ACADIA Pharmaceuticals Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 2, 2023

There are 14 speakers on the call.

Operator

Day, ladies and gentlemen, and welcome to Arcadia Pharmaceuticals Second Quarter 2023 Financial Results Conference Call. My name is Jada, and I will be your coordinator for today. At this time, all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call. I would now like to turn the presentation over To Jessica Tiesen, Associate Director of Investor Relations at Acadia, please proceed.

Speaker 1

Thank you. Good afternoon and thank you for joining us on today's call to discuss Acadia's Q2 2023 earnings. Joining me on the call today from Acadia are Steve Davis, our Chief Executive Officer, who will provide some opening remarks Followed by Brendan Tien, our Chief Operating Officer and Head of Commercial, who will discuss the debut launch and New Plaza execution. Doug Williamson, our Head of Research and Development will provide an update on our pipeline programs and Mark Schneier, our Chief Financial Officer We'll review the financial highlights. Steve will then provide some closing thoughts before we open the call up for your questions.

Speaker 1

In addition, Kathy Bishop, our Head of Rare Disease and External Innovation will be available for the Q and A session. We're using supplemental slides, which are available on our website's Events and Presentations section. Before proceeding, I would like to remind you that during our call today, We will be making several 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 several risks and uncertainties that may cause results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC.

Speaker 1

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.

Speaker 2

Thank you, Jess. Good afternoon, everyone, and thank you for joining us. Please turn to Slide 5. Acadia is entering a transformational as we continue to execute across all strategic priorities. First, Newplazit is an increasingly cash flow positive franchise And it's the financial foundation to our business.

Speaker 2

Our real world evidence studies, which we began rolling out at the beginning of the year, have had a positive impact on new patient starts. And despite a contracted Parkinson's disease market, NUPLAZID continues to gain market share and outpace new patient starts over other antipsychotics used off label in the PDP market. 2nd, the launch of DEVU is off to an exceptional start. We are seeing high demand and broad reach since U. S.

Speaker 2

Commercial availability on April 17. We continue to see a broad distribution of prescriptions Written across all account types, including high volume institutions and community practices in addition to centers of excellence. As Brendan will discuss further in his section, we're very pleased to be receiving highly positive caregiver feedback regarding the benefits they are seeing. In addition, we are receiving positive feedback from healthcare providers and caregivers regarding the level of support they are receiving through our Acadia Connect services And we're seeing these efforts translate into sustained demand. 3rd, last month we announced our expanded licensing agreement for trofinetide and we now have worldwide rights to the asset.

Speaker 2

The successful launch of DABU in the U. S. Underscores the opportunity we have to execute our global strategy. We expect to file a new drug submission for trofinetide in Canada in the next 18 months and we'll engage with European and Japanese regulators soon. There is a significant unmet medical need worldwide and no approved treatment for Rett syndrome outside of the United States.

Speaker 2

Incidents rates around the world are similar to those in the U. S. We estimate prevalence in Europe and UK combined to be Between 9,014,000 patients based on birth rates, mortality rates and other data, we expect the prevalence in Japan to be between 23,000 patients. 4th, we have multiple late stage programs with near term milestones including our Phase 3 ADVANCE 2 study of pimavanserin in negative symptoms of schizophrenia where we have now completed enrollment and expect top line results in the Q1 of 2024. We have a Phase 2 study of ACP-two zero four in Alzheimer's disease psychosis that's expected to begin in the Q4.

Speaker 2

Later in his section, Doug will discuss more about how that study will roll seamlessly into 2 Phase 3 studies, all three of which could potentially support an NDA submission. And HCP-one hundred and one is also expected to start a Phase 3 trial in Prader Willi syndrome in the Q4 of this year. 5th, we have a deep early stage portfolio that includes disclosed and undisclosed programs focused on neuropsychiatric and rare disorders And we remain active in business development to further expand our portfolio. As an important side note, Through the success of our debut of New Plazit franchises, our business has now reached cash flow neutrality. Let's turn to New Plazit on Slide 6.

Speaker 2

The New Placid franchise has been cash flow positive going back to 2019 and we've generated increasing cash flow from this franchise each year Since then by focusing on both top and bottom line inclusive of reducing expenses by over $100,000,000 when comparing 2021 results to our expectations for 2023. Our 2nd quarter performance of $142,000,000 in net sales was driven by an increase in new patient starts across Both office based and long term care channels with particularly strong performance in LTC. As we've laid out previously, there are two dynamics, which we believe can contribute to top line growth for our NUPLAZID franchise. 1 is the awareness and understanding by healthcare professionals Of the 3 real world studies that demonstrate the benefits of pimavanserin compared to off label atypical antipsychotics. As Brendan will elaborate further in his section, it's clear that these studies are gaining traction as evidenced by an increase in our market share of new to therapy patients for PDP.

Speaker 2

And second is our ability to continue to grow this year despite no significant improvements in Parkinson's Disease Market Dynamics. Let's turn to Slide 7 to discuss our pipeline highlights. Here we have a big picture overview of our 2 commercial And numerous early stage and late stage pipeline programs. Each of these contribute to our leadership in the development and commercialization of new medicines for central nervous system disease and shape our long term growth opportunities. We have Phase 3 programs underway in both negative sentences schizophrenia and Prader Willi syndrome.

Speaker 2

We also have a Phase twothree program quickly getting underway in Alzheimer's disease psychosis. And behind that, we have a rich pipeline of early stage disclosed and undisclosed programs that position us for long term growth. I'll now turn it over to Brendan to provide additional insights on our debut launch

Speaker 3

Thank you, Steve. Let me provide commentary on both of our commercial franchises, Debut and New Placid, each of which are performing exceptionally well. Let's start with Debut on Slide 9. We're excited to report that our debut launch continues to exceed our expectations. Before I get into important metrics today, I'd like to first describe the most important elements of this launch illustrated through the caregiver testimonials you see on this slide Regarding day to day improvements in real world use of DABU that these families are sharing with us.

Speaker 3

Just 15 weeks into the launch, Hearing these important examples about the tangible impact DABU is having on patients and families makes the value of this first Every treatment for Rett syndrome all the more meaningful. A few examples of benefits families are describing include Improvement in speech or speaking for the first time in years, broadening vocabulary and improved engagement in conversations. We also hear regular feedback about increased alertness such as the testimonials on this slide in which patients are able to better follow conversations Or complete activities that were previously unable to complete and decreased hand wringing and stereotypies. These proof points all speak to the promise of treatment with DaeVu and we'll continue to monitor and share those experiences as patients continue treatment. Let's now turn to prescriber metrics on Slide 10.

Speaker 3

I'd first like to speak to the significant breadth of demand we're seeing from prescribers. To date, well over 400 prescribers have written prescriptions for DABU. This demand is coming from all sectors, Centers of Excellence, High Volume Institutions and Community Practices. We received prescriptions from all 18 of the designated centers of Within the 1st 5 weeks post product availability. In addition to the broad distribution of prescriptions across account types, We're seeing enrollment forms from every region of the country and from each of our 36 territories.

Speaker 3

We're also seeing a significant number of prescribers who have written more than one prescription, pointing to not only encouraging breadth, but also increasing depth of prescribing at this point of launch. While we're pleased with both the breadth and depth of prescribing, there is still significant opportunity to penetrate the broader Rett syndrome market. With respect to advancing these prescriptions to paid therapy, to date about 7 out of 10 written prescriptions from the Q2 have converted And we expect the remainder to convert in the weeks ahead. The rate of conversion to paid scripts continues to improve monthly. In terms of process, the vast majority of centers are treating patients as they come to see them during planned Rett Syndrome Clinic days.

Speaker 3

Some centers have increased a number of reticulate days to accommodate patients and families. Looking at the mix of Patients early on, we are seeing characteristics such as weight, age and gender that are consistent with the broad label that we have and the demographics

Speaker 4

of the

Speaker 3

Reb community, including a meaningful number of male patients and patients above the age of 20. We're pleased to see a high degree of titration to help patients reach their optimal dose. While many of the patients who started treatment early Post launch are now reaching their most appropriate dose. More recently added patients will continue to titrate up from their starting point. Overall, we are very encouraged by what we're seeing at this stage of launch given our broad label.

Speaker 3

Let's discuss our patient support services next On Slide 11, we continue to be very proactive in providing a wide range of support services to HCPs and caregivers With a special emphasis on educating about the benefits of DABU and providing strategies for our GI management plan. Our One Acadia team has received excellent feedback from both the medical community and from caregivers, underscoring the benefit of our programs. Let me double click on this briefly. As a reminder, we have fully staffed teams of nurse care coordinators at our hub as well as family access managers Who are paired with each patient and caregiver from the moment the prescription is written. Our field based family access managers or FAMs Also reach out proactively to the prescribing physicians to develop strong relationships with office staff leading to faster prior authorizations, Pull through and approvals.

Speaker 3

Our sales team is staffed with rare disease experts who are highly engaged with the Rett Centers of Excellence, High volume institutions as well as the smaller community practices. They are educating on the DABU package label and clinical program as well as our support services to ensure that all practices are well supported. Our field based rare disease medical science liaisons provide Timely insights based on healthcare provider requests for further clinical information as they start treating patients with DABU. Overall, our One Acadia approach to supporting the Rett community has been instrumental to our early success. Let's discuss access dynamics on Slide 12.

Speaker 3

Since commercial launch, coverage written coverage policies for DABU have At this stage, payers have adopted formal policies covering approximately 1 third of rent lives. This written policy process has progressed somewhat faster than we anticipated at this stage of the launch and underscores That patients that payers understand the severity of Rett syndrome, the impact it has on patients and their families, As well as the clinical evidence that supports DABEU's approval. As we projected, Medicaid makes up about 60% of coverage With commercial plans covering about an additional 25%, the rest of the mix is Medicare and other federal programs. For those 2 thirds of patients who have payers that have not yet adopted a formal policy, DayView prescriptions are fulfilled through medical exception or letters of medical necessity. Looking at prescription reauthorizations, these are generally consistent with our expectations and reflective of what has been seen for other rare disease specialty products.

Speaker 3

Most reauthorizations are at 6 or 12 months with some 3 months then annually thereafter. Let's now turn to New Placid on Slide 13. As Steve noted, the New Placid franchise is significantly cash flow positive and Off label atypical antipsychotics in a contracted overall Parkinson's disease market. Driven by increased PDP new patient starts, our net product sales of DUPLAZID in the Q2 were $142,000,000 up 6% year over year. We began our broad educational campaign leveraging newly available real world evidence studies at the beginning of the year And are pleased to see these efforts beginning to drive both NUPLAZID brand preference and most importantly, an increase in new patient starts Across both the community and long term care segments of our business.

Speaker 3

Since the beginning of the pandemic, The overall Parkinson's disease market has contracted significantly. Looking at carbidopalevodopa prescriptions over the first half of 2023 versus the second half of twenty twenty two, we continue to see this trend. Despite this, during the same timeframe, NUPLAZID's performance has continued to run against the current and we have grown new patient starts significantly. As you can see on this slide, in the office based channel during this timeframe, we've grown new patient starts 13%, while all other PDP products have declined 3%. Turning to the LTC channel where we're seeing improvement in new patient admissions, NUPLAZID has substantially outpaced the class, Growing fully 20% during this period, while all other products used to treat PDP in the long term care setting have grown just 1%.

Speaker 3

Understanding that the large majority of revenues we record during any given quarter are the result of refills by continuing patients, These significant increases in new patient starts in both market segments are encouraging. I'll now turn it over to Doug Williamson, our Head of Research and Development to provide an update on our pipeline programs starting on Slide 14.

Speaker 5

Thank you, Brendan. I'd now like to update you on the continued progress of our clinical programs, starting with pimavanserin as a potential treatment for the negative symptoms of schizophrenia on Slide 15. As Steve mentioned, We've now completed enrollment on schedule in ADVANCE-two, our second study of pimavanserin in negative symptoms of schizophrenia And are on track for high level results in the Q1 of 2024. I want to remind you of the opportunity that we're pursuing in this program. Predominant negative symptoms remain one of the largest unmet needs in schizophrenia.

Speaker 5

And as of today, there are still no approved treatments for these symptoms. Let's first understand the distinction between treating the positive and negative symptoms of schizophrenia. The positive or psychotic symptoms of schizophrenia Are characterized by hallucinations, delusions and thought disorders. They typically resolve with appropriate antipsychotic treatment over a period of weeks and often occur in discrete episodes. The negative symptoms of schizophrenia are characterized by social withdrawal, Lack of motivation and blunted affect.

Speaker 5

Negative symptoms often persist following acute episodes of psychosis And continue to worsen between episodes. These symptoms can lead to greatly diminished social functioning, Increased caregiver burden, poor occupational outcome and long term disability. Drugs that treat the positive symptoms, including drugs approved to treat schizophrenia today, typically also show a benefit on negative symptoms during the acute treatment phase, but thereafter failed to resolve the chronic persistent and significant negative symptoms affecting approximately 700,000 patients in the U. S. Our late stage adjunctive pimavanserin program is designed to treat these patients whose positive psychotic symptoms are adequately controlled, but who still suffer from persistent and uncontrolled negative symptoms Inhibiting their ability to lead a normal productive life.

Speaker 5

In order to demonstrate utility in this population And obtain an FDA approval for treatment of negative symptoms, it's necessary to study patients with predominant negative symptoms, whose positive symptoms are under control And for a sufficient period of time, usually several months. Please turn to the next slide. Let me just highlight a few key elements of our now fully enrolled Phase 3 clinical trial ADVANCE-two to treat the negative symptoms of schizophrenia. Negative symptoms of schizophrenia have proven to be an exceedingly difficult drug development challenge with multiple industry failures over several decades. Therefore, with our previous positive ADVANCE-one study of pimavanserin, we achieved something very rare in this population.

Speaker 5

In our second pivotal study ADVANCE-two, we're following the same design as our positive ADVANCE-one study with 2 key differences, both of which are aimed at improving the probability of success. First, In the ADVANCE-one trial, we studied patients on a flexible dose range of 20 milligrams to 34 milligrams. And while the primary endpoint of improvement in all patients Was met, we clearly saw that the patients on 34 milligrams had a meaningfully stronger response. So as a result, in ADVANCE-two, we're only treating patients with the 34 milligram dose,

Speaker 3

the

Speaker 5

same dose for which NUPLAZID is approved for Parkinson's patients With or without dementia. Secondly, ADVANCE-two is being conducted solely in sites outside the U. S. It's well understood in our industry as well as by the FDA that separating from placebo has become more difficult in U. S.

Speaker 5

Schizophrenia trials over the past of decades, largely because of differences in the way schizophrenia patients are treated and the way clinical trials are run here. Therefore, because we already have all the U. S. Patients we need, ADVANCE-two is being run solely outside the U. S.

Speaker 5

Again, having recently completed enrollment, we remain on track to announce top line results from this study in the Q1 of 2024. Please turn to Slide 17 to discuss our program in Prader Willi Syndrome. In early June, we announced the addition of our Phase 3 development candidate ACP-one hundred and one for the treatment of hyperphagia in Prader Willi Syndrome or PWS. ACP-one hundred and one in PWS reinforces our ongoing strategy to increase our footprint in rare disease. Prader Willi syndrome is a rare genetic neurobehavioral syndrome that affects approximately 8000 to 10000 patients in the United States And represents a significant unmet need.

Speaker 5

There are currently no therapies approved to treat the characteristic hyperphagia in patients with PWS. ACP-one hundred and one is an intranasal formulation of carbetocin, which is a synthetic analog of the naturally occurring hormone oxytocin. Oxytocin deficiency is believed to play a particularly important role in PWS, resulting in increased appetite and behavioral symptoms such as anxiousness. However, oxytocin has a very short half life, is usually administered intravenously or by I'm injection and accordingly is not a viable treatment for PWS. Carbitosin has improved drug qualities relative to oxytocin, including a much greater half life, which allows for 3 times daily dosing.

Speaker 5

It also has greater seal activity for oxytocin receptors compared to off target vasopressin receptors, Reducing the risk of anti diuretic effects such as hyponatremia. In addition, ACP-one hundred and one's intranasal administration of of carbatocin provides direct delivery of the drug to the brain and greatly reduces systemic exposure, Further reducing the potential for side effects. On this slide, we've laid out the design of a Phase 3 global multicenter Randomized double blind 12 week placebo controlled study evaluating the efficacy and safety of ACP-one hundred and one in approximately 170 prior early patients. In this study, we will evaluate 3.2 milligrams of ACP-one hundred and one Compared to placebo. The primary efficacy endpoint is improvement of hyperphagia as measured by the hyperphagia questionnaire for clinical trials or HQCT Scale.

Speaker 5

This was the same primary endpoint on which the 3.2 milligram dose group achieved statistically significant separation In the previous Phase 3 study conducted by Livo Therapeutics. Those patients who complete the study will be eligible to enroll in an open label long term extension study. I'd like to provide some additional perspective regarding the 3.2 milligram dose. Prior to Arcadia's acquisition, Livo conducted a Phase 3 multicenter, randomized, double blind, 8 week placebo controlled study evaluating 2 doses of ACP-one hundred and one, 3.2 milligrams and 9.6 milligrams versus placebo. The study was underpowered and the 9.6 milligram dose, While it demonstrated improvement compared to placebo, did not achieve statistical significance.

Speaker 5

However, Top line results showed that ACP-one hundred and one demonstrated statistically significant efficacy at the 3.2 milligram dose. With regard to safety and tolerability, 3.2 milligrams of ACP-one hundred and one had a very clean profile with no serious adverse events of concern, both in the LIBOR Phase 3 study and an open label extension study that followed. If data from this Phase 3 study is positive, We plan to submit a new drug application for the treatment of hyperphagia in PWS to the FDA. We look forward to working with the Proctor Wille community and clinical experts as we continue to advance development of this program. We know that patients and their families waiting for a treatment.

Speaker 5

On Slide 18, let's shift now to ACP-two zero four, Our next generation 5 HT2A compound, which we're developing as a potential treatment for Alzheimer's disease psychosis. ACP-two zero four continues to make excellent progress and we believe has a potentially exciting future. ACP-two zero four works primarily as an inverse agonist at the 5 HT2A receptor. Our experience with pimavanserin suggests that this mechanism is very well suited for elderly populations with multiple comorbidities and Providing antipsychotic efficacy with a highly tolerable safety profile and a low drug drug interaction liability. With ACP-two zero four, we're seeking to build on those learnings.

Speaker 5

As Steve mentioned, we have completed A comprehensive Phase 1 program for ACP-two zero four involving over 100 subjects, including both adult and elderly volunteers. This Phase 1 effort reflects our goal of characterizing ACP-two zero four as fully as possible early in development in order to accelerate late stage development. Our work completed to date supports our target product profile for 204, A profile that could represent a significant improvement over an already strong product profile for pimavanserin. Firstly, we wanted to mitigate or eliminate a QTC signal. This was an important goal as it limited the dose of pimavanserin.

Speaker 5

To date, we've seen no signals of risk of QT prolongation at planned doses in our studies with ACP-two zero four. Next, we wanted to explore doses of ACP-two zero four higher than the equivalent of 34 milligrams of pimavanserin. We believe the 30 milligram and 60 milligram doses of ACP-two zero four we are taking through to Phase 2 development represent up to 2 fold that dose. Finally, we wanted ACP-two zero four to have a faster onset of action. ACP-two zero four has a shorter half life than pimavanserin And it reaches a steady state in less than half the time, roughly 5 days compared to around 12 days.

Speaker 5

In addition, in our Phase 1 studies, ACP-two zero four demonstrated a very favorable safety and tolerability profile With a low propensity for drug drug interactions similar to pimavanserin. Please turn to Slide 19. Armed with this strong data from Phase 1, we're preparing to start our Phase 2 study of over 300 patients for ACP-two zero four in the Q4. We've designed Phase 2 so that if successful, it could be considered a pivotal registration study. As we previously described, we recently met with the FDA to get alignment on our Phase twothree development plan And be able to move seamlessly from Phase 2 into 2 Phase 3 studies.

Speaker 5

With this accelerated development plan, We can move seamlessly from Phase 2 to 2 Phase 3 studies with the same sites continuously enrolling patients. As each site completes their Phase 2 site allocation, they will move directly into enrolling patients for 1 of the Phase 3 studies. Once the full study allocation of patients for Phase 2 is complete, we will analyze and report Phase 2 results, By which time the 2 Phase 3 studies will already be underway. This plan will ultimately provide 3 potential pivotal studies for submission. Overall, we're very excited with the progress of this program and we've already begun exploring a potentially rich lifecycle plan for 204, which will comprise other indications where 5 HT2A inhibition plays a significant role.

Speaker 5

And now, I'll turn it over to Mark For a financial update on Slide 20.

Speaker 6

Thank you, Doug. Let's review our quarterly performance on Slide 21. In the Q2, we recorded $165,200,000 of total net sales. New Plaza net product sales of $142,000,000 up 6% from the Q2 of last year. Our gross And for NUPLAZID was 20.7% for the quarter.

Speaker 6

Year over year demand and selling growth were each up approximately 3% in the quarter, Driven by an increase in new patient starts across both the office based and long term care channels with particularly strong performance in long term care. Turning to DABU. Net product sales were $23,200,000 in the Q1 of commercial availability. As a reminder, DayView is sold directly to our single specialty distribution partner using a consignment model. Our revenue is recognized when customer orders are filled to the pharmacy warehouse, which is essentially right before product is shipped to the patient.

Speaker 6

Therefore, there is no in channel inventory stocking for DABUT. R and D expenses decreased to 58,800,000 in Q2 2023 from $75,600,000 in Q2 2022. The decrease was mainly due to the inclusion of Pre approval manufacturing supply expenses for trofinetide in last year's Q2. SG and A expenses increased slightly to 96 $1,000,000 in Q2 2023 from $89,900,000 in Q2 2022. The increase was driven by commercial costs associated with the Debut launch, partially offset by efficiencies in our commercial support of New Plaza.

Speaker 6

We ended the quarter with a cash balance of $375,400,000,000 compared to $416,800,000 at the end of 2022. The decrease is primarily due to the $40,000,000 milestone payment to Neuren related to debut's first commercial sale. As a reminder, our pro form a cash balance is approximately $275,000,000 after considering the $100,000,000 upfront payment Related to our expanded licensing agreement with Neuren for worldwide rights of trofinetide that we completed in July. Finally, as Steve mentioned, our existing business as a whole has now reached cash flow neutrality. Our PDP franchise has been cash flow positive going back to 2019 and we've generated increasing cash flow from this franchise each year since then by focusing on both the top and bottom line, inclusive of reducing expenses by over $100,000,000 when comparing 2021 results to the midpoint of our 2023 SG and A expense guidance range.

Speaker 6

Turning to Slide 22,

Speaker 2

We are reiterating

Speaker 6

our Q3 debut net sales guidance of $45,000,000 to $55,000,000 Our full year New Plazfit guidance also remains unchanged, with net sales expected to be in the range of $530,000,000 to $545,000,000 And gross to net expected to be in the range of 22% to 25%. On the expense side for 2023, We now expect R and D expenses to be between $335,000,000 $355,000,000 adjusted for the $100,000,000 upfront payment to Neuren that we will record as R and D expense in the Q3. We are raising our SG and A expense guidance range to $380,000,000 to $400,000,000 The increase is primarily due to an increase in operating costs as a result of favorable business performance. And now, I'd like to turn the call over to Steve for closing remarks.

Speaker 2

Thanks much, Mark. Please turn to Slide 24. I'd like to end today's prepared remarks by reiterating where I started. Acadia is entering a transformational period of growth as we continue to execute across all strategic priorities. And with that, I'll turn the call over to the operator to begin Q and A.

Speaker 7

Thank

Operator

Please stand by for your first question. Your first question comes from Tess Romero of JPM. Please go ahead.

Speaker 7

Great. Thanks so much for taking our question. Hi, Steve and team. So our question is, can you give us a sense Of what the new patient starts are looking like month to month qualitatively, any trend you'd point out? And to the extent you can provide any directional color into July that may be informing the guide that would be helpful?

Speaker 7

Thanks so much.

Speaker 2

Yes. Thanks much for the question, Jess. Brendan, you want to take that?

Speaker 3

Sure. Thanks, Jess. So I think we're focused on providing output instead of input at this point with the revenue guidance we provided for the quarter. We're doing so principally because we know there are a number of adjustments that we make from the time of a new patient start to fully realizing revenue. As you know, it's a weight based prescription.

Speaker 3

There's also titration that takes place to find that optimal dose, which isn't Always reflective of the written prescription. So rather than give sort of a single metric on patients, we believe it's more productive At this point to guide to revenue, which takes into account each of those variables for the quarter. If and when we get to metrics that we think are dependable and reliable, we'll surely help you we'll surely help out and share those when we have them. But for today, I think we've outlined the strong breadth of demand we're seeing, the number of physicians that have written As well as insights into the patient mix that we're seeing in these initial months post launch.

Speaker 7

Okay. Thank you so much for taking our question.

Operator

Thank you. One moment for your next question. Your next question comes from Charles Duncan of Cantor Fitzgerald. Please go ahead.

Speaker 8

Hey, good afternoon, Steve and team. Congrats On a great quarter and nice to see the take on debut. Lots of questions to be asked, but I'll limit Mine to just one, and that is on the negative symptoms for schizophrenia with pimavanserin I think Doug mentioned this on the call about conducting the study solely ex U. S. Can we assume that that was discussed with the agency in advance?

Speaker 8

And secondly, With regard to the predominant negative symptoms versus positive symptoms maybe in the U. S, can you help understand how that might be a little bit different or why that's a little bit different ex U. S. And just to gauge probabilities of success for that trial? Thanks.

Speaker 2

Yes, Charles, I'll take the first part of that and then I'll ask Doug to answer the second part. So in terms of running This study, ADVANCE-two entirely outside of the United States. As Doug mentioned, it's well understood in the community and certainly also At the FDA, it's just become increasingly difficult over the last few decades as Doug mentioned, to separate from placebo and it goes It's based upon some of the things that Doug referred to that we probably need to go into here. We have enough patients In the United States today. So we don't need to enroll more.

Speaker 2

In terms of the broad plan for negative Yes, we did discuss that at the early stage of development with the FDA, but we're confident that we have enough patients, enough U. S. Patients in the database today. Doug, you want to take the second part?

Speaker 5

Yes. Charles, can you clarify your second question? We were asking about the difference between positive and negative symptoms Between the U. S.

Speaker 8

And Europe? Yes. Just quickly, Doug, you mentioned that it was important to Saudi, predominant negative symptom patients. And I guess I'm wondering if you would have seen that in the States Or is there something different in the treatment paradigm ex U. S.

Speaker 8

That results in that?

Speaker 3

The clinical trial where you're essentially trying to define the treatment benefit of the product. In the real world, Physicians and families can take all of those learnings from the trial and translate those into a treatment plan that can lead to the highest long term success rate. I should say separately that payers do approve prescriptions on a monthly basis, so we don't see families ending up with large excesses Of product on hand as a function of that. And then in terms of actual titration rates, while it varies from Physician and patient, they tend to reflect the starting dose in the area of about 50% of the target dose With a scheduled titration rate or I should say titration time over a period of about 2 to 6 weeks. That obviously varies from patient to patient with their experience.

Speaker 3

And as you would expect, we would expect patients to settle in on their optimal dose Over that period of time and then create a consistent dosing schedule from there.

Speaker 6

What does that mean for pricing?

Speaker 3

Sorry, yes, good question. So Based on what we said prior to launch, the fundamentals of how we described pricing for DayView remain largely the same. Many patients are titrating as we said. The average weight is perhaps slightly higher than expected because of our broad label and a meaningful number of patients over the age of 20. But other than that, the elements of both titration, dosing and patient mix support our expectations for a net realized price.

Speaker 2

Thanks.

Operator

Thank you. One minute for our next question. Our next question comes from Gregory Renza of RBC Capital Markets. Please go ahead.

Speaker 9

Hey, good afternoon, Steve And team, congrats again on the progress, and thanks for taking my question. I will keep it to 1 and maybe just pivoting back to Negative symptom schizophrenia. For Doug, certainly helpful to hear about the unmet need and characterizing the population there. But maybe, Steve, as you get closer to the readout, it would be great to just hear a little bit about that commercial opportunity, maybe how You're thinking about leveraging the existing infrastructure, what that would look like, especially as you direct New Plaza now and the base business So to leverage and cash flow positivity, any additional color there on what the opportunity looks like pending positive readout would be great. Thanks so much.

Speaker 2

Yes. Thanks so much, Greg. I'll start, Brendan feel free to chime in with any additional color you'd like to add. So about 700,000 patients in the United States have what Doug as Doug described these prevalent Negative symptoms that continue on despite the fact that they've got positive symptoms under control and have already received any Many times, transitory benefit from getting that under control. So it's a sizable population.

Speaker 2

It's about 5 times the size of Parkinson's disease psychosis. It is a very significant unmet need and there are no drugs approved to treat the negative symptoms of schizophrenia. So when we think about the pricing and penetrating that market, We do not anticipate any difference on pricing in negative symptoms than where we're priced currently to treat Parkinson's disease psychosis, again, the needs are very similar, no drug approved, significant, unmet need. So, when we think about how to leverage the capabilities we have in place today, Obviously, with NUPLAZID and PDP, we have a drug that treats psychiatric symptoms that are predominantly Written by neurologists. So we have a strong franchise both in neurology and psychiatry.

Speaker 2

Negative symptoms of schizophrenia are treated predominantly by psychiatrists. So we would anticipate having an expansion of our field force To cover that much broader footprint, we would anticipate that it would Again, being expansion, not a separate sales force that we would stand up, we would expand the force that we have to cover the same Territories, territories that have to be slightly different size. Today with neuropsychiatric drugs, The franchises that we stand up are dramatically smaller than what we did in the industry a few decades ago. We think it's all very manageable and of course there's an opportunity to significantly leverage all of the other components of our commercial Franchise as we move into negative symptoms schizophrenia. So I think we're very, very well positioned To capitalize on a potential approval here and we're very excited about it.

Speaker 2

Brendan, anything you'd like to add?

Speaker 3

Yes. I completely agree. I was just going to reinforce that final point. We have we are foundational in the CNS space and we have a lot of internal capabilities That are leverageable across indications. So beyond the addressable physician population, which we would Augment our current field footprint to support.

Speaker 3

We have lots of capabilities internally, whether those are patient support services, Account management or our marketing leadership team, we're in good shape.

Speaker 2

Greg, I'm sorry, just one other Component that I think is just important to remind everyone of. As Doug mentioned, the population we're seeking to treat is not First line therapy for schizophrenia patients. For those patients, particularly if they're focused on the positive symptoms, there are And more than a dozen approved drugs that are now generic, they're relatively inexpensive. So we are not trying to displace those drugs. We would be adding on top of those drugs as adjunctive therapy to treat the persistent negative symptoms.

Speaker 2

So it's a little from a pricing perspective, it's a little bit different dynamics than the way we would think about the market if we were seeking to treat positive symptoms It's first line therapy.

Speaker 9

That's great, Steve. Thanks so much. Appreciate it.

Operator

Thank you. One moment for our next question. Your next question comes from Tazeen Ahmad of BofA. Please go ahead. Hi, thanks so much for taking my question.

Operator

Maybe to

Speaker 10

go back to the topic of DABU, as it relates to managing the initial signs of diarrhea, How have doctors found it to be the best way to go about it? And are they made aware that a patient is having Severe diarrhea right away or how does that communication work to get that treatment started? Thanks.

Speaker 3

Yes. Thanks so much, Tazeen. Brendan? Sure. Tazeen, thanks so much for the question.

Speaker 3

I'll go back to all of the Preparation work we did as a function of what we learned from Phase 3. So the Phase 3 study gave us a pretty clear Image of the product profile for DAVEU. As a function of that, you've seen us with GI Management Guidelines that have been written, we have a hub that educates all patients and families in advance of starting treatment. We do the same with HCPs and we're grateful that the label for DABU also includes Information about discontinuing anti constipation medicines, so you can prepare the patient for the best treatment journey ahead. In terms of how the families interact both with our family access managers and their treating physicians, For sure, as they run into any issues that they might have with tolerability, they are alerting their healthcare professionals and they're looking for Guidance on best ways to manage that.

Speaker 3

I think as I said, we're pleased with what we've seen in terms of both titration And persistency, I think those are intertwined, a thoughtful approach to finding the optimal dose, Constant interaction, I would say between families and their providers to talk about that treatment journey And then choosing the appropriate adjustments to get to the best dose for the individual patient.

Speaker 10

Thanks, Brendon. You guys felt comfortable providing a range for 3Q sales already For debut, is that because the initial management of the diarrhea symptoms is pretty similar among all patients and you can more accurately predict what patients are

Speaker 2

Tazeen, the reason we gave Q3 guidance is we felt like We have a good handle on exactly what we're seeing overall, and we felt like it was more productive and more useful to you and everyone else that's On this call to get the output as opposed to various inputs and hopefully people get to the right conclusion. So that was the reason for guiding on Q3. As it relates to persistence and continuation of therapy, I would just simply repeat what we said earlier and that is, we're very encouraged by what we're seeing. It's still very early and we don't have perfect line of sight on these things once a patient starts therapy, but we have good access to information particularly through our FAM And what we're hearing, we're very, very encouraged by.

Operator

Okay. Thanks, Steve. Thank you. One moment for our next question. Your next question comes from Samant Kulkarni of Canaccord Genuity.

Operator

Please go ahead.

Speaker 4

Good afternoon. Thanks for taking our question. Could you comment on what the specific primary endpoint you might be using will be in the Phase II and III trials for V204 for Alzheimer's disease psychosis and how that compares to the prior study for pimavanserin in DRP?

Speaker 2

Yes. Thanks so much for the question. Doug, you want to take that?

Speaker 5

Yes. We'll be using the same primary outcome measure, The SAPS

Speaker 11

HD. Thanks.

Operator

Thank you. One moment for our next question. The next question comes from Jason Butler of JMP. Please go ahead.

Speaker 4

Hey, thanks for I'll jump in with a follow-up there on the ACP-two zero four Phase twothree trial design. If you're using the same endpoint, is the 30% improvement in symptoms threshold that you use for responders still a relevant Marker for clinical significance and what drove the decision to go for a 6 week endpoint given that You saw improving efficacy through at least 8 weeks in the run-in and the last Phase 3 trial. Thanks.

Speaker 2

Yes. Doug, you want to take that? Sure.

Speaker 5

I mean, the 30% improvement is Generally kind of regarded as a clinically significant change, so we're sticking with that. And even though we're seeing Even though you may see continued improvement past 6 weeks, when we looked at the existing data we had for pimavanserin, we decided 6 weeks was the optimal treatment period.

Speaker 4

Great. Thank you.

Operator

Thank you. One moment for your next question. Your next question comes from Yatin Sunaha from Guggenheim.

Speaker 4

Hey guys, thanks for taking the question. Another one on 204. Could you just comment How consistent was the PK in younger healthy volunteer versus the elderly? And then with regard to the studies that you are running, I mean, Are these patients going to roll over to the long term safety study because that generally tends to be a gating factor from an NDA perspective for some of these new indications? Thanks.

Speaker 2

Doug, two questions.

Speaker 5

Yes. I'll have to come back to you on the second one because I couldn't hear it properly. But so How consistent was the PK findings in the young adults versus elderly? It was consistent with many other studies of comparing young adults with elderly. We did see Slightly higher exposures in the elderly population, but we've chosen our doses Based on that, based on the elderly volunteers that we study, and can you repeat the second part of the question again?

Speaker 2

Yes. The second question was, will patients roll over in dalpivotalin label extension? And the answer is yes. Yes.

Speaker 4

Thank you.

Operator

Thank you. One moment for your next question. Your next Question comes from Ami Fadia of Needham and Company. Please go ahead.

Speaker 11

Hi, good evening. Thanks for taking my question. Going back to the negative symptoms of schizophrenia study. Can you talk to the subset analysis of the ADVANCE-one study between the U. S.

Speaker 11

And ex U. S. Patient population and talk about the Sort of the magnitude of the text size you saw in the patients out of Europe in the 34 milligram dose. And if you could sort of just remind us if you disclosed any details around powering of your ADVANCE-two study? Thank you.

Speaker 2

I'll maybe start at our high level and Doug feel free to chime in. So As Doug mentioned, what we saw in the ADVANCE-one studies, we did see a differential between U. S. Sites and ex U. S.

Speaker 2

Sites. It's Very consistent. We see this all the time in schizophrenia. We also saw it, by the way, when we did an earlier study To treat difficult to treat patients with positive and negative symptoms, we saw a similar pattern there Higher response outside of the U. S.

Speaker 2

As opposed to U. S. So it's very consistent result that we see. And as Doug mentioned, The results were in the 34 milligram dose, I think you were asking about were highly improved over the total population where we allowed Those flexibility down to 20 milligrams and with a 34 milligram dose we saw an effect size of 0.34. Doug, anything else you want to add?

Speaker 5

No, I mean, I think the effect size was consistent across regions. It was really the separation from placebo that differed.

Operator

Thank you. One moment for our next question. Your next question comes from Jay Olson of Oppenheimer. Please go ahead.

Speaker 12

Hey, thank you for taking the question. We're curious about ACP-one hundred and one. Can you describe the size of the commercial opportunity in Prader Willi syndrome? And since that's been a notoriously challenging therapeutic area, what learnings can you take away from previous studies that should help you increase the Probability of success. Thank you.

Speaker 2

Yes. Thanks, Mitch. Brendan, do you want to take that?

Speaker 3

Yes. Sure. Thanks for the question. As we, I think noted in a prior call, there is a higher prevalent population for Prader Willi. I would put the unmet medical need similar to what we've seen in the Rett syndrome community.

Speaker 3

There are no approved treatments. This is a life changing type of opportunity. For us, that's the way we would Kind of approach 101 in BWS.

Speaker 12

And learning from previous studies will help you increase?

Speaker 13

Yes. I can help out there. So I think One advantage we have is we do have access to the full data and the learnings from Livo's previous Phase 3 study that they conducted with This exact product intranasal carbidocin. And we've very We've gone over all that data in great detail which has helped us plan our Phase 3 clinical trial that we're going to be starting in the Q4 here. We'll be talking exactly about the trial design, I think as we start the trial.

Speaker 13

But we Based on that data, I think made some tweaks to the inclusion exclusion criteria. And as we talked about previously, this is a 12 week Trial we made a little bit longer because we do see greater benefit, the longer we treat, with that previous experience. You're exactly right. The Prader Willi field is quite experienced in clinical trials. There's been quite a work done there.

Speaker 13

Unfortunately, no approved treatments to date. So, I think some disappointments in the field. But that's also an advantage because we do have very And they're able to use some of those learnings, I think also in the execution of the trial. So we're working with experienced sites and a CRO that's experienced in Prairie du Willi trials to as you mentioned tap into that previous experience.

Speaker 12

Great. Thank you very much.

Operator

Thank you. One moment for your next question. Your next question comes from Danielle Brill of Raymond James. Please go ahead.

Speaker 3

Hey guys, this is Alex on for Danielle. Thanks for taking our question. Just a question on DABU. So So I know you said the reauthorization requirements were within expectations, but to us when reading some of the enacted payer policies, It seems that the reauthorization requirements are on the more stringent side requiring documented measured treatment benefit, not just Physician attestation. So we were just curious how you were thinking on a quantitative basis roughly what percentage of patients made fall off debut therapy, Whether by reauthorization rejections at the 6 month time point or discontinuations throughout the 1st 6 months to 1 year.

Speaker 3

Thanks so much.

Speaker 2

Brendan, do you want to take that?

Speaker 3

Yes, thanks. Appreciate the question. I would characterize what we've seen among payers to date as Seeing them take a thoughtful approach to DayView coverage and looking to ensure appropriate use. And so we work very closely with them On a regular basis, to look at their coverage policies and make sure that these are elements that payers and families are going to be able To me to continue to not only to get approved, but to stay on therapy. So we believe by and large, when we look at Paid claims and the published coverage criteria, the payers are recognizing the challenges, the unmet needs that are seen in Rett syndrome And are valuing the clinical benefit that DayView is bringing to address those patients.

Operator

Thank you. One moment for your next question. We do only have time for one more question. So please stand by for that. Your last question comes from Ritu Baralff of T.

Operator

B. Cowen. Please go ahead.

Speaker 11

Hi, guys. This is Athena on for Ritu. Thanks for taking the question. Another one on DABUT. How long do caregivers give

Speaker 2

David, do you want to speak to this?

Speaker 3

Yes, sure Athena. Thanks for the question. I think we've been encouraged by guidance that The Rett community, the treaters are giving to caregivers to set appropriate expectations. Obviously, the LAVENDER study is 12 weeks in duration, which gives people some sense for what they should be looking forward to see the initial signs of Improvement and Debut. But many physicians are saying, look, this is a lifelong illness that we're dealing with here.

Speaker 3

It's the first ever drug approved, 12 weeks worth of treatment is a relatively short treatment course and are encouraging families And caregivers to look out to 6 months to make sure that they're seeing the benefits that they would expect to see. Now with that said, our in our prepared remarks, We're already very encouraged to hear caregivers note differences day to day improvements That are occurring well before that time period. So I think it's a balance of those 2, but at least the guidance given is to give the drug A thoughtful period of time to work.

Operator

Thank you. Thank you. Thank you. Mr. Davis, please proceed to closing remarks.

Speaker 2

Great. Thank you, operator. Thanks again everyone for joining us today. We look forward to updating you on our progress next quarter.

Operator

Thank you for your participation in today's conference call. That concludes this presentation. You may now disconnect. Good

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Earnings Conference Call
ACADIA Pharmaceuticals Q2 2023
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