Q2 2022 Intra-Cellular Therapies Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the intracellular therapies second quarter earnings call. At this time, all participants on a listen only mode. A question and answer session will follow the formal presentation, if you'd like to ask a question. Please press star one on your telephone keypad, if anyone should require.
Greater assistance during the conference. Please press Star Zero on your telephone keypad as a reminder, today's conference is being recorded.
I would now like to turn the conference over to Dr. Juan Sanchez, Vice President Corporate Communications and Investor Relations. Thank you. Please go ahead.
Good morning, and thank you all for joining us on the call today.
Our earnings press release provides a corporate update and details of the company's financial results for the second quarter ended June 30th 2022.
The press release clothes. They wear earlier this morning, and it's available on our website at intra cellular therapies dotcom.
Joining me on the call today, I'll talk to Sharon mates, Chairman and Chief Executive Officer.
Mark Newman Executive Vice President and Chief Commercial Officer.
Doctors, the rest telecom executive Vice President and Chief commercial Medical Officer and.
Larry Hineline, senior Vice President and Chief Financial Officer.
As a reminder.
During today's call, we will be making certain forward looking statements.
These statements May include statements regarding among other things.
As a coffee safety I mean tend to use of the company's product development candidates, our clinical and non clinical plans our plans to present or report additional data the anticipated conduct and results of ongoing and future clinical trials.
Plans regarding regulatory filings future research and development, our plans and expectations regarding the commercialization of <unk> potential the potential impact of the COVID-19 pandemic on our business and possible uses of existing cash and investment resources.
These forward looking statements are based on current information.
And expectations.
Are subject to change when you bought a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements.
These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports.
You are cautioned not to place undue reliance on these forward looking statements and the company disclaims any obligations to update such statements.
I'll now turn the call over to Sharon.
Thanks, Juan good morning, everyone. Today I am pleased to share with you our second quarter results. We will update you on the strong performance of kept lighter following our launch bipolar one and bipolar depression as well as the progress in our clinical development programs.
We are pleased to report that total revenues for the second quarter 2022 were $55 $6 million compared to $20 million for the same period in 2021, representing a 178% increase.
<unk> net product revenues for the second quarter, 2022 what $55 $1 million, representing a 190% increase over the same period in 2021, and 58% increase over the first quarter 2022.
Larry will provide additional detail on our financial performance in his remarks.
Our commercialization of kept Blida continues to go extremely well following the fda's approval of Capsulitis or bipolar depression in late December 'twenty 'twenty. One we have seen tremendous enthusiasm from health care professionals, which has been reflected in our strong prescription glass.
In the second quarter kept light in new and total prescriptions increased 225% and 191% respectively versus the same period in 2020 one.
Second quarter 2022 kept light in new and total prescriptions increased 55% and 51% respectively versus the first quarter 2022.
In addition to continued increases in kept light up prescriptions. We have received highly positive feedback from health care practitioners regarding the strength of kept lightest clinical profile, including both the efficacy and safety profile and the positive experience their patients are having on the medication.
We are proud to be helping a growing number of patients manage their bipolar disorder.
Kept light it is the first and only treatment indicated for depressive episodes associated with bipolar one or bipolar two disorder in adults as monotherapy or as adjunctive therapy with with EMR Valproate.
Prior to kept lighter there was only one medicine approved for bipolar depression, and only as a monotherapy.
We are pleased to have seen such a significant uptake of kept light up to treat both bipolar one and bipolar two disorder I'd have a similar patient population size.
We have also seen an increase and kept light of prescriptions for the treatment of schizophrenia, Mark will further elaborate during his comments.
Kept lightest profile makes it an important medicine for patients.
Kept light and interact with key neurotransmitter systems believed to be involved in major neuro psychiatric conditions, including depressive disorders.
Although the mechanism of action of alumina kept around is unknown the modulation of the dopamine system, coupled with five Ht two antagonism serotonin reuptake inhibition and indirect interaction with the glutamate system offers distinct pharmacologic characteristics relevant to treating mood disorders. In addition to schizophrenia.
There is a significant need for medicines that safely and effectively treat these disorders in our clinical studies kept blida has shown consistent efficacy supported by a favorable safety and Tolerability profile.
In fact changes in key safety metrics, such as weight change fasting glucose total cholesterol triglycerides and E. P S, including akathisia were all similar to placebo.
The pharmacologic properties and clinical results of kept lighter have led us to expand our programs beyond schizophrenia and bipolar disorder to include major depressive disorder or M. D. D and mixed features an M D D in bipolar depression.
We are currently enrolling patients in our global Phase III M. D. D studies to evaluate when would have grown 42 milligrams as an adjunctive treatment to antidepressants.
To remind you studies five O one in five O to a global double blind placebo controlled study with approximately 470 patients in each study.
Alright endpoint is changed from baseline and let him address at week six.
Additionally study five O. Three is an open label rollover study to assess long term safety in this patient population.
We expect to file a supplemental new drug application with the FDA for approval of alumina tap wrong as an adjunctive therapy to antidepressants for the treatment of M. D D in 'twenty 'twenty four.
I'll now discuss the study for all three are mixed feature study patient enrollment is progressing well and will study a large well controlled global clinical trial evaluating room type wrong 42 milligram in patients with M. D D and in patients with bipolar depression, who exhibit next features.
The primary endpoint of this study is changed from baseline versus placebo on the mattress at week six and changes in C. G. I S as key secondary endpoint.
A follow up safety assessment as planned approximately two weeks after the last dose of study medication we.
We expect to complete clinical conduct in this study in late 2022.
Following completion of data analysis, we expect to report topline results in Q1, 'twenty two 'twenty three.
Study four O three represents another opportunity to study the safety and efficacy of alumina tapped brown and an area, where there are important medical needs.
During depressive episodes, roughly one third of patients with unipolar depression, and bipolar disorder present with mixed features mixed features is defined by a patient having co occurring substance Wrestlemania or hypomanic symptoms during their depressive episode.
This clinical presentation is important to highlight as these patients have greater severity of illness have higher rates of suicide and suicidal ideation higher recurrence rates and comorbidities.
These patients are more difficult to treat 10 patients exhibiting classic depressive episodes and tend to respond poorly to antidepressants.
The inclusion of mixed features specifier in the DSM five underscores the recently recognized importance of this clinical presentation.
During the quarter, we had multiple scientific presentations featuring kept lighter at prominent medical and scientific conferences. These meetings included the American Psychiatric Association meeting International Conference for bipolar disorders annual meeting the American Society of clinical Psychopharmacology.
And the schizophrenia International search Society.
I'll now highlight several of these presentations.
At a S. D. P N I S. P. D. We presented further evidenced a favorable metabolic profile of moving to tackle them.
Rates have metabolic syndrome at baseline and at the end of treatment were similar between patients who received lunar TERP wrong or placebo.
More patients who received bloom a tap of an improved from having metabolic syndrome that baseline to no longer meeting criteria at the end of treatment compared with placebo.
These and other results presented at these meetings highlight the favorable placebo like metabolic profile of limit at Brown and support its use in patients with bipolar depression and schizophrenia.
And I S. P. D. We presented data demonstrating broad antidepressant effects when the cat brown as evidenced by improvements versus placebo across the 10 single items of the majerus total scale as well as a higher percentage of limit chapter on patients versus placebo shifting from severe does.
He used to moderate mild disease or illness.
And I S. P. D N a S E T. We presented analysis highlighting marked improvements in functional disability and quality of life.
Tapper on statistically significantly improved the Prespecified secondary outcome measure the quality of life enjoyment and satisfaction questionnaire short form total score from baseline to day 43 compared with placebo.
In a post hoc analysis, there were marked improvements within the tap wrong and items, representing the ability to function in daily life family relationships households activities leisure time activities mood and overall life satisfaction.
At the <unk> meeting, we presented additional safety analysis from our open label safety switching study evaluating when the TERP wrong 42 milligram in patients with stable schizophrenia.
Data from this post hoc analysis further support the favorable safety and Tolerability profile of <unk> one.
<unk> 42 milligrams in patients with schizophrenia, who switched from another anti psychotics, regardless of the previous anti psychotic and.
In addition patients switching from Risperidone pallet paradigm Orlando pain to loom attack run had significant improvements in cardio metabolic parameters and prolactin concentrations.
We have also continued to advance other programs in our pipeline.
We are working to develop long acting injectable formulation of supplement type wrong that are effective safe and well tolerated and last one month or longer to provide more treatment options for patients suffering from mental illness.
We have completed the preclinical development of an L. A I formulation and we have conducted a phase one single ascending dose study with this formulation. This study evaluated the pharmacokinetics safety and Tolerability of Luna Pepper on long acting injectable in patients with stable symptoms of schizophrenia.
We are now exploring alternate sites of injection with this formulation as well as progressing with other formulations. This will assist us in evaluating dosing strategy and formulation for our efficacy studies.
That's just our 12 84.
Program I T. I 12, 84 is due to rated form of Luna Tapper off a new chemical entity formulated as an oral disintegrating tablet for Sublingual administration. We are presently evaluating ITI 12, 84 O D. T. S. L. In phase one study, including drug drug interaction study.
We expect to commence clinical conduct in phase two clinical trials and agitation in patients with probable alzheimers disease, and dementia related psychosis and uncertain depressive disorders and the elderly in 'twenty two 'twenty three.
And our PD one inhibitor programs, we have completed or have ongoing phase one trial, including drug drug interaction bioavailability from scale batches and food effect study, we have initiated our phase two clinical program with one supposes for Parkinson's disease, and expect to commence patient enrollment in the second half of 'twenty.
'twenty two.
We continue to investigate the anti cancer effect.
Of PD, one inhibitors at ACR, we presented preclinical data demonstrating the anti tumor effect of PD one inhibitors when administered in conjunction with checkpoint inhibitor immunotherapy in an animal model of triple negative breast cancer.
We have now shown that are PD, one inhibitors can potentiate the action of checkpoint inhibitors in various models of colorectal kidney.
Grasp and Glioblastoma cancers.
Finally, our ITI Triple three program for opioid use disorder continues to advance following the recent completion of our single ascending dose study. We have commenced a neuro imaging study to investigate brain occupancy for receptors play a role in substance use disorder and have applicability for pain.
And the results of this study will support the dose selection for future studies.
We ended the second quarter in a strong financial position with $679 2 million in cash cash equivalents and investment securities and we have no debt.
In summary, we are pleased with our second quarter results and proud of our accomplishments. We look forward to kept light is continued market growth in bipolar depression, and schizophrenia and advancements in our pipeline.
I will now turn the call over to Mark who will provide additional details about our successful launch mark.
Thanks, Sharon I'm pleased to report that we continue to make significant progress in.
In the first six months of our bipolar launch kept light a new and total prescriptions have approximately doubled.
New patient starts as reflected by new to brand prescriptions are at five times the level. They were just prior to our label expansion.
Significant launch inflection that we saw in the first quarter continued throughout the second quarter in both new and total prescriptions, reflecting sustained and robust growth. Following kept light is approval in bipolar depression.
Second quarter kept light, our new and total prescriptions increased by 55% and 51% respectively versus the first quarter.
A broad patient population is using capital, Idaho, including patients diagnosed with both bipolar one and bipolar too.
Prescribers are using capital Ida as both monotherapy and adjunctive therapy.
An increasing number of newly diagnosed patients are initiating therapy on capital item as well as those switching from other anti psychotics, including both branded and generic medications.
While an increasingly larger portion of prescriptions are coming from bipolar depression. We're also pleased with the continued growth of capital Ida for the treatment of schizophrenia.
Hepatitis robust performance has been driven by successful commercial execution.
Broad market access and a strong clinical efficacy safety and dosing profile.
In market research recently fielded with 300 health care professionals. These hcp's rated capital as well differentiated on the attributes of a broad bipolar depression indication that includes both bipolar one and bipolar too.
Low risk of metabolic dysfunction low risk of weight gain.
Low risk of extra pyramidal symptoms, including akathisia.
And ease of dosing with no titration required.
In this research a significant majority of physicians intend to prescribe kept light or in the future.
Yeah, I play to maintain broad coverage in the Medicare part D and Medicaid channels with greater than 98% of lives covered and.
And during the second quarter, we further expanded coverage in the commercial channel to approximately 85% of lives covered.
We expect this coverage to continue to increase in the coming months.
We are also looking forward to launching two new dosage strengths for cap light, a 10.5 milligrams and 21 milligrams, which were F. D. A approved during the second quarter of 2022.
This will expand the patient population, who has access to capital Idaho, specifically for patients taking strong or moderate Sip 384 inhibitors in patients with moderate or severe hepatic impairment.
We anticipate these new dosage strengths to be available in pharmacies later this month.
In closing kept light it is a very appealing option for prescribers and patients with bipolar depression and schizophrenia, and we are confident in our ability to drive continued robust prescription and revenue growth throughout the second half of the year.
I will now turn the call over to Larry Larry.
Thank you Mark I will now provide a summary of our financial results for the second quarter ending June 32022.
Total revenues in the second quarter grew to $55 6 million compared to $20 million in the second quarter of 2021.
In the second quarter, we recorded net product revenue of capital items of $55 1 million compared to $19 million for the same period in 2021 and $34 $8 million in the first quarter of 2022.
This represents a year over year increase of 190% and a 58% increase over the first quarter of 2022.
The second quarter of 2022 gross to net percentage was in the low thirties consistent with our prior guidance, we expect capillatus gross to net percentage to remain consistently in the low thirties throughout 2022.
Cost of product sales were $4 $7 million in the second quarter of 2022 compared to $2 million for the same period in 2021.
Selling general and administrative expenses were $103 million for the second quarter of 2022 compared to $69 9 million for the same period in 2021.
This increase was primarily due to an increase in marketing and advertising expenses and labor related cost.
Research and development expenses for the second quarter of 2022 were $38 5 million compared to $17 $3 million from the second quarter of 2021.
This increase is due to higher lemon pepper, one clinical trial in non clinical related costs and an increase in nonhuman Pepperoni project cost.
The net loss for the second quarter of 2022 was $86 $6 million compared to a net loss of $68 $7 million for the second quarter of 2021.
Cash cash equivalents restricted cash and investment securities totaled $679 2 million at June 32022, compared to $413 $7 million at December 31, 2021.
In January 2022, we completed a $460 million public offering resulting in net proceeds to the company of approximately $433 $7 million from the sale of 10.952 million 381 shares of our common stock.
After deducting offering expenses paid by the company.
<unk> our prepared remarks, operator could you. Please open the line for questions.
Thank you. The floor is now opened for questions. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. If he would like to remove your question from the queue. Please press star two.
We do ask analysts to please limit themselves to one question to allow everyone. The opportunity to ask their questions. Today. Once again that is star one if he would like to register a question.
The first question is coming from Andrew Tsai of Jefferies. Please go ahead.
Okay, Thanks, and good morning.
Ask them on the outlook.
The prescription trends you know maybe your touch points. So far whether you know your sales reps have exhausted all the targeted physicians or do you think you've barely scratched the surface and that you still remain in the early innings. So just curious if we can expect the trajectory to maintain.
Or could scripts in fact, even further over time thanks.
Go ahead and take that.
Yeah. So so.
So Andrew Thanks for your question and what I would say is we're very confident in our ability to drive continued robust growth throughout 2022.
And remain bullish on the long term potential for cap later, our awareness levels continue to rise as we continue to further penetrate our target audience.
The physicians in the market research that we've recently fielded recognize the differentiated profile that we have with cap light up and.
And we continue to execute in a very strong way and our promotional activities.
What what I would say about the reach to our target audiences that we've been pleased with the significant progress, we're making in reaching our target audience and.
And educating them on the clinical profile and the benefits of cap light in bipolar and I'd say, we've reached the majority of the target prescriber audience, but we continue to make additional strides in furthering that reach both with our in person promotional activities with our sales force.
With the virtual capability, our sales representatives have and then also supplementing that effort with a comprehensive digital and.
Personal programs that we have so we're making very good progress with that.
Room for additional reached still room for additional frequency.
We've been pleased with the progress at this stage of the launch so far.
Great. Thanks for all the color.
Thank you. The next question is coming from Jessica Fye of J P. Morgan. Please go ahead.
Great can you hear me.
Before Jessica something Okay, you can hear me before and I just wanted to add to.
Mark said.
Yes, we think that we are still on a good trajectory Andrew give you. The short answer and then you can add into that what everything mark added into that.
Thank you Jessica Please go ahead.
Great when you kind of following up on that and not the first time or for Mark but last quarter you talked about the launch these being sort of a six to 12 month period characterized by the most robust new to brand growth.
Now that we're a little more than six months into the bipolar depression.
Do you think the launch phase here is going to be closer to that six months or 12 months you talked about before.
Okay.
Yeah, So jessica and in <unk>.
Launched there, there's always going to be sort of week to week variability.
And I think in the recent period that we've just gone through we've seen.
Some summer seasonality.
Have some holidays with.
That kind of interrupt the weekend Memorial day weekend, you have fourth of July or June teams.
Summertime is when you tend to have vacations of physicians with patients et cetera.
And we have seen some impact.
Rise in nickel.
Covid cases.
Which has impacted the overall market, but we think that the longer term prescription trends.
Remained very healthy for kept lighter.
And as Sharon said, we continue to believe that we're on a very good trajectory.
It'll take us into the end of the second.
Got it if I could just add.
I've got a follow up were there any changes in the inventory days on hand in the channel at the end of Q2 relative to the end of <unk>.
Yeah.
Mark or Larry.
Yeah, Larry you don't hand, they've been relatively stable and have been.
And you know have been rising one when sales rise but.
They're pretty been pretty much stable.
Thank you.
Thank you. The next question is coming from whom a raft of Evercore. Please go ahead.
Hi, guys. This is Mike difiore in for whom are thanks, so much for taking my question.
First on the mixed features trial.
You saw it in the bipolar phase III, a solid stat Sig effect size was seen on the Madras about halfway into the six week trial.
And continue to improve through the end of the trial. However, the mattress score of these patients was around 30.
Whereas the.
The mixed features trials inclusion criteria specifies a score of at least 24, so where I'm going with this is can you give us a sense of where the baseline <unk> scores in the mixed feature trial may fall.
Relative to the bipolar depression trial also is.
Are there any reason why the placebo group may behave differently in this patient population and whether and whether there could be any.
U S versus ex U S dynamics that may affect the results and.
Just separately really quick on inventory how many weeks do you typically keep in the channel. Thank you.
So let's break that into a couple of questions and I'll ask Suresh to address our mixed features.
Yeah.
Yeah. It makes me just Ah study is.
It is ongoing right now we are on track.
Our.
Enrollment by end of the year.
In them so.
The <unk>.
Question about mix are the baseline.
It is 24, but youre correct in terms of what we have for this trial, but it will usually be in the range than what we have seen the baselines would be what we have seen in our monotherapy and adjunctive trial studies around 30 to 32, so I expect that it would be in the same range.
Oh I'm just trying to.
In terms of.
You have a question about placebo response, we had to again, that's as you know that these styles.
No.
Depression trials in general how.
But could you give us some successful great.
And.
Bipolar even little bit higher however, we have shown.
<unk> in bipolar depression.
To demonstrate efficacy in both monotherapy and adjunctive therapy.
Also in the post hoc analysis, but the photo hold steady.
We haven't seen a big.
Patients with mixed speeches, which whereas we used the proxy.
Why a modest asset mix feature there in that.
[noise] analysis post talk analysis, we saw a clear separation and this mixed week of population in the trial.
And.
Wait and see for themselves.
Yeah.
I would just add to that that you have cut off points for these.
Madras scores, but again as Raj mentioned.
There is a range of mattress scores that these patients can come in.
Just like in our bipolar.
Both monotherapy and adjunctive therapy studies.
Great very helpful and also just real quick on the inventory question. How many weeks do you typically keep in the channel.
Yeah. So I'll start and then I'll ask him if Larry wants to chime in so remember this is not a category where you keep a large stocks of inventory on the distributors are amazingly.
Amazingly efficient at being able to move product around the country on very very short order. So there arent large inventory stocks for this category.
At least in our hands I don't know Larry if you wanted to add anything to that yeah.
Yeah.
A question asked earlier about days on hand and days on hand is has been stable and is relatively low and it's more of a just in time sort of effect that we're seeing so there's not a lot of inventory in the channel I mean, we have a lot of inventory on our balance sheet, but it is.
It just doesn't stockpile and in the channel.
Efficient as Sharon said.
Got it thanks very much.
Thank you. The next question is coming from Brian Abrahams of RBC capital markets. Please go ahead.
Hi, Good morning, Thanks for taking my question and congrats on the continued strong launch maybe a question for Mark I'm curious, how you're thinking about the impact that the DTC campaign is having on the bipolar launch and also the inflection we're seeing and do you have a sense as to how much it may be contributing relative to the growth that you might expect from a label expansion.
Spansion alone and then I guess I'm also curious how long you expect the DTC campaign to run for them about the potential long term impact on SG&A and margins would be thanks.
Yeah sure Brian Thanks for the question so as as I think you know our bipolar T V began running in early second quarter with a mix of media and broadcast cable syndicated streaming TV et cetera.
And we do have some interim metrics and we don't have all of the metrics at this point.
But what I would say is we are pleased with how our media is successfully targeting and reaching the bipolar depression audience.
Our T V. Ed has driven substantially more visitors to our website, where they're seeking information about capital light up.
And we are seeing an increasing number of physicians reporting patient requests for capital Ida.
And we would expect to see this continue to increase as our ads continues to air. So overall I'd say, we've been very pleased with the impact of the D. T C and our expectation is that we would continue to run DTC throughout 2022.
Thanks.
Thank you. The next question is coming from Charles Duncan of Cantor Fitzgerald. Please go ahead.
Yeah, Hi, good morning, Sharon and team congratulations on a good quarter.
Thanks for taking our questions. It's a multipart single question for Mark or you Sharon and that is.
Relative to some of the prepared remarks I'm positive experience that the patients are.
I guess I'm wondering if you could provide any qualitative information on persistence and its fat is providing a halo effect to see to drive say additional schizophrenia.
Prescribing and then relative to the new dosage forms I'm wondering if you could provide even qualitative information on what percentage of patients are not being done being prescribed a Catholic and and how could that result in an uptick further up.
Kick in adoption. Thanks.
Yeah. So thank you Charles for the questions and I'll ask mark to take them, but yes just to comment.
Comment on your first comment on yes, our continued strong launch week.
We are.
I'm very pleased with the continued strong launch and into that will now also launched these lower doses and I will ask Marc to further comments I'm here.
Yeah, sure and Charles Let me, let me start there are we we are pleased to be able to offer appropriate dose strengths now for an expanded patient population, who will now have access to capital light and that's specifically.
As you saw on the press release for patients with either moderate to severe hepatic impairment.
Who are taking moderate or are taking moderate to strong CYP three <unk> four inhibitors and you know precise numbers are difficult to obtain for these patient populations, but we estimate it to be about 5% of the population are taking an eye psychotics and we will be launching the shortly we.
We expect actually these new dosage strengths to be available.
And then pharmacies by next week. So we're looking forward to that launch and making kept light available two additional patients who may not have had access to it before on your first question Yeah from a persistency perspective, we continue to see we continue to track and see the same kind of.
Improved persistence uncapped blida, particularly in patients with schizophrenia that we've been monitoring since the beginning of the launch.
As you know we talk about this quite a bit each time, we get together and we did have the hypothesis that given the safety and Tolerability profile of kept light are that we would see that translate into a good compliance and persistence profile in all of the data that we've seen.
Through our most recent data suggests that that's the case. So we're pleased with what we're seeing there as well.
Very good thanks for the added color.
Thank you. The next question is coming from Marc Goodman of Seb. Please go ahead.
Yes, good morning.
I think the questions about inventory are related to the fact that if you just simplistically.
Took the IQ can get prescriptions from first quarter and second quarter, and then you listen to your guidance about gross to nets, which are low thirties for both quarters.
Is that you struggled a little bit to get to the sales move.
Moving from 35 to 55 without some inventory change in the channel, which I guess, we all assume that the channel. It's two to three weeks or so sometimes you can move from the low end to the high end and I think that's where the question. He loves her or maybe I cubie is not picking up all the scripts or maybe you can give us a flavor for that as gross to net.
Lower in the second quarter versus first quarter anything you can do to help us with that would be helpful. And then I just had one other question, which is on mixed features Mark can you give us a sense of if you get that indication how many new.
New patients do you think that brings as a potential new market for you. Thanks.
Well I'll start this is Larry.
Yeah well.
Let me take the first part of the question and then I'll Oh I'll take the second part on how many new patients next features with Brian .
Yeah, So like I said earlier that the days on hand at the strip.
The distributors and elsewhere, it's been stable, okay. So that way there's theirs isn't.
Not been a big increase in that I think when you're in a launch mode and end sales are rising it's hard to take the IQ <unk> IQ via data and match with the gross to net and then matched to our revenue. It's it's it's you can try to do it but youre going to be off just by the mathematics involved so I.
Say theirs.
There is nothing to worry about it because we see that we see the data as far as the days on hand in the inventory in the channel.
And I don't know if I can add any more color to that but one when sales are rising it's hard to do that math.
And by the grocery segment, whereas lower than the first quarter.
The gross to net was but it's fairly consistent and we'll be consistent the rest of the way it's in that range and we didn't see a large change in our gross to net in this quarter.
Yeah.
Which is interesting because usually gross to net for the first quarter or so high relative to the rest of the year just for every product out there and we've talked about that our last call and as commercial channel is increasing you know that was it.
You'll still see the impact of gross to net even though you have the seasonality of the first quarter and you have an increase in commercial channel usage.
And that'll keep the gross to net at a higher range higher end of the range. So.
I think the mechanics behind behind it we're pretty comfortable with it and it's pretty clear to us so maybe.
When we talk one on one I can give you a little more insight on the.
You know mechanics of it but pretty straightforward.
Thank you. The next question is coming from Corinne Jenkins of Goldman Sachs. Please go ahead.
Hi, Good morning, I think in the past you've got it.
85.
90% of covered lives under the commercial payer infrastructure I'm curious now that you're at 85% how much incremental coverage, we expect to see and then can you provide any additional detail.
Back to authorization policies.
That commercial coverage.
So yeah, that's correct.
Yeah, sure So Korea, we actually where where we've been what we've communicated previously is that we've had over 80%.
Coverage in the commercial channel and that was up from approximately about 50 50.
And then a part of last year. So as we approach the bipolar depression approval and as we began that launch.
We were very pleased to be able to get that coverage from the mid fifties up to over 80% and what we're communicating this quarter is during the second quarter, we improved even further on that coverage and now we're approximately 85% covered in the commercial channel and we do expect that number to continue to climb in the.
The coming months.
And as far as the the utilization criteria they've been pretty consistent you have certain plans and channels that make kept light available unrestricted which means there's no. Prior authorizations, there's no step edits through a generic or other plans, who use our electronic step edits which is.
It's not a significant barrier at all to accessing capital I know, we've talked in the past about a sort of the patient churning through anti psychotics that happens both in schizophrenia, and bipolar where they're dissatisfied typically due to a tolerability issue.
They've gone through 123 generics already so they already qualify for meeting that step criteria of having to use a generic first or sometimes two generics.
And then there's other plans that require prior authorization.
But even the prior authorization and this category is not onerous basically the payer just wants to ensure that the patient is appropriate meaning its either a patient with schizophrenia or with bipolar depression.
And we have our lighter link program that helps physician offices navigate that process and typically when they do that the payer a very frequently approves that medication for that so overall I would say we continue to enjoy a very strong market access position we're happy.
With where we are and we expect to see even further continued increases.
In the in the commercial channel.
Thank you. The next question is coming from Craig Susan Lafayette of Mizuho. Please go ahead.
Hi, good morning, Thanks for taking my questions congrats on the quarter.
I was wondering if.
If you could if you'll have to stay to can you quantify the magnitude of the current market penetration of cap later in in both schizophrenia, and bipolar depression or at least put some quality.
You know qualifying comments around that and then second in terms of the current brand awareness of kept laid out within the prescribing community.
Would you characterize that right now and maybe that's you know kind of asking like what additional level of market education do you need to do and if there are physicians, who have yet to use it or are resistant to using it I'm wondering if you can.
Some color as to what the potential kind of pushback might be thanks.
Yeah, Greg Thanks for the questions Yeah on it at this stage with without providing real quantification of these numbers what I would say for your second question is the awareness levels.
In bipolar depression.
Among our prescriber audience are right about where we would expect them to be at this stage of the launch and so we're pleased with both the awareness levels of capital item, both unaided they bring it up on their own in and even much higher when given a list of products to take a look at it and they can recognize that.
Kept light is approved for bipolar depression.
Haps, even what's more encouraging to us in the recent market research that we had with over 300 physicians.
How they rate cap later versus the various attributes of the product compared to the other anti psychotics and so are our belief and understanding is that physicians have a very good understanding of the clinical profile are.
And the areas of differentiation.
Especially in being indicated for both bipolar one or bipolar too.
And then all of the safety and Tolerability measures the low risk of metabolic dysfunction low risk of weight gain low risk of extra pyramidal symptoms and also the ease of dosing with.
With no titration so.
Okay.
Okay.
Okay.
Any color on kind of where you feel you are in terms of penetrating schizophrenia, and bipolar depression in terms of market share or anything like that.
Okay.
Okay.
[noise] impression you know this is a category where you have several big branded products that have been out in the market for many years Latuda for over 10 years very long for over five years.
Certainly the generics have been around for a long time as well so we think theres plenty of room.
For upward penetration of cap light up.
And we continue to make very good progress in penetrating.
Each of those areas, we look carefully each month at the source of our new patient says as I mentioned in my prepared remarks, we are seeing increasingly.
More and more patients being newly diagnosed.
Diagnosed patients being placed on cap lighter.
For those patients whose insurance allow for first line usage.
But also encouragingly when we look at the switch dynamics, we are seeing switches from a wide variety of anti psychotics, including both generic products and increasingly coming from other branded products as well and we see that as a very healthy sign that physicians understand the clinical profile and the value of the clinical profile.
And they're taking the steps to make those switches to capitalize them.
Thank you.
Thank you. The next question is coming from Jason Carberry of Bank of America. Please go ahead.
Hey, guys. Thank you for taking my questions or question.
Just wanted to better try to connect the script data for the big Bpd drugs like Latuda rate lock up later.
These patient numbers right. These patient numbers or massive 611 million patients we have heard but we know the bpd is sort of an under diagnosed condition. So do you have a sense sort of what is the the diagnosed patient number do you have like maybe a more realistic.
For the market based on how many of these patients do you think are getting diagnosed because when I look at like the with two very large scripts and assume some reasonable average duration of therapy. It would suggest the only like maybe four to 500000 patients might be getting treated furby PD with with the brands right I don't know what the generic number would be but.
You just how do you kind of cause because this is an important I guess data point to just trying to understand how much bigger sort of the branded bpd category can get thanks.
Yeah, Jason the they the category is a massive category you know our estimates of the epidemiology suggests that there are upwards of $11 million.
Patients who suffer from bipolar disorder.
Which is four to five times the size of schizophrenia.
You know both schizophrenia and bipolar disorder are serious mental illness with significant symptomatology. So I would say the majority of patients are diagnosed.
Once diagnosed then they go sort of on their on their treatment journey of really zeroing in and perhaps Suresh.
Suresh would want to comment on this from a psychiatrist perspective, but they go on their treatment journey, where a psychiatrist or other treating physician is trying to determine exactly what their condition is one of the dynamics in bipolar disorder is distinguishing between a patient who has.
First who maybe might present as a patient with major depressive disorder.
But particularly in bipolar too because these are sub threshold mania.
Symptoms they might go unnoticed in that patient might not get diagnosed with bipolar too.
For several years and that physician may tried treating them with an anti depressants and anti depressants typically do not work well in bipolar depression.
It takes a little time for them to get an accurate diagnosis and get them appropriately treated with an anti psychotic like like capital item.
I don't know Suresh are or Sharon, whether you'd like to add any any color to that that might help address jason's question there.
Yeah.
So can you hear me.
Yeah, right, sorry, everybody I'm, having some technical issues here.
Yeah, I agree with everything that Mark said and also what you said that it is a Jason it is a a large it is a large market and that has still not reached its potential I do think what mark said the bipolar two patient population is certainly.
And untapped market.
<unk>.
The rash did you want to add anything or are you good.
Yeah, no nothing to add there just sort of distill it its still an untapped market.
Great. Thank you.
Thank you. The next question is coming from as from of UBS. Please go ahead.
Hi, Good morning, Thanks for taking my question I have two so so now that'd be a beyond the half year Mark with the first half was kept light I seem to have done around 90 million finish up on a strong quarter and to Q. How do you feel about the consensus expectation for second half, which is that on 130 million that's.
Number one and then just.
Secondly on the Opex. So it seems like SG&A and R&D, we saw a jump in the second quarter or.
You mentioned that the DTC program is going to continue throughout the year. So is this a good run rate to assume for the remainder of the year. Thanks.
Larry do you want to take that yeah, I'll take the second part yes. They are.
Expenses were higher for R&D and SG&A in the second quarter.
As we expected and I think it is a good.
It's it indicates what the run rate would be for the rest of the rest of the year I'd also like to remind you that we had given guidance earlier 500 million in cash spend which doesn't include noncash expenses.
For the year and we spent 260 of that in the first half and we are guiding to $2 40 for the second half so I would say that.
And within the context of the expenses for the first and second quarter as well as what we project for the rest of the year you should you should see that guidance remain intact.
And.
I think that's that.
Tells the story.
Do you have any further questions related to that.
And just don't get lighter sales.
Oh.
Yeah, So why don't give guidance and we don't give guidance as you know about with that we're very pleased with our launch to date and our continued progress in our continued trajectory.
Mark did you want to add anything to that.
No I completely agree with you.
Yeah.
Thank you.
Unfortunately, we have only time for one more question today. The last question will be coming from Sumit Kulkarni of Canaccord. Please go ahead.
Good morning apologies for any background noise. Then this this has been asked already but I'll ask two questions, mainly because you may not answer my first.
On the first question is could you give us a split between bipolar depression and schizophrenia for the current C is that you have on any components of growth and second now that limit that.
Going along nicely in the U S. What are your latest thoughts internally on taking that product ex U S.
Yeah.
Yeah.
Mark do you want to take the first part and I'll take the second part.
Yeah sure so much with the with the explosive growth that we've seen in the first half of the year, our business is increasingly being sourced.
From bipolar depression over schizophrenia, now that that being said we are pleased with the continued growth that we've seen in the schizophrenia business. In addition to the more explosive growth that we've seen with all the new patients coming in.
Consistent with the new indication and in bipolar depression, and the mix of those two is increasingly weighing more and more towards bipolar depression and I think if you look at the existing branded products like Latuda and like for a lawyer.
And you look at the mix of their business. It is significantly more coming from bipolar depression bipolar disorder, then from schizophrenia, and we are tracking along that same.
That same track and would expect to have a similar profile.
As they do once we get to a more mature stage of the business.
And Sharon I might kick the second part of that question back to you.
Yeah, Thank you and and so as we've said before.
We continue to evaluate opportunities ex U S and we will.
Well, let you know as that progresses, Oh, we don't have any updates for you right now and we will update you as soon as we have further information.
Thank you.
Thank you at this time I would like to turn the floor back over to Dr. <unk> for closing comments.
Thank you operator, and thank you everyone. We're very pleased with our progress made to date, both on our <unk> launch as.
As well as our development programs and the extension.
Of Ah lunar tap around into M. D. D and mixed features are we look forward to updating you on those.
Those programs as we move forward and thank you very much everyone for joining and I look forward to speaking with you again.
At this time you can disconnect.
Yeah.
Ladies and gentlemen, thank you for your participation. This concludes today's event you may disconnect. Your lines have log off the webcast at this time and enjoy the rest of your day.
[music].
[music].