit about what you would have needed to see, I guess, in the first quarter to kind of feel comfortable raising the guidance, just given the strength, you know, the increase in numbers.

I was just wondering first if you could comment on whether there was any impact from inventory during the quarter and then also just thinking about the guidance. The reiterated guidance, maybe if you could talk a little bit about what you would have needed to see I guess in the first quarter to kind of feel comfortable raising the guidance just given the strength.

Congrats number this quarter.

Yes, so we're really encouraged by what we saw in the first quarter record number of new patients environment improving.

Nina Bertaro-Garge: Yeah, so we were really encouraged by what we saw in the first quarter, a record number of new patients, and the environment improving, but we're really only through the first quarter. And we've just launched our expanded sales force. So we felt it prudent to simply reiterate guidance at this point. As it relates to inventory, no real comment this quarter. We have gotten into a place where we don't have as many significant swings in inventory. And so there is nothing to flag right now.

But were really only through the first quarter.

We've just launched our expanded sales force. So we felt it prudent to simply reiterate guidance.

At this point.

As it relates to inventory no real comment this quarter.

Got it into a place where we don't have as many significant swings in inventory.

Nothing to flag right now clean quarter from that regard.

Thank you.

Okay.

Matt Abernethy: A clean quarter in that regard. Thank you. We will take our next question from Tahseen Ahmad with Bank of America. Hi, good morning, guys.

We will take our next question from <unk> Ahmad with Bank of America.

Hi, Good morning, guys. Thanks for taking my questions.

Tahseen Ahmad: Thanks for taking my questions. Can you give us a little bit of color on how the split is looking these days between psychiatrists and neurologists in terms of scripts? I know you've had a focus on increasing penetration in the neurologist community. Just wondering how that's going and if you could give us a sense of where you think you'll be by the end of the year in terms of penetration with new neurologists versus adding patients to the group of psychiatrists who are already using Ingresa. Thank you. Yeah, good morning, Suzeen.

Can you give us a little bit of color on how this is Glenn is looking these days between psychiatrist and neurologist in terms of script.

You've had.

Our focus on increasing penetration in the neurologist community just wondering how that's going and.

If you could give us a sense of where you think you'll be by the end of the year in terms of <unk>.

Penetration with with new neurologists versus adding patients to.

The group of psychiatrists are already using in Gaza. Thank you.

Yes, good morning, <unk> so historically.

Eric Benevich: So historically, you know, it's really been pretty consistent over the last few years, the split of our business between neurology and psychiatry has been about 80 ish percent in psychiatry and about 20% in neurology. You know, certainly, in looking at the development of the TD market, we felt that there was an opportunity to better penetrate the neurology segment. And, you know, that was an important consideration in our decision to expand and reorganize our sales team; we just deployed our new standalone neurology group. And, obviously, we've hired people with considerable experience in relationships in neurology. But that is just hitting the ground, so to speak.

No.

<unk> been pretty consistent over the last few years.

The split of our business between neurology and psychiatry has been about 80 ish percent.

In psychiatry and about 20% in neurology certainly in.

In looking at.

The development of the TV market.

Felt that there was opportunity to.

To.

Eric Benevich: And so I think we'll have a better sense of how it's going with further developing the neurology segment of our business as we get into the second half of the year. But what I should also comment on is that an important group for us across both psychiatry and neurology is advanced practice providers. And part of the rationale for expanding our field sales organization is to do a better job of reaching and educating nurse practitioners and physician assistants in both neurology and psychiatry. Okay, thanks, Eric.

Better penetrate the neurology segment.

And that was an important consideration in our decision to expand and reorganized the sales team.

We just deployed our new Standalone Neurology group.

And obviously, we've hired people with considerable experience and relationships in neurology.

But that is just hitting the ground so to speak and so I think we'll have a better sense of how.

It's going with.

Further developing the neurology segment of our business as we get into the second half of the year.

But I should also comment that.

An important group for us across both psychiatry, and neurology as advanced practice providers and part of the rationale for expanding our field sales organization is to do a better job of reaching in educating nurse practitioners and physician assistance in both neurology and psychiatry.

Okay. Thanks, Eric maybe just a quick follow up.

Eric Benevich: Maybe just a quick follow-up, you know; this year was the first year that you provided sales guidance for the year. Some companies have gone so far as to provide their thoughts on what they think peak sales could be for products. Do you at Neurocrine have a sense of where you think Ingressive Sales could peak longer term? So Zane, we're not we're not prepared to talk about peak sales haven't been and probably won't be. Okay, I had to try it.

Last year that you provided sales guidance for the year.

Some companies have gone as merchants to provide their thoughts on what they think peak sales could be for products.

Do you at Neurocrine have a sense of where you think <unk> itself could peak longer term.

So we're not we're not prepared to talk about peak sales haven't been and probably won't be.

Okay had to try thanks.

Thanks, Kevin.

We will take our next question from Josh <unk> with Evercore. Your line is open.

Kevin Gorman: Thanks, Kevin. We will take our next question from Josh Schimmer with Evercore. Your line is open. First, SG&A seems to be annualizing much higher than the guidance for their one-time charges in the quarter to note. And then Ungentis doesn't seem like it's doing particularly well commercially.

Great. Thanks for taking the questions first SG&A it seems to be annualizing much higher than the guidance for the one time charges in the quarter to note and then.

Josh Schimmer: What do you think is going on that's limiting uptake? What are your plans to minimize losses from this product and then to avoid launching other products in the future that don't achieve commercial success? Hi Josh, it's Matt.

Genesis it doesn't seem like it's doing particularly well commercially what do you think is going on thats limiting uptake what are your plans to minimize losses from this product and then to avoid launching other products in the future that don't achieve commercial success.

Hey, Josh it's Matt in regards to the SG&A spending really two dynamics that occurred during the quarter. The first is the seasonal spending if you look back over time. There is has historically been a step up from Q4 to Q1, better Q1 specific investments that we make.

Matt Abernethy: In regards to SG&A spending, there were really two dynamics that occurred during the quarter. The first is seasonal spending. If you look back over time, there has historically been a step up from Q4 to Q1 that are Q1 specific investments that we make. So you would expect that to pull back a bit as we head into the second quarter. And then, in addition to that, we did invest in our sales force; most of them were on board for the quarter going through training, and they were recently pushed out into the field at the beginning of April.

So you would expect that might pull back a bit as we head into two.

The second quarter.

And in addition to that we did.

And our sales force most of them were onboard for the quarter going through training and were recently.

Matt Abernethy: So within our guidance range that we provided today, you know, we're confident that's the right level of spending. As it relates to Ongentis, you know, as Eric mentioned previously, we have an expanded sales force at this point with a higher focus on neurology. We're going to continue to focus on calls to neurologists for both TD and then also Parkinson's disease. And it is something that we're looking at, Josh, and ensuring that if we are making the investment in Ongentis, that it does drive the right kind of return. And I think it's straightforward: the sales are a bit lower than what any of us would have expected at this point.

Pushed out into the field at the beginning of April so within our guidance range that we provided today.

We're confident that's the right level of spending.

As it relates to <unk> as Eric mentioned previously we have an expanded sales force at this point with a higher focus on neurology, we're going to continue to <unk>.

Eric Benevich: But we do hear positive feedback as to the benefit that it's providing to patients, so it's something that we're spending a significant amount of time looking at and talking through. Ongensis is a really good product, but the anti-Parkinson's category is challenging from a payer access perspective. Frankly, the way that health plans manage anti-Parkinson's drugs is to really limit access to branded medicines across the board.

Focus on calls to neurologists for both.

TD and then also Parkinson's disease and it is something that we're looking at Josh and ensuring that.

If we are making the investment in <unk> is that it does drive the right kind of return.

I think there is straightforward that sales are a bit lower than what any of us would have expected at this point, but we do hear positive feedback as we benefit that is providing to patients. So it's something that we're spending a significant amount of time looking at and talking through and if I can.

If I could just tack onto that.

On Justice is a really good product.

Any Parkinson's category is challenging.

From a.

Payer access perspective, frankly, the way that health plans manage any Parkinson's drugs.

As to really limit access to branded medicines across the board and so on Genesis will continue in 2022 to be primarily.

Eric Benevich: And so, Ongensis will continue in 2022 to be primarily approved in the prescription process through formulary exceptions. And the feedback that we get from prescribers is very positive. And so, we're going to continue to press forward with our new neurology team, driving initial trial and adoption of this medicine. We feel like it provides an important benefit for Parkinson's patients, and, you know, we're committed to moving to sort of neurologists. Thanks very much.

Proved in the prescription process through formulary exceptions and.

The feedback that we get from prescribers is very positive and so we're going to continue to press forward with our new urology team.

<unk>.

Initial trial and adoption of this medicine, we feel like it provides an important benefit for Parkinson's patients.

And we're committed to a movement disorder neurologists.

Yeah.

Thanks very much.

We will take our next question from Andrew Pom <unk> Rama with Jpmorgan. Your line is open.

Anupam Rama: We will take our next question from Anupam Rama with J.P. Morgan. Your line is open. Hey guys, thanks so much for taking the question. Maybe a quick pipeline question for me, just thinking about the mid-year readout for essential tremor, phase two, you know, how are you thinking about the data set, that data set, and you know, what would you describe as sort of the win scenario there? Thanks so much.

Hey, guys. Thanks, so much for taking the question maybe a quick pipeline question for me just thinking about the midyear readout in essential tremor phase II.

How are you thinking about dataset that data set and what would you describe as sort of a win scenario there. Thanks so much.

Hi, Thanks Telecom.

Eiry Roberts: Hi, thanks, Anupam. Good morning. So we are on track to read out the data from our proof of concept signal-seeking phase 2 study in essential tremor with the T-type calcium channel antagonist mid-year. The primary endpoint for that study is a crossover study, single-center, well-controlled program in 28 patients, and the primary endpoint is an accelerometer-measured quantitative endpoint of maximal tremor change from baseline.

Morning.

We are on track to read out the data from our proof of concept signal seeking phase III study in essential tremor with their T type calcium channel a lot of progress.

Yeah.

The primary endpoint for that study is a crossover study single center well control program in 28 patients and the primary endpoint is a an accelerometer measured quantitative endpoint of Maxwell China.

From baseline so, we'll obviously be interested in that as evidence of pharmacological activity of the drug in this important disease States. In addition to that we do have the more traditional tetris clinical endpoints in that study as well and we'll be able to compare the.

Eiry Roberts: So we'll obviously be interested in that as evidence of pharmacological activity of the drug in this important disease state. In addition to that, we do have the more traditional Tetris clinical endpoints in that study as well. And we'll be able to compare the tremor measures across placebo and active treatment for each patient against those endpoints, in addition. So then we'll look at the totality of those data to understand what signal we're seeing.

Trevor measures.

Across the <unk> treatment for each patient against those endpoints. In addition, so then we'll look at the totality of those data to understand what signal, we're seeing and using that will go forward to regulators. If we have a positive outcome to understand the next steps for registration program.

Eiry Roberts: And using that, we'll go forward to regulators if we have a positive outcome to understand next steps for a registration program. Thanks so much for taking our question. We will take our next question from Carter Gould with Barclays. Your line is open. Great. Good morning.

Thanks, so much for taking my question.

We will take our next question from Carter Gould with Barclays. Your line is open great.

Carter Gould: Congratulations on the quarter. I'm going to ask a follow-up question to Anupam's question there. Just as we think about that 104 data coming out, can you talk about the then sort of the urgency to move forward, given that relative, you know, you're somewhat behind your peers. Should we be thinking that you'll wait for the CSWS data before then engaging with regulators? Or once you have sort of the ET data, can you kind of move forward on its own and not wait for the data?

Great. Good morning, Congrats on the quarter I'm going to ask a follow up too on our pumps question. There just as we think about that 104 data coming out can you talk about then.

Sort of the the urgency to move forward given relative you're somewhat behind your peers should we be thinking that you will wait for the CFS Ws data before then engaging with regulators or once you have sort of the data you can kind of move forward on its own and not wait for those data. Thank you.

Eiry Roberts: I think we're looking at these programs independently. They're both very important potential indications for this medication. And obviously, we'll learn from one study to the other, particularly in terms of tolerability in different patient sets. But we will be looking at these independently and moving forward. We'll take our next question from Phil Nadeau with Cowan & Company. Your line is open. Good morning.

I think we're looking at these programs independently, they're both very important potential indication for this medication and.

Obviously, we'll learn from one study to the other particularly in terms of Tolerability in different patient set.

But we will be looking at these independently and moving forward.

Okay.

Yes.

And the next question operator.

We will take our next question from Phil Nadeau with Cowen <unk> Company. Your line is open.

Good morning, Thanks for taking my question back on <unk> commercial.

Phil Nadeau: Thanks for taking our question. Back on Ingres's commercial success, we're curious to understand where the psychiatry field is today in terms of in-person visits. What are the latest statistics on the proportion of visits that are in-person?

Commercial success.

We're curious to understand where the psychiatry.

Yield is today in terms of in person visits whats the latest statistics on the proportion of visits that are in person.

Whats nerve his thoughts on when the reimbursement could change to make in person better compensated then virtual visits and <unk>.

And last how.

However, it is congrats this performance to an in person visits would you expect an acceleration in <unk> growth once more of a certain person or do you think that the.

Eric Benevich: What is NERC's thoughts on when reimbursement could change to make in-person visits better compensated than virtual visits? And last, how levered is Ingres's performance to in-person visits? Would you expect an acceleration in Ingres's growth once more visits are in-person, or do you think that the virtual commercial efforts that you're doing have really made it less relevant whether patients are seeing their physicians in-person or virtually? Thank you.

Virtual commercial efforts that you're that you're doing has really made it less relevant one of their patients who are seeing their physicians in person.

Virtually thank you.

Yeah.

Hi, Phil so the.

Eric Benevich: So the latest data that we've seen is that telemedicine still constitutes about half of all visits in psychiatry, and telemedicine is utilized at a lower rate than other physician specialties. It's less than 10 percent of paid visits in neurology, for example. So psychiatry still stands out as an outlier in terms of the use of telemedicine and in terms of, you know, how that's going to change over time. You know, certainly as long as the public health emergency declaration is still in place, the temporary waivers that were issued by CMS remain in place, including parity of reimbursement for a virtual visit versus an in-person visit.

The latest data that we've seen is that.

Telemedicine is still constitutes about half of all.

Our visits in psychiatry.

And.

It's telemedicine is utilized at a lower rate and other physician specialties is less than 10% of paid visits in neurology for example.

Psychiatry still stands out as an outlier in terms of the use of telemedicine in terms of how thats going to change over time.

Certainly as long as the.

Public health Emergency Declaration is still in place.

The temporary waivers that were issued by CMS remain in place including.

Parity of reimbursement for a virtual visit versus an in person visit.

Eric Benevich: In the market research that we've done with physicians and psychiatrists, in particular, their expectation is that in the future, they will utilize telemedicine at a lower rate, probably more like in the 20 to 30 percent range. But that's after there are changes to reimbursement and some of the temporary waivers have been removed. So, you know, from a business perspective, we continue to operate as if the status quo is going to continue into at least 2023.

In the market research that we've done with physicians and psychiatrists in particular their expectation is that in the future. They will utilize telemedicine at a lower rate.

It will be more like in the 20% to 30% range, but that's after.

There is changes to reimbursement in some of the temporary waivers have been.

Removed.

From a business perspective, we continue to operate as if the status quo is going to continue out into.

At least 2023.

Eric Benevich: And certainly, a lot of the work that we've done to adapt our business model to our HCP customers' changes in terms of how they're delivering health care has paid dividends. And, you know, certainly I think that that's reflected in, you know, for example, the strong Q1 that we just experienced.

And certainly a lot of the work that we've done to adapt our business model to our HCP customers.

Changes in terms of how they are delivering health care have paid dividends.

And certainly I think that thats reflected in for.

For example, the strong Q1 that we just experienced.

Eric Benevich: So any changes to telemedicine in the future or any reduction in telemedicine and an increase in in-person visits is really just an upside from our perspective. And Phil, the only thing I would add to that is, as Eric said earlier, our enhanced focus on advanced practice professionals, who utilize telemedicine far less than psychiatrists do.

Any changes to telemedicine in the future or any reduction.

In telemedicine and increase in in person visits is really just upside from our perspective and Phil the only thing I would add to that is as Eric said earlier our.

Our enhanced focus on advanced practice professionals, they utilize telemedicine far less than psychiatrist do they are really the top lines delivering psychiatric care and so that gives us more in person contact with health care professionals than if we just focus on the psychiatrist.

Eric Benevich: They're really on the front lines of delivering psychiatric care, and so that gives us more in-person contact with health care professionals than if we just focused on psychiatric care. Very helpful, thank you.

Very helpful. Thank you.

We'll take our next question from Brian <unk> with Baird. Your line is open.

Brian Surkey: We'll take our next question from Brian Surkey with Baird. Your line is open. Hey, good morning, everyone.

Hey, good morning, everyone in the fourth be with you I know, it's been a while but we're finally seeing.

Brian Surkey: It's my fourth time to be with you. I know it's been a while, but we're finally seeing Chronestrophon's phase three program coming on the horizon next year. Assuming access, I'm just wondering how you're thinking about commercializing it. It seems over the years you've come to focus more on the neuro side of things and less on the crin side of things. Is this an area that you would want to build out a separate sales force for?

<unk> phase III program coming on the Horizon next year.

Assuming a SaaS I'm, just wondering how youre thinking about commercializing it seems over the years you've come to focus more on the neuro side of things and less on the crane side of things. So is this an area that you would want to build out a separate sales force for or are you thinking about evaluating strategic partnerships or or a full sale I'm just trying to think off into next year upon success.

Kevin Gorman: Or are you thinking about evaluating strategic partnerships or, or a full sale? I'm just trying to think ahead. Next year, upon success, what the build out should look like. Thanks, Brian.

Yes.

Good luck.

Kevin Gorman: I think our plan is still, as we've said all along, we would plan on commercializing crinesophon ourselves. And in addition to that, that's not just in North America; we look forward with crinesophon to being able to internationalize neurocrine. And it could be one of several drugs that we find that Europe would be an ideal location for us to begin to put down a commercial footprint. So we do know that we do not plan on looking for a partner either in North America or in Europe.

Thanks, Brian I think our plan is still as we've said all along we would plan on commercializing for NASA upon ourselves.

And in addition to that that's not just in North America.

We look forward with connections to be able to internationalize neurocrine and it could be one of several drugs that we find that Europe would be an ideal location for us to begin to put data.

Commercial footprint. So we do not plan on looking for a partner either in North America or in Europe .

Is there any way you could kind of give some qualitative.

Unknown Speaker: Unknown Speaker Is there any way you could kind of give some qualitative description on or even quantitative on what kind of the build out to launch our Cronuster Fund would look like? Hey, Brian, we'll, of course, get into more detail around that as we get closer to potential launch. But the footprint isn't too large.

Description on.

Quantitative on on what kind of a build out launch our Kronos <unk> would look like.

Thank you, Brian we will of course get into more detail around that as we get closer to potential launch, but the footprint isn't too large you think about how these patients are cared for in a very concentrated way by <unk>.

Pediatric endocrinologists are the adult.

And all of this so the sales infrastructure.

To be added to commercialize this isn't too significant and something that's well within our wheelhouse.

Our wheelhouse and capabilities.

Alright, Thank you very much.

We'll take our next question from Brian Abrams.

Unknown Speaker: You think about how these patients are cared for in a very concentrated way by the pediatric endocrinologist or the adult endocrinologist. So the sales infrastructure to be added to commercialize this isn't too significant and something that's well within our wheelhouse and capabilities. Thank you very much. We will take our next question from Brian Abrahams with RBC Capital Markets. Your line is open. Hi, good morning. This is Steve, on behalf of Brian.

Abrams with RBC capital markets. Your line is open.

Hi, Good morning. This is Steve on for Brian Congrats on the progress and thanks for taking a question for Chris on Huntington's Chorea curious, if we could get a little more on.

Brian Abrahams: Congratulations on the progress and thanks for taking our question. For Ingress and Huntington's Korea, curious if we could get a little more on how clinicians reacted to the full data presented recently, and maybe your view on what type of patients will see the strongest uptake early on. Thanks. Yeah, I can start on that, Brian. Good morning.

Clinicians reacted to the full data presented recently and maybe your view on what type of patients we will see the strongest uptake early on.

Yes, I can start on that Brian .

Eiry Roberts: So we were able to present more of the data from our Phase 3 Connect HC trial at the AAM just recently, and I think in general, the response was very favorable, as it has been from the investigative group and even the community to the data that we were able to share. As you recall, we saw highly statistically significant improvement in the total maximal career score, 10 to 12, compared to baseline in individuals with HC, together with improvements in the clinician's global assessment and patient global assessment of severity. And so from that perspective, and in particular, as well, the tolerability and safety profile was very consistent with what we've already seen for Engresa and Tardifosconesia with no indication of suicidality.

Good morning, So we were able to prevent the more of the data from our phase III connect HCC trial at the end of this week.

In general the response was very favorable as it has been from the investigator group.

Even in the community.

To the data that we were able to share as you remember we saw.

Highly statistically significant improvement in the total maximum curious go.

10 to 12 compared to baseline compared to baseline in individuals with HD together with improvements in the clinician global assessment.

The patient global assessment of severity.

And so from that perspective.

Particularly well the Tolerability and safety profile was very consistent with.

What we are already seeing Paul and Greg and Todd of Dyskinesia with no indication of suicidology and so I think that we were.

Eiry Roberts: And so I think that we were very impressed by that profile. We continue to be on track with the long-term safety data generation from the six-month data that's required for the submission later this year, and we'll be moving forward with that. Thanks.

We were very impressed by that profile.

We continue to be on track with the long term safety data generation from the.

The six months data that's required for the submission later this year and we'll be moving forward with that.

And maybe is there a buffer.

We will take our next question from Jay Olson with Oppenheimer. Your line is open.

Eiry Roberts: We will take our next question from Jay Olson with Oppenheimer. Your line is open. Oh, hey, congrats on the quarter and thank you for taking the question. Since Neurocrine has a strong cash position on the balance sheet and a solid track record of business development, can you talk about what types of deals and therapeutic approaches you're most interested in these days? Thank you.

Oh, Hey, congrats on the quarter and thank you for taking the question.

Neurocrine has a strong cash position on our balance sheet and a solid track record of business development can you talk about what types of deals and therapeutic approaches you're most interested in these days. Thank you.

Thanks, Jay This is Kyle obviously, what you've seen over time is.

Jay Olson: Obviously, what you've seen over time is it's kind of a three-prong strategy in how we allocate capital over time. Number one is focusing on Angraza and building out indications there with the lead in Tardis, can you get it supporting the pipeline, and then business development. On the BD side of things, you've seen a range of collaborations that we have struck over the years.

It's kind of a three pronged strategy in how we allocate capital over time, its number one focusing on growth and building out the indications there with.

The lead in Tardive Dyskinesia is supporting the pipeline and then business development on the BD side of things you've seen a range of collaborations that we struck over the years.

What you see is that the strategy lies at the intersection of looking for novel medicines in development that treat or address conditions with unmet medical need and then looking at partners that offer our technology expertise programs that complement our own.

Kyle Gano: And I think what you see is that the strategy lies at the intersection of looking for novel medicines and development that treat or address conditions in that medical need and then looking at partners that offer technology and expertise programs that complement our own. I think largely we'll continue down that line. We move forward, and where we can, we can find programs that range from early to late stage. These are all things that we consider as time goes along. Matt, do you have anything to add to that?

Largely we will continue down that line and that strategy as we move forward and when we can find programs that range from early to late stage. These are all things that we would consider.

Time goes along.

Do you have anything to add to that no I think we have a lot of flexibility to your point Jay.

We're going to continue to operate our business focused on growth and advancing our pipeline but.

Open to things to in license or potentially acquire so.

Let's move to the next question operator.

Matt Abernethy: No, I think we have a lot of flexibility to your point Jay, and we're going to continue to operate our business focused on angraza and advance in our pipeline, but open to things that are in my things or potentially acquire. Let's move to the next question, operator. We'll take our next question from Danielle Brill, with Raymond James, your line is open. We'll take our next question from Danielle Brill, and we'll take our next question from Danielle Brill, and we'll take our next question from Raymond James. Hey guys, this is Alex on for Danielle.

We'll take our next question from Danielle Brill with Raymond James Your line is open.

Hey, guys. This is Alex on for Danielle. Thanks for taking my question just had a curiosity what do you think that the key driver for new patient starts increased foot traffic with salesforce that direct to consumer campaign.

Danielle Brill: Thanks for taking our question. Just had a curiosity question. What do you think is the key driver for new patient starts, increased foot traffic, the salesforce, the direct-to-consumer campaign? And on the foot traffic angle, we're curious whether you are seeing any sort of inhibition based on some of these B8.123 variants? Yeah, I think that the answer is all the above.

Just the foot traffic angle for curious whether you are seeing any sort of.

Mission based on some of these be 8123 variance.

I think the answer is all of the above.

Eric Benevich: In terms of what's driving new patient starts, you know, certainly, the overarching theme for our launch these past five years has been to increase awareness and drive diagnosis of PD, through educating HCPs, and then more recently, through the efforts that we've had with the patient and care partner population, as evidenced by the success of our DTC campaign. So, you know, whether it's the HCP, the psychiatrist, the nurse practitioner being more diligent and having an awareness and proactive screening approach for TD, whether it's the patient bringing up the symptoms during their visit, you know, our goal is to make sure that TD gets diagnosed and treatment is offered.

In terms of what's driving new patient starts certainly.

The overarching theme for our launch these past five years has been to increase awareness and drive diagnosis of TD and.

Through educating Hcp's and then more recently through the efforts that we've had.

<unk>.

Patient and care partner population as evidenced by the success of our DTC campaign, so whether it's the.

The HCP psychiatrists the nurse practitioner being.

More diligent and having a.

And awareness and proactive screening approach for TD, whether it's the patient, bringing the symptoms up.

During their visit.

Eric Benevich: And certainly, as the COVID environment improves, and there are more face-to-face interactions between providers and patients, that also helps. And so, you know, all of these things, we think are positive drivers for growth of the franchise. And with regard to the most recent variants, you know, certainly, you see, you know, regionally, some changes in terms of reported rates. What we're not seeing as much now are changes in terms of how we're dealing with COVID societally; there's not as much likelihood of closures and things like that.

Our goal is to make sure that TD gets diagnosed and treatment gets offered and certainly as the COVID-19 environment improves and theres more face to face interactions between the providers and the patients that also helps and so all of these things we think are positive dry.

<unk> for the growth of the franchise.

Eric Benevich: So overall, I'm pleased with the progress that we're seeing in the market. Right now, let's move on to the next question, please. We will take our next question from Miles Mentor with William Blair. Hey, congrats on the quarter. Just done 5-6-8, the M4, Agones.

And with regards to the most recent variants.

Certainly.

C <unk>.

Recently, some changes in terms of.

However reported rates, we're not seeing as much now is changes in terms of how we're dealing with.

With Covid decidedly theres not as much likelihood for closures and things like that so.

Overall I am pleased with the progress that we're seeing in the market.

Now, let's move to the next question. Please.

We will take our next question from Myles Minter with William Blair.

Oh, Hey, congrats on the quarter just on phosphate site. The <unk> agonist, that's moving into phase III. This year are you also planning to do any cardiac safety monitoring studies, either before or alongside that study just given the debate there is in the field with the cholinergic mechanism.

Miles Mentor: Phase 2 this year. Are you also planning to do any cardiac safety monitoring studies either before or alongside that study just given the debate there is in the field with the colon? Yeah, thanks. So we are moving forward, and we're on track with our plan to commence a Phase 2 study in schizophrenia for our selected M4 agonists later this year. And I think we will be including all appropriate safety and efficacy measures in that study for the acute treatment of schizophrenia.

Yes, hi.

So we are moving forward on their own track with our plans.

Plan to commence phase II study in schizophrenia.

Selective <unk> agonist later this year.

And I think we will be including all appropriate safety and efficacy measures in that study in.

Treatment of schizophrenia.

Miles Mentor: I think once we release the full protocol in the context of clinicaltrials.gov, obviously, you'll be able to see exactly how we're measuring some of those cardiovascular and other safety measures in the context of the study. All right, fair enough.

Once we release the full protocol in the context Clinicaltrials Gov.

Youll be able to see exactly how were measuring some of those cardiovascular safety mentioned in the context of the study.

Okay fair enough. Thanks.

Well take our next question from Chris <unk> with Goldman Sachs. Your line is open.

Eiry Roberts: We will take our next question from Chris Shibutani with Goldman Sachs. Your line is open. Yes, good morning.

Yes. Good morning, I just wanted to clarify the updated what appears to be operating expense guidance. It looks like that the range for the R&D is slightly diminished SG&A slightly higher you have discussed some of the push pulls that were collected in the first quarter, but maybe.

Chris Shibutani: I just wanted to clarify the updated operating expense guidance. It looks as if the range for R&D is slightly diminished, and SG&A is slightly higher. You have discussed some of the push-pulls that were collected in the first quarter, but maybe you could just help provide further color in terms of what guided those changes. Thank you. Yeah, so from an expense guidance perspective, overall expense guidance was held to be neutral.

Maybe if you could just help provide further color in terms of what guided those changes. Thank you.

Yes, so from an expense guidance perspective over overall expense guidance was held neutral, but then we had like you said, Chris an increase in SG&A a slight decrease in R&D I just think that's a reflection of.

Matt Abernethy: But then we had, like you said, Chris, an increase in SG&A and a slight decrease in R&D. And I just think that's a reflection of some of the onboarding of sites, as we mentioned in Eiry's prepared remarks in Ukraine, and some of the spending behind those programs was a bit delayed. And then on the SG&A side, I'll continue to look for places for investment that would allow us to continue to market Ingresa more effectively.

Some of the.

On boarding and sites as we mentioned in prepared remarks in the Ukraine.

Some of the spending behind those programs was a bit delayed and then on the SG&A side saw continued places for investment that would allow us to.

We need to market and grow them more effectively.

To update.

Operating expense guidance for those sort of reclassification to power allocating or spending.

Okay.

Matt Abernethy: So I felt it prudent to update the operating expense guidance for those sort of reclassifications of how we're allocating our spending. We're going to move to our next question. We will take our next question from Charles Duncan with Cantor Fitzgerald. Yeah, good morning Kevin and team.

Okay.

We will take our next question from Charles Duncan with Cantor Fitzgerald.

Charles Duncan: Congratulations on the commercial successes this year. Had a quick pipeline question, actually, a multi-part question for 104, and that is in essential tremor and CSWS. I guess I'm wondering as you contemplate moving forward with that, would the candidate actually leverage the existing neurology sales force? Or does it represent an opportunity to move into rare epilepsy and would that result in, perhaps, expanding the sales force to capture that? And then can I re-compare and contrast the, call it, burden of disease in essential tremor versus CSWS? Thanks. So, Chaz, this is Matt.

Yes, good morning, Kevin and team congrats on the commercial successes this year adequate pipeline question.

Multipart question, four one or four and that is in essential tremor and CSW S. I guess I'm wondering as you contemplate moving forward with that.

With the candidate assayed leverage the existing neurology sales force or does it represent an opportunity to move into rare epilepsy and would that result in.

And perhaps expanding the sales force to capture that then can can I re compare and contrast.

Call it burden of disease in essential tremor versus CES ws. Thanks.

Yes.

Matt Abernethy: And similar to the question on CAH, we'll provide more insight as we get closer to the commercial call points. But clearly, you know, some neurologists treat patients with epilepsy, but we would have to expand the call activity if we did go into epilepsy, especially on the rare side. You know, when you look at a broader indication, like vocal onset, which is the second indication that we're exploring with the xenon compound.

So Chad.

Chad This is Matt and <unk>.

Similar to the question on CAH, who will provide more insight as we get closer on the commercial call point, but clearly.

Some of the neurologists treat patients with.

Epilepsy, but we would have to expand the <unk>.

Activity, if we did go into epilepsy, especially for on the rear side.

When you look at a broader indication like focal onset, which is the second indication that we're exploring with the xenon compound.

So.

Unknown Speaker: I know I'm talking, but from an epilepsy perspective, those would be what you've leveraged together, and it wouldn't be specific to our current call activity. Yeah, just a comment on the two different indications. Obviously, essential tremor and CSWS are very different in terms of their indications.

But from a from an epilepsy perspective, those would be what you'd leverage together.

And it wouldn't be specific to our current call activity.

Unknown Speaker: I would make a couple of comments, though. First of all, I think from a mechanism of action perspective, there's good reason to believe that we have an opportunity, potentially, in each of those indications to add value to patients. The second thing I'd say is that there is significant unmet need in both of those indications. For essential tremor, there have obviously been no medications approved since propranolol back in the 1970s.

Yeah, just to comment on the two different indications, obviously essential tremor.

Somebody else Thats very different in terms of that indication I would make a couple of comments. So first of all I think from a mechanism of action perspective.

Good reason to believe that we have an opportunity potentially in each of those indications to add value for patients. The second thing I'd say is the significant unmet need in both of those indications for essential tremor. There's obviously been no medications approved since the private law back in the 19 seventies and <unk>. There are no medications currently approved for those things.

Unknown Speaker: And for CSWS, there are no medications currently approved for those individuals. And so I think we believe it is very worthy of exploration in both of those indications. And obviously, we won't have to wait too long to understand whether we have some positive signals and adequate tolerability to be able to move forward. That's great.

And so I think we believe it is.

Very worthy.

Exploration in both of those indications and obviously, we're not going to have to wait too long to understand whether we had positive signals on adequate tolerable listen to give it its.

Unknown Speaker: Brittany, let's keep plugging away. Next question. And we'll take our next question from Lauren Chico with Web Bush Securities. Your line is open.

Great Britain going away next question.

And we'll take our next question from Laura Chico with Wedbush Securities. Your line is open.

Lauren Chico: Great, thanks for taking the question. I just wanted to ask a follow-up question with respect to ET, commercial opportunities, and market access. So in the case of Ongentis, we've seen a little bit of trouble driving revenue there, and you've talked about some of the challenges. I'm just wondering if you could discuss a little bit about the ET market and what gives you confidence that those barriers would not replicate from Parkinson's to the essential tremor opportunity.

Great. Thanks for taking the question I just wanted to ask a follow up with respect to key commercial opportunity and market access. So in the case of Genesis, we've seen a little bit of trouble driving revenue there and you've talked to some of the challenges Im just wondering if you could discuss a little bit about the <unk> market and what gives you confidence that those.

Barriers would not replicate from Parkinson's to the essential tremor opportunity. Thank you.

Yes.

Lauren Chico: Yeah, I'll jump in here, Laura, and as we're going through this program, essential tremor is the largest lupus disorder that exists with nearly 10 million patients in the United States and a little bit more in Europe.

I'll jump in here.

Morris.

As we're going through this program the.

Essential tremor is the largest movement disorder.

That exists with.

Nearly 10 million patients in the United States, and a little bit more over in Europe .

Kevin Gorman: We're at the very beginning of this program. We did initial work that shows there is a very good commercial opportunity here, but it will be several years before we are out in that marketplace. And so a lot is going to change between now and then.

We're at the very beginnings of this program.

We did initial work that showed for very good.

The commercial opportunity here, but it will be several years until we will be out in that marketplace and so a lot of it's going to change between now and then so I think anything that we would say now about any type of commercial plans for what the marketplace looks like will almost certainly be obsolete by the time that were on the market. So as we get closer we'll then.

And started talking about those aspects of the program right. Now we are solely focused on the signal seeking study that we have ongoing that will report out here shortly.

Kevin Gorman: So I think anything that we would say now about any type of commercial plans or what the marketplace looks like will almost certainly be obsolete by the time that we're on the market. So as we get closer, we'll then start talking about those aspects. of the program. Right now, we're solely focused on the signal seeking study that we have ongoing that will be reported out here shortly. Brittany, we'll go to the next question. We will take our next question from Vamil Gavan with Mizzou Securities. Your line is open.

Let's go to the next question.

We will take our next question from Amit <unk>.

Neil the van with Mizuho Securities. Your line is open.

Great. Thanks for taking my question.

Vamil Gavan: Great, thanks for taking my questions. Congratulations on what looks like a solid quarter. Todd, thanks for keeping the call pretty tight this morning; it's helpful on a busy week. So maybe I could just sort of follow up on the 104 questions from before, and I think we've spoken a lot about ET and expectations. Can you maybe just frame how you're thinking about, again, this is for Irene, in terms of CSWS, what exactly are the key sort of things you'll be looking for in that phase two data set? And what are the key factors to decide whether or not to move forward with that?

Congrats on a solid quarter and Tom Thanks for keeping the call pretty tight.

Any helpful on a busy week.

So maybe if I could just sort of follow up on the one off for questions.

Questions from before.

Look at a lot of NTT and kind of expectations can you maybe just frame how you're thinking about I guess it was probably read in terms of the CSW as no one.

Exactly.

A key sort of things you'd be looking for in that phase two data set and what are the key factors to decide whether to move forward with that.

Eiry Roberts: with that program and that specific indication. Thank you. So the phase 2 study we have ongoing in CSWS right now is in 24 patients. It is a, the thing with CSWS is that these individual patients, in addition to having significant issues with seizures, they have a characteristic signal on their EEG measure, the spike and wave measure on the EEG.

With that program in that specific indication.

So the phase II study, we have ongoing right now.

You're saying 24 patients.

Hey.

The thing with DSW asked is that these individual patients in addition to having.

Significant issues seizures, they have a characteristic signal on that E. G measure despite getting way measure on the EEG and so that is the primary end point in this initial phase II study is the ability for 104 to reduce the.

Eiry Roberts: And so that is the primary end point in this initial phase 2 study, the ability of 104 to reduce the signal that is seen on that EEG overnight in patients in an inpatient setting when you compare baseline to the primary end point. And so, in addition to that, obviously, we will be looking at seizure frequency in this patient population together with obviously additional safety and tolerability end points and measures of functionality, both clinical and physician-assessed.

The signal that is seen on that EG overnight and patient pay.

I think when you compare baseline to a primary.

Primary endpoint and so in addition to that obviously, we will be looking at.

<unk> frequency in this patient population together with.

Obviously additional safety and Tolerability endpoints are measured.

Functionality.

Both clinical and positioning.

Eiry Roberts: And so from that point of view, I think that, again, we'll be looking at the totality of the information that we see from this early phase 2 study in order to determine whether we're seeing a signal of appropriate magnitude to be able to move forward. Thanks for your one question, Vamu. Brené, we will take our next question from Mark Goodman with SVP Lyric. Your line is open.

And so from that point of view I think.

Again, we'll be looking at the totality of the information that we see from this early phase II study in order to determine whether we're seeing a signal of the appropriate models that you to be able to move forward. Thanks for your one question one more Brian Goldner.

Well take our next question from Marc Goodman with SVP Leerink. Your line is open.

Mark Goodman: Yeah, Kyle, you were talking about business development and strategy and stuff, but I was curious what was going on just behind the scenes with respect to Just discussions with companies and with, you know, valuations down so significantly, whether, you know, discussions have been enhanced, if, you know, companies that you were talking to before that, you know, didn't have an interest because of valuation, if those, you know, have changed. Just a little more color And then, Matt, can you just confirm the tax rate discussion that we've had before, 5% this year, 24% next year, is still confirmed? Thanks.

Yeah, Kyle you were talking about business development, and the strategy and stuff, but I was curious what was going on behind the scenes with respect to.

Just discussions with companies and with valuations down so significantly whether discussions have been enhanced if you know companies that you were talking to you before that.

It didn't have an interest because of valuation.

As you know.

Have changed just a little more color there and then Matt can you just confirm the tax rate discussion that we've had before 5%. This year, 24% next year is still confirmed.

So on the business development side of the questions here I think I would just make two points. One is I don't think we've had sufficient time during this downturn that we've seen.

Kyle Gano: So on the business development side of the questions here, I think I just make two points. One is that I don't think we've had sufficient time during this downturn that we've seen for companies to fully come to terms with their current valuation. There's still a line of sight to where they were, you know, 12, 18 months ago.

Our company is to fully.

Come to terms with the current valuations are still a line of sight to where they were 12 to 18 months ago. So we're having to deal with a little bit of that.

Kyle Gano: So we're having to deal with a little bit of that. But other than thinking about time being something that would be a benefit to us and seeing stock prices for companies that are diminished continue to fall, the thing that we noticed, and I'm sure that you have as well, is that quality companies with quality programs don't tend to be the ones that have been, you know, hit as hard in this downturn that we've seen. So for a lot of the things that we're interested in and looking at, valuation and decreased valuation really aren't a topic of discussion.

Other than thinking about time being something that would be a benefit to us in seeing.

Stock prices for companies that are diminished continue.

The thing that we noticed and I'm sure that you have.

As well as the quality companies with quality programs. They don't tend to be the ones that have been.

It is hard in this downturn that we've seen.

So for a lot of the things that we're interested in and looking at.

Evaluation and decreased valuation really isn't a topic of discussion. So I think that's something that we have seen over time those things that are of good quality assets tend to do well.

Matt Abernethy: So I think that's something that we have seen over time; those things that are good quality assets tend to do well. And on the tax rate, yeah, I think from a cash tax perspective, you could expect to be a state cash tax payer this year with a bit of cash tax on the federal side by the end of this year. You may know this, but there's tax legislation in place that you now have to capitalize your R&D and take that as a deduction over a long period of time. And because of that, that's going to cause us to burn through NOLs more quickly than we otherwise would have.

And on the tax rate.

From a cash tax perspective, you could expect it to be a state cash tax payer this year with a bit of cash tax on the federal side by the end of this year you may know this but there's a tax legislation in place that you now have to capitalize your R&D and take that as a deduction over a long period of time.

And because of that Thats going to.

It caused us to burn through Nols more quickly than we otherwise would have and I know this is an issue not just for us but across the industry and others.

Matt Abernethy: And I know this is an issue not just for us, but across the industry and others. Hopefully, it does get delayed or pushed aside permanently because it could impact innovation. But for us, it puts us in a place where we would spend around $10 million leaving this year. And then next year, we would be a full cash tax payer on the federal and state sides of the equation. Our medium-term effective tax rate, I would just say, as we always have, around 24 to 25 percent is what you should expect.

Hopefully it does good.

Either delayed or pushed aside permanently because it could impact innovation, but for us it puts us in a place where we would spend around $10 million exiting this year and then next year, we would be a full cash tax payer on a federal and state side of the equation or medium term.

<unk> effective tax rate I would just say as we always have.

Round, 24% to 25% is what you should expect.

Let's keep on trucking Brittany.

We will take our next question from Jeff Hung with Morgan Stanley . Your line is open.

Jeff Hung: Let's keep on talking, Brittany. We will take our next question from Jeff Hung with Morgan Stanley. Your line is open. Thanks for taking on my question. For the Ingressive Sales Team expansion, I realize it might be a bit early, but what are you seeing in the leading indicators? And typically, how much of a lag is there from the leading indicators to seeing new patients start being generated? Is it more like two to three months or more like six to eight months?

Eric Benevich: Thanks. Yeah, I think leading indicators, from my perspective, are really related to promotional activity, sales calls, peer to peer speaker programs, use of samples, etc. The, the lag that we typically see in the industry, I think, is relevant here for the Ingressa brand, it's, you know, within a quarter. So the activity that we're doing now is typically going to lead to patients being identified and started on treatment a month or two down the line.

Thanks for taking my question for the Ingrid the sales team expansion I realize it might be a bit early but what are you seeing in the leading indicators and typically how much of a lag is there from the leading indicators to seeing new patient starts being generated is it more two to three months or more like six to eight months.

Yes, I think.

Leading indicators from my perspective is really related to promotional activity sales calls.

Peer to peer speaker programs use of samples et cetera.

And then the lag that we typically see in the industry I think is relevant here for the <unk> brand.

It's.

Within a quarter.

So the activity that we're doing now.

Typically is going to lead to.

Patients being identified and started on treatment in a month or two down the line.

That's a pretty normal kind of lag time that we'd see.

Eric Benevich: That's a pretty normal kind of lag time that we'd see. Yeah, so from a Salesforce expansion perspective, what we saw, you know, two years ago, or three years ago, when we did the most recent, it was, you know, two quarters where we started seeing some of the benefit. And by the end of the third quarter, they were producing or performing at a similar, similar rate.

Yes, so from a sales force expansion perspective, what we saw.

Two years ago or three years ago, when we did the most recent.

Two quarters, where you started seeing some of the benefit by the end of the third quarter.

They were producing are performing at or similar.

Similar rates, so theres, a lot of leading indicators and kpis that we're looking at to measure.

How much traction, we're gaining but it does take a few quarters, where it start Jenna.

Generating incremental revenue.

Matt Abernethy: So there are a lot of leading indicators and KPIs that we're looking at to measure how much traction we're gaining. But it does take a few quarters for it to start generating incremental revenue. Yeah, well, I will clarify, you know, with Matt's comments that it takes a little while for someone that's new to get the same level of traction as someone that's experienced in the market. So that's what we're focused on right now, helping our new folks to get up to the same level of productivity as the legacy. Brittany, let's go to the next one. We'll take our next question from Ami Fadada with Meeham & Co. Your line is open. Hey guys, thank you for your time. This is Amin asking for Ami.

Yes, I will I will clarify.

With with Matt's comments that it takes a little while for someone that's new.

To get the same level of traction that someone that's experienced in the market. So that's what we're focused on right now, helping our new folks too.

Get up to the same level of productivity is the legacy team.

Okay Brittany.

Yes.

We'll take our next question from Ami for data with me him and co. Your line is open.

Hey, guys.

Q4.

Oh are you at a time.

Ami Fadia: I was wondering if you can elaborate more on how you differentiate the 104 This is a program from the competition right now in the market. There are some other companies pursuing two types of calcium challenge blockers in ET, and they're relatively at the same level in the race as So if you can add more color on that, that would be great. Yeah, I mean, I think 104 is a highly potent T-type calcium channel antagonist and preferentially CNS active in terms of its distribution.

And then asking for and I was wondering if you can elaborate more on how to get these things take a while for.

Oh ground from.

The competition is outside the market there are some other companies pursuing T type calcium channel blockers and ETE umbrella relatively in the same.

Metal.

<unk>.

So if you can add more color on that that would be great.

Yes, I mean, I think <unk> is a highly potent T type calcium channel antagonists.

DNS preparing intensively distribution and so from that perspective.

Eiry Roberts: And so from that perspective, we believe, and based on the preclinical data as well, we have a favorable profile to take into the clinic to assess. Obviously, we're designing the study such that we're able to look at both efficacy and tolerability in these initial phase two studies. And at that point in time, when we have more information, I think we'll have a better understanding. Okay, let's go to the next question. We'll take our next question from Yatin Samina with Guggenheim.

We believe based on the pre transportation as well, we have a favorable profile to take into the clinic to assess.

Obviously, we are designing the study such that we're able to look at both efficacy and Tolerability. In these initial phase II studies in that at that point in time, when we have more information I think we'll have a better understanding.

Let's go to the next question.

We'll take our next question from <unk> <unk> with Guggenheim. Your line is open.

Eiry Roberts: Your line is open. Hey guys, thank you for taking my question. I have a question about the M4 program that you have. Can you maybe just talk about how your program differs from other M4 agonists or the PAMs in development, given a couple of them are significantly ahead? How are you thinking of differentiating there? Is the specificity of the M4 or the potencies where you think it differentiates, or is the differentiation around the tolerability profile?

Hey, guys.

For taking my question I have a question on the <unk> program that you have can you maybe just talk about like how your program differentiate from other than before and then they started the pads and development given a couple of them are significantly ahead.

Yatin Suneja: And what are the next steps there beyond the schizophrenia program that you're planning to initiate? Thank you. So, the M4 program that we have in hand through our collaboration with Soce Hepatitis is a highly selective orthosteric agonist. One of the potential advantages of an agonist over some of the competition is the fact that there's no requirement for acetylcholine to be present in order for the agonist to be effective.

How are you thinking of differentiating that is the specificity specificity on the M four or the potencies, whether you think the differentiator of risk on the on the or the disposition.

Tolerability profile and what are the next steps there beyond the schizophrenia program that you're planning to any shifts. Thank you.

So the <unk> program that we have in hand.

Our collaboration with <unk>, they have ties to say highly selective <unk> agonist.

One of the potential advantages and the agonist is from some of the competition is the fact that there's no requirement for <unk> to be present in order for the argument would be affected.

Eiry Roberts: And now, obviously, we do not have clinical data in schizophrenia yet. We are starting that Phase 2 program in schizophrenia later this year. And, as you can imagine, we are considering a range of other indications, and as we move forward, potentially, with those, we'll be able to talk more about that. Hey, one minute.

Now obviously, we do not have clinical data in <unk>, yet we are adopting a phase II program.

And later this year.

As you can imagine we are considering a range of other indications as we move forward potentially with those we'll be able to talk more about that.

One.

Kevin Gorman: Let's do it on the last one. We will take our next question from David Aslam with Piper Sandler. Your line is open. I guess that's it, Brittany.

Sean.

Yeah.

Operator: And there are no further questions on the line. We will go ahead. I will turn the program back over to Kevin Gorman for any additional or closing remarks. Thank you very much.

We will take our next question from David <unk> with Piper Sandler Your line is open.

Yes, Brian .

And there are no further questions on the line. We will go ahead and I will turn the program back over to Kevin Gorman for any additional or closing remarks.

Kevin Gorman: I really appreciate everyone's participation today. As you can see, we're trying to get through all of the questions. It's important to us that everyone gets an opportunity to ask us questions.

Thank you very much I really appreciate everyones.

Participation today as you can see we're trying to get through all of the questions. That's important to us that everyone gets an opportunity to ask.

Ask questions.

I'm, just going to close with that right.

Right now.

The company is.

To use a metaphor hitting on all cylinders as I would say, we're very pleased with.

With the trajectory of <unk>, and our ability to bring that into more and more TD patients and that is even without the impact of the sizable investment that we've made with the new sales forces that are out there.

I am also very pleased that with a large and growing pipeline.

We have aggressive goals this year and as I always said, yes the conflict.

That has taken place the tragic conflict over in Ukraine.

That has impacted a couple of programs that we were going to be starting up some clinical sites over there, but we're going to work through that.

And the challenges we face are our I don't have to say obviously.

Compared to the challenges.

People will be created by our suffering we will get through this with only a minimal impact on the company all of the other programs are working out quite well and we're very much looking forward to sharing the results.

Later this year or.

The T type calcium channel one O four in both.

And then in <unk> and then finally I would say the following year 2023 is going to be a well.

Data readouts that we're going to have so we're very much looking forward to the rest of this year to be able to progress our business in what is shaping up to be a much more open and normal environment that we're going into no guarantees but.

Kevin Gorman: I'm just going to close with that. Right now, the company is, to use a metaphor, hitting on all cylinders, as I would say. We're very pleased with the trajectory of Ingressa and our ability to bring that to more and more TD patients. And that is even without the impact of the sizable investment that we've made with the new sales forces that are out there. I'm also very pleased that, with a large and growing pipeline, we have aggressive goals this year.

Kevin Gorman: And as I already said, yes, the conflict that is taking place, the tragic conflict over in Ukraine, has impacted a couple of programs that we were going to be starting up some clinical sites over there. But we're going to work through that. And the challenges we face are, I don't have to say, obviously, small compared to the challenges that the people of Ukraine are suffering. We will get through this with only a minimal impact on the company. All the other programs are working out quite well.

Kevin Gorman: And we're very much looking forward to sharing the results later this year for the T-type calcium channel 104 in both ET and then in CSWS. And then finally, I would say the following year, 2023, is going to be a wealth of data readouts that we're going to have. So we're very much looking forward to the rest of this year to be able to progress our business in what is shaping up to be a much more open and normal environment that we're going into. No guarantees, but we're very pleased with the way things are shaping up for us throughout 2022.

We're very pleased with the way things are shaping up for us shaping up for us throughout 2022 looking forward to getting together.

Operator: I am looking forward to getting together with many of you in person in the coming months. Thank you very much. This does conclude today's program. Thank you for your participation. You may disconnect at any time.

With many of you in person in the coming months. Thank you very much.

This does conclude by Graham. Thank you for your participation you may disconnect at any time.

Operator: Copyright 2019 The Ultimate Party Ltd. All Rights Reserved. No part of this recording may be reproduced without Patronage. [music]

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