Q2 2022 ACADIA Pharmaceuticals Inc Earnings Call

Good day, ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals second quarter 2022 financial results conference call.

At this time, all participants are in a listen-only, mode.

Thanks.

Thank you.

After the speaker presentation, there will be a question and answer session.

To ask a question during the session, you will need to press star 11 on your telephone. Please be advised that today's conference is being recorded.

One moment for our next question.

I would now like to hand the conference over to your speaker, Mr. Mark Johnson, Vice President of Investor Relations at ACADIA.

Please go ahead, sir.

Yeah, thanks for the question, Ritu.

That will come from the line of Sumat Kulkarni with Canaccord Genuity.

Good day, ladies and gentlemen, and welcome to the Acadia Pharmaceuticals second quarter 2022 financial results conference call at.

Thank you.

Let me ask Serge to comment, on the first part of that question, and then I'll take the second part regarding ADP Go Forward strategy.

Please go ahead.

At this time all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session.

Good afternoon, and thank you for joining us on today's call, to discuss ACADIA's second quarter 2022 financial results.

To ask a question during the session you will need to press star one one on your telephone. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker, Mr. Mark Johnson, Vice President of Investor Relations at Acadia. Please go ahead Sir.

Joining me on the call today from ACADIA are Steve Davis, our Chief Executive Officer, who will provide an overview of our, second quarter performance and a review of our business.

Mark Schneier, our Chief Financial Officer, will discuss our financial results and guidance.

Brendan Thien, our Chief Operating, Officer, Head of Commercial, will provide updates on our commercial performance, and Kathy Bishop, our Chief Scientific Officer and Head of Rare Disease, will provide an, overview on trypsinotide.

Dr. Serge Stankovich, our President, will then discuss our pipeline progress before turning it back to Steve for final remarks and opening the call up for your questions.

Serge?

Thank you for that.

Afternoon, and thank you for joining us on today's call to discuss <unk> second quarter 2022 financial results.

I would also like to point out that we're using supplemental slides which are available on the events and presentation section of our website.

With me on the call today from Acadia are Steve Davis, our Chief Executive Officer will provide an overview of our second quarter performance and a review of our business Marc Schneier, Our chief financial the financial Officer will discuss our financial results and guidance.

Before we proceed, I would first like to remind you that during our call today, we'll be making a number of, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, or future results, are based on current information, assumptions, and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially.

Stan our Chief operating officer head of commercial to provide updates on our commercial performance and Cathy picked up our sheets.

If it got certain had a rare disease will provide an overview entrepreneur.

Okay. Thanks, Rich our President will then discuss our pipeline progress before turning it back to you for final remarks, and opening the call up for your questions.

These factors and other risks associated with our business can be found in our filings made with the SEC.

I would also like to point out that we're using supplemental slides, which are available on the events and presentations section of our website.

Your caution not to place under-reliance on these forward-looking statements, which are, made only as of today's date.

I will now turn the call over to Steve.

Before we proceed I would first like to remind you that during our call today, we'll be making a number of forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995. These forward looking statements, including goals expectations plans prospects growth potential timing of events or future results are based on current information assumptions and expectations that are inherently.

Thank you, Mark.

Yeah, thanks, Ritu.

Good afternoon.

Good afternoon, everyone, and thank you for joining us today.

A great question.

Thanks for taking my question.

Subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially.

These factors and other risks associated with our business can be.

We are developing ACP-204, as a compound, internally developed compound, with similar but different and differentiated pharmacology from Pimavansaran. So as a compound, although it does target serotonergic systems, similarly as Pimavansaran, it has a number of potential advantages that are stemming from differences in pharmacology and some properties of the molecule.

Its made with the SEC you are cautioned not to place undue reliance on these forward looking statements, which are made only as of today's date.

I'll now turn the call over to Steve.

Okay.

Thank you Mark good.

On the business development environment, you mentioned that you are in a potential situation to take advantage of that.

Good afternoon, everyone and thank you for joining us today.

Please turn to slide five.

How quickly would you need to do that?

Our business plan is focused on the following priorities.

Maximize the value of our Parkinson's disease psychosis franchise with NUPLAZID.

Deliberate triffin attached to the market is our second commercial product in the first FDA approved treatment for Ret syndrome.

Please turn to, slide 5.

What's the sweet stage for a product in terms of the pipeline stage it's in?

Our business plan is focused on the following priorities.

And how would you balance that against the potential recovery in the Parkinson's disease market?

Complete our second pivotal study in negative symptoms of schizophrenia.

Maximize the value of our Parkinson's disease psychosis franchise with Neuplazid.

Yeah, thanks so much for the question, Sumat.

Disciplined early stage development to selectively advance molecules into late stage development.

And finally positioning ourselves to leverage an increasingly attractive opportunities yet in business development by carefully allocating capital.

We fund our current business from our existing balance sheet and move to becoming cash flow positive.

Let me get into these in greater detail, let's start with our NUPLAZID PDP performance on slide six.

For the second quarter, 2022, NUPLAZID achieved $134 $6 million in net sales, representing a 17% year over year increase.

Importantly, NUPLAZID continues to outperform the basket of top branded drugs in the neurology segment, the PD market and in long term care facilities.

I'm proud of our execution to continue to outperform market competitors and grow market share in a Parkinson's market environment, which continues to be negatively impacted by the pandemic.

Given the current 80 market dynamics, we have been and continue to be focused on efficiently managing and optimizing our PDP commercial spend.

As Mark will describe in a moment by carefully allocating capital to PDP opportunities with the highest ROI, we expect to keep overall SG&A relatively flat in 2023, while funding the projected launch it or phenotype in ret syndrome.

Longer term.

Our outperformance against market competitors and ability to continue to gain share in what is currently a downsize market gives us confidence in our ability to continue to grow the brand while maximizing the value of NUPLAZID in PDP.

Before leaving NUPLAZID I want to provide some clarity on our patent protection for the franchise.

Deliver Trufenetad to the market, as our second commercial product and the first FDA-approved treatment for Rett syndrome.

Our composition of matter patent in the Orange book was recently updated with patent term extension. After the end of April 2030.

In addition, we are conducting clinical work in pediatric autism that should result in a six month pediatric extension.

Our composition of matter patent to the end of October 2030.

As a reminder, we have additional method of use and formulation patents that protect the currently marketed tablets and capsules of NUPLAZID after 2037 and 2038, respectively.

Let's now move to slide seven.

As announced last month, we submitted our NDA for Tryphena task for the treatment of Ret syndrome in adults and pediatric patients two years of age and older.

The submission is based on our pivotal phase III Lavender study, which delivered positive top line results on its co primary end points and on the key secondary endpoint.

<unk> has been granted fast track status and orphan drug designation for Ret syndrome.

And its also been granted rare pediatric disease designation by the FDA.

As such we expect to San Diego received a priority review with an action date, most likely in the first quarter of 2023.

Complete our second pivotal study in negative symptoms of schizophrenia.

And if approved we would expect to receive a pediatric priority review voucher.

Our commercial and medical teams are working diligently on preparing for launch including market development disease State education.

Customer profiling and broader care team identification.

As a reminder, our patent protection for Trinidad consists of a method of use patents with expected patent term extension out to early 2036 with additional patents pending.

Moving now to pivot the answer for the treatment of negative symptoms of schizophrenia.

And we've answered has already completed one positive pivotal study advance one.

As we previously noted negative symptoms there has been a particularly difficult area for the industry with many failed studies and no FDA approved therapies.

Discipline early-stage, development to selectively advance molecules into late-stage development.

Our second pivotal study advance two is ongoing.

So that perspective, we anticipate that this molecule is going fairly successfully so far through the Phase I to pursue, after our Phase II work, to pursue aggressive development into the neuropsychiatric, symptoms.

The advance one we explored a range of doses and determined at the top dose 34 milligrams. The same dose approved for PDP perform meaningfully better than lower doses. So in advance to we are only using the 34 milligram dose.

Obviously, among others, we are considering Alzheimer's disease psychosis, but we are looking at a whole array of psychiatric symptoms that this compound may be.

Hey, Serge will discuss as a result of the ongoing Russia, Ukraine War, we are extending our projections to complete enrollment around the middle of next year.

As a reminder, this is a study with a six month treatment period.

Let's now turn to slide eight to discuss the further evolution of our early stage portfolio.

One early stage program, we've not previously discussed as an internally developed new molecule <unk> four which is currently in phase one development.

ACP tool for builds on the learnings of <unk> answering.

At this point the compound is looking very good and in phase. One is successful we plan to develop it as a potential treatment in neuropsychiatric symptoms, which may include Alzheimer's disease psychosis.

And finally, positioning ourselves to leverage an increasingly attractive opportunity set in business development by carefully allocating capital as we fund our current business from our existing balance sheet and move to becoming cash flow positive. Let me get into these in greater detail.

One thing that I would add here, particularly of the importance of this compound, is the higher potential in terms of the efficacy, which, again, is related to the properties of the molecule and the data that we have from our preclinical work.

So let me just start by reflecting on what we've seen in cycles like this in the past. And it's been quite a while since we've had a significant and sustained downturn in the capital markets in the biotech industry. What we've seen in the past is as these kind of closed windows or disjointed capital markets go on for two quarters, three quarters, four quarters, that companies just naturally become more engaged and interested in partnering because it just becomes more and more difficult for them to fund all of their programs independently. And so that's what we anticipate happening.

We expect ACP to afford to complete phase one development around year end.

And of course, making disciplined decisions in early development is a threshold requirement to success in late stage development.

We've also made the decision to discontinue the development of ACP Ofer for an acute and chronic pain based on an evaluation of the final data set from a previously completed phase III Bunionectomy study.

And the second, there is, as well, a differentiation in terms of a lack of liability, QT liability, which is differentiation compared to a Pimavansaran.

We're beginning to see some early signs of that, companies that maybe were not as interested in talking earlier are now more engaging.

Ritu, Serge, on my end of the line, was breaking up a little bit.

We're also discontinuing ACP 319, and then one Pam modulator based.

Did you hear his answer?

Based on the profile that does not support advancement to phase III.

I heard about the QT.

But for this to really result in a meaningful change in the attractiveness of the business and the opportunities that the capital markets will need to stay disjointed for another quarter or two or three, which at this point in time is anyone's guess, but it doesn't look like this is going to turn around anytime soon.

Moving to the bottom line or the.

Bottom of the slide I just wanted to go back to a point I made when I opened my remarks.

And that is that we are positioning ourselves to leverage what we believe will be an increasingly attractive business development environment.

We're positioning ourselves by being very focused in our investments in PDP.

I heard about the potency.

<unk> investments with the highest ROI as I mentioned this will enable us to appropriately fund our launch in ret syndrome, while keeping SG&A relatively flat.

We will also continue to be very disciplined in allocating capital in our R&D portfolio as I described above.

I wasn't exactly sure about the differential, pharmacodynamic middle portion.

And so while in some respects it's a difficult time for the industry, it winds up being probably a net positive for us and companies like us, because what happens is the BD tables, as we said, just tilt dramatically in favor of companies with our kinds of resources and infrastructure.

If the capital markets day, just joined it and it appears they will for the foreseeable future.

What we've seen in the past in these cycles is that the tables tilt dramatically in favor of companies like us.

Okay.

Companies with a strong balance sheet.

<unk> revenues and established commercial and R&D infrastructure.

So as we go forward, we're poised to take advantage of that.

Let me just sum up.

The most, by far, the most challenging competitor we've had in business development for the last five to seven years has been the capital markets.

In addition, we've established an infrastructure cost all four quadrants you see here.

So 204 is similar but not identical from a biochemical perspective.

And that's a very, very different dynamic today as we go forward.

And both psychiatry, and neurology and across broad indications in rare disease.

So from a binding profile perspective, very similar but not identical.

Got it.

Of course to replenish that as a good example of our past success in business development.

Our strong financial position and established infrastructure position us extremely well to leverage the evolving business development opportunity set for further success.

That, together, with other properties of the compound, we think give us important potential differentiating factors from Pimavansaran.

Thanks.

With that I'd like to now turn the call over to Mark to discuss our financial position guidance and strategy in more detail.

Of course, this all has to play out in the clinic.

Thank you.

We are eager to continue advancing the compound, but we think it has very great potential, and we are excited about it, given that it is an early-stage compound.

One moment for our next question.

Thank you Steve let me start by building upon what you just talked about as we turn to slide 10.

As a company we continue to refocus our expense base to align it with our key strategic priorities.

This includes the optimization of our SG&A expenses as well as the prioritization of our R&D expenses at the same time, we continue to ensure they are able to fund our existing business without the need for additional capital.

Now let me provide some additional color.

First we expect to invest in the launch of <unk>, while maintaining a relatively flat SG&A expense base in 2023 as compared to 2022.

This means we will continue to redeploy resources from PDP commercial and G&A to the tryphena type commercial lab.

Second we have prioritized, our R&D portfolio with a number of programs advancing continuing completing and terminated.

That will come from the line of Paul Matias with CFL.

Let's start with our Neuplazid PDP performance on slide 6. For the second quarter of 2022, Neuplazid achieved $134.6 million in net sales, representing a 17% year-over-year increase. Importantly, Neuplazid continues to outperform the basket of top-branded drugs in the neurology segment, the PD market, and in long-term care for I'm proud of our execution to continue to outperform market comparators and grow market, share in a Parkinson's market environment which continues to be negatively impacted by the pandemic.

Please go ahead.

Based upon our prioritization efforts, we expect R&D expense from program cost to decrease by approximately $50 million.

We expect a reduction of $15 million for the remainder of this year and another approximately $35 million next year.

And finally with our current cash balance of $436 $4 million, we have more than sufficient resources to fund our business until we turn cash flow positive.

Of course, this is subject to the scope of future BD.

Now, let's turn to our quarterly performance on slide 11.

In the quarter, we recorded $134 $6 million in net sales an increase of approximately 17% compared to $115 2 million of net sales in Q2 of 2021.

Year over year demand in selling volume were down one and 2% respectively.

During the current quarter, our sell in volume matched our demand.

And for the first six months of 2022 demand growth was up over 1% year over year.

Our gross to net adjustment for Q2 was 15, 4% down from 18, 4% last year.

<unk> for the first half of the year was 22.

Which is essentially flat as compared to 24% for last year.

GAAP R&D expenses increased to $75 6 million in the quarter compared to $56 9 million in Q2 2021.

Given the current PD market dynamics, we have been and continue to be focused on efficiently, managing and optimizing our PDP commercial spend.

And in other considerations, and in this case, it also included ACP 204.

Hi, this is James on for Paul.

The increase was primarily due to development activities for ACP 044, which has now been discontinued investment in trip into type commercial supply, which is expense in advance of approval and expenses related to early stage programs.

So, it certainly wasn't the only consideration, but it was a consideration.

GAAP SG&A expenses decreased to $89 9 million in the second quarter from $96 8 million in the second quarter of last year.

And finally, we ended the quarter with a healthy cash balance of $436 4 million.

Please see our adjusted guidance ranges on slide 12, now that we're halfway through the year.

At the beginning of the year, we deliberately provided a wide net sales guidance range to reflect various scenarios related to the pandemic.

And then at.

The top end of the range reflected a significantly improvement significant improvement PD Mark.

And we've not seen that yet so far this year.

As a result, we are reducing the top end of our net sales guidance range.

Regarding gross to net we have reduced our range slightly to 19, 5% to 25% for the year.

As Mark will describe in a moment, by carefully allocating capital to PDP opportunities with, the highest ROI, we expect to keep overall SG&A relatively flat in 2023 while funding the projected launch of Trufenatide in Rett Syndrome.

ACP 204 will have a patent life that will go into the early 2040s.

Thanks for taking our question.

On the expense side, we are reducing our R&D guidance by $15 million and maintaining our SG&A guidance.

You mentioned ADP as a potential indication for ACP-204.

While R&D will come down in 2022, we expect most of the cost reductions I referred to earlier are another approximately $35 million to be realized next year.

We're raising the bottom end of our expected year end cash balance are now guiding to the range of $375 million to $405 million.

And so, you know, it was, so going forward, we will not be running another study with Pimavanserin.

I guess in your recent communications with the FDA, you know, around Pimivanserin, I guess, did they provide any specific guidance or anything around what development should look like?

To reiterate we are confident in our ability to generate sustainable growth with our existing cash resources.

And now I'd like to turn the call over to Brendan to discuss our PDP business.

Thank you Mark.

Please turn to slide 14.

Longer term, our outperformance against market competitors and ability to continue to gain, share in what is currently a downsized market gives us confidence in our ability to continue to grow the brand while maximizing the value of Nuplyazid and PDP.

We've not yet determined if we will with ACP 204, but certainly that will be one very high priority indication for us to consider.

You know, for example, running acute versus relapse prevention studies or, you know, any learning that you can carry forward as you potentially pursue that indication.

We, at this point, we just need to wrap up phase one, get a full profile on the compound, and then we'll get back to you and others with a more definitive development plan.

I am pleased with our team's performance this quarter delivering net sales of $134 $6 million.

Before leaving Nuplyazid, I want to provide some clarity on our patent protection for, the franchise. Our Composition of Matter patent in the Orange Book was recently updated with patent term, extension out to the end of April 2030.

Very helpful.

Thanks.

In addition, we are conducting clinical work in pediatric autism that should result in, a six-month pediatric extension, taking our Composition of Matter patent to the end of, October 2030.

Representing 17% year over year growth.

Thanks, Steve.

Yeah, thanks so much for the question.

Today I want to address four key themes regarding our commercial organization and performance.

As a reminder, we have additional method of use and formulation patents that protect the, currently marketed tablets and capsules of Nuplyazid out to 2037 and 2038, respectively.

Thanks, Serge.

I'll start.

The PD market dynamics and our relative performance.

<unk> optimizing growth for the NUPLAZID brand.

Let's now move to slide seven.

Thank you.

Serge, feel free to jump in if you have additional thoughts.

And I'll shed some light on exciting new real World studies on theme of answer and safety profile and we'll finish off by discussing our preparations Richard for that time.

One moment for our next question.

So, first of all, let me just say with ACP-204, we've not had discussions about late stage development yet with the FDA.

Let's start with the PD market dynamics and our relative performance.

That will come from the line of Nina Garg with Citi.

That'll be a part of the process in due course.

But what I would say is, of course, we learned an awful lot about Alzheimer's disease psychosis throughout the development of Pimivanserin.

Our demand volume grew slightly in the first six months of 2022 compared to 2021, which is encouraging given the very slow incremental improvements in the PD market dynamics seen to date.

Please go ahead.

And so we'll leverage those learnings.

Hey, guys.

We have a very, very good feel for what the appropriate safety and tolerability profile needs to be, what efficacy is, how to run these studies, et cetera.

As shown on this slide we are further encouraged as NUPLAZID growth outperformed foundational Parkinson's medications, including carbon believe at Delta.

So, I think we're very, very well positioned to leverage the institutional knowledge that we have in ADP.

And, of course, if we pursue to afford ADP, which we've indicated we think is a very attractive indication, then we'll certainly be able to leverage all those learnings.

As well as the market basket of branded LTC products across multiple therapeutic areas.

Performance continues to indicate our strong brand support from our treating audience and has allowed us to continue to increase our market share which has grown despite the pandemic and is up approximately 15% through since 2019.

Serge, anything you'd like to add?

I would just briefly add that circumstances around Pimivanserin development in dementia-related psychosis and or ADP are different than any new chemical entity that you would bring into development.

In that, at the time we were contemplating doing and agreeing with FDA to do a randomized withdrawal trial, we already had behind us two acute trials in psychosis associated with neurodegenerative disease. So, there was already evidence of efficacy in the acute treatment and paradigm for treatment of psychotic symptoms.

Any new molecule that you would bring would have a different circumstance, and then obviously the development program would just have to be designed to accommodate those circumstances.

Second as Steve alluded to.

We have.

Very helpful.

Continue to optimize our PDP commercial spend in the current market environment.

Thanks.

To evaluate growth opportunities more efficiently and increased cash flow from the business, we will as always be opportunistic when the PD market dynamics improve and move closer to pre pandemic levels.

Third and recently several real World studies have been published or presented that make important comparisons win.

As announced last month, we submitted our NDA for Trufenatide for the treatment of Rett, Syndrome in adults and pediatric patients two years of age and older. The submission is based on our Pivotal Phase III Lavender Study, which delivered positive, top-line results on its co-primary endpoints and on the key secondary endpoint.

Thanks for taking the question.

Thank you.

When treating patients with team of answer and as opposed to off label multi receptor or atypical anti psychotics in PDP patients.

Trufenatide has been granted Fast-Track status and orphan drug designation for Rett Syndrome, and it's also been granted rare pediatric disease designation by the FDA.

I was just wondering if you could clarify some of the dynamics on the quarterly Pimavanserin growth to net specifically.

One moment for our next question.

As such, we expect this NDA to receive a priority review with an action date most likely in, the first quarter of 2023.

Maybe if you can describe kind of what drove the steep drop-off in the growth to net discount there, and then if you can clarify what we should expect for the full year, that would be great.

That will come from the line of Yatin Suneya with Guggenheim.

One of these studies was recently published in the American Journal of Psychiatry.

The authors of this study concluded the theme of answering was.

And if approved, we would expect to receive a Pediatric Priority Review Voucher.

Thanks.

Please go ahead.

Sure.

Hi, guys.

Use was associated with approximately 23% lower mortality rates and other atypical anti psychotics over 360 days.

Mark, do you want to take that?

This is Eddie on for Yatin.

These are important findings, which serge will speak to in a moment.

Yeah, sure.

Thanks for taking the questions.

Let's now turn to our preparations for the launch of Tryphena tied for the treatment of <unk> syndrome on slide 15.

Our commercial and medical teams are working diligently on preparing for launch, including, market development, disease state education, customer profiling, and broader care team identification.

Thanks for the question.

So, on Drofinetide, given the lack of approved therapies, do you expect to bullet the patients going on drug quickly after the launch, or should we accept some sort of education or sales work to temper that ramp?

Acadia is preparing to reach yet another important milestone in the company's history launching our second commercial product and building a rare disease focused commercial organization.

The decline just for the second quarter in comparison to the second quarter of last year was really a timing difference, that happened in accruals between the first and second quarter of 2021.

So I think that's why we're importantly noted kind of the growth to net for the full six months year to date, which is essentially basically the same and flat.

Our commercial teams are already working on shaping and developing the market for what will potentially be the first therapy approved to treat ret syndrome.

Patients with Ret syndrome, generally have a dedicated care team, which includes their caregiver usually family as well as their health care providers.

In order to achieve our goals in the near term we have several prelaunch activities ongoing.

Including building best in class patient support and educational resources to further generate awareness retrofitted tied upon launch and identify and engage the families of patients.

And as we look forward to the year, we announced, or I commented, that we are bringing down our guidance range for growth to net a little bit from 19.5% to 20.5%.

Secondly, we are continuing to engage the community to build awareness, including leveraging our strong partnerships with advocacy groups to best understand care team needs and perspectives and finally, we're increasing our community outreach for disease education, and establishing tryphena tied to clinical impact through publications side.

And that's just as we're seeing kind of less of a growth in 340B dynamics, which has been kind of the main driver of growth in the last year or so as growth to net has ticked up.

As a reminder, our patent protection for Trufenatide consists of a method abuse patent with expected, patent term extension out to early 2036, with additional patents pending.

Got it.

And related to that, how many of those 6,000 to 9,000 U.S. patients have you identified so far?

Moving now to Pimivansir for the treatment of negative symptoms of schizophrenia. Pimivansir has already completed one positive Pivotal Study, Advance I.

And then quickly, if you can comment just a bit more on why you terminated the M1 program.

<unk> presentations and KOL engagement.

As we previously noted, negative symptoms has been a particularly difficult area for, the industry, with many failed studies and no FDA-approved therapies.

Thanks.

Our ultimate launch objective will be to establish <unk> as the foundational treatment for ret syndrome and.

And ensure access to all patients in need.

I'll turn it over now to Kathy to discuss ret and <unk> from a clinical perspective.

Our second Pivotal Study, Advance II, is ongoing. Advance II is virtually identical to Advance I, with one important difference. In Advance I, we explored a range of doses and determined that the top dose, 34 milligrams, the same dose approved for PDP, performed meaningfully better than lower doses. So in Advance II, we are only using the 34 milligram dose.

Sure.

Thank you Brandon, let's start on slide 17.

As you know ret syndrome is a serious and debilitating rare disorder, which we estimate there are between six and 9000 patients in the United States.

That's helpful.

Brendan, you want to take everything down to the M1 portion of the question, and then Serge, I'll ask you to take that.

I guess then maybe if you can talk a little bit about just then the script dynamics, and kind of how we should think about kind of the pace of new starts in the second quarter, just because it seems like most of the sequential growth in sales is driven then by the growth to net.

There is no FDA approved treatment for ret syndrome in the U S.

The debilitating symptoms of <unk> syndrome, and cleared severe neuro developmental and motor impairment, including day abnormalities and loss of purposeful hand, yet.

Yeah, sure.

Sure, Eddie, thanks for the question.

Mark, go ahead.

The desire to trial profinetide, whether you're speaking about HCPs or families, is high.

Yeah, I think as we continue to just be in this kind of, I guess, flat to modest growth period, that will last forever.

But, you know, it remains where we are now. So we're confident that, you know, over the long term, that as kind of PD market dynamics kind of return to a more favorable environment, normal environment as we would expect, timing of which is hard to predict, that will return to greater growth period as we continue to outperform and gain market share in this market.

<unk> ability to communicate both verbally and non verbally and gi issues, including into the air constipation.

I think for the remainder of this year, you know, we lowered the top end of our guidance range.

Ultimately ret syndrome patients.

To maintain independence rationing on a daily basis and require around the clock support.

Let's review the <unk> results on slide 18, which formed the basis of our recent NDA submission to the Sds.

And 11, you're setting positive results there for the pre specified co primary endpoint.

At week 12 for the RSV Q the P value was 0.01 75.

In effect size of <unk> 37.

As a reminder, the RSV curious is that all of the data caregiver completed rating scale assessing a wide range of neuro behavioral and narrow dilemma.

A core symptom known to be impaired in ret syndrome.

To finish I patients improved on average five one points from baseline at week 12 on this which is very meaningful.

In addition at week 12 for the senior the P value was 0.0.

With an effect size.

Four seven.

<unk> is a clinician completed assessment of how much the individual business has improved or worsened relative to baseline.

Scored using the standardized <unk> that are specific to the clinical features of ret syndrome.

This is exercise is quite meaningful for these patients and their families.

Furthermore, in the study statistically significant separation from placebo on the key secondary efficacy endpoint was also achieved.

This important endpoint was designed to assess the communication skills of the patient.

Though initially designed for infants and toddlers skills applicable to and has been applied to older age gap for patients with neuro developmental disorders, such as Ret syndrome.

Lack of ability to communicate verbally and non globally is a significant challenge for patients and their families.

As Serge will discuss, as a result of the ongoing Russia-Ukraine war, we are extending, our projections to complete enrollment to around the middle of next year.

Just, you know, that was reflective of a PD market dynamic that would have been significantly improving.

In all of our market research, we see a high level of enthusiasm for that.

This endpoint at week 12, the P value was 0.0064 with an effect size of <unk>.

As a reminder, this is a study with a six-month treatment period.

You know, as I mentioned, we haven't seen that quite yet.

With that said, we've been able to look at other analogs of rare disease, pediatric product launches.

So our current range is that kind of demand would be in kind of the slightly negative to positive range for demand growth.

There is the early stages where, of course, we would expect patients that have been part of our studies to be able to roll over onto a commercial drug relatively seamlessly.

Selling bottles will be slightly less than demand is our expectation as we had last year.

And we're working very closely with centers of excellence and high value institutions to make sure we're very well aware of the patient population already diagnosed to be ready to treat.

Great.

The consistency of these results with observed across all age groups and severity of disease. In this study this.

A little bit of selling growth that exceeded demand growth.

With that said, we will work closely with payers to make sure we're doing our best to make sure that access is available as readily as possible.

But we do anticipate in the first few months post-launch that there will be work to be done to make sure that every patient that is seeking therapy will have an opportunity to be treated.

I think your second question was around how many of these patients are we already aware of. We've done a lot of work with multiple databases to confirm the already identified and diagnosed RET population. And of that 6,000 to 9,000, I would say that roughly two-thirds of patients are diagnosed.

And we expect, as is the case with many rare disease products post-launch, that diagnosis rates would increase when people are aware that there is a therapy available. Don't expect that to be overnight, obviously. But as more and more people become aware that there's a novel treatment for RET syndrome, it's very likely that families will seek additional diagnoses.

This helps reinforce it meaningfulness and to finish is potentially in all patients with Tourette's syndrome.

And we don't necessarily expect that dynamic to increase to continue this year.

In addition, these results are also consistent with what was observed previously in phase two study.

And we'll see where we wind up this year and look forward to growing the brand over time.

And now I'll turn it over to search for an update on our other pipeline programs.

One of the things to just note is that the PD market environment is smaller today than, it was prior to the pandemic.

We see that when we see the scripts for carbidopa levodopa growing at a very slow rate, much, slower than it was prior to the pandemic.

We see it in occupancy rates in long-term care facilities, patient, in-person offices, et cetera.

So we've talked about those dynamics a lot. Importantly, despite a smaller, what is today a smaller market, which we believe will grow, again in the future, throughout the pandemic, we've gained about 15% market share. So our market share, part of the pandemic versus where it stands today, has gone up, about 15%.

Thank you Kathy and good afternoon, everyone.

So that is another consideration that gives us confidence that as pandemic conditions, ultimately improve, and we're able to continue to grow market share, that we'll go back to the kind of longer-term growth rates that we've seen historically.

Got it.

Let's discuss the evolution of our CNS portfolio on slide 20.

In regards to M1 program, let me just make a first start with a clarification.

We did not discontinue M110 program.

We made a decision to discontinue development of the ACP319.

First.

To reiterate what Steve and Mark said, we believe that the business development opportunity set will continue to get more and more attractive over the course of the next year and favor companies like ours that are well capitalized and have existing infrastructure in place to transact and expand.

Let's now turn to slide 8 to discuss the further evolution of our early-stage portfolio. One early-stage program we have not previously discussed is an internally-developed new molecule, ACP204, which is currently in Phase I development. ACP204 builds on the learnings of Pimivantrin. At this point, the compound is looking very good, and if Phase I is successful, we plan to develop it as a potential treatment in neuropsychiatric symptoms, which may include Alzheimer's disease psychosis.

And the story there is very similar to what I described with the ACP044.

We expect ACP204 to complete Phase I development around year-end.

We defined a certain profile that we were anticipating on the basis of preclinical animal data and early stage Phase I data. And the molecule just did not rise to the level of reaching that high threshold of our anticipation for the competitive molecule.

Therefore, it is important to stay disciplined and make the right investment decisions for each program and the portfolio as a whole.

Of course, making disciplined decisions in early development is a threshold requirement to success in late-stage development.

We've also made the decision to discontinue the development of ACP044 in acute and chronic pain based on an evaluation of the final data set from a previously completed Phase II bunionectomy study.

We're also discontinuing ACP319, an M1-PAM modulator, based on a profile that does not support advancement to Phase II.

Moving to the bottom of the slide, I just want to go back to a point I made when I opened my remarks, and that is that we are positioning ourselves to leverage what we believe will be an increasingly attractive business development environment.

As a result of our prioritization efforts today, we announced that we have discontinued the development of HCP, all 44 in acute and chronic pain and HCP $3 19, the lead molecule from our <unk> program.

We're positioning ourselves by being very focused in our investments in PDP, prioritizing investments with ISROI.

Thank you.

But I will remind you that we have additional backup molecules in our M1 PEM collaboration with Vanderbilt.

As I mentioned, this will enable us to appropriately fund our launch in Rett syndrome while keeping SG&A relatively flat.

On the other hand, we are investing further in an internally developed molecule HCP tool for this.

We will also continue to be very disciplined in allocating capital in our R&D portfolios I've described above.

If the capital markets stay disjointed, and it appears they will for the foreseeable future, what we've seen in the past in these cycles is that the tables tilt dramatically in favor of companies like us, companies with a strong balance sheet, solid revenues, and established commercial and R&D infrastructure.

One moment for our next question.

And we will be further evaluating these molecules as we move forward.

This molecule is being evaluated in phase one and we expect to complete phase one development around the end of this year.

ACP tool for builds upon the learnings of <unk> in the treatment of neuropsychiatric symptoms.

In addition, we've established an infrastructure across all four quadrants you see here, in both psychiatry and neurology, and across broad indications and rare disease.

That will come from the line of Chris Howerton with Jeffries.

Thank you for all the follow-up.

Of course, terpenatide is a good example of our past success in business development.

We are also investing in our ASO programs.

Had stalled collaboration among the early stage programs.

Now, let's discuss <unk> in PDP and the negative symptoms of schizophrenia.

Please go ahead.

Appreciate it.

Hi, y'all.

Thank you.

This is A.J.

One moment for our next question.

Building upon what brand them stated.

Would like to discuss a couple of real World Studies on Slide 21. This compares treatment with PMI, while I'm sitting in patients with PDP two off label multi receptor atypical anti psychotics.

Velazquez, and I'm on behalf of Chris Howerton here.

Are you thinking about NSS any differently following Karuna's CAR-XP data today?

Do you maybe see atypical antipsychotics as a sort of holdover if physicians are willing, to go out and get preauthorizations for that?

The recent publication in the American Journal of Psychiatry.

And second a recent poster presented at the 2022 American Society of clinical Psychopharmacology meeting.

Both the publication and the presentation were made public in June of this year.

The publications describe findings from the retrospective Medicare claims analysis, comparing the risk of all cause mortality associated with Nevada.

Versus other atypical anti psychotics in patients with Parkinson's disease to treat psychosis.

Sure.

The outlets conclusions were answering use was associated with an approximately 23% lower mortality than other atypical anti psychotics over 360 day.

Serge, do you want to take that?

Yes, absolutely.

The risk of mortality was approximately 35% lower in cream of answering patients than with other atypical anti psychotics. During the first 180 days of use while the risk scores similar thereafter.

Thanks for the question, although I'll probably leave it for Brett to comment on the authorization, and all that.

But from a scientific perspective, I would say that the indication that Karuna is pursuing, is very different from the indication that we are pursuing with Pimavansir in negative symptom schizophrenia.

This data is very encouraging and our team is proud to continue to make NUPLAZID available to patients with PDP and their families.

Let's move on to our second potential indication for Cree in my answer and starting on slide 22.

First of all, Karuna's program is on a therapy in acute schizophrenia symptoms, short-term, studies, and the results, I would say we are very pleased to see that there is another potential treatment option for this serious condition.

There are over 700000 patients in the United States, who are currently treated <unk>.

For schizophrenia, but still have persistence and potentially the ability of being negative symptoms.

Social withdrawal lack of emotions.

And blond <unk> among others.

These symptoms lead to low social functioning long term disability and significant caregiver burden and there is currently no FDA approved treatment.

But it's very different from negative symptom schizophrenia, where it's a long-term treatment, with a requirement that positive symptoms of schizophrenia, acute symptoms of schizophrenia, are under control, and that remaining negative symptoms in terms of social withdrawal, emotional withdrawal, and so on, are treated most frequently adjunctively, and that's exactly how we are pursuing that.

So, we are not seeing a direct read-through from the Karuna data, because it's a different, competitive environment than what we are pursuing.

As part of our advanced program, we have one positive pivotal study advance one where we observed statistical separation on the primary endpoint overall and even more robust results in patients receiving 34 milligram.

<unk> answered.

These positive results were published in Lancet psychiatry.

Today I want to focus on the results of the 34 milligram group, which appears to be optimal therapeutic dose, which we are evaluating our second pivotal study advance two.

The graph on slide 23 shows the improvement for only the patients who received 34 milligram dose of <unk>.

You can see the significant improvement from placebo was achieved at week 26, when an unadjusted P value.

I will remind you there are no approved treatments for negative symptom schizophrenia, while, there are multiple treatments for acute schizophrenia symptoms.

<unk> 0.0065, with an observed effect size of <unk> 34.

The separation began as early as week, two which continued to increase throughout the six month treatment period.

We look forward to keeping you updated on our progress in this high unmet need.

And with that I will turn the call back to Steve for closing remarks.

Our strong financial position and established infrastructure position us extremely well to leverage the evolving business development opportunity set for further success.

Thank you Serge please turn to slide 25.

Today, we are executing on our promise to deliver NUPLAZID to patients with PDP, where there is an attractive long term opportunity to continue to grow this brand.

With that, I'd like to now turn the call over to Mark to discuss our financial position, guidance, and strategy in more detail.

I will only add one other thing, is that movement on the negative symptom subscale of PAMS in, the context and paradigm of the acute short treatment is something that we regularly see in our trial, because with the reduction of acute symptoms, you are seeing some movement on the negative symptoms as well.

But that's not accepted as evidence of the efficacy in the treatment of negative symptom, schizophrenia.

Thank you, Steve.

The only long-term, six-month studies in the context of stable positive symptoms and improvement, of negative symptoms is accepted by regulators as an inappropriate paradigm for evidence of efficacy.

Thank you for the clarification.

Let me start by building upon what you just talked about as we turn to slide 10.

Operator Thank you.

As a company, we continue to refocus our expense base to align it with our key strategic priorities. This includes the optimization of our SG&A expenses, as well as the prioritization of our R&D expenses.

In addition, we are preparing for our second commercial product launch with <unk>.

At the same time, we continue to ensure that we're able to fund our existing business without the need for additional capital.

<unk>, our phase III program for the negative symptoms of schizophrenia.

Now let me provide some additional coverage.

One moment for our next question.

In developing several additional programs, while pursuing strategic business development.

With a strong balance sheet and the projected launch of our second product early next year, we are well positioned for long term growth.

That will come from the line of Greg Renza with RBC Capital.

That will come from the line of Amin Makaram, with Needham.

In closing I would like to thank our employees for their accomplishments and their ongoing commitment and passion as we continue our mission to elevate lines.

I will now open up the call for questions.

First, we expect to invest in the launch of terpenatide while maintaining a relatively flat SG&A expense base in 2023 as compared to 2022. This means we will continue to redeploy resources from PDP commercial and G&A to the terpenatide commercial assets.

Please go ahead.

Please go ahead.

Operator.

Thank you as a reminder, ladies and gentlemen, if you wish to ask a question. Please press star one one on your Touchtone telephone.

We ask that you. Please limit yourself to one question I repeat please limit yourself to one question. Please standby for your first question.

That will come from the line of Charles Duncan with Cantor Fitzgerald. Please go ahead.

Hi, guys.

Thanks for taking the question Andy update Sarah update today.

Let's see I'll try to ask one question and it will probably be a multi parter.

Greg Renza Great.

Thank you, guys, for taking the question to Amin and for Ami.

Perhaps for Kathy I guess I'm wondering if she could provide any further color on whether or not she anticipates an AD com given that Joe phenotype is a first in class.

Second, we have prioritized our R&D portfolio with a number of programs advancing, continuing, completing, and terminating. Based upon our prioritization efforts, we expect R&D expense from program costs to decrease by approximately $50 million. We expect a reduction of $15 million for the remainder of this year and another approximately $35 million next year.

Thanks, Steve and team, for the update today and thanks for taking my question.

And finally, with a current cash balance of $436.4 million, we have more than sufficient resources to fund our business until we turn cash flow positive.

First in indication drug and what what's gone on to prepare for that and then maybe the second part is for Brandon.

Relative to the target product profile is if he can share any feedback from payers that you've gotten so far on Trofim Hittite.

Yes.

Yes, great. Thanks.

Kathy you want to take the first part of that question and Brendan the second.

Yes, happy to and thanks for the question Charles.

As we announced we filed our NDA in July .

And as Steve mentioned, given that Ret syndrome is a severe rare pediatric disease, we are anticipating priority Raytheon.

At day 60.

Since the filing we will hear about acceptance of the NDA. So that would be in September and we are anticipating at that time hearing about producer date officially and as well what are the <unk>.

Of course, this is subject to the scope of future BD.

I just wanted to give you a chance to perhaps close the loop on the recent CRL with Tim, I know it's been communicated from the team as disappointing and certainly telegraphed over this recent time, but just perhaps you can provide a punctuation mark on or say a final point on what it means for the company.

One question from our side.

Now let's turn to our quarterly performance on slide 11.

You've made some changes today that are certainly meaningful across the pipeline and the profile, but how is that feeding into how you're looking at ACAT going forward?

Do you have visibility on how GTN for neoplasm, is likely to trend next year in light of the increasing 3, 4 dB mix?

In the quarter, we recorded $134.6 million in net sales, an increase of approximately 17% compared to $115.2 million of net sales in Q2 of 2021.

Year-over-year demand and selling volume were down 1% and 2% respectively.

During the current quarter, our selling volume matched our demand volume.

<unk> is leading an advisory committee meeting.

I will say we are preparing in case they are going to have advisory Committee meeting.

In my experience, having market managed disease for about 20 years.

Yes.

Certainly so that for the first.

Given indication they have advisory Committee meeting.

In our case I think the data is pretty straightforward. So there is potential that that would not happen.

Yeah.

Okay, Thanks, Cathie and.

Charles Thanks for your question is well spread it.

Yes, we've had a chance to engage payers since the <unk> trial results.

Thanks.

I'm sorry.

They are very understanding of this being an area of high unmet medical need they understand the devastating nature of ret syndrome.

<unk> have had a chance to see <unk> target product profile, they understand the importance of being able to treat across the core symptoms of ret syndrome, and they have given us I think favorable feedback on that product profile.

Tim I think that's for the question, Greg.

I couldn't hear the question.

You know, look, there's no drug approved for the treatment of Alzheimer's disease, psychosis, and it's a traumatic unmet need, so, of course, we continue to be very disappointed that we didn't have a positive outcome with our recent mission in ADP.

Could you ask it again?

Thank you for taking the question.

Do you have any visibility into how GTN for neoplasm, is likely to trend next year in light of the increasing 3, 4 dB mix?

<unk> that the product would be.

Okay.

Like other rare diseases in the pediatric space that they would expect ctrip edit tied in that same category.

Okay.

Hey, good hop back in the queue. Thanks.

Thank you very much.

Thank you one moment for our next question.

That will come from the line of <unk> <unk> with Cowen. Please go ahead.

Mark Schneyer, do you want to take that?

Yeah, sure.

Hi, guys. Thanks for taking my question. This afternoon I wanted to ask about ACP tool for when you say building upon the learnings of pillows answer and is that a statement on the mechanism of <unk> is that also.

Thanks for the question.

We don't forecast out for next year at this time.

We'll, release guidance when we publish our fourth quarter results.

I think what we've seen thus far this year is that the growth in volume of 3, 4 dB is moderating.

And inverse agonist and.

Is this year forward.

<unk> strategy.

Or.

Phase II strategy. Thanks.

Yes. Thanks for the question, let me ask Serge to comment on the first part of that question and then I'll take the second part regarding ADP cohort strategy Serge.

Yeah.

Thanks to a great question.

Sure.

Developing ACP tool for.

Compound in terminal developed compound.

Similar.

But different and differentiated pharmacology from <unk>.

So as a compound.

That's target <unk> similarly speed of answering it has.

Potential vintages are stemming from differences in all of <unk>.

Some properties of the molecule so that perspective, we.

That molecule.

At Boeing.

So far through the phase.

To pursue.

Okay.

We will pursue aggressively.

Okay development into the newer Patrick symptoms, obviously among others.

Correct.

Alzheimer's disease psychosis, but we are looking at all that right.

Patrick.

That this compound may be.

Right.

One thing that I would add here, particularly of the important.

Sure.

This compound is.

Higher put that probably in terms of the efficacy.

Which again is related to the properties of the molecule and the data that we have from our pre clinical and preclinical work and the second there is.

As when a differentiation in terms of.

<unk> liability acuity liability.

<unk>.

Which is differentiation compared to BMO runs here.

Yes, Sir.

Ritu Serge on.

On my end of the line was breaking up a little bit did you did you hear his answer.

I heard about the Qt I heard about that.

<unk>.

Wasn't exactly sure about the differential pharmacodynamic middle portion.

Okay, well, let me just start up so two O four.

Is similar but not identical from about chemical perspective, so from a binding profile perspective, very similar but not identical.

That together with.

Other properties of the compound we think gives us important potential differentiating factors from primitive answering of course. This all has to play out in the clinic, we're eager to get.

To continue advancing the compound, but we think it has a very great potential and.

We're excited about it given that it's an early stage compound in terms of our ADP go forward strategy.

As we previously stated we do not plan to conduct another ADP study with Tim of answering.

That kind of decision is always multifaceted.

Partly relies on the amount of time that it would take to run another study.

You know, look, going forward, we haven't given up on the indication.

I think we've given a clear signal that today still remains a very significant unmet need.

And you know, maybe one of the key elements of success in ADP is just the recognition, that this is a very frail and elderly population, and they take a lot of other medications, and so an ideal drug to treat them is one that resolves the, or at least mitigates the psychosis, but also does it without a lot of side effect or tolerability baggage, and so that's been kind of a hallmark of our approach working through the synergic system.

And so, you know, we'll continue to be interested in trying to help the, you know, 600,000 patients, and their families that are currently taking atypical grand theft psychotics that have, you know, a lot more side effect baggage than what we've seen with our approach.

Frail elderly population in the pandemic and there's always the potential for that taking longer than otherwise would.

So, you know, we'll continue to be very interested.

Obviously, we'd, you know, much prefer to be helping these patients today, but we'll continue to press forward on multiple fronts.

Juxtaposed against.

The where the product Disney in its lifecycle.

And.

Other considerations and in this case it also included.

ACP tool for that so it certainly wasn't the only consideration, but it was a consideration.

Thanks, Steve.

I appreciate the call.

<unk> will have a patent life that will go into the early 2014.

And so so.

It was so going forward.

Thank you.

We will not be running another study with AC.

Tim or answer and we've not yet determined if we will with HCP to afford but certainly that will be one very high.

Indication for us to consider at this point, we just need to wrap up phase one beautiful profile on the compound that will get back to you and others with.

A more definitive development plan.

Very helpful. Thanks, Steve Thanks Serge.

Thank you one moment for our next question.

One moment for our next question.

That will come from the line of Neenah Garg with Citi. Please go ahead.

Hey, guys. Thanks for taking my question I was just wondering if you could clarify some of the dynamics on the quarterly <unk> answering.

And for the first six months of 2022, demand growth was up over 1% year-over-year.

Gross to net specifically.

Maybe if you can describe kind of what drove that.

The steep drop off in the gross to net discount there and then if you can clarify what we should expect for the full year.

Our gross net adjustment for Q2 was 15.4% down from 18.4% last year. Gross net for the first half of the year was 20.2%, which is essentially flat as compared to 20.4% for last year. GAAP R&D expenses increased to $75.6 million in the quarter compared to $56.9 million in Q2 2021. The increase was primarily due to development activities for ACP 044, which has now been discontinued, investment in triphenotype commercial supply, which is expense in advance of approval, and expenses related to early-stage programs. GAAP SG&A expenses decreased to $89.9 million in the second quarter from $96.8 million in the second quarter of last year. And finally, we ended the quarter with a healthy cash balance of $436.4 million.

Please see our adjusted guidance ranges on slide 12 now that we are halfway through the year.

So, I think that is the component of why we've reduced kind of our guidance for this year for growth to net.

Great. Thanks.

At the beginning of the year, we deliberately provided a wide net sales guidance range to reflect various scenarios related to the pandemic. At that time, I mentioned that the top end of the range reflected a significant improvement in PD market dynamics, and we've not seen that yet so far this year.

Sure Mark you want to take that.

Yes sure. Thanks for the question.

A decline for the just for the second quarter in comparison to the second quarter of last year. It was really a timing difference that happened in accruals between the first and second quarter of 2021, So I think thats why we are.

Shortly noted kind of the gross to net for the full six months year to date, which is essentially basically at the same at flat.

And as we look forward to the year, we announced our.

I commented that we are bringing down our guidance range for gross to net.

A little bit from 19 to night from 19, 5% to 25% and Thats just as we're seeing kind of less of a growth in 340 B.

Dynamics, which has been kind of the main driver of growth over the last year or so as gross to net has ticked up.

Got it that's helpful. I guess, maybe if you can talk a little bit about just the than the script dynamics and kind of how we should think about kind of the pace of new starts and the <unk>.

Second quarter, just because it seems like most of the sequential growth in sales was driven by the gross to net.

Yes sure Mark go ahead.

As a result, we are reducing the top end of our net sales guidance range.

Regarding gross net, we have reduced our range slightly to 19.5% to 20.5% for the year. On the expense side, we are reducing our R&D guidance by $15 million and maintaining our SG&A guidance. While R&D will come down in 2022, we expect most of the cost reductions I referred to earlier, another approximately $35 million, to be reduced by $15 million. We expect most of the cost reductions I referred to earlier, another approximately $35 million, to be realized next year.

We are raising the bottom end of our expected year-end cash balance and are now guiding to the range of $375 to $405 million.

Yes, I think as we continue to just be in this kind of I guess flat to modest growth period that that won't last forever, but.

To reiterate, we are confident in our ability to generate sustainable growth with our existing cash resources.

And now I'd like to turn the call over to Brendan to discuss our PDP business.

Thank you, Mark.

Please turn to slide 14.

I'm pleased with our team's performance this quarter, delivering net sales of $134.6 million, representing 17% year-over-year growth.

Today I want to address four key themes regarding our commercial organization and performance.

It remains where we are now so we're confident that over the long term that is kind of PD market dynamics kind of returned to a more favorable environment in normal environment. As we would expect timing of which is hard to predict that we will return to greater growth period as we continue to.

Outperform and and gained market share in this market I think for the remainder of this year, we lowered the top end of our guidance range. Just that was reflective of a PD PD market dynamic that would've been significantly improving as I mentioned, we haven't seen that quite yet so our current range is that kind of dimmed.

And we'll continue to monitor that as we proceed through this year and consider that as we, you know, share guidance with the suite for next year.

First, the PD market dynamics and our relative performance.

Thank you.

<unk>.

Would be in kind of the <unk>.

Lately negative to positive range for demand growth selling bottles will be slightly less than demand as our expectation as we had last year.

Next, optimizing growth for the New Plazid brand.

Thank you.

A little bit of sell in growth that exceeded demand growth and we don't necessarily expect that dynamic to increase to continue this year.

We'll see where we wind up this year and look forward to growing the brand over time.

Got it thank you.

Just a quickly echo Mark's comments one of the thing.

Just note is that.

Yes.

The PD market environment is smaller today than it was part of the.

Pandemic, we see that when we see.

The scripts for coverage I believe with Oba growing at a very slow rate much lower.

Part of the pandemic and we see it in occupancy rates and long term care facilities patient in person offices et cetera. So we've talked about those dynamics a lot.

Importantly.

Despite a smaller what is today, a smaller market, which we believe will grow again.

One moment for our next question.

That will come from the line of Mark Goodman with SVB Learing.

That will come from the line of Jay Olson with Oppenheimer.

The future throughout the pandemic, we've gained about 15% market share so our market share part of the pandemic versus where it stands today, it's gone up about 15%.

Please go ahead.

Please go ahead.

And I'll shed some light on exciting new real-world studies on Pima-Vancer and safety profile.

Oh, hey.

And we'll finish off by discussing our preparations for Trufinitide.

Thanks for the update, and thanks for taking the question.

Let's start with the PD market dynamics and our relative performance. Our demand volume grew slightly in the first six months of 2022 compared to 2021, which is encouraging given the very slow incremental improvements in the PD market dynamics seen to date. As shown on this slide, we are further encouraged as New Plazid's growth outperformed foundational Parkinson's medications, including carbidopa levodopa, as well as a market basket of branded LTC products across multiple therapeutic areas.

Since you have two, programs for Rett syndrome with trophinatide and then a collaboration with Stokes Therapeutics, can you just talk about how these two programs would complement each other and potentially be used in combination?

This performance continues to indicate our strong brand support from our treating audience, and has allowed us to continue to increase our market share, which has grown despite the pandemic and is up approximately 15% since 2019.

Second, as Steve alluded to, we have continued to optimize our PDP commercial spend in the current market environment, to evaluate growth opportunities more efficiently and increase cash flow from the business.

So that is another consideration in terms of that gives us confidence that as the pandemic conditions ultimately improve and we're able to continue to grow market share of that.

We will, as always, be opportunistic when the PD market dynamics improve and move closer to pre-pandemic levels.

Thank you.

Third, and recently, several real-world studies have been published or presented that make important comparisons, when treating patients with Pima-Vancer and as opposed to off-label multi-receptor atypical antipsychotics in PDP patients. One of these studies was recently published in the American Journal of Psychiatry. The authors of this study concluded that Pima-Vancer use was associated with approximately 23% lower mortality rate, than other atypical antipsychotics over 360 days.

It will.

We'll go back to the kind of longer term growth rates that we've seen historically.

Yeah, sure.

These are important findings, which Serge will speak to in a moment.

Thanks much, Jay.

Got it thank you.

Thank you one moment for our next question.

Let's now turn to our preparations for the launch of profinetide for the treatment of Rett syndrome on slide 15.

Kathy, do you want to take that?

Acadia is preparing to reach yet another important milestone in the company's history, launching a second commercial product and building a rare disease-focused commercial organization.

Our commercial teams are already working on shaping and developing the market, for what will potentially be the first therapy approved to treat Rett syndrome.

Sure.

That will come from the line of Chris Howerton with Jefferies. Please go ahead.

Patients with Rett syndrome generally have a dedicated care team, which includes their caregiver, usually family, as well as their healthcare providers.

Yeah, and we think that the two different programs, because they have different mechanisms, would complement each other very nicely. So, not compete with each other, but trophinatide could be a foundational treatment, hopefully approved next year.

In order to achieve our goals in the near term, we have several pre-launch activities ongoing, including building best-in-class patient support and educational resources to further generate awareness for profinetide upon launch and identify and engage the families of Rett patients.

The Stoke program in clinical has a very different mechanism in that the goal is to increase the missing MeCP2 protein in these patients.

Secondly, we are continuing to engage the community to build awareness, including leveraging our strong partnerships with RET advocacy groups to best understand care team needs and perspectives.

And so patients on trophinatide could also undergo that therapy as well, having an additive, maybe even a synergistic effect.

And finally, we're increasing our community outreach for disease education and establishing Trofinetide's clinical impact through publications, scientific presentations, and KOL engagement.

Our ultimate launch objective will be to establish Trofinetide as the foundational treatment for RET syndrome and ensure access to all patients in need.

I'll turn it over now to Kathie to discuss RET and Trofinetide from a clinical perspective.

Thank you, Brendan.

Hi, all this is AJ blocker on top of his Harrington here.

And now I'll turn it over to Serge for an update on our other pipeline programs.

Great.

Let's start on slide 17.

Thank you, Kathie.

Thank you.

As you know, RET syndrome is a serious and debilitating rare disorder for which we estimate there are between 6,000 and 9,000 patients in the United States. There is no FDA approved treatment for RET syndrome in the U.S. The debilitating symptoms of RET syndrome include severe neurodevelopmental and motor impairment, including gait abnormalities and loss of purposeful hand use, loss of ability to communicate both verbally and non-verbally, and GI issues, including severe constipation. Ultimately, RET syndrome patients lose their ability to maintain independent functioning on a daily basis and require around-the-clock support.

And I think I'll just add that all the work Brendan and his team is doing now for the, potential launch of trophinatide in Rett syndrome kind of establishes us as the leader in that disease. So, any follow-on program will be able to use all those learnings as we develop and commercialize the second program.

Let's review the LAVENDER results on slide 18, which form the basis of our recent NDA submission to the FDA. In the LAVENDER setting, positive results were observed for the pre-specified co-primary endpoints. At week 12 for the RSVQ, the p-value was 0.0175, with an effect size of 0.37. As a reminder, the RSVQ is a validated caregiver-completed rating scale assessing a wide range of neurobehavioral and neurodevelopmental core symptoms known to be impaired in RET syndrome. Tryphinotype patients improved on average 5.1 points from baseline at week 12 on this scale, which is very meaningful.

In addition, at week 12 for the CGII, the p-value was 0.003, with an effect size of 0.47. The CGII is a clinician-completed assessment of how much the individual's illness has improved or worsened relative to baseline, scored using a standardized rubric that is specific to the clinical features of RET syndrome. This effect size is quite meaningful for these patients and their families.

Are you thinking about NSS any differently following kudos car T data today.

Furthermore, in the study, statistically significant separation from placebo on the key secondary efficacy endpoint was also achieved.

This important endpoint was designed to assess the communication skills of the patients. Although initially designed for infants and toddlers, the scale is applicable to and has been applied to older age groups for patients with neurodevelopmental disorders such as RET syndrome. Lack of ability to communicate verbally and non-verbally is a significant challenge for RET patients and their families.

On this endpoint, at week 12, the p-value was 0.0064, with an effect size of 0.43.

The consistency of these results was observed across all age groups and severity of disease in the study.

This helps reinforce the meaningfulness and triphenotide potential in all patients with Rett syndrome.

In addition, these results are also consistent with what was observed previously in Phase 2 studies.

Good afternoon, everyone.

Thank you.

Do you maybe see atypical antipsychotics are the sort of.

Holdover, if physicians are willing to go out and get Preauthorization for that.

Let's discuss the evolution of our CNS portfolio on slide 20.

And we do have time for one more question.

First, to reiterate what Steve and Mark said, we believe that the business development opportunity set will continue to get more and more attractive over the course of the next year, and favor companies like ours that are well capitalized and have existing infrastructure in place to transact and expand.

Therefore, it is important to stay disciplined and make the right investment decisions for each program and the portfolio as a whole.

Sure Sir do you want to take that.

Yes, absolutely. Thanks for the question I'll, probably leave it for Brent.

Okay.

To comment on the authorization and all of that but.

Perfect perspective, I would say that the.

Patient that Corona.

Pursuing is very different from the indication that we.

We are pursuing with <unk> integrated symptom schizophrenia first of all Corona is.

The program is on a therapy in acute schizophrenia symptoms short term studies.

And.

The results.

I would say we are very pleased to see that there is another potential treatment option for days.

Serious condition, but it is very different from.

Negative symptoms schizophrenia, where.

It's a long term treatment.

Good.

Requirement that the positive symptoms of schizophrenia acute symptoms of schizophrenia are under control.

And.

Ed remaining.

Negative symptoms in terms of social withdrawal, while emotional withdrawal and so on.

Sure.

Hi.

Our.

<unk>.

With.

Most most frequently are John Kimberly and Thats exactly how we are pursuing that so we are not seeing a direct read through.

From.

Corona data because it's.

A different competitive environment than what we are pursuing I believe I'll remind you. There are no approved treatment for negative symptoms schizophrenia, while there are multiple treatments for four.

Schizophrenia symptoms.

Let me add one other thing is that movement.

On the negative symptom subscale pans in the context and paradigm of the acute treatment is something that we.

We regularly see our trial because with the reduction of acute symptoms you are seeing.

Our movement.

Movement on the negative symptoms as well, so but thats not.

Accepted.

Evidence of the efficacy.

And that will come from the line of Ritu Baral with Cowan.

For <unk>.

Treatment of negative symptoms schizophrenia, the only long term.

Please go ahead.

Hi, guys.

Thanks for taking the follow-up.

Six month studies.

I wanted to ask about the SG&A, which you guys indicated should stay relatively flat, despite the RET launch. And you mentioned sort of redeploying some of that capital from PDP to RETs.

So within the context of stable positive symptoms and the improvement of negative symptoms is accepted by regulators.

Can you discuss where you're pulling the RET dollars from and, I guess, your conviction, that it won't destabilize the PDP franchise?

Thanks.

As <unk>.

Appropriate paradigm for evidence of efficacy.

Sure.

Got you. Thank you for the clarification.

Thank you one moment for our next question.

Mark, do you want to start?

That will come from the line of Greg <unk> with RBC capital. Please go ahead.

Sure.

Great. Thanks, Steven team for the update today and thanks for taking my question.

Thanks, Steve.

And thanks for the question, Ritu.

I think, importantly, you know, as we look forward to next year and kind of develop kind, of our investment for both PDP and Drophinitide, we did it independently to figure out what the right resources are to put on each product.

Just wanted to give you a chance to perhaps close the loop on the recent CRM with <unk> I know the.

And that is – and a consequence of that evaluation kind of results in an overall flat, SG&A.

It wasn't a flat SG&A in and of itself, wasn't a specific target.

And I think for us on Drophinitide, we want to make sure we have the right resources and, budget to ensure a successful launch.

It's been communicated for men team is disappointing and certainly telegraphed.

We feel confident in that.

And on PDP, you know, we just remain in this kind of modest growth period, flat growth, period. And as we get deeper into the life cycle of the drug, kind of what are the best, you know, return on investment tactics and how do we drive growth and value at the same time.

And we're confident that we're putting the right resources behind the drug to achieve, that as we move forward.

Over this recent time, but just perhaps you can just.

Provide a punctuation mark on or I should say.

Final point on what it means for the company you made some some changes today that are certainly meaningful across across the pipeline and the profile, but how is that feeding into how you are looking at a cat going forward. Thanks.

Yes, thanks, so much for the question Greg.

Look.

Okay.

There is no drug approved for the treatment of Alzheimer's disease psychosis and into three.

Dramatic unmet need so of course, we continue to be very disappointing.

We didn't have a positive outcome with our resubmission in ADP.

Look going forward.

We haven't given up on the indication I think we have given a clear signal that today still remains a very significant unmet need.

Maybe one of the key elements of success in ADP is just a recognition that this is a very frail and elderly population.

And they take a lot of other medications and so.

An ideal drug to treat them as one that results the.

Or at least mitigate the psychosis, but also does it without a lot of side effects tolerability baggage and so thats been kind of a hallmark of.

Of our approach.

Looking through the <unk>.

<unk> system and so well.

We will continue to.

Be interested in trying to help.

Thanks, Mark.

600000 patients and their families that are currently taking Egypt psychotics that have.

Sorry, Ritu.

Steve, can you tell us what is your strategy for Europe?

A lot more side effects.

Baggage than what we've seen with.

Are we still thinking about bringing Iplaza to Europe at all?

With our approach. So so we'll continue to be very interested obviously.

As a result of our prioritization efforts, today we announced that we have discontinued the development of ACP044 in acute and chronic pain and ACP319, the lead molecule from our M1 PAM program.

And then just on the pain product that you killed, why kill it before we get the chronic pain data?

Much prefer to be helping these patients today.

Thanks.

But we will continue to press forward.

Yeah, sure.

Yeah, just, again, echoing Mark's thoughts.

I'll let, I'll take the first part of the question.

The only thing I would add is, you know, we've mentioned this before, but just try to be, a little more precise.

On multiple fronts.

With PDP right now in the current market, which is smaller, you know, for instance, things like DTC advertising on television don't produce the same kind of return on investment if, you know, patients are going to, patient visits to their doctor are down 20%.

So however, digital DTC continues to be very effective.

I'll let Serge take the second.

So, in terms of Europe, our strategy has not changed.

So we're far enough into the pandemic now to have a good feel for what are the drivers, that are driving growth, you know, rep exposure directly with physicians, physicians talking directly to patients, long-term care, occupancy rates and new patient admissions.

Thanks, Steve I appreciate the color.

Thank you one moment for our next question.

You know, the grim reality is for drugs like this, like Iplaza, that is, the pricing environment outside of the United States is very different.

You have a very good feel for what the levers are to pull in this kind of an environment.

That will come from the line of Marc Goodman with SBB Leerink. Please go ahead.

Steve can you tell us what is your strategy for Europe or are we still thinking about bringing NUPLAZID to Europe at all and then just on the pain product that you killed why kill it before we get the chronic pain data. Thanks.

And in many cases, it's difficult to get pricing, that would even make the venture profitable or even break even.

Sure I'll, let I'll take the first part of your question I'll take the second so in terms of Europe .

And so, it's just a very challenging environment in Europe.

Our strategy is strategy has not changed.

And of course, if the whole world operated with similar pricing structures, we just wouldn't have any drugs.

So, it's a, you know, I wish the situation were different, but it's a very difficult situation today for lots of drugs in terms of getting appropriate pricing outside of the United States.

The reality is for drugs like this.

Like NUPLAZID that is.

The pricing environment outside of the United States is very different.

So, our strategy there has been to consider advancing Iplaza, with additional indications above and beyond PDP.

And in many cases, it's difficult to get pricing that would even make.

The venture.

Profitable or Oregon.

We'll come back and take a look at that when we get the results, of negative symptoms of schizophrenia.

EBIT breakeven and so.

So it's just a very challenging environment.

We do have, in Europe as well as in Japan, 10 years of data exclusivity.

In Europe and of course, if the whole world operator, with similar pricing structures, which wouldn't have the drug so so.

So, the product life would not be governed by patents.

I wish the situation with different but it's a very difficult situation today or lots of drugs in terms of getting appropriate pricing outside of the United States.

And so, we'll take a look at that down the road.

But today, with only a PDP indication, it just makes it a very challenging environment to launch.

On the other hand, we are investing further in an internally developed molecule, ACP204.

On the second question about ACP 044, first let me just find that early stage small molecule, drug development has a high attrition rate and therefore it's our approach that we consider very important to be disciplined with the data.

So our strategy there has been to consider.

Advancing NUPLAZID.

With additional indications above and beyond PDP, and we will come back and take a look at that.

This molecule is being evaluated in Phase 1, and we expect to complete Phase 1 development around the end of this year.

When you get the results of negative symptoms schizophrenia, we do have in Europe as well as in Japan 10 years of data exclusivity. So.

ACP204 builds upon the learnings of pimavansirin in the treatment of neuropsychiatric symptoms.

And so as a consequence, there's just some investments that just don't pass the test, to invest in, having nothing to do with REDD or launch there, but just because we're just being disciplined about how we invest our dollars.

The product lifestyle life would not be governed by our patents and so we'll take a look at that down the road, but today with only a PDP indication.

We are also investing in our ASO programs with stoke collaboration among the early stage programs.

Now let's discuss pimavansirin in PDP and the negative symptoms of schizophrenia.

Building upon what Brandon stated, I would like to discuss a couple of real-world studies on slide 21 that compare treatment with pimavansirin in patients with PDP to off-label multi-receptor atypical antipsychotics.

First, the recent publication in the American Journal of Psychiatry, and second, a recent poster presented at the 2022 American Society of Clinical Psychopharmacology Annual Meeting. Both the publication and the presentation were made public in June of this year.

The publication described findings from the retrospective Medicare claims analysis comparing the risk of all-cause mortality associated with pimavansirin versus other atypical antipsychotics in patients with Parkinson's disease to treat psychosis. The authors' conclusions were that pimavansirin use was associated with an approximately 23% lower mortality than other atypical antipsychotics over 360 days. The risk of mortality was approximately 35% lower in PMI patients than with other atypical, antipsychotics during the first 180 days of use, while the risk was similar thereafter.

This data is very encouraging, and our team is proud to continue to make Nuplazid available, to patients with PDP and their families.

Let's move on to our second potential indication for premalancery, starting on slide 22.

We have a high internal threshold for future investment and this particular candidate, ACP 044, did not meet it. The decision to discontinue ACP 044 was multifaceted, but ultimately the efficacy data we observed in the bunionectomy study, and we spent quite a bit of time analyzing that data thoroughly, as well as when that's a juxtaposition with safety and tolerability profile, overall the totality of data just did not reach our threshold for further investment in this molecule.

The last thing I'll add is just want to emphasize something that Brendan mentioned earlier.

There are over 700,000 patients in the United States who are currently treated for schizophrenia, but still have persistent and potentially debilitating negative symptoms, such as social withdrawal, lack of emotions, and blunted affect, among others. The symptoms lead to low social functioning, long-term disability, and significant caregiver, burden, and there is currently no FDA-approved treatment.

There's important new real-world information out that's just been published that I think, does really help underscore the benefits of PIM of answering.

As part of our ADVANCE program, we have one positive pivotal study, ADVANCE-1, where we, observed statistical separation on the primary endpoint overall, and even more robust results in patients receiving 34 mg of premalancery. These positive results were published in Lancet Psychiatry.

And so that's the kind of thing, of course, that we are investing heavily into to make, sure that our medical affairs team is very well equipped to describe those differences and help physicians understand the data when they have questions about it.

It just makes it a very challenging environment to launch it.

Today, I want to focus on the results of the 34 mg group, which appears to be optimal therapeutic, dose, which we are evaluating in our second pivotal study, ADVANCE-2. The graph on slide 23 shows the improvement for only the patients who received 34 mg dose, of premalancery.

Yes.

You can see that significant improvement from placebo was achieved at week 26, when an unadjusted, p-value of 0.0065, with an observed effect size of 0.34. The separation began as early as week 2, which continued to increase throughout the six-month, treatment period.

So I feel like we're pressing on all the right buttons and the resource dollars are, as Mark, mentioned, purely a consequence of our assessment of what's working and warrants investment, Thank you.

The second question about ACP or 44.

We look forward to keeping you updated on our progress in this high unmet need.

I would now like to turn the call back over to Mr. Steve Davis for any closing remarks.

First let me just.

Find that that early stage small molecule drug development has a higher tuition rates and therefore.

And with that, I will turn the call back to Steve for closing remarks.

It's our approach that we consider very important to be disciplined with the data we have.

Thank you, Serge.

Hi, internal threshold or future investment than this.

Please turn to slide 25.

Today, we are executing on our promise to deliver Neuplaza to patients with PDP, where, there's an attractive long-term opportunity to continue to grow the brand.

In addition, we are preparing for our second commercial product launch with Trophinatide, advancing our Phase III program for the negative symptoms of schizophrenia, and developing several additional programs while pursuing strategic business development.

With a strong balance sheet and the projected launch of our second product early next year, we are well-positioned for long-term growth.

In closing, I would like to thank our employees for their accomplishments and their ongoing, commitment and passion as we continue our mission to elevate life.

Particular candidate a CPO 44 did not meet it.

I'll now open up the call for questions.

Having said that, I will say and remind you that we acquired a battery of molecules with this mechanism of action and we will be realigning our focus to earlier stage molecules and evaluating their further development.

The decision to discontinue ACP all 44.

Operator?

Thanks.

Was multifaceted, but ultimately the efficacy data we observed in the Bunionectomy study and we spend quite a bit of time.

Analyzing that data.

Tal early as well as when that started.

Thank you.

Thank you.

Great.

As a reminder, ladies and gentlemen, if you wish to ask a question, please press star, 11 on your touchtone telephone.

Acquisitions with.

Safety and Tolerability profile overall, the totality of data that just did not reach our threshold.

For further investment in this molecule, having said that I will say and remind you that we acquired a battery.

We ask that you please limit yourself to one question.

One moment for our next question.

Thanks so much, Operator.

Molecules with this mechanism of action and we will be.

I repeat, please limit yourself to one question.

That will come from the line of Danielle Brill with Raymond James.

Thanks again, everyone, for joining us today.

We, look forward to updating you on our progress next quarter.

Realigning our focus to.

Please stand by for our first question.

Please go ahead.

Earlier stage molecules.

Hey, guys.

All the waiting there further development.

Thanks.

Thank you one moment for our next question.

That will come from the line of Danielle Brill with Raymond James. Please go ahead.

Hey, guys. This is Alex on for Danielle forgive me for getting a little granular I just want to look at and are tied in some of the open label studies that are happening. So when your top line <unk> you spoke about some diarrhea mitigation strategies, including the removal of anti constipation meds, given that you've been at that could be administered in an unblinded fashion.

That will come from the line of Charles Duncan with Cantor Fitzgerald.

This is Alex.

Ladies and gentlemen, thank you for participating in today's conference call.

Please go ahead.

This concludes the presentation.

You may now disconnect.

Hi, guys.

Good day.

The conference will begin shortly.

To raise your hand during Q&A, you can dial star 1-1.

And so we were curious what percent of patients stop taking anti constipation med and the open label Lilac studies and also what the rates of diarrhea in patients.

Thanks for taking the question and the thorough update today.

Let's see.

In lilac, who were not on anti conservation.

Thanks for the question Alex.

Curt do you want to take that.

Sure. Thanks, Alex for the question.

So as we had patients enrol in the lilac line and lilac to open label extension studies, which are continuing.

We as we talked about previously we instituted a diarrhea management plan.

Ill, let the diarrhea, it's important critical to know that these patients have <unk> issues do their <unk> syndrome, which you're in about 80% of patients is to VR constipation, which in this patient population that is unable to communicate verbally or non durability is very difficult to manage.

<unk>.

Parents and their physician.

In any patient and this constipation can be very severe lead to hospitalization.

So they are on multiple anti constipation medication.

So what we suggest now and what we're planning for as we think about Tomorrow fell launch is implementing the diarrhea management plan in which we asked them to start taking those anti constipation medications as they start on <unk>.

As you could imagine that does medications on retrofit.

To the Bay area.

In addition, we asked them to manage the diarrhea easing.

Over the counter medications as well as fiber supplements.

We have seen a reduction in the severity and incidents of diarrhea management plan.

And we have patients.

<unk> remained on <unk>.

So at a very long time now I don't think we provide specifics in terms of percentages, but we are optimistic that this diarrhea management strategy as we work towards commercial launch.

I'll try to ask one question.

I'm for Danielle.

It will probably be a multi-parter perhaps for Kathie.

Forgive me for getting a little granular.

The effective in managing the diarrhea that we see with <unk> also Ron I remind you that the diarrhea is mild to moderate in severity.

Then maybe the second part is for Brandon relative to target product profile if he can share any feedback from payers that you've gotten so far on trophinatide.

Leanne to dehydration of hospitalization.

When you compare that to the constipation patient type.

It could be preferreds.

Great. Thanks, so much for the color.

Great.

Thanks, Charles.

Thank you one moment our next question.

That will come from the line of Sumatra call Kearney with Canaccord Genuity. Please go ahead.

Kathie, you want to take the first part of that question and Brendan the second?

Good afternoon. Thanks for taking my question on the business development environment, you mentioned that you had in a potential situation to take advantage of that.

Yeah, happy to.

How quickly would you need to do that what's the sweet stage put a product in terms of the pipeline stages, and how would you balance that against the potential recovery and Deepak and since disease market.

Thanks for the question, Charles.

Yes. Thanks, so much for the question so.

Let me just start by reflecting on what we've seen in cycles like this in the past and it's been it's been quite a while since we've had a significant and sustained downturn in the capital markets in the biotech industry, what we've seen in the past is.

As we announced, we filed our NDA in July. As Steve mentioned, given that Rett syndrome is a severe, rare pediatric disease, we are anticipating priority review.

At day 60, since the filing, we will hear about acceptance of the NDA, so that would be in September.

As these.

Kind of closed Windows are just joined at capital markets go on for two quarters three quarters four quarters.

That company is just naturally become more more.

More engaged and interested in partnering because it just becomes more and more difficult to.

For them to fund all of their programs independently and so that's what we anticipate happening we're beginning to see some early signs of that.

Companies that maybe we're not as interested in talking earlier now more.

Engaging but for this to really result in a meaningful change in the tracking through the business development opportunities to at the capital markets wanting to stay just joining for another quarter or two or three.

Which at this point in time is anyone's guess, but it doesn't look like this is going to turnaround.

Anytime soon and so.

While in some respects.

It's a difficult time for the industry it winds up being.

Probably a net positive for us and companies like us because what happens is the BD tables as we said just tell dramatically favorite companies with all kinds of resources and infrastructure.

So as we go forward, we're poised to take advantage of that.

The most.

We are anticipating at that time hearing about a PDUCA date officially and as well where the FDA is leaning on advisory committee meeting.

By far the most challenging competitor we've had in business development for the last five years to seven years has been the capital markets and Thats.

Very very different dynamic today as we go forward.

Got it thanks.

Thank you one moment for our next question.

I will say we are preparing in case they are going to have advisory committee meeting, but in my experience, having worked in rare disease for about 20 years, it is not necessarily so that for the first drug in a given indication, they have advisory committee meeting.

Yeah.

That will come from the line of Paul Matteis with Stifel. Please go ahead.

In our case, I think the data is pretty straightforward, so there's potential that that would not happen.

Great.

Hi, This is James on for Paul Thanks for taking our question.

Thanks, Kathie.

And Charles, thanks for your question as well as Brendan.

You mentioned ADP as a potential indication for <unk> I guess in your recent communications with the FDA around <unk>.

Yes, we've had a chance to engage payers since the Lavender trial results. They are very understanding of this being an area of high unmet medical need.

Did they provide any specific guidance or anything around what development should look like.

For example, running acute versus relapse prevention studies or any learnings that you can carry forward as you potentially pursue that indication.

Yes. Thanks, so much for the question I'll start certain feel free to jump in if you have additional thoughts.

So first of all let me just say with ACP do before we have not had discussions about late stage development, yet with with the FDA.

Part of the process in due course.

But what I would say is of course, we learned an awful lot about Alzheimer's disease psychosis throughout the development of <unk> and so we'll leverage those learnings we have a very very good feel for what the appropriate safety and Tolerability profile.

It needs to be.

Efficacy is how to run these studies et cetera. So so I think we're very very well positioned.

Positioned to leverage the institutional knowledge that we have in ADP and of course, if ADP, if we pursue to afford an ADP, which as we've indicated we think we view as a very attractive.

Indications, then we'll certainly be able to leverage all of those learnings.

Serge anything you'd like to add.

Yes, I would just briefly add.

<unk> stances around between my answer in development.

Dementia related psychosis.

Our ADP.

We're deferring our differ in any new.

Chemical entity that you would bring in the deemed to development in that debt at the time, you were contemplating doing and agreeing with FDA to do a randomized withdrawal trial, we already had.

Behind us two acute trial.

<unk>.

Neuro degenerative site.

Psychosis associated with neuro degenerative disease, so that was already.

Evidence of efficacy.

They understand the devastating nature of Rett syndrome.

Just want to look at trufinatide and some of the open-label studies that are happening.

In the acute treatment paradigm for treatment of psychotic symptoms.

Any new molecule that you would bring would have a different circumstance and then obviously the development program, we just have to be.

Designed to accommodate those circumstances.

Very helpful. Thanks.

Thank you one moment for our next question.

That will come from the line of Yadkin sooner with Guggenheim. Please go ahead.

They also have had a chance to see Trofinetide's target product profile.

So when you top-lined Lavender, you spoke about some diarrhea mitigation strategies, including the removal of anti-constipation meds, given that trufinatide could be administered in an unblinded fashion.

They understand the importance of being able to treat across the core symptoms of Rett syndrome.

So we were curious what percent of patients stopped taking anti-constipation meds in the open-labeled lilac studies and also what the rates of diarrhea in patients in lilac who were not on anti-constipation meds.

Hi, guys. This is Eddie answer and thanks for taking the questions. So entre veneti given the lack of approved therapies do you expect that bolus of patients going on drug quickly after the launch or should we accept some sort of.

Education of our sales work to temper that ramp and related to that how many of those six to 9000 U S. Patients have you identified so far.

And they have given us, I think, favorable feedback on that product profile, expecting that the product would be in, like other rare diseases in the pediatric space, that they would expect to see Trofinetide in that same category.

Thanks for the question, Alex.

Quickly if you can comment just a bit more on why you terminated the <unk> one program.

Sure Brendan you want to take everything down to the <unk> portion of the question and then Serge I'll, let you ask you to take that.

Sure sure Eddie Thanks for the question.

The desire to trial <unk>, whether you are speaking about hcp's or families is high.

Very good.

Kat, do you want to take that?

In all of our market research, we see a high level of enthusiasm for that.

With that said, we've been able to look at other analogs of rare disease.

Sure.

Patrick product launches.

There is the early stages, where of course, we would expect patients that have been part of our studies.

To be able to rollover onto a commercial drug relatively relatively seamlessly.

And we're working very closely with centers of excellence at high value.

High value institutions to make sure we're very well aware of the patient population already diagnosed.

Be ready to treat.

We will work closely with payers to make sure we're doing our best to make sure that access is available as readily as possible, but we do anticipate in the first.

A few months post launch that there will be.

Work to be done to make sure that that every patient once that is seeking therapy will have an opportunity to be treated.

Your second question was around how many of these patients are we already aware of.

We've done a lot of work with multiple databases to confirm.

<unk> already identified and diagnosed ret population.

Six to 9000, I would say that roughly two thirds of patients are diagnosed.

Back in the queue.

Thanks, Alex, for the question.

So as we had patients enroll in the Lilac 1 and Lilac 2, open-label extension studies, which are continuing, as we talked about previously, we instituted a diarrhea management plan to help deal with the diarrhea.

It's important, critical to note that these patients have severe GI issues due to the Rett syndrome, which in about 80% of patients is severe constipation, which in this patient population that is unable to communicate verbally and non-verbally is very difficult to manage, both through the parents and the physicians who manage these patients. And this constipation can be very severe leading to hospitalization. So they are on multiple anti-constipation medications.

So what we suggest now and what we're planning for as we think about Comirna for launch is implementing a diarrhea management plan in which we ask them to stop taking those anti-constipation medications as they start on triphenatide. Because you could imagine that those medications along with triphenatide would contribute to the diarrhea. And in addition, we ask them to manage the diarrhea using over-the-counter medications as well as fiber supplements. And we have seen a reduction in the severity and incidence of diarrhea with this management plan.

And we have patients that have remained on triphenatide for a very long time now.

I don't think we provide specifics in terms of percentages, but we are optimistic that this diarrhea management strategy as we work towards commercial launch will be effective in managing the diarrhea that we see with triphenatide. Also, we want to remind you that the diarrhea is mild to moderate severity.

And we expect as is the case with many rare disease products post launch.

Diagnosis rates.

Would increase when people are aware that there is a therapy available don't expect that to be overnight obvious obviously, but as more and more people become aware that there is a novel treatment for ret syndrome, it's very likely that families will seek additional diagnosis.

Thank you in regards <unk>.

<unk>.

Program, Let me just make a first start with.

Clarification.

Did not discontinue and one time program, we made the decision to discontinue development of the HCP $3 19.

And the story there is very similar to what I described with the ACP all 44.

We define a certain profile that we were anticipated on the basis of that.

Preclinical animal data and early.

Thanks.

Page.

Thank you.

Phase one data and.

Molecule just did not.

Rise to the level of reaching that threshold.

One moment for our next question.

<unk> threshold.

All of our.

Dissipation for the competitive molecule, but I will remind you that we have additional backup molecules in our am one Pam collaboration with one their bill and we will be further evaluating these molecules.

As we move forward.

Thank you for all the color appreciate it.

Thank you one moment for our next question.

That will come from the line of unmanned <unk> with Needham. Please go ahead.

Thank you guys for taking the question.

Sure Anthony.

<unk>.

One question from our side do you have.

Visibility on.

How GPM.

Nonetheless, it is likely to trend next year.

Might that be increasing <unk>.

Okay.

Yes.

Im sorry, I Couldnt hear the question could you ask it again.

Thank you for taking the question so.

Do you have any visibility on into how GKN for NUPLAZID is likely to trend next year in light of the increasing 240 <unk> mix.

Got it okay. Thank you very much Mark Schneider, you want to take that yeah sure. Thanks for the question.

Well, we don't forecast kind of out for next year at this time, we'll release guidance when we publish our fourth quarter results I think what we've seen thus far this year is that the growth in volume of $3 40.

That will come from the line of Ritu Baral with Cowin.

Moderating.

So I think that is the component of why we reduced our guidance for this year.

Please go ahead.

Core gross to net and we will continue to monitor that as we proceed through this year and consider that as we.

Hi guys, thanks for taking the question this afternoon.

Share guidance with the fee production.

Thank you.

Thank you one moment for our next question.

That will come from the line of Jay Olson with Oppenheimer. Please go ahead.

Okay.

Oh, Hey, thanks for the update and thanks for taking the question.

Since you have two programs for Ret syndrome with Trop finished tied in then.

<unk> Stokes Therapeutics can you just talk about how these two programs would complement each other and potentially.

Can you just didnt combination thank you.

Yeah sure. Thanks, so much Jay Kathy you want to take that.

Sure.

And we think that there are two different programs because there are different mechanisms will complement each other very nicely. So not compete with each other but <unk> could be a foundational treatment wholesale next year.

That program is.

Clinical has a very different mechanism and that is the goal.

Is to increase the missing protein in these patients.

So patients chicken at Hyatt.

And because of that therapy as well.

Added or maybe even a synergistic effect.

Andrew.

Yes, I'll just add that all the work Brendan and his team is doing now for the potential launch of <unk>.

Sanitizing Ret syndrome.

Establishes us as the leader in that disease, so any follow on program.

He has all the refineries.

We develop and commercialize the second program.

Thank you.

Thank you and we do have time for one more question.

And that will come from the line of Ritu <unk> with Cowen. Please go ahead.

Hi, guys. Thanks for taking the follow up I wanted to ask about the.

The SG&A, which you guys indicated should stay relatively flat. Despite the launch and you mentioned sort of redeploying some of that capital from PDP to Bret can you can you discuss where you are pulling the rent dollars from <unk>.

And I.

I guess your conviction that it won't be stabilized.

The PDP franchise.

Sure Mark you want to start.

Sure. Thanks, Steve and thanks for the question Ritu I think importantly, as we look forward to next year.

Develop that's kind of our events for both.

PDP and <unk>, we did it independently.

To find to figure out what the right resources are put on each product and that is a consequence of that evaluation kind of results in an overall flat estimate it wasn't the flattish year ended up itself wasn't a specific target.

And I think for us Entre Pinotage, we want to make sure we have the right resources and budget short Vesperal launch, we don't put it at that.

And on PDP, we just remain in this kind of.

Not to.

So modest growth period flat growth period.

As we get deeper into the lifecycle of the drug.

Kind of what are the best.

Return on investment tactics, and how do we drive growth and value.

And we're confident that we're putting the right resources and the drive to achieve that.

As we move forward.

And thanks, Mark sorry.

Again, echoing mark so I think the.

Only thing I would add is.

We've mentioned this before but just try to be a little more precise.

With PDP right now in the current market, which is smaller.

For instance, things like DTC advertising on TV.

Don't produce the same kind of return on investment.

Patients are going to.

Patient visits to their doctor or down 20%.

So so however, digital DTC continues to be very effective so we're far enough into the pandemic now to have a good feel for what are the drivers that are.

Driving growth.

Web.

Exposure directly with physicians physicians talking directly to patients.

Long term care.

Occupancy rates of new patient admissions.

We're very good feel of what the levers are to pull in this kind of environment.

And so as a consequence of just some investments that just don't pass the test to invest in.

Having nothing to do with Brad or launch there, but just because we're just being disciplined about how we invest our dollars. The last thing I'll add is I just wanted to emphasize something that Brendan mentioned earlier, there's important new real world information out.

That's just been published that.

Think does.

Really help underscore.

The benefits of <unk> and <unk>.

So that's the kind of thing of course that we are investing heavily in to make sure that our medical affairs team is very well equipped to describe those.

Differences and help physicians.

Understand that data when they have questions about it. So so we're I feel like we're pressing on all the right.

Buttons and the resource dollars are as Mark mentioned purely a consequence of our assessment of what's <unk>.

I wanted to ask about ACP-204.

It does not lead to dehydration or hospitalization. So when you compare that to the constipation that the patients have, this could be preferred.

When you say building upon the learnings of Pimavansaran, is that a statement on the mechanism, of ACP-204?

Great.

Is that also an inverse agonist?

Thanks so much for the comment.

And is this your forward ADP strategy or Phase II strategy?

Working in warrants investment at this moment in time at least in this environment and what doesn't.

Thank you I would now like to turn the call back over to Mr. Steve Davis for any closing remarks.

Great. Thanks, so much operator, and thanks again, everyone for joining US today, we look forward to updating you on our progress next quarter.

Ladies and.

Gentlemen, thank you for participating in today's conference call. This concludes the presentation. You may now disconnect good day.

The conference will begin shortly to raise Johan during Q&A, you can dial star one one.

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Dan.

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