ACADIA Pharmaceuticals Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 6, 2024

There are 13 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter 2024 Acadia Pharmaceuticals Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Operator

I would like now to turn the conference over to Al Kildani, Senior Vice President, Investor Relations and Corporate Communications. Please go ahead.

Speaker 1

Thank you. Good afternoon and thank you for joining us on today's call to discuss Acacia's 3rd quarter 20 24 earnings results. Joining me on the call today from Acadia are Catherine Owen Adams, 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 our strong commercial franchise's debut in New Plaza. Also joining us today is Liz Thompson, PhD, Executive Vice President, Head of Research and Development, who will provide an update on our pipeline programs and Mark Schneier, our Chief Financial Officer, will review the financial results. Catherine will then provide some closing thoughts before we open up the call for your questions.

Speaker 1

We are 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 make 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, future results and financial guidance 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. You are cautioned not to place undue reliance on these forward looking statements, which are made only as of today's date, and we assume no obligation to update or revise these forward looking statements as circumstances change, except as required by law.

Speaker 1

I'll now turn the call over to Catherine for opening remarks beginning on Slide 4.

Speaker 2

Thank you, Al. Good afternoon, everyone, and thank you for joining us. By way of introduction, I'm Catherine Owen Adams, and it's an honor to be speaking with you as the new CEO of Acadia. I want to take a few moments to share a little about my background and how it aligns with Acadia's goals and explain why I felt so drawn to join Acadia. To begin, I have over 30 years of experience in the pharmaceutical industry, most recently serving as Senior Vice President and General Manager of the U.

Speaker 2

S. Business at Bristol Myers Squibb, and prior to that, leading their international major markets business. Before that, I spent 25 years at Johnson and Johnson working in both their pharma and medtech businesses in the EU and U. S. Throughout my career, I've led teams that have successfully launched and managed drugs across many therapeutic areas, including rare disease and neurology.

Speaker 2

In the last 5 years, I've had the privilege of being involved in 9 drug launches in the U. S. And internationally, including a number of successful rare disease launches. I joined ACADIA because I was excited by the foundational business and the future potential of the pipeline. I'm both inspired and humbled to have the opportunity to lead ACADIA in advancing therapies that can make a real difference in people's lives.

Speaker 2

As I look towards that future, I see incredible opportunities ahead to grow our current portfolio and advance the innovations in our pipeline, including 2 late stage assets serving new communities of patients with high unmet medical needs. I see significant potential to enhance shareholder value as we continue to execute and evolve our commercial priorities and advance our pipeline assets. Please turn to Slide 5, where I will elaborate a little on each of these areas and underline why I chose to join Acadia against our 3 core pillars. 1st, on the commercial front, we have 2 growing franchises, which together based on our Q3 results are now tracking to over $1,000,000,000 in annualized sales, an extraordinary milestone for a biotech company of our size. 2nd, our robust pipeline includes 2 late stage assets in Prader Willi Syndrome and Alzheimer's disease psychosis, complemented by many promising early stage programs.

Speaker 2

And 3rd, our financial strength is fueled by positive cash flows at a growing cash balance, which now stands at $565,000,000 I'll now briefly highlight our commercial and R and D pillars before handing off to our leaders who will dive deeper into the details. Turning now to Slide 6. Beginning with JVU, where we had another solid quarter generating sales of $91,200,000 up 36% year over year and 8% sequentially. I'd like to take this opportunity to share some high level observations on JBUs based on my experience with multiple rare disease launches and to give some context for our launch results to date. 6 quarters in with $429,000,000 generated in sales, I think we can say this has been a successful launch.

Speaker 2

Every rare disease launch is unique, but I have observed some key commonalities with DABUT. They are complex, highly situational and involve coordination of lots of moving parts within the health care system. Especially important is the focus on the patient's journey both to start and stay on therapy and concentrating on how this journey is fully supported. We've reached a steady state of new patient starts with DABU and have strengthened our focus on growing this in the next several quarters. This will take time and growth will be driven by continuing to lean in to the breadth of our clinical data, illustrating and describing to HCPs the impact DABE has on patients, bringing to life the scoring systems used in clinical trials and generating real world experience and insights from our ongoing LOTUS study.

Speaker 2

We will also continue to focus on the early part of the patient journey as families and doctors work together to find the dose for their child. I'm extremely confident about the potential for debut growth and further penetration beyond our COEs into the diagnosed patients who can benefit from its impact both in the U. S. And beyond. I'll now turn to NUPLAZID, which has had an outstanding quarter with net sales of $159,200,000 up 10% year over year.

Speaker 2

These results were achieved on the basis of underlying trends we described last quarter, including the impactful real world evidence studies and last year's label clarification combined with what we now see as a stable Parkinson's disease psychosis market. In August, in collaboration with Ryan Reynolds, we announced our unbranded Morgue to Parkinson's campaign to raise awareness of Parkinson's related hallucinations and delusions. We are excited about the early impact of this campaign that we're seeing with patients and caregivers and HCPs. Separately, we launched a New Plazid direct to consumer campaign, which we believe will help us accelerate growth for New Plazid in 2025. Brendan will discuss these campaigns in more detail.

Speaker 2

Turning now to Slide 7 for a discussion of our pipeline. In addition to our successful commercial brands, Acadia's pipeline is an important reason why I was so excited to join the company as I believe the pipeline is truly underappreciated. We have a Phase 3 asset in ACP-one hundred and one that's being evaluated as a treatment for Prader Willi Syndrome, a rare and debilitating genetic disease with no FDA approved treatment, where patients often have an unrelenting drive to eat called hyperphagia. Behind that in our pipeline is ACP-two zero four, our 2nd generation 5 HT2A blocker, while we are currently conducting the Phase 2 portion of the program. This exciting asset has the potential to extend and expand our neuropsychiatry franchise.

Speaker 2

Both of these drugs will allow us to offer new options for patients in underserved communities with patient numbers larger than our current portfolio. We also have a number of exciting earlier stage assets we look forward to discussing more in the future as they advance their development. We're also actively pursuing opportunities to expand this pipeline further through business development, which remains a strategic imperative of the company and an important focus for me as we look to set our growth trajectory for the future. I'll now turn it over to Brandon to discuss our commercial performance with these brands beginning on Slide 8.

Speaker 3

Thank you, Catherine. Let's take a look at both our Debut and New Plaza franchises starting first with Debut on Slide 9. In Q3, we continue to drive growth in our Debut business with $91,200,000 in net sales. Net growth was primarily driven by continued penetration of the prevalent population and increased demand as measured by dispense rates among our continuing patients. During the quarter, 923 patients received paid shipments, which compares to 9 17 receiving shipments in Q2 and 871 in Q1.

Speaker 3

Importantly, the average number of bottles each patient received increased as our patient cohorts mature and begin reaching a dose that they will likely remain on longer term. Weekly patient discontinuations in the quarter were similar to Q2 and continue to be down significantly from Q1. Importantly, we now have over 60% of all active patients on treatment for 10 months or more since treatment initiation. This is significant as the persistency curve for patients out past 10 months on treatment is flattening, suggesting a strong enduring patient base benefiting from treatment over time. In fact, looking out 12 months and beyond, we see persistency rates at 50% or higher.

Speaker 3

This compares favorably to other chronic therapies at similar stages. Turning to prescriber dynamics. We have continued to expand the breadth of prescribers with now approximately 800 unique prescribers having written a prescription for DayVue. We have further increased our penetration of the 21 Rett Centers of Excellence or COEs and we see an increasingly large proportion of new starts coming from non COE high volume institutions as well as community based practices. This is important as approximately 70% of all Rett patients are treated outside of COEs.

Speaker 3

We are focusing on driving depth of prescribing among those HCPs who have prescribed DEBUT to 1 or 2 patients where we know they have additional patients under their care who can also benefit from DEBUT. Let's discuss our ongoing efforts to drive future adoption. Please turn to Slide 10. As Catherine mentioned, to expand treatment to more of the prevalent RET patient population, we are focusing on further educating prescribers about DEBUT's efficacy and the real world day to day benefits patients and their families are experiencing. This is especially important outside of COEs where HCPs do not have as deep an understanding of Rett syndrome or Debut's efficacy profile.

Speaker 3

These caregiver and HCP reported real world benefits include improved quality of life, improved mood, more purposeful use of hands, increased alertness and better engagement in conversations and improvement in both verbal and nonverbal communication skills, which among other benefits are the driving force behind continued penetration of the Rett population. As an example of these tangible daily benefits, I was excited to speak to one of our caregivers at a recent program about what her daughter is now capable of doing on her own now that she's been treated with DABU. She shared that since her 8 year old daughter started treatment, she can now grab and hold on her own everyday items like utensils and other objects, including much to her delight, ice cream cones. Her daughter has become more expressive and increased her vocalizations, improving her overall ability to communicate as well. Other caregivers tell us about their loved ones improved ability to communicate non verbally with their Tobii Eye Gaze device.

Speaker 3

Each of these benefits are helping create better connections between Rett patients and their caregivers. These are just a few very tangible and exciting examples of the real world benefits we want all HCPs and caregivers to hear, understand and pursue. We are sharing these stories within the Rett community where these types of improvements will surely resonate. One of our best sources of real world efficacy is our ongoing LOTUS observational study that continues to yield valuable insights for both HCPs and families about the number and breadth of clinical benefits caregivers are reporting in their loved ones as well as their GI management experiences. We are sharing this data with HCPs to allow them to make more informed prescribing decisions for their Rett patients.

Speaker 3

In summary, our primary focus for growth is on demonstrating Daybut's efficacy and real world benefits in our sales materials, peer to peer engagements and our caregiver programming, sharing these benefits with all HCPs and families. We continue to increase penetration of the Rett population and are building a strong and enduring patient base. We're confident in our growth outlook based on the current rate of new patients entering at the top of the funnel combined with a growing base of enduring patients. And we plan to continue to drive growth while helping HCPs and families better manage tolerability challenges and improve the early treatment journey. With now over 30% of the 5,000 and growing diagnosed RET patients in the U.

Speaker 3

S. Having started DEBUT, we have a substantial opportunity ahead of us to continue growing the brand.

Speaker 1

Now let's turn to

Speaker 3

Newplazid on Slide 11. Q3 was another outstanding quarter for the Newplazid franchise with $159,200,000 in net sales, representing the highest ever quarterly sales for the brand with 10% growth year over year. We achieved this growth by increasing active patients on NUPLAZID across all market segments. This strong performance in the quarter follows what we've seen throughout the year as we've grown demand quarter over quarter throughout 2024. Q3 volume growth was driven by 2 key initiatives that have been the focus of our discussions with HCPs.

Speaker 3

First, leveraging the published real world evidence demonstrating the important differential outcomes Parkinson's disease psychosis patients have experienced with NUPLAZID, including a lower overall risk of all cause mortality versus all other off label antipsychotics, most notably low dose quetiapine. And educating the market about last year's label clarification, which helps HCPs understand that they can treat Parkinson's disease patients experiencing hallucinations and delusions with or without comorbid dementia. These two levers helped us increase HCP conviction in NUPLAZID as their first line therapy of choice for PDP, leading to a higher demand and market share. Looking at the broader market, we are seeing a return of Parkinson's patients as measured by in office visits as well as long term care resident census numbers. This market dynamic supports continued future growth for NUPLAZID.

Speaker 3

We are excited about NUPLAZID's Q3 results, which were achieved in advance of the benefits we expect to see from our recently launched direct to consumer campaigns, which I'll discuss now. Please turn to Slide 12. As we announced in August, we launched an unbranded disease state education campaign featuring Ryan Reynolds and his mother Tammy focused on the non motor symptoms of hallucinations and delusions that can often accompany Parkinson's disease. The early results of this disease state awareness campaign suggest it is among the most successful campaigns ever in this category. Here are just a couple of the impressive early measures demonstrating this.

Speaker 3

Over 3,900,000,000 media impressions in just the 1st 8 weeks or so of airing and nearly 200 media placements including approximately 75% with headline mentions of the campaign. These are very encouraging early indicators. Concurrently, we also launched a branded campaign featuring NUPLAZID as the first and only treatment for PDP. In just the 1st 2 weeks post campaign, we saw a nearly threefold increase in Parkinson's disease patients who visited newplazid.com and subsequently visited a PD specialist. As a reminder, we expect the vast majority of the benefit of these campaigns to be seen in 2025 as new patients schedule appointments with their specialists and seek treatment for hallucinations and delusions with NUPLAZID in the months ahead.

Speaker 3

In summary, we're excited about the growth we're seeing in NUPLAZID and we'll look to capitalize on that momentum with our consumer campaigns in the weeks months ahead. I'll now turn it over to Liz on Slide 13.

Speaker 4

Thanks, Bren. Please turn to Slide 14. I'd like to start today highlighting some good news on the global expansion front. We recently received approval from Health Canada for DaeVu as the 1st and only approved therapy for patients in Canada living with Rett Syndrome. Our next focus is in the EU, where we are targeting a submission of the marketing authorization application in the Q1 of next year.

Speaker 4

We're now building up our team and expertise in Europe in order to plan for that launch. In addition to European expansion, we've had productive conversations with PMDA, the regulatory agency in Japan, regarding the potential to bring DABU to patients there. We very much look forward to continuing to collaborate with PMDA and Japanese experts to progress our clinical program. Continuing on regarding support of our marketed medications, I'd also like to touch upon some of the analyses that we continue to generate and share about NUPLAZID on Slide 15. At the recent Movement Disorder Society meeting, we presented data on sedation and sleep, Both sleep quality and the avoidance of unwanted sedation are key areas of interest for physicians treating Parkinson's disease psychosis.

Speaker 4

In some of the studies of pimavanserin across healthy volunteers, patients with PDP and patients with neuropsychiatric symptoms related to a neurodegenerative disease, these included various exploratory measures of sleep. Taken together, the data across these trials suggested that pimavanserin may be associated with low levels of sedation and other sleep related adverse events. Just last week, we also presented data at the PSC Congress meeting, examining patients in our PDP studies who had complete resolution of their hallucinations and delusions. The literature suggests that symptoms of Parkinson's disease psychosis will tend to worsen over time if left untreated, but there's little information about the impact of treating earlier versus later. In an integrated analysis, including 135 patients with PDP, of whom 21 reported no symptoms after receiving pimavanserin, treatment initiated sooner after onset of hallucinations and delusions was associated with a higher probability of achieving a complete response than was later treatment.

Speaker 4

Turning to Slide 16, I'll discuss our late stage clinical programs, starting with the ACT-one hundred and one program in Prader Willi Syndrome. As a reminder, Prader Willi is a rare genetic neurobehavioral disorder, roughly 8,000 to 10000 patients in the U. S. Are living with Prader Willi. As we've described before, the defining characteristic is hyperphagia, which is an unrelenting hunger.

Speaker 4

This manifests very early in life and can lead to obesity and myriad complications like type 2 diabetes or heart disease, as well as behavioral changes like anxiety and aggression. And unfortunately, life expectancy is currently only around 30 years old, largely due to cardiovascular disease. Our Phase 3 study called COMPASS PWS is currently enrolling. This study is global, multicenter, randomized, double blind and placebo controlled. We built on prior Phase 3 experience in terms of both dose and endpoint selection.

Speaker 4

We've been truly pleased with the enthusiasm we are seeing in the Prader Willi community and we look forward to continuing to work with them and clinical experts as we advance through the study. I anticipate providing more specific guidance on timing early next year. Now turning to our 2nd late stage clinical program, AZP-two zero four on Slide 17. Here we have utilized our extensive neuropsychiatry expertise and pathway understanding to develop a next generation 5 HT2A compound designed to build upon the strong product profile of NUPLAZID. In particular, to date we've seen no sign of QT prolongation at the doses we are studying, a wide dose range supporting the potential for a dose equivalent to approximately twice the approved NUPLAZID 34 milligram dose and steady state PK achieved in less than half the time of NUPLAZID, suggesting the potential for an earlier onset of activity.

Speaker 4

Currently, ACP-two zero four is in development as a potential treatment for Alzheimer's disease psychosis in a master protocol that includes a Phase 2 and 2 Phase 3. The program is global and contains randomized, double blind, placebo controlled studies. The Phase 2 is over 300 patients. We continue to plan that the 2 Phase 3 studies will be of roughly equivalent size. Once the Phase 2 study data are collected, we will analyze and report results, by which time the 2 Phase 3 studies will already be underway.

Speaker 4

I look forward to also providing more specific timing guidance on this program early next year. And now, I'll turn it over to Mark for a financial update beginning on Slide 18.

Speaker 5

Thank you, Liz. Let's review our quarterly financial performance on Slide 19. In the 3rd quarter, we recorded $250,400,000 in total net sales, up 18% from the Q3 of last year. Debut net product sales were $91,200,000 in the 3rd quarter, up from $66,900,000 in the Q3 of last year. Sequentially, DAVEU sales were up 8% from the 2nd quarter comprised of 4% volume growth and 4% net price growth.

Speaker 5

NUPLAZID net product sales were $159,200,000 in the 3rd quarter, up 10% versus the prior year's Q3 comprised of 7% volume growth and 3% net price growth. Gross to net for NUPLAZID was 24.9 percent in Q3. R and D expenses decreased to $66,600,000 in the Q3 of 2024 from $157,000,000 in the Q3 of 2020 3. The decrease in research and development expense was related to a reduction in business development expenses as we made the $100,000,000 upfront payment to Neuren for ex North American rights to trofinetide in Q3 of last year. SG and A expenses increased to $133,300,000 in the Q3 of 2024 from $97,900,000 in Q3 2023.

Speaker 5

The increase was mainly due to the ongoing NUPLAZID consumer activation campaign as well as one time costs related to our CEO transition. We ended the quarter with a cash balance of $565,300,000 which increased $64,400,000 versus the prior quarter. I also have an update to share on our rare pediatric disease priority review voucher. Yesterday, we entered into an agreement to sell the PRV for $150,000,000 We expect this transaction to close in the Q4. And as a reminder, as part of our licensing agreement with Neuren for trofinetide, we will own Neuren 1 third of the net proceeds received from this transaction.

Speaker 5

Please turn to Slide 20 for a discussion of our latest 2024 financial guidance. For DayView, based upon our Q3 results and the dynamics Brent described, we are narrowing our guidance range for debut and now expect net sales of $340,000,000 to $350,000,000 For NUPLAZID, we are narrowing our guidance range to the high end of our previous range and now expect net sales of $600,000,000 to $610,000,000 As Bren said earlier, this guidance does not rely on a meaningful impact from our recently launched DTC campaigns, the benefit of which will largely be achieved in 2025. We are also narrowing our full year New Placid gross to net guidance and our new guidance range is 26% to 27%. On the expense side, based upon year to date results, we are reducing our R and D guidance to $280,000,000 to $290,000,000 and increasing SG and A guidance to $480,000,000 to $495,000,000 Lastly, we are raising our cash guidance range to 600 $600,000,000 to $640,000,000 reflecting our expectations for our operational performance. This range does not reflect the anticipated net proceeds from our sale of our PRV.

Speaker 5

And now, I'll turn the call over to Catherine for closing remarks.

Speaker 2

Let's now please turn to Slide 21. As we head towards the end of the year, our business today is built on a strong foundation and I'm excited for us to drive further growth in 2025 and beyond. We will continue to execute on the significant opportunity that remains in front of us for both debut and new plaza to drive that growth. We will also work diligently to enroll our 2 late stage trials as well as our pipeline programs and potential for business development deals. We're pleased to be generating sustainable and expanding cash flow from operations to fund future growth.

Speaker 2

As I stated upfront, I truly believe that the deeper I dive into the company, the more enthusiastic I am about Acadia's incredible potential for future growth. With that, I'll turn it over to the operator for our Q and A. Operator?

Operator

Thank you. And our first question comes from Gregory Renza with RBC Capital Markets. Your line is now open.

Speaker 6

Great. Good afternoon, Catherine and Acadia team. Congrats on the progress. Catherine, welcome aboard and thanks for taking my questions.

Speaker 2

You're welcome. Catherine,

Speaker 6

Thank you. And Kathryn, maybe to start, maybe I'll refrain from asking a question about Ryan Reynolds. But you've given us some interesting just color on the rationale and what you saw the attractiveness of joining Acadia. You mentioned business development and certainly the early stage pipeline I'm sure is of interest to us. Just wondering if you could just add a little more color about how you break down the strategic framework, what the capabilities are for Acadia to sort of welcome in some of those business development assets as well as really nominating and fleshing out the early stage pipeline that was of interest to you?

Speaker 2

Great. Thanks for the question, Greg. So yes, I'll ask Brent to talk about Ryan Reynolds at a more appropriate point, but I will focus on

Speaker 7

business

Speaker 2

development. So yes, in terms of the focus of growth for the company, I believe business development is going to play an important role in our future. As you know, it's played an important role up until now in our growth with the acquisition of trofinetide. And so as we think about the framework that you asked around, obviously, we have a very strong footprint in neuropsychiatry and continue to develop drugs in that area. And I believe that will be part of our future and possible additional business development areas.

Speaker 2

Rare disease, we now have a year and a half under our belt, strong successful launch with debut and rare continues to be a strong focus for the company. Beyond that, I'm working with the team to discuss further areas of interest and we'll be sharing that probably at a slightly later date. But just to confirm that, we are in a strong financial cash position as Mark has outlined and we feel very strongly that we are in a great position to look at business development deals as they come forward in the next few months.

Speaker 6

That's helpful. Thank you. And maybe a question for Brendan. Just on the latter part of 2024 with respect to debut and as we think about coming into the holiday seasons and we reflect on some of the December to January to February patient visits and debut utilization from patients and families. Now how should we be thinking about some of the patterns when it comes to us entering Thanksgiving and the December holiday season and how it relates to transitioning to 2025?

Speaker 6

Thanks again guys and congrats.

Speaker 3

Sure, Greg. Thanks. Thanks so much for the question. Just as a reminder, this will be just our second first quarter transition as we head into 2025 and a lot has changed in the debut franchise since then. First of all, we have a much better understanding of the reverification process and requirements for our patients.

Speaker 3

And we've built out those capabilities both within our hub, but also our family access manager team that's working very closely with each of our families during that transition. I think a very important difference is our patient mix heading into 2025, which is quite different than the mix we had in the Q1 of 2024. As I mentioned in our prepared remarks, we have over 60% of our current debut patients currently on treatment for 10 months or longer, which obviously wasn't even possible in the Q1 of 2024. There were far less than 10% of patients at that time that had been on therapy that long. So I think that provides a much more dependable base of business for Q1 demand.

Speaker 3

In terms of patient dynamics, I would think that just as we've seen in Parkinson's disease, I don't think that patients tend to schedule as many appointments in January. So that wouldn't be a surprise to me. But otherwise, we fully expect

Speaker 1

to grow

Speaker 3

patients and sales in 2025 over the longer period.

Speaker 6

Fantastic. Thanks so much.

Operator

And the next question comes from Jason Butler with Citizens. Your line is now open.

Speaker 1

Hi. Thanks for taking the questions and congrats on the quarter. I guess just to have a couple on niplasid. Can you give us a sense of the profile of patients that are initiating therapy now in the context of the branded and unbranded campaigns? I guess and also in terms of the label change, are you seeing more older patients initiate on therapy versus, to what extent you're seeing patients come on board earlier in the diagnosis or early in the psychosys symptoms?

Speaker 2

Thanks for the question, Jason. I'm going to let Brian answer that for us.

Speaker 3

Thanks, Jason, for the question. I would say first, we're in very early days post launch of both of those campaigns. But I can tell you from what we're seeing for patient dynamics thus far, the mix of prescribers still seems to reflect what we see for from what we saw in the second and third quarter. So we're seeing the same kind of prescribers that are our targets and a similar number of new physicians that are new to the brand. In terms of the age of our patients, it's been largely what we would expect.

Speaker 3

I think the caregiver campaign has helped to help connect families to identify perhaps more readily subtle changes that they're seeing in their loved ones. But I don't think we've seen a substantial change in the age of our patients so far.

Speaker 1

Okay, great. Thanks for taking the question.

Operator

And our next question comes from Amy Fadia with Needham and Company. Your line is open.

Speaker 8

Hi, this is Poona on for Ami. Thank you for taking our question. You've suggested that you'll be having $1,000,000,000 in sales in 2025. Just wondering, are you anticipating any decline in debut sales relative to 2024? What is like the mix of the 2 products?

Speaker 8

Thank you.

Speaker 2

Thanks, Tina. I'm going to let Mark answer that for you.

Speaker 5

Yes. So let me just clarify that. Thanks for the question. I think what we're saying is right now, we have $250,000,000 in sales in the quarter and that equates to a run rate of $1,000,000,000 So we're not at this point suggest guiding yet for the full year 2025, but we're pleased to kind of have a run rate milestone that's over $1,000,000,000 and then we'll guide into next year, but certainly at this time can share that we expect growth in both franchises and growth over that in 2025.

Speaker 1

Thank you.

Operator

And our next question comes from Mark Goodman with Leerink Partners. Your line is open.

Speaker 7

Hi, this is Basma on for Mark. Thank you for taking our question. We have a question regarding debuts. Regarding the 50% or 60% of the patient remaining on therapy, do we know the proportion of patients who respond to the treatment and actually demonstrate clinical benefit? Should we assume that all of them at this point are responders and basically benefit from the therapy?

Speaker 7

And on the flip side, I wonder if you could provide us with more color on the discontinuation data and share with us what is the key factor that really drives the discontinuation of therapy? Is it the A profile or is it the lack of treatment effect? Thank you.

Speaker 2

Thank you, Batna. I think I'm going to ask Brent to take us through those two questions.

Speaker 3

Sure. No problem. And thank you for the question. First, just to confirm, yes, we have over 60% of patients at 10 months or longer. And what we see there is the flattening of the persistency curve out to 15 months for the latest cohort that we're looking at, which is very encouraging.

Speaker 3

What that would suggest to us is that patients have worked through the treatment journey and have found the dose that they're settling in on and are benefiting. Our family access manager team and our clinical nurses at the hub would confirm that these patients are benefiting and continuing. So I think that answers that question. The second question around discontinuations, we still see that the majority of discontinuations happen in the first one or two fills on of treatment. And that is consistent in terms of the reasons for discontinuation tends to be diarrhea or vomiting and not so much a lack of treatment effect.

Speaker 3

It's really the tolerability in the early fields.

Speaker 2

Thanks, Brian.

Speaker 7

Thank you.

Operator

And our next question comes from Tessa Romero with JPMorgan. Your line is open.

Speaker 8

Hi, team. This is Caroline Poacher on for Tessa Romero with JPMorgan. Thanks for taking our questions. So first, in your prepared remarks, you had mentioned that the debut launch is now at steady state of new patient flow. We were just curious if you could just clarify this statement.

Speaker 8

Does this mean steady net adds?

Speaker 2

And then you mentioned it will be

Speaker 8

a focus to grow this over the next few quarters. Is there anything that has fundamentally changed in your strategy to accelerate new patient starts? And are you considering changing or pivoting any facets of the launch strategy going forward? Thank you.

Speaker 2

Thanks, Carolyn. I'll take some of that in terms of the perspective that I've developed with the team over the last 6 weeks. So just to go back to the original part of the question. In terms of the steady state, yes, we're seeing a steady state of patient adds after a very strong start to the debut launch. And that's not unusual in rare disease launches.

Speaker 2

As you know, you see a big burst of patients out the door with the high unmet medical need and then tend to sort of go to a more plateau phase. But we are looking to see how we can recharge that growth and start to see more patients coming in the top of the funnel. And we believe that there is a strong possibility of driving that growth. And let me just tell you what the areas that we're focusing on in order to achieve that. The first is efficacy.

Speaker 2

What we've learned over the last 6 quarters is that the scales that we use in our clinical trials, the RFPQ and the CGI, they need to be brought to life for physicians and they need to understand for their patients the impact that, debut can promise them for their changes in cognition, their changes in communication, their changes in hand wringing. So bringing the efficacy to life is our first real focus, as well as, starting to enhance the data that we're generating around the LOTUS study and ensure we're amplifying this message to physicians and helping them understand the longer term impact of DABU on their patients. The second, Brenda just sort of mentioned, which is managing the patient journey. With all rare diseases, we need to really start thinking about the patient journey that surrounds the patient when they start on therapy and as they continue to persist. And as Bren has indicated, we're really going to start focusing on those first few fills to ensure that patients have guided through that first process.

Speaker 2

But also, we now have a strong mature cohort of patients towards the end of the treatment right out beyond 15 months now and ensuring that our families are supported throughout that whole journey. And then finally, we've talked about the penetration of debut into the currently diagnosed patient population of 30%. Couple of things. First of all, we've seen the diagnosis rate increase since the launch of DABU. We've seen that increase by around 10%, which obviously allows us to go after more patients and make them aware of the opportunities with DABU.

Speaker 2

And secondly, 70% of our patients are treated outside our COEs. So we see a strong opportunity for growth outside of our centers of excellence. So if I compound those three factors, enhancing the efficacy, really focusing on the patient journey at the beginning and then driving the growth beyond our COEs, I feel very strongly that we will see strong baby growth as we move into 2025.

Speaker 8

Great. Thank you so much.

Operator

And the next question comes from Joel Beatty with Baird. Your line is open.

Speaker 9

Hi. Thanks for taking the question. What do you make of the ratio of the patients on therapy to the number of unique prescribers? And what I mean is that it looks like there's been about 1500 patients who have started therapy at some point with about 800 unique prescribers. So that's a little bit less than 2 patients per prescriber and perhaps I would have expected it to be a little bit more concentrated.

Speaker 2

Thanks, Joel. That's a great observation and one that I know we've been looking at. So, Brian, do you want to share a little bit more about that?

Speaker 3

For sure, Joel. Thanks for the question. And I think it's right. There is a concentration and a long tail. And I think for a 1st mover in a rare disease area, the centers of excellence still have the vast majority of prescribers that have multiple referrals that are written for DABU.

Speaker 3

High volume institutions also have a concentration of physicians that have 3 or more referrals that have been written and we're continuing to penetrate those. In the community, as we've gone further and further into the community, it is not uncommon to see a physician that may have 1 patient or 1 or 2 patients that they see less frequently. And there you see kind of a long tail of not necessarily pediatric neurologists anymore, you're seeing primary care physicians and some pediatricians who likely will have one patient to offer. We are however focused on those physicians that have written 1 or 2 prescriptions for DABUT and we know they have additional patients for follow-up.

Speaker 9

Thank you.

Operator

And the next question comes from Keith Tapper with BMO Capital Markets. Your line is open.

Speaker 9

Thanks and good afternoon team and thanks for taking my question. Welcome and congratulations to Kapper and excited to see what they had for Acadia. So for debut, can you remind us what to expect from the Canadian approval maybe in 2025 and 26 in terms of launch expenses, materially impact revenues if all goes well? And then have you guided for time lapse revenues in Europe and Japan? And then separately, I know it's early, but could you talk about 2,591, which you have rights to in REGULX?

Speaker 9

Is it a similar strategy versus debut, the drug itself? I know your partner, Niran, showed interesting data recently in different indications. Anything you could share would

Speaker 5

be helpful there. Thank you.

Speaker 2

Thanks, Keith. I'm going to ask Brent to elaborate a little bit more about our strategy in Canada, Europe and Japan. And then, Liz, perhaps take the 2,591 question for Brent.

Speaker 3

For sure. Thanks. We're obviously excited to have an ex U. S. Approval for Canada, very much looking forward to serving that patient population.

Speaker 3

Post approval, we then enter into negotiations with health technology assessment approvals. We're going to be talking with stakeholders about public and private reimbursement. We anticipate having limited coverage in 2025 through private payers and the public payer process tends to take a bit longer. In the interim, we have a great opportunity to work with the centers that have RET patients in Canada and begin to generate their interest in signing patients up for when we do have reimbursed approval. So we'll be doing that in the interim.

Speaker 3

And otherwise, we are very much looking forward to making DABU accessible to patients as soon as we can while we're actively engaging those necessary stakeholders to get to coverage.

Speaker 4

And to comment a little bit on 2,591, I think I'll start out by commenting generally. We think we've got a first great treatment for patients living with DABU, but are obviously interested in continuing to find new ways to serve that community. So 2,701 and other things that you may see come from us in the future really show our commitment to this patient population. At this point, it's probably premature to talk to specifically about what we're thinking about from a clinical perspective. I'll just generally say that we are learning from Neuren and their interesting data that they have compiled so far, as well as putting together our own set of information that we think is necessary to have a RET specifically specific strategy with this asset.

Speaker 4

So more that I'll be able to talk about in future.

Speaker 2

And just Keith in terms of Europe and Japan, we are preparing our MAA as Liz has already referred to in the prepared remarks, we started to build out a team in Europe to support that launch and we're looking forward to not only making our debut product available for patients in Canada, but in Europe and beyond. And in terms of Japan, Liz alluded to, it was on the slide, our discussions with the PDMA. So all of those discussions are currently active and ongoing.

Operator

And our next question comes from Tazeen Ahmad with Bank of America Securities. Your line is open.

Speaker 10

Hi, good afternoon. Thanks for taking my questions and Catherine, a welcome from me as well. I wanted to get your thoughts about how to think about the European launch. In your previous role, you did handle ex U. S.

Speaker 10

Launches. Are there certain rules of thumb to be aware of as it relates to rare disease launches in Europe that you can share with us today? And can you talk to us about your general plan forward in that region? Thanks.

Speaker 2

Sure. Thanks, Jazeen. So, as I've just said, we are preparing for our MAA application early next year in Europe. As you know, there's a set time clock in Europe. It normally takes up to a year for that document to be assessed.

Speaker 2

Then we start the clock with each of the national HTAs on reimbursement. And we would normally expect to launch in Germany first, as well as Switzerland and then other countries come online after that depending on how long our local negotiations take with both the national authorities and then some of the regional authorities in places like France, Italy and Spain. In terms of managing a rare disease launch in Europe from my experience, it's relatively similar to managing a rare disease launch in the U. S. Except that in some ways it's a little bit easier because with a single healthcare system in all of our countries in Europe, we have less involvement in the patient journey.

Speaker 2

The access to medicines once it's prescribed is a lot easier. We're not dealing with payers on a sort of a case by case basis. And so while we need to wrap around support of the physician and patient, it just looks slightly different in terms of that individual patient journey. But with my experience and the team already being built up in Europe, I feel very confident that we will have debut available post registrational approval and we're looking forward to making that launch successful as well.

Operator

Our next question comes from Jeff Hung with Morgan Stanley. Your line is open.

Speaker 5

Thanks for taking my question. For ACP-two zero four, I was just wondering if there's any updates on whether EU regulators have agreed to your master protocol? And can you just remind us of the strategy there? Thanks.

Speaker 2

Yes. I'll ask Liz to take that one for us.

Speaker 4

Sure. So we haven't reengaged with them about the master protocol, the Phase 3 portions in particular. We anticipate doing that one more a little further into the Phase 2 portion of the study. That said, again, all this really means is that Europe may be a little bit slower up and running on the Phase 3 portion of the on the Phase 3 portions of the master protocol. But the advantage is that potentially we'd be in a position of starting up Phase 3 there with data in hand, from the Phase 2 portion, which is always helpful in terms of getting investigator interest.

Speaker 4

So it's a little bit of a bump in the road, but we don't see this having an overall implication on strategy or timeline.

Speaker 5

Thank you.

Operator

And our next question comes from Ritu Baral with T. V. Cowen. Your line is open.

Speaker 4

Hey, guys. This is Athena on for Ritu. Thanks for taking my question. I had another follow-up on high value academic centers and community practices. How should we think about forward adoption rates here?

Speaker 4

And how comfortable are these physicians when it comes to titrating debut? And what learnings are you applying from the earlier stages of DABU's launch to your conversations with these folks? Thank you.

Speaker 2

Thanks, Athena. I'll let Bren elaborate on that.

Speaker 3

Yes, sure. Thank you for the question. As I think I alluded to in my prepared remarks, COEs were instrumental in the early part of the launch and they still continue to contribute and we're driving further penetration there. I'm pleased with what we've seen for high volume institution penetration growth over the past year. I'm similarly pleased with our ability to get into the community, to find those physicians that have read patients and see them continue to start to prescribe DABU.

Speaker 3

The further you get from a COE, the more you're doing education on the particulars of Rett syndrome because they have infrequent visits with these patients as well as the clinical profile for DABU. We're starting to leverage those clinical champions, those that have a lot more experience with DABU in the early part of the launch to do programs like discovering DABU where we'll pair a clinician and several caregivers that have had longer term successful experiences on DABU to tell them what to expect in real world performance of the product and what they're seeing in their loved ones. And that's been a very successful combination for us.

Speaker 2

Thanks, Ben.

Operator

And our next question comes from Paul Matteis with Stifel. Your line is open.

Speaker 6

Hi, this is Julian on for Paul. Thanks so much for taking our question. Just really quick one. What are your expectations for ROI on the DTC campaign in 2025 for New Plaza? Obviously, you've you've demonstrated strong execution in 2024.

Speaker 6

Just curious if you have any more commentary you can provide for next year. Thank you.

Speaker 2

Thanks. So Brent, do you want to talk about the direct to consumer campaign?

Speaker 3

For sure. And thanks for the question, Julian. So we initiated this campaign in the middle of August and it is really just pick up its momentum as it relates to patient visits starting to see their neurologists or movement disorder specialists. So we think the vast majority of the benefit we'll see will begin in 2025. But as a reminder, the lifetime value of our NUPLAZID patients, both in the community and long term care will extend beyond 2025.

Speaker 3

So we'll start to see both an increase in new patient starts, but also they're continuing value throughout 2025, 2026 and 2027 perhaps beyond. And so I don't think we'll fully realize all of its value in 2025. But we're enthusiastic about what we're seeing about early visits and some of the early returns.

Speaker 2

Thanks, Brian.

Operator

The next question comes from Charles Duncan with Cantor. Your line is open.

Speaker 11

Hey, good afternoon, Catherine and team. Thanks for taking our question. And Catherine, congrats on the new opportunity with ACADIA. I had a quick question regarding, ACP-two zero four. In terms of the data release protocol, I guess, I appreciate the master protocol in terms of facilitating enrollment, but I'm a little bit confused as to whether or not you'll be releasing any information from Phase 2 in terms of efficacy, etcetera, as the enrollment of the Phase 3s are ongoing.

Speaker 11

So please provide a little color there. Thanks.

Speaker 2

Thanks for the question, Charles. I'm going to let Liz enhance that.

Speaker 4

Yes. Our current expectation is that we would be releasing some data at an appropriate time. And the expectation was always that we could use the Phase 2 data to make modifications to Phase 3 as needed.

Operator

And our next question comes from Jay Olson with Oppenheimer. Your line is open.

Speaker 1

Hey, thank you for providing the update and thanks for taking our question. For Catherine, could you please talk about your due diligence and any key considerations that you were contemplating as you considered taking on the role of CEO at Acadia? And then also maybe elaborate on your longer term vision for Acadia. Where would you like to see this company go in the future? Thank you.

Speaker 2

Thank you, Jay. So in terms of the approach I had to looking at an opportunity, I was really looking for the combination of 3 things. 1st was a strong commercial base where I could come in and add value based on my experiences of 30 years so far in the commercial side of the pharma business. And that's what I found with New Plaza and Debut, very exciting core brands that we can look to grow and develop over the coming years. The second important area I was looking at was a pipeline and that I was really excited by especially with our 2 later stage clinical trials in Prader Willi and Alzheimer's disease psychosis.

Speaker 2

And as I got into the due diligence, I was able to see a little bit more in the pipeline. I'm still very excited by that. And then finally, it was really around a strong financial position, which obviously Cadia has and in terms of the cash position, but also a really strong Board and strong investors. And so those three things together made Acadia for me a very attractive and exciting option. And I can tell you 6 weeks in, I'm even more motivated and excited than I was when I first walked in the door here in San Diego.

Speaker 2

I'm very excited about the future and really believe that this company has only to go from strength to strength.

Operator

And our next question comes from Sumit Kakarini with Canaccord. Your line is open.

Speaker 12

Good afternoon. Thanks for taking our question. Another one on DABU. Other than patients being at centers of excellence versus not, what's your understanding of the key bottleneck that may be preventing new patients from starting DEBUT? And what's the main variable you need to focus on to see an inflection on DEBUT sales from current levels?

Speaker 2

Thanks, Sumit. Very fair question. So I'm going to let Brent answer that.

Speaker 3

Hey, Sumit. Thanks so much for the question. I think we're focused entirely once you get beyond centers of excellence and some of the academic centers that are very much like COEs on education on the efficacy in the real world setting. And so it really is a combination of focusing on physicians and explaining to them what the translation of CTII RSBQ into daily improvements that families are seeing, which we're doing through a combination of peer to peer programming as well as having caregivers that have had their loved ones on therapy for 2 or 3 years, talk about what they've been able to see in their loved ones over time. And then similarly leveraging those experiences to speak to caregivers that may be on the sidelines, need to know more about what they should expect in their loved one.

Speaker 3

And we have a number of programs that look at patients between the ages of 25, 5 to 10, preteens, teenagers and patients over the age of 20, so that we can really speak the language of the caregivers from similar experiences that some of the caregivers that have already started to debut are well ahead on. And those are really our 2 primary areas of focus to elucidate efficacy and what I can see for clinical benefit for both of those audiences.

Speaker 2

Thanks, Brian.

Operator

And the next question comes from Danielle Brill with Raymond James. Your line is open.

Speaker 3

Hey, guys, this is Alex on for Danielle. Thanks for taking the question. Continuation on that on DEVU patient numbers, just curious what your level of effort is to potentially getting patients who have tried DEVU and discontinued potentially back on treatment given the ongoing learnings from real world mitigation strategies to the adverse events? Thanks.

Speaker 2

Yes, great. Thank you, Alex. I'll let Brendan do that one as well.

Speaker 3

For sure. Great question. It's important to realize that we stay in contact with every family. And as you know and probably are pointing out here, there are some patients that will discontinue after just 1 or 2 fills mostly due

Speaker 1

to

Speaker 3

tolerability challenges. With those families, we're obviously checking to see what their GI management experience was like and looking to further educate them on strategies both around GI tolerability and engaging their HCPs to make sure they have a strategy in place, but also understanding more about their dosing and treatment journey, because there could be alternate approaches where they could work themselves to a dose that would be more effective. And so that will certainly be something we continue to focus on over time. Up to now, I would say that the for restarts in terms of patients that are restarted, it's still significantly less than 10% of our overall patient base.

Speaker 2

Thanks, Brent.

Operator

And at this time, I would like to turn the call back over to Catherine Owen Adams for closing remarks.

Speaker 2

Great. Thank you, operator. So thanks again everyone for joining us today. Really appreciate the welcome that you've given me into the Acadia community. We look forward to updating you further on our progress in the next quarter.

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Earnings Conference Call
ACADIA Pharmaceuticals Q3 2024
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