ACADIA Pharmaceuticals Inc. (ACAD) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals First Quarter 2021 Financial Results Conference Call. My name is Mary, 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. If at any time during the call, you require assistance, please followed by Zero and a coordinator will be will be happy to assist you. I would now like to turn the presentation over to Mark Johnson, Vice President of Investor Relations at ACADIA. Please proceed. Mark Johnson: Thank you, Mary. Good afternoon, and thank you for joining us on today's call to discuss ACADIA's first quarter 2021 financial results. Joining me on the call today from ACADIA are Steve Davis, our Chief Executive Officer; who will provide an overview of our Q1 2021 financial performance and a review of our business operations. Also joining us on today's call is Amanda Morgan, our Chief Revenue and Customer Officer; and Charmaine Lykins, Global Product Planning and Chief Marketing Officer, who will provide updates on our commercial performance. Dr. Serge Stankovic, our President, will discuss our pipeline progress and our Chief Financial Officer, Elena Ridloff, will then discuss our financial results in more detail before turning it back to Steve for final remarks and opening the call up for your questions. I would also like to point out that we are using supplement slides, which are available on the Events and Presentations section of our website. Before we proceed, I would first like to remind you that during our call today, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events or future results, are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve. Stephen Davis: Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Please turn to Slide 4. We remain steadfast in our commitment to our mission into executing on our 3 strategic pillars to create long-term growth. First, driving continued growth in NUPLAZID for patients with Parkinson's disease psychosis, or PDP. second, delivering on the dementia-related psychosis or DRP, opportunity. And third, developing the next wave of break-through therapies by advancing our development pipeline and acquiring new assets. Let's review our Q1 results in greater detail, starting on Slide 5. For the first quarter of 2021, NUPLAZID achieved $106.6 million in net sales. This represents an 18% year-over-year increase, driven by strong year-over-year performance in the office-based setting. During the first quarter, sales of NUPLAZID were negatively impacted by the post-holiday spike of COVID-19 and ongoing conditions relating to the pandemic. As we look ahead, we observed improvements related to the pandemic in the latter part of the first quarter and into the beginning of the second quarter. And based on these indicators, we are projecting continued growth throughout the year and reiterating our net sales guidance for fiscal year 2021 at $510 million to $550 million. Let's move to an update on our DRP program on Slide 6. We remain committed to bringing pimavanserin to the DRP patient community. In April, we announced that the FDA issued a complete response later, or CRL, regarding our supplemental new drug application for dementia-related psychosis. We look forward to a constructive dialogue with the FDA in our Top A meeting, where we plan to discuss the CRL and the potential path, approval path for pimvanserin. We are prudently planning and preparing for multiple scenarios based on what we learned at this meeting. Amanda Morgan: Thank you, Steve. Today, we'd like to review our first quarter performance and our long-term expectations for NUPLAZID in Parkinson's disease psychosis. The strong base of PDP patients continuing on NUPLAZID, improvements in the conditions related to the pandemic and our focus on growth initiatives, will enable us to deliver double-digit revenue growth in 2021. Please turn to Slide 9. NUPLAZID continue to transform the standard of care for patients with PEP. In the first quarter, we delivered net sales of $106.6 million, representing an 18% year-over-year increase. Performance in the quarter was driven largely by new patient starts and growth of our subscriber base within the office-based channel. As Steve mentioned, NUPLAZID performance in Q1 was negatively impacted as a result of the post holiday spikes in COVID-19 cases, resulting in a decline in patient office visits. However, as we exited the quarter, we observed overall visits returning to traditional levels, including an increase in face-to-face interactions, all of which are related to improving conditions of the pandemic. and an increase in vaccination rates. While continuing patients on NUPLAZID remained high, we face a unique temporal dynamic in the first quarter as payers reverted to pre-pandemic guidance of 30 day refills versus the ability to obtain a 90-day fill. Stephen Davis: Charmaine, I believe you are on mute. Charmaine Lykins: Thank you. Thanks, Amanda. Please turn to Slide 11. We've tailored our marketing channel mix to maximize response to the underlying market conditions as we begin to emerge from the pandemic. We continue to amplify our health care professional and consumer campaigns, both digitally and in person. And we expect that these initiatives will drive growth throughout the remainder of the year. This means strong engagement with virtual CME and speaker programs and leveraging virtual promotional booths at several key medical congresses across the country. Srdjan Stankovic: Thank you, Charmaine. Good afternoon, everyone. Please turn to Slide 13. In regards to DRP, our team has been diligently preparing a briefing package, which outlines our perspective on SNDA, the positive Phase III HARMONY study results and provides a template for discussion and future interactions with the FDA. This document is almost complete now and will be included in the request for a Type A meeting. Our objectives for the Type A meeting are to discuss the CRL and identify a mutually agreeable path towards approval with the FDA. We are confident in the science, the data and benefit risk profile of pimavanserin in DRP, described in our sNDA and are committed to active FDA approval and make NUPLAZID available to patients, caregivers and their families who suffer from DRP. As we've said before, we believe that the prospectively agreed development program and the design of the pivotal HARMONY study is scientifically the most appropriate way to evaluate efficacy and safety of pimavanserin as a treatment for DRP. Our position is informed by the following: The pivotal HARMONY study met its prespecified primary and key secondary endpoints, with highly statistically significant and clinically meaningful results. Consistent with these results, in the double-blind portion of the study, pimavanserin demonstrated meaningful separation from placebo on the measures of severity of psychotic symptoms such as hallucinations and delusions, or on a global clinical assessment. And all this with a notable effect size. Furthermore, in the open-label portion of the study, over 60% of patients met very rigorous treatment response criteria, while on pimavanserin demonstrated meaningful and sustained reduction in the symptoms of psychosis, consistent across patient subgroups. The consistency of the above described results in our pivotal HARMONY study further informs our view on the benefit-risk profile of pimavanserin for DRP. We would like to better understand the division's position in hopes that we can align on an efficient plan towards resubmission. Elena Ridloff: Thank you, Serge. Today, I'll discuss our first quarter 2021 results and our updated 2021 financial outlook. Please turn to Slide 20. In the first quarter of 2021, we recorded $106.6 million in net sales, an increase of approximately 18% compared to $90.1 million of net sales in Q1 of 2020. This was driven by 4% volume growth year-over-year. Importantly, this comparison is challenging because last year's first quarter was pre-pandemic. Despite this, we delivered increased demand year-over-year. Our performance was led by the office-based channel, with year-over-year growth impacted by fewer patient office visits and the decline in average bottles per patient in the quarter, as Amanda described. In the long-term care channel, demand declined year-over-year, driven by a further decline in census levels in LTC facilities in the first quarter of 2021, following several months of stabilization in the second half of last year. However, we started to see patient office visits in office-based channel increase and census levels and our demand improved in LPC as we exited the first quarter and into April. The gross to net adjustment for Q1 2021 was 22.3 million -- 2.3%. As a reminder, gross-to-net is typically highest in the first quarter due to the annual reset of the donut hole for Medicare Part D patients. We saw the inventory in the channel at the end of the first quarter were slightly higher than year-end. Moving down the P&L. GAAP R&D expenses decreased to $57 million in the quarter compared to $72.6 million in Q1 2020. GAAP SG&A expenses increased to $111.7 million in the first quarter, from $102 million in the first quarter of last year. Noncash, stock-based compensation expense during the quarter was $13.2 million compared to $22.3 million for the feed period in 2020. Our cash balance at the end of the quarter was $577.8 million. Please turn to Slide 21. For the full year 2021, we are reiterating our new placid revenue guidance of $510 million to $550 million. Given the impact of the pandemic we observed in the first quarter, we could land in the lower end of the guidance range. Just where we finish will be a function of the timing and pace of recovery in face-to-face field interactions, patient office visits and LTC new admissions. On the expense side for 2021, we now expect GAAP R&D to be between $280 million and $300 million for the full year, from a previous range of $300 million to $320 million. This reflects some optimization in our development expenses and includes approximately $25 million in stock-based compensation expense. We are reducing our SG&A guidance to reflect the reduction of expenses associated with the delay in a potential DRP launch. We now expect GAAP SG&A to be between $385 million and $415 million for the full year from a previous range of $560 million to $590 million. The revised guidance range includes approximately $50 million in stock-based compensation expense. And with that, I'll turn the call back over to Steve. Stephen Davis: Thank you, Elena. Please turn to Slide 23. In closing, we are confident in our long-term commercial outlook for DRP. We are committed to bringing pimavanserin to patients and caregivers struggling with DRP, and we are focused on investing in our clinical programs and business development opportunities. I would like to thank our employees for their unwavering passions to our mission to elevate life. I'll now open up the call for questions. Operator? Operator: . Your first question comes from the line of Ritu Baral from Cowen. Ritu Baral: I wanted to ask about the path forward for DRP. I guess first, a very quick housekeeping question. Have you formally requested the Type A meeting at this point? And then two, the broader question here is, I guess, if the main issue has to do with the 011 study and potentially records kept around that, is there any way to sort of address those record-keeping quality issues with those clinical trial records that are worth discussing at the Type A or beyond? Stephen Davis: Yes. Thanks much for the question, Ritu. I'm going to answer the first part of your question. I'll ask Serge to answer the second part. So the answer is, we have not yet submitted the request. So in order to request a Type A meeting, you first have to prepare a briefing document, which outlines your position and provides a template for discussion. And it's important to get this right and lay the right foundation and template for the benefit of future interactions. We believe we have very strong arguments to discuss with the FDA and want to be diligent in preparation before submitting the formal request. And this includes input from expert counsel and outside advisers. The document is also -- is almost complete and will be included in our official request for the Type A meeting again very soon. And as a reminder, the Type A meeting will be scheduled by the FDA within 30 days of our request. Serge, do you want to take the second part of Ritu's question? Srdjan Stankovic: Yes. Ritu, I'll just reiterate first what Steve mentioned earlier, and that is that our principal objective in this meeting is really to understand the concerns and issues raised by the division in the Complete Response Letter. Considering that a part of those issues were related to the study of '19 that you mentioned, we certainly, in our briefing document, will be addressing all of the issues point by point that were raised in the complete response letter, in a detailed and extensive manner, in a hope that we can provide additional information that will be helpful to the division to understand the context of those concerns and issues and to address that. Operator: Next question comes from the line of Charles Duncan from Cantor Fitzgerald. Charles Duncan: Yes. Good quarter on the top line. I had a follow-up question on the DRP indication. I guess I'm wondering if maybe this is jumping the gun, but are you willing to pursue a dispute resolution? Or do you need to learn more information before you determine strategy? And could you imagine refiling with a more limited label based on some diagnostic criteria? Stephen Davis: Yes. Thanks much for the question, Charles. So the -- if following the Type A meeting, we can't agree on the appropriate path towards resubmission. There is baked into the FDA process, an official appeal process that could be pursued. At this time, we don't think it's productive to speculate on that appeal process until we actually had the meeting with FDA and have a sensible -- and get our information. So That's the next step, we'll be focused on that. And I'm sorry, Charles, there was the second part of your question, it's escaping me now. Charles Duncan: Yes, that makes sense. Steve, regarding a limited label based on some diagnostic criteria. Stephen Davis: Yes. No, I remember now. I, look, there too, we need to have this Type A meeting. We need to learn what we can learn there. And I don't want to speculate about potential avenues beyond the Type A meeting. We've obviously done a lot of scenario planning, but we just need to have the meeting first. Operator: Next question comes from the line of Cory Kasimov from JPMorgan. Unidentified Analyst: This is Turner on for Cory. Just curious, what are your latest thoughts on your European strategy? Does the DRP delay in the U.S. impact how you think about Europe? And is it possible to potentially take this package to European regulators about the PDP? Stephen Davis: Yes. Thanks much for the question. So as we previously indicated, we've frame-shifted our European filing strategy. And this is really just a reflection of the very, very dramatic difference in pricing that drugs like this. This is not unique to -- drug like this in Europe versus in the United States. So in other words, the vast majority of the value pie for a drug like this is in the United States. And because the pricing is so dramatically different, we felt it was important to play out the work that we're doing in other indications in attempts to try to get multiple indications into a common senior data exclusivity. So we don’t have anything more to say on that at this juncture. We'll continue to assess as we go forward. But U.S. There is outside of the U.S., and we certainly want to make sure we secure every bit of value with pimavanserin, but at this juncture, we don't have anything more to say about the timing of filing in other jurisdictions. Operator: Next question comes from the line of Jason Butler from JMP Securities. Jason Butler: Just had one on the -- thinking about PDP opportunity moving forward. I guess just looking a little into the future midterm as we exit the COVID headwinds. How do you see the opportunity for growth in the office space channel versus long-term care, which one has the larger opportunities for growth? And if you could just remind us of your views on the market size in each channel, how deeply penetrated in each you are today in that context? Stephen Davis: Yes. Thanks much for the question. Charmaine, I'm going to ask you to answer that. Charmaine Lykins: Yes, sure. Thanks, Steve. Well, first of all, when you look overall about our opportunity for growth in PDP, we're committed to accelerating growth across all the channels, both office base and long-term care, and we're going to do this through several means. Namely, our commercial initiatives have demonstrated positive effects across those channels over time. And we're going to continue to provide resources to deliver information to patients and caregivers, to activate that caregiver and that patient to request NUPLAZID and also establishing NUPLAZID as the only FDA-approved treatment out there for Parkinson's disease psychosis. Beyond that, we're educating the medical community, which has an impact both in the office-based business and the long-term care setting on important data on pimavanserin and the benefits of NUPLAZID through virtual promotional booths at several congresses that we've already actually participated in and virtual speaker bureaus throughout the year. In addition to that, we've got a fully integrated consumer awareness program, which is executing the social media, both on the HCP side and on the consumer side. And we continue to see strong results coming from our digital platform, across both HCP and consumer, regardless of setting. I think I would say, overall, we continue to perform or outperform actually the market basket in long-term care, with market basket of products that we benchmark ourselves against, which I think further underscores the effectiveness of these tactics that we're executing on today. So we're very optimistic of our growth prospects, not only in the long-term care channel, but also in the office-based channels. Jason Butler: Okay. Great. Operator: Next question comes from Gregory Renza from RBC Capital Markets. Gregory Renza: Steve and team, thank you for the update. Steve, I just wanted to focus a bit on the near-term outlook for PDP. It sounds like you had an encouraging exit, first quarter metrics and the reiteration of the full year guidance. I'm just curious if you could just touch a little bit more on those factors. If I heard Elena correctly, I think you indicated that maybe a lower end of the range. So just curious if you could maybe unpack that a bit, maintaining that guidance versus perhaps narrowing that or lowering it just in light of the commentary you added? And then just lastly, related to that, just curious, to what degree, if any, was the DRP opportunity this year a potential potentiator for PDP penetration in the market? Stephen Davis: Yes. I'm going to answer the second question first, and then I'm going to ask Elena to answer the first question. So we -- from the time we've launched this drug, we've had very, very low off-label use. We can't see every bottle in all channels, but the significant majority of scripts come through our hub, and we know exactly the percent of scripts that are on label, and it's always been in the high 90% range. That hasn't deviated. So I don't see any impact on first quarter from the changes in off-label -- percent of off-label use in PDP. In addition, just as a reminder, obviously, is, our overall results in DRP were very, very compelling. And of course, the results in PDD, patients that have Parkinson's disease dementia, patients with that psychosis were also super compelling. So I just don't see any connectivity between DRP and PDP first quarter models. Lenny, you want to take the first question? Elena Ridloff: Sure. So Greg, we are confident in our guidance range. I did comment with regards to the low end of the range, just to remind you and folks that when you lose patients in the first quarter, have fewer new patient starts than expected, that has an impact on the continuing bottles for those patients through the remainder of the year. As we talked about the, in both March and April have seen improved trends in both the office-based setting and the long-term care channel, and we expect to see continued growth in both those channels. So we are confident in the guidance range that we reiterated today. Operator: Next question comes from Neena Bitritto-Garg from Citi. Neena Bitritto-Garg: So I guess just another question on kind of next steps in DRP. I guess can you elaborate a little bit more on, I guess, what's the time line to us kind of hearing the outcome of the Type A meeting? And is that something that you do plan to communicate or right after the meeting, or would you wait until after you have minutes from that meeting. Yes, if you could just talk a little bit more about that, that'd be great. Stephen Davis: Yes. Thanks, Rich, for the question. So the meeting under the FDA's structure should happen within 30 days of their request, and they usually are right at 30 days. Once we have the meeting, as we would do in most meetings of the store, whether it's in the Phase II meeting or pre-sNDA meeting or in this case, a Type A meeting following the CRL, we would typically wait until we get minutes from the meeting speaking public loan, and that's our plan in this case as well. Operator: Next question comes from Jeff Hung of Morgan Stanley. Jeff Hung: For DRP, should you go down the path of Otis, I know it's really early, but are there any precedent cases you can highlight where companies went through the appeals process and the CRL was overturned? And any similarities or differences that you would highlight from those cases to pimavanserin in DRP? Stephen Davis: Well, first, just one kind of -- just to make sure we're all level set. There's no overturning of the CRL per se, because once you get a CRL, you have to resubmit. So the question always is, what do you need to do to resubmit. And in some cases, you can resubmit without doing additional clinical work and in other cases, you need to do additional clinical work. The -- this was SNDA or supplemental new drug application. So the decision on issuing a CRL was made by the psychiatry division, and that is the division with whom we'll have the Type A meeting. And so as we -- once we've had that meeting, we'll be in a position, as I indicated earlier, to comment further about plans for it and of course, it will then inform our view of what the next steps will be. Operator: Next question comes from Salveen Richter of Goldman Sachs. Andrea Tan: This is Andrea on for Salveen. Maybe some questions on the pipeline. Serge, maybe if you could speak a bit more on the mechanism of action for ACP-044 and if there's any reason to believe the drug may be more effective in acute versus chronic pain? And as you look at those 2 opportunities, if one is more of a low-hanging fruit, and then I have a second. Srdjan Stankovic: Yes. The very interesting mechanism of action. First of all, we are particularly excited about having a non-opioid mechanism of action. This compound has ability to accelerate elimination of paroxy nitride, which is in the development of pain, it's an underlying upstream mechanism for sensitization of multiple pain mechanisms. And that's really what is particularly attractive. This is also peripherally restricted compounds. So the risks of any potential dependence, abuse liabilities is not present. So from that perspective, we are very excited about the drug. In regard to the question whether we anticipate a better benefit in the acute versus chronic pain models. So far, we have only indications we have are the -- from the preclinical data that we have. And in those mechanisms, we saw quite a bit of efficacy displayed in a variety of different pain models, single pain models, whether acute or chronic. And in some extent, we saw an efficacy that is quite on par or better with the opioid. So from that perspective, we are quite bullish in terms of our anticipation, of possible ability to demonstrate benefit both in the acute models of pain as well as chronic models. And that's why in the Phase II trial, we are pursuing both models. Obviously, looking forward to the clinical data for the confirmation. Andrea Tan: Got it. And then with your M1 PAM, if you could just speak on what -- what the status right now is that Phase I, the nature of that and when we could start to see some of the data emerge, that would be helpful. Srdjan Stankovic: Yes. As I said, we have -- we are quite progressed in the process of transitioning and continuing the Phase I work. We -- this is -- this compound already is in a Phase I. We need to continue through the -- expanding the exposures as we move forward. And that's actually the stage where we are right now, both from the perspective of providing the appropriate toxicology covering so that we can be increasing those exposures in humans, as well as doing the human work. But we are in the Phase I right now. And as we complete this work, we will be reporting, obviously, and updating you on the future plans, moving forward. Operator: The next question comes from Paul Matteis of Stifel Financial. Paul Matteis: I know there's a lot of moving parts of 1Q, and we can from an machines about changes in compliance and retail rates. I guess, I wanted to try to simplify it. Did you exit first quarter with more patients on drug than you had at the end of last year? And I guess what do you kind of see now that things are reopening in terms of the cadence of the patient at rate for the rest of the first half? Stephen Davis: Yes. Thanks, Paul for the question. Elena, you want to take that? Elena Ridloff: Yes. Thanks for the question. As we talked about ending Q1, we are -- we did see growth in both the office face setting and the long-term care channel. So we are exiting Q1 in a good place. I also just want to comment on the continuing bottles. We had strong continued bottles for the majority of our patients. There was a small portion where single-digit percentage of patients that started to receive 90-day fills, which Amanda spoke about in her prepared remarks, that historically pre-pandemic was about 5%. It grew to about 8% in the pandemic. And in Q1, we saw that reverse to 6% and now in April, it's back to 5%. So we expect, starting in Q2 to see a more normal trend as far as average bottles for continuing patients. Operator: Next question comes from Brian Miles of Jefferies. Unidentified Analyst: So maybe a few follow-ups on 0044, in acute postoperative pain. So if possible, can you speak to the PK profile, maybe its estimated half-life and onset of action? And then as a follow-up, can you outline the dosing strategy? I know there's a high and a low dose, but is this once daily or as needed? And then finally, maybe you could talk about what rescue medications are allowed and how that's going to be handled in the primary endpoint. Stephen Davis: Serge, you want to take those questions? Srdjan Stankovic: Yes. As a matter of fact, this study that we are conducting right now, one of the important questions that we want to answer is, what is the optimal dosing regimen for the drug. So we are essentially testing the same daily dose but in 2 different dosing regimens. So the trial has 3 arms, 2 active arms and 1 placebo and that's essentially one of the objectives for us because we would definitely want to better understand, both from the pharmacokinetic but also pharmacodynamic perspective behavior of the drug and potential for analgesic coverage in that respect. I'm not sure that I addressed your second -- second part of the question, if you want. Unidentified Analyst: Yes, it's about rescue medications, how they'll be handled for the primary and if they're allowed. Srdjan Stankovic: Yes, we are -- we don't go into that level of details in the protocols and all that. But obviously, the design of this trial is very, very -- it's a classical acute pain design. And of course, we do make records. There are certain medications that are prohibited, that interfere with this, but we are -- there is -- in terms of the primary measure, we are measuring pain intensity, and there are some restrictions in terms of the rescues. Operator: Next question comes from Yatin Sinha of Guggenheim. Eddie Hickman: This is Eddie on for Yatin. So on the LAVENDER study, given that the Phase II is only 6 weeks and you're upping it to 12 weeks, and in the Phase II, the drug arm was still decreasing when that study stopped, how much additional benefit do you think you can get on those clinical endpoints with that added time? And then in the Phase III, you're enrolling slightly older patients, was there any age or severity of disease-related differences in that Phase II data that led you to add older girls to the study? Srdjan Stankovic: Yes. Our view on the data and discussion with the experts that we had as well as vis-a-vis the mechanism of action of trofinetide led us to a conclusion that actually the shorter trial did not provide a full opportunity to display the benefit and the additional benefit based on the symptom, change in symptoms over time would have been potentially obtained. So therefore, we have decided to design the trial in the way how it is designed. And we do expect that the additional benefit will be verified. Of course, we did not want to go with the overly extended period for the trial, but we believe that we are at a right timing for the duration of this trial. In terms of the specific characteristics, I mean the important point with this particular patient population is that we have a patient population that is within the span of the school age, where the patients are receiving also a number of rehabilitations measures that are applied in these and that patients that are older than that may have a different disease course or maybe more stagnating from that perspective. So similarly, we did not include in this trial very young patients. We are doing that in a separate clinical trial. But for the group that is including in this trial, we do not anticipate that there will be significant variability in terms of the symptoms across the group. I mean, some variability is always present, but we do not expect it to be significant and substantive. Operator: The next question comes from Jay Olson from Oppenheimer. Jay Olson: Maybe just a follow-up on trofinetide. Can you talk about the target product profile for trofinetide. And any work that you're doing to prepare for the launch and how you're thinking about the ultimate market potential for trofinetide. Stephen Davis: Serge, do you want to take the target product profile? And Sherman, do you want to take the question regarding preparations for launch. Srdjan Stankovic: Yes. I think that the important point I would like to underscore here, talking about trofinetide is that, trofinetide targets or symptoms overhead disease, meaning multiple, as we know, multiple symptoms as we know cost deeper and symptom clusters. And that is something that is relatively unique so far from the perspective of the treatments that have been tested or applied in this patient population. As you know, we have some development programs where people were mostly targeting respiratory symptoms, others were targeting seizures and so on. So I think that's one distinguished characteristic out there at this point, at least that we are not on par of programs that are targeting a broad array of the core symptoms of rev syndrome as trofinetide. And I think that's what -- obviously, there is nothing else available for treatment, and this broad target of symptoms is certainly the most salient characteristics of trofinetide. Charmaine Lykins: And from a commercialization perspective, as we look to prepare for launch, do you see this is a rare disease. Of course, the caregiver is very, very important in a high-touch relationship with those caregivers and those patients is also going to be very important for launch. Some of the things that we're working on are strong relationships with advocacy, particularly rettsyndromefoundation.org or rhettsyndrome.org as well as looking to understand the patient journey and the diagnosis to rett initially, and then how that patient is managed throughout the course of their disease and where we might find an opportunity for trofinetide at launch, to help those patients manage their disease. So a lot of the early core foundational brand strategy types of deliverables that we're working on with an extra emphasis on the caregiver and the patient, knowing that this is a rare disease. Operator: Next question comes from Vamil Divan of Mizuho Securities. Vamil Divan: I guess this one's for Steve. I asked this question to you previously, but just curious, you've given the sort of delay here with DRP, how that may be impacting your thoughts around the overall corporate strategy? I'm sure you want to get through the type A meeting and kind of really get more clarity on the outlook there. But just as you think about business development or other steps you could take in order to diversify the story or what is has anything evolved in your thinking over the last couple of months since you first got that notification that there are some deficiencies? Any updated thoughts would be helpful. Stephen Davis: Yes. Thanks much for the question. Look, we're obviously very disappointed in having a setback here in DRP. It doesn't change the strategy. We're equally committed to capitalizing on the opportunities we have of very attractive revenue growth going forward in PDP. We're determined to meet the unmet need in DRP patients, and we will continue to have business development be a key pillar of our strategy. As it relates to business development, well, I said previously, and this continues to be the case. I just want to make sure that we iterate it, you will see more deals. Second, we have a strong foothold both in neurology and psychiatry today. We have a presence both in chronic indications with significant unmet need, as well as rare disease. As we go forward, we will likely see this shift on the types of deals that we do evolve in more neurology and rare disease and more on the specialty front. That doesn't -- just be completely clear, there's still very, very interesting opportunities in psychiatry and neurology, a very interesting opportunities in broad symptomatically chronic therapies as well as in rare disease. So you'll see things evolve in that direction. So again, business development will continue to be a very, very important part of our business. And as I've said before, you will see more deals from us. Operator: Next question comes from Dannielle Brill of Raymond James. Danielle Brill: I've got another exenatide question. Could you remind us what we should be looking for in the lavatory data set later this year, with respect to what do you consider to be a clinically meaningful outcome for the 2 co-primary behavioral endpoints, the RSTQ and the CGI. Srdjan Stankovic: Yes. It's a little bit, sort of difficult to describe that in the context of 2 co-primary measures. As you mentioned, we have red behavior or symptom questionnaire, which is a parent assessed outcome, and then clinical global assessment, which -- or improvement, which is the clinician assessment of the changes. We obviously, being a co-primary, we have to separate statistically on both of these measures in order to declare the trial positive. And I think in itself, that's a high threshold, but achievable threshold, because both of these measures separated significantly in our smaller Phase II trial. So we have a reasonable of the expectations that we will be able to replicate. These are difficult trial. I will say in absence of the substantively beneficial treatments out there, the improvements that we would see on both of these scales, even on the -- even on the lower end of the effect size would be tremendously valuable to patients and the families. And that is, although we expect to repeat relatively robust results that we have in Phase II, we would not be disappointed with a win on both primary measures or primary measures. Operator: Next question comes from David Hoang of SMBC. David Hoang: So my precedent, a couple. So first one. Have you talked to -- did you talk to a bunch of KOLs following FDA's issuance of the CRL and DRP? I just kind of wanted to get a sense of still excited to use the in DRP. Is there any conserve or hesitancy on their part? Is there a willingness to prescribe after the agency's decision? Stephen Davis: Yes. So I'll take the answer, if you want add on, please feel free to. So the answer is yes, we've continue to talk to KOLs even after the CRL is issued. I wanted to take a little bit of running start at this and describe kind of what those interactions have been like from the time we initially announced the results of the HARMONY study. So when we announced those results, we convened a panel of 15 KOLs around the time to see that meeting and went through all of the data with them, and they were extraordinarily excited about the data. That has not changed. So we've had regular dialogue with a broad array of KOLs in this space. We've done through all the data. And they continue to be very impressed with both the efficacy that we observed in the study. We get strong support in the medical community that they believe this is the right way to study this population. And sometimes are very tricky to diagnose. There's often mixed etiology. It's very -- they're frequently misdiagnosed and about 40% of dementia patients don't get a subtype diagnosis, look at the challenges associated with that. On the safety side of the integration, the KOLs, and I would say the medical community in general that we've consulted with along the way, have been very excited about the fact that this drug is -- we've observed clinically, does not impair cognition, and that's not what you see with the dopaminergic antipsychotics. You see that they -- in a very large study, very well established that they impair cognition. It's not insignificant. It's equivalent about 1-year disease progression, so a very unfortunate situation in using those drugs. Is that when you use it in this patient population, you actually make -- you may help on the psychosis, although it's very debatable whether they can get in an fit there. But you certainly have to compromise, because they see cognitive impairments that these patients force. So as we continue to sort of our top in, we continue to have dialogue with a broad array of medical and scientific experts and continue to feel very, very confident in our data. David Hoang: Got it. Maybe just 1 quick follow-up. Can you... . Stephen Davis: Operator, maybe can get back in the queue. I think we've lost the connection there. Operator: Sorry. David Hoang, your line is now open again. David Hoang: Are you able to hear me? Stephen Davis: Yes, we can. Yes, go ahead. David Hoang: Okay, great. Just a second quick question, in terms of the arms. Can you just remind us which subgroups hold the great magnitude of benefits there? Stephen Davis: Serge, do you want to take that? Srdjan Stankovic: Yes, the greatest magnitude that was observed was a late Parkinson's disease, dementia patients with psychosis. Owing, of course, that if you abstract a dimensional body patient because the day we just simply could not calculate there, due to small numbers, but it was also , there was 1 relapse in placebo while no relapses on drug. Next in line, with the same number of patients is Alzheimer's disease psychosis sub-group. And in that sub-group, we observed approximately 40% reduction in risk of relapse, which is clinically very meaningful. And in line with all of the data that we are aware of, the clinical meaningful results and statistically significant results from different randomized withdrawal trials. Operator: As there no further question at this time, Mr. Davis, you may proceed on your closing remarks. Stephen Davis: Great. Thanks so much operator, thank each of you for joining us today. We look forward to updating you on our progress. Operator: Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.ACAD Ratings Summary
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ACADIA Pharmaceuticals Shares Down 20% Following sNDA resubmission for ADP
ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) shares were trading around 20% lower Tuesday morning following the company’s announcement, according to which it will file an sNDA for pimavanserin for Alzheimer's Disease Psychosis (ADP) powered by new analyses of the HARMONY and -019 studies that look specifically at ADP.
While management stated the FDA has shown a "high level of engagement" in its meetings with the company, the analysts at Berenberg Bank stated that the concern remains that the agency will require additional studies, which will result in the dramatic increase in the capital required and time to launch.
