ACAD - NASDAQ

Good day, everyone, and thank you for standing by. Welcome to the ACADIA Pharmaceuticals First Quarter 2024 Financial Results and Operating Overview Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Al-Kildani, Senior Vice President of Investor Relations and Corporate Communications. Please proceed.

Thank you. Good afternoon and thank you for joining us on today's call to discuss ACADIA's first quarter 2024 earnings. Joining me on the call today from ACADIA are Steve Davis, our Chief Executive Officer, who will provide some opening remarks, followed by Brendan Teehan, our Chief Operating Officer and Head of Commercial, who will discuss our strong commercial franchises, DAYBUE and NUPLA

Thank you, Al. Good afternoon, everyone, and thank you for joining us. Please turn to Slide five. The foundation of ACADIA'S business is built on our two first-in-class drugs on the market, a robust pipeline of late-stage assets with more behind them, and a strong balance sheet that allows us to invest in future growth. During the first quarter, our commercial franchises delivered total revenues of $205.8 million, increasing 74% from the first quarter of 2023, which did not yet include sales of DAYBUE. NUPLA

Thank you, Steve. Please turn to Slide eight, beginning with DAYBUE. Let me start by discussing the three key drivers of long-term value for DAYBUE and the continued growth potential they represent. First, with now one out of four diagnosed Rett patients having received treatment with DAYBUE, we still have a large remaining patient population in the market that has significantly higher physician and caregiver awareness about the product one-year post-approval. Launched to date, we've been successful penetrating centers of excellence, where we now have approximately 50% share of patients treated, so we have a lot of room to grow to pursue growth to pursue in this segment. In addition, we're also focusing on driving depth of prescribing outside of COEs, where the majority of our patient potential exists. We're already seeing a shift in the source of prescriptions today and expect an increasing share to come from non-center of excellence high-volume institutions and community practices moving forward. Second, a year into launch, we now have a foundation of real-world evidence providing us with the following levers. Number one is real-world benefits. We are describing the real-world benefits patients and families are seeing across a wide range of ages, as well as severities of disease, serving as examples of successful treatment with DAYBUE. In a moment, I will share some quotes from caregivers about the meaningful benefits they're seeing in their patients. Number two is GI management. We're sharing key learnings from successful GI management strategies. We've observed a wide range of GI management approaches, and we see an opportunity to further enhance and accelerate the establishment of best practices in the community. Number three is that time to benefit is a key consideration. We know a majority of patients, with their doctor's guidance, are starting treatment by titrating. And of course, when you titrate over a period of several weeks, it may take longer to get to a therapeutic dose. It's therefore important to ensure that families and physicians have the right expectations regarding the time it may take to observe benefits. We have observed that many discontinuations happen early in a patient's treatment, a timeframe that may not have been sufficient to get to a dose that produces benefits or work out an appropriate GI management regimen. To further support these families, our messaging on treatment expectations emphasizes the importance of HCPs and caregivers working together on setting the appropriate timeline to realize the benefits of DAYBUE and determine the appropriate GI management strategy for each patient. Our third driver is persistency on therapy. We now have data out to the nine-month mark that demonstrates persistency tracking 10 percentage points above what was observed in the Lilac open-label extension study for placebo rollover patients. This continues the consistent persistency curve we've seen from the time of launch. I'd like to take a deeper dive into each of these drivers. First, let's discuss market penetration and growth potential. One year into launch, we've started more than 1,300 patients on DAYBUE in a market with 5,000 diagnosed Rett patients. Many of these patients come from COEs where we have approximately 50% patient share, which leaves us ample opportunity for growing in that setting. Our mix is shifting to an even more split of prescriptions, with one-third of prescriptions coming from centers of excellence, one-third from non-center of excellence high-volume institutions, and one-third from community practices. Since the level of experience with treating Rett patients outside of centers of excellence is lower, we're delivering enhanced messaging to these prescribers on both clinical benefits to expect from DAYBUE, as well as tolerability management strategies. Our second key driver is the real-world evidence and the success stories those have created to motivate both HCPs and families to initiate DAYBUE. Broad prescribing early post-launch has led to many DAYBUE treatment success stories across a range of ages and disease severities. We're now utilizing these successes to educate prescribers and caregivers on what to expect when starting and staying on DAYBUE, which will encourage broader adoption. Looking at GI management strategies, we've seen a pretty wide range of approaches. Some physicians and practices, particularly a few of the COEs, feel they have this very much dialed in, utilizing product labeling and GI management strategies to achieve success. However, implementation of these strategies in the broader community is variable, telling us there is an important opportunity to educate further on these guidelines. While we continue to be very encouraged by the longitudinal rate of persistency we've been tracking, we believe that in addition to communicating DAYBUE's clinical benefits, implementation of more consistent best practices in GI management will further support building a sizable base of enduring patients over time. This leads to our next driver, persistency, where we've seen a very consistent pattern since launch when comparing the post-launch rate of persistency to our clinical trial experience. Let me now share our latest persistency data. With patient cohorts now out to nine months, the real-world persistency rate is 58%, compared with 47% seen for placebo rollover patients in Lilac at nine months. As we described on our last call, approximately 40% of patients that initiated therapy on DAYBUE in Phase 3 remain on therapy today, and have been on therapy for more than two and a half years. This comparison underscores the opportunity we see to build a sizable enduring population on DAYBUE. If we continue to track approximately 10 percentage points above our clinical trial experience, we believe the enduring population could be approximately half of patients who initiate therapy. Let me touch on the number of patients we have on therapy. As of the week ending May 3, we have 862 patients active on DAYBUE therapy, compared with the figures we shared on February 27 of 860. During most of the first quarter, we saw a decline in active patients on therapy due in part to an increase in numerical discontinuations Steve described earlier. We've now seen net patient additions in each of the last six weeks, and we believe the increase in numerical discontinuation we observed in the first quarter has peaked and is now largely digested. I'd like to recap our view of the U.S. opportunity as we now commence our second year on the market. With over 3,500 diagnosed patients who have not yet tried DAYBUE, and several thousand Rett patients who have not yet been diagnosed, we have an opportunity to continue to substantially grow DAYBUE. Our persistency experience to-date indicates we can build a sizable enduring population benefiting from DAYBUE. We have a strong foundation to build on, including a large prescribing population and broad payer access. Please turn to Slide 10 for a discussion of our plans on DAYBUE outside the United States. Looking beyond the U.S., we are rapidly advancing toward making DAYBUE available in additional markets. Our Pediatric Investigation Plan, or PIP, which detailed the previously completed clinical trials for DAYBUE, has been agreed upon with the Pediatric Committee of the EMA, paving the way for an anticipated filing in the first quarter of 2025. In Japan, we now have a formal meeting scheduled with the PMDA later this quarter to discuss our proposed clinical plan. And in Canada, we recently announced that our new drug submission was accepted for filing and granted priority review by Health Canada, potentially leading to an approval in that market around the end of this year. Let's now turn to Slide 11. Here you see quotes from caregivers reinforcing some of the observations described above, each consistent with the feedback we've been hearing for many months, such as caregivers noting higher levels of engagement, improvement in speech with a broadening vocabulary, and improved engagement in conversations, more purposeful use of hands, and decreased hand-wringing and stereotypies. We also regularly hear feedback about a loved one's increased cognitive ability or increased alertness, with patients now being able to better follow conversations. Caregivers tell us they view these improvements as meaningful enhancements in quality of life for the patients in their care, as well as their families. These testimonials all speak to the promise of treatment with DAYBUE and underscore exactly why we at ACADIA do what we do to support and benefit those with greatest needs. Let's turn to Slide 12 for a discussion of our NUPLA

Thank you, Brendan. In addition to our commercial products, we have a strong pipeline of late-stage clinical programs and early-stage disclosed and undisclosed programs, providing us with several opportunities to further expand our growth. I'll review our two late-stage programs. Please turn to Slide 15 to discuss our ACP-101 program, the Treatment of Hyperphagia and Prader-Willi Syndrome, or PWS. Let me start with just a brief background on the disease. Prader-Willi Syndrome is a rare genetic neurobehavioral disorder that affects approximately 8,000 to 10,000 patients in the U.S. The defining characteristic of PWS is hyperphagia, which commonly begins between the ages of three to eight. Hyperphagia is characterized by unrelenting hunger that often leads to obesity and behavioral challenges, such as anxiety and aggression. As you can imagine, it is extremely distracting for patients, as well as parents and caregivers of patients with PWS. To illustrate just how devastating this disorder is, the average life expectancy is 30 years, largely due to obesity and resulting cardiovascular-related diseases. Hyperphagia and PWS represents a significant unmet need, as there are currently no therapies approved to treat it. Let's now turn to Slide 16, where we describe our clinical program in Prader-Willi Syndrome. Late last year, we initiated a Phase 3 study of ACP-101 for the treatment of hyperphagia in PWS. This study builds on the prior Phase 3 experience and includes a 3.2 milligram dose that was shown to significantly reduce hyperphagia-related behaviors. As you see on this slide, the COMPASSPWS is our Phase 3 global, multi-center, randomized, double-blind, 12-week placebo-controlled study evaluating the efficacy and safety of ACP-101 in approximately 170 Prader-Willi patients. The primary efficacy endpoint is improvement of hyperphagia, as measured by the Hyperphagia Questionnaire for Clinical Trials, or HQCT scale, also used in the prior Phase 3 study. Those patients who complete this study are eligible to enroll in an open-label, long-term extension study. If data from the Phase 3 study are positive, we plan to submit a new drug application for the treatment of Hyperphagia and PWS to the FDA. The Prader-Willi community has incredibly high-level enthusiasm for this opportunity and interest in our study. We look forward to working with them and with clinical experts as we continue to advance this program. Please turn to Slide 17 to review our second late-stage clinical program, ACP-204. ACP-204 is our next-generation 5-HT2A compound that we're developing as a potential treatment for Alzheimer's disease psychosis. Similar to pimavanserin, ACP-204 works primarily as an inverse agonist at the 5HT2A receptor. With ACP-204, we are seeking to build on our learnings from pimavanserin and believe it is an exciting product opportunity. Our work completed today includes a comprehensive phase one program that supports our target product profile for ACP-204, including no sign of QT prolongation at planned doses in our study, a wide dose range established supporting the potential for a dose equivalent to approximately 2x the approved pimavanserin 34 milligram dose, and steady state PK achieved in less than half the time of pimavanserin, suggesting potential for an earlier onset of activity. ACP 204's profile could represent a significant improvement over their already strong product profile for pimavanserin. Please turn to Slide 18. Our seamless Phase 2-Phase 3 program for ACP-204, which we have aligned on with the FDA, builds on our clinical experience with pimavanserin and is now underway. Our plan includes a Phase 2 study with over 300 patients, which is designed to roll seamlessly into two Phase 3 studies. This Phase 2 study is ongoing and is designed and sized in such a way that if successful, it could be considered an adequate and well-controlled registrational trial. Once the full study allocation of patients for Phase 2 is complete, we will analyze and report Phase 2 results, by which time the two Phase 3 studies will already be underway. We are pleased to be advancing both of these promising late-stage clinical assets and look forward to providing future updates. And now, I'll turn it over to Mark for a financial update, beginning on Slide 19.

Thank you, Kimberly. Let's review our quarterly financial performance on Slide 20. In the first quarter, we recorded $205.8 million in total revenue, up 74% from the first quarter of last year. DAYBUE net product sales were $75.9 million in the first quarter, which was a sequential decline of 13% as compared to the fourth quarter of 2023. The sequential quarterly change was comprised of a 10% reduction in bottles sold and a 3% reduction in net price due to higher gross to net. In terms of the reduction in bottles sold, on our last call, we described the seasonal dynamics that were affecting our business in the first quarter, including fewer Rett clinic days and Rett patient visits, as well as reductions in refills and conversion rates due to the beginning of the year insurance reauthorization and re-enrollment process. In addition, for a period of time, numerical discontinuations outpaced new patient starts, the dynamics of which were described earlier by Steve and Brendan. As we are now back to a period of net patient ads and the first quarter seasonal dynamics are behind us, we are confident in our ability to grow DAYBUE sales on a quarter-by-quarter basis through the remainder of the year. NUPLA

Thanks, Mark. Let's now please turn to Slide 22. Looking to this year and beyond, we are focused on penetrating the significant opportunity that remains in front of us for DAYBUE in the United States. Together with NUPLA

Thank you so much. [Operator Instructions] Our first question is from Tessa Romero with JPMorgan. Please proceed.

On the business development front, curious, you've previously talked a lot about an interest in rare disease and neuro. Just curious, how would you characterize your appetite today here? And can you speak to the amount of capital you would ideally allocate to BD activities and the amount of risk you would be willing to take on in terms of stage? And then quick follow-up just on DAYBUE, you talked about net patient adds in each of the last six weeks. We just wanted to confirm, would the correct interpretation be that you expect this to continue such that you are comfortable to reiterate the guide today? Thanks, guys.

Thanks much, Tessa. I'll take the BD question and I'll ask Mark to comment on your DAYBUE question. So in terms of BD, nothing changed. It continues to be a very important part of our strategy. It's always a little bit difficult to predict the timing of transactions because a lot of things have to come together, obviously, but we continue to be very active on the BD front and looking at what I would characterize as some really interesting opportunities. It is also a little bit difficult to project exactly how much capital we would allocate to an individual deal or deals because it's really kind of fact dependent. But what I would say is, we do see what I would characterize as a very interesting opportunity set and we will execute on deals that we think are additive and obviously add value to our base. I think that was it on BD. Mark, do you want to take the DAYBUE guidance question?

Yes. On guidance, thanks for the question. Your interpretation is correct. We do expect to have net patient ads continue in a positive direction going forward and that supports the reiteration of our guidance.

Tessa, just want to confirm, did you have a third question on BD? I think I captured all of it. I want to make sure.

Yes. Thanks, Steve. Thanks, Mark. Just on kind of stage of asset on the BD side that you'd be contemplating, how early would you go versus something more late stage? Thanks.

Yes. No, thanks. I appreciate the question. Also very opportunity dependent. I would say, as an industry, we've worked through several years there where the biggest challenger that we and other companies had doing deals were honestly the capital markets because, capital is readily available and that just made it, more challenging or more expensive to do partnerships or acquisitions. It's a little bit different environment today and I'm seeing, a much more fertile environment for deal making. And so having said that, historically because it was very challenging in very robust capital markets, we and other companies did a lot of early -- tended to, produce more, that environment produces more early stage deals, I guess is the way to say it. We have an appetite for early and late stage deals. I think our, you know, the sweet spot of our capabilities translates to more of a focus on pre-commercial assets, although, you know, we do from time-to-time look at products that are already commercialized. And so I would say there are no, we're agnostic more or less to the stage of development of asset. We have a strong balance sheet. We have strong capabilities. We certainly would love to do more late stage assets. DAYBUE and ACP-101 and Prader-Willi are two examples of deals that we've done at the late stage. And we'd certainly be eager to do more. It really is more a function of the kinds of opportunities that exist in the market.

One moment for our next question, please. And it comes from the line of Ritu Baral with TD Com. Please proceed.

Can you guys talk about, if you have this number, the percentage of diverse patients that have started DAYBUE at any time? Given the 50% long-term persistence rate, does that mean that since you have 25% market share, 50% of diagnosed patients have attempted to start DAYBUE? And can you speak a little to what you know about restart rates and how the GI management plan might factor into that? Thank you.

Ritu, I'm not sure we understood the full question, but I think Brendan thinks he caught it all, so I'm going to let him answer.

I think I did, Ritu, and thanks for both portions of the question. So the first is the percentage of diagnosed patients that are on DAYBUE. As Steve pointed out, a quarter of patients, so actually a little north of 25% of patients are on DAYBUE. I would discuss that in terms of diagnosed Rett patients, forgive me, on DAYBUE.

We have initiated therapy on DAYBUE.

Have initiated therapy on DAYBUE. We have prescriptions, obviously, for more. As you know, we work them through the payer access process, so we would expect that we will, as we have said with conversion rates, continue to convert those prescriptions we have on hand as we continue to get additional prescriptions in. Your second question was around restart rates. We do see restarts of patients, and that happens for a variety of reasons. In some cases, a patient and family may have gone to a prescriber that is not necessarily a Rett expert but is close by. They may have started on the full dose and may not have had the best of experiences. That's one group that tends to come back as they've heard a bit more about titration as a potential strategy for starting, so we see that. We also see patients that have gone through significant medical procedures and honestly take a break and then come back to therapy. That often happens. And as we've discussed, because of our family access manager team, we stay very close in proximity to each of these families, offering support whether they have decided to initiate DAYBUE or, in some cases, if they have decided at least to take a temporary pause or to discontinue, to just keep them up to date on what we're seeing and opportunities to restart.

Got it. On the first question, I don't think it was perfectly clear on my part, is the 25% the number, I'm sorry, the proportion of patients that have attempted to start on DAYBUE or is it a bigger number of the percentage of diagnosed patients that have at one point started on DAYBUE but may not have remained due to long-term compliance reasons? Thank you.

Yes. Thanks for the clarification. It is the former. 25% of the 5,000 diagnosed patients, or as Brendon said, slightly more than 25%, have initiated therapy on DAYBUE. We do obviously have some of those that discontinued, but 25% have started therapy.

Thank you. One moment for our next question, please. And as a reminder, we ask that you please keep your questions to one. Our next question is from Gregory Renza with RBC Capital Markets. Please proceed.

Congrats on the progress. Thanks for taking my questions. When it comes to the new patient starts, my question is just really around the rate of that. Certainly appreciate the discontinuations in the [indiscernible] that you commented on and thinking those up with the totals. I'm just curious to what extent do you think there'll be some degree of predictability or maybe some stability on anticipating a more stable rate of new starts, especially as you think about broadening to beyond the [indiscernible]? Thanks so much.

Yes. thanks so much for the question, Greg. Brendan?

Yes. Thanks for the question, Greg. So in terms of new patient starts, as we described in the first quarter, it was slow in January, but did begin to pick up in February and March, again in April. As we discussed in our guidance range, we do anticipate continuing an upward increase in new patient starts. The two factors I would say that factor in most notably for us will be new patient starts and net patients. So as we've also described, we've seen a decline in numerical discontinuations, which we think is logical based on [indiscernible] of patients that started and now a more consistent rate of patient adds week-over-week.

Thank you. One moment for our next question, please. And it comes from Ami Fadia with Needham and Company. Please proceed.

You mentioned in your remarks that going forward, you expect a significant portion of the growth to come from non-COE high-volume centers as well as community centers, which often tend to be more sort of spread out. How are you thinking about sort of the commercial effort in sort of educating and reaching these physicians so that they can start patients on therapy appropriately with the titration schedule that works and enables patients to stay on drug longer?

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

Yes, sure. Thanks for the question. And maybe from my prepared comments, I would say that obviously in the early days, we had a substantial number of patients come from Centers of Excellence, but we already had a good number of patients that were coming from those high-volume institution non-COEs and from the community. And what I think we've seen is a very logical migration of where prescriptions are coming from. So, well over 50% coming from COEs in the earliest of days, now more like a third coming from COEs and two-thirds coming from the others. From there, I think we have a base of experience in those two latter segments. What we're really focused on are the real-world benefits that have been seen for DAYBUE, because I think the tangible conversations that take place with caregivers are more around what I'm going to see in my patient. What am I going to see in my loved one? So, we've created vignettes that look at patients over the age of 20, teenagers, as well as preteens and two- to five-year-olds to give a much clearer perspective on what the treatment opportunity looks like and the benefits that they can expect to see in DAYBUE. And then, I think embedded in the question was a question about our ability to get to these patients wherever they are. We have a great footprint to cover all of the Rett treaters, and we also have claims data that helps us more deliberately track down those physicians that will be the point person, either at a high-volume institution or the community, for us to engage in those conversations.

Thank you. One moment for our next question. And it comes from Yatin Suneja with Guggenheim. Please proceed.

Could you clarify what is gross to net right now? And then, since you have reached 50% penetration in COEs, could you just comment on the level of penetration that you could reach in non-COEs over time, and then where you can push the COEs? Again, you're at 50, where can you go? Thank you.

Yatin, thanks much for the question. Mark, you want to take the first question? Brendan?

I presume you mean, the question on gross to net is related to DAYBUE.

Yes.

So I think for us, as we talked about on the last call, we're tracking towards 20% for the year, and we don't expect that to fluctuate on a quarter-by-quarter basis. So we're not going to disclose it as we go along. And I would just say, maybe qualitatively in the first quarter, we're just slightly below that target.

And for the second part of your question, I think in two parts, for COEs with 50% patient penetration, I think we have tremendous momentum in these core areas of where these patients are treated. We'll continue to work through that population. I think that as you get further and further up the curve, obviously, the engagement of those families with COEs is a critical factor for how far we'll get for penetration there. But we do see that in high-volume institutions and in the community, some of these conversations are easier for us to engage in, in terms of our ability to get face-to-face with those physicians to talk about the benefits that they see for DAYBUE. And then it's really a function of working very closely with them to make sure that they can get to their families, alert them that a therapy is available, and get them in for treatment. In terms of penetration, I think we expect to have similar rates of, I think we expect to see rising rates of penetration of high-volume institutions, more closely replicating what we see in COEs. And then in the community, it really depends on kind of the physician level of engagement that we're seeing and the proximity of the last kind of discussions they've had with their Rett patients. But we're encouraged by what we're seeing early on.

Thank you. One moment for our next question, please. And it's from David Hoang with Citigroup. Please proceed.

I just wanted to ask about whether you had any insight on whether persistency differs between COEs and the non-COE community segment. And if you could possibly tie that back to their GI management strategy, how are docs managing it in the non-COE segment, and how much room is there to improve?

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

Yes, sure, David. Thanks for the question. At the top, I'll say that there are not wide disparities in persistency rates between COEs and non-COEs. What I think we see is more the proximity to patient and the work done on a GI management strategy so that there's a clear discussion up front with the families about the treatment journey and the options that are available to make sure they manage that. So, the more experience a physician gets, the more consistent I think their approach to GI management becomes, the better persistency gets. So, I think it's more a function of that than it is whether you're in a COE or not.

Thank you. One moment for our next question. And it's from the line of Joel Beatty with Baird. Please proceed.

For the net numerical discontinuations in the first six weeks of the year or so, could you characterize those a little bit more, such as what was the cause, and was it driven more by lower patient starts during that time or higher than usual discontinuations?

Thanks much for the question, Joel. Brendan, do you want to take that?

Yes, Joel. Thanks for the question. Numerical discontinuations were largely what we would expect, which is why we reiterated the point around the consistency of our persistency curve. We do think from a seasonal perspective, there were some patients that started perhaps in the fourth quarter that discontinued early. It may not have been great timing for them to have started DAYBUE around the holidays, for example. That may have contributed from a seasonal perspective to slightly higher numerical discontinuations than anticipated.

Thank you. One moment for our next question. And it's from the line of Jeffrey Hung with Morgan Stanley. Please proceed.

Hi. Good afternoon. This is Catherine on for Jeff. Thank you so much for taking our question. Just another one on the Centers of Excellence from us. Now that we're a year into launch, have you observed COEs increasing the number of Rett clinic days from the once-monthly you mentioned last quarter to a more frequent basis? And do you have an updated average number here?

Thanks much for the question, Catherine. Brendan?

Yes, sure. Thanks for the question. In most cases, I would say that COEs are maintaining the process that they've had to engage families. There are a handful of centers that have increased Rett clinic days. There are a couple that have specific DAYBUE clinic days as well. But generally, I would say it's been consistent with how they've seen patients over time.

Thank you. One moment for our next question, please. And it's from the line of Charles Duncan with Cantor. Please proceed.

Hi. This is Elaine on for Charles. Thank you for taking our question. I just wanted to ask, I think at the last update, you said that the age range was comparable or spread throughout for DAYBUE. Would you say that the key drivers for demand, such as real-world benefit and establishing GI management strategies, does it depend per age range?

Thanks much for the question. Brendan?

Yes, sure. Thanks so much for the question, Elaine. I would say that we're still seeing largely what we expected in terms of the existing prevalent population for Rett, meaning that we're getting the age range and the respective weights that we would expect to see in terms of a patient mix. If anything, in the first part of 2024, we've seen slightly older and heavier patients that have been started on DAYBUE in terms of the patient mix, which might lead to somewhat of an increase in average dose as a function of that.

Thank you. One moment for our next question, please. And it's from the line of Jason Butler with Citizens JMP.

Good afternoon. This is Jose for Jason. Thanks for taking our question. How do you think about the potential role of gene therapies in Rett syndrome and how could DAYBUE be used alongside this therapy? We understand these therapies are pretty early in development, but we're just curious about your thoughts. Thank you.

Yes. Thanks much for the question. I'll start by saying we hope that DAYBUE is the first of multiple drugs approved to treat this highly debilitating disorder. As it relates to gene therapy, I think that we know that gene therapy can be very challenging. We've even seen some of the challenges played out just in the last week with gene therapy generally speaking. In Rett, it's a little bit more, there's a little bit of an additional hurdle here because with Rett, there's kind of a Goldilocks level of gene expression that you want to operate within because if you have too much expression, you get the same symptoms, you give them too little. And so there are a couple of companies that are in very early stages of testing on gene therapy and I think there's just a lot more to come. It won't be rapid, nothing is in this industry, it takes some time, but we're certainly hopeful that there will be, again, that DAYBUE will be the first of many therapies for this population. Having said that, as we think about additional drugs becoming available, including gene therapy, we don't see any reason that DAYBUE couldn't be prescribed alongside other drugs as well. And so these patients are so highly symptomatic that if you had another therapy, gene therapy or otherwise, that reduced symptoms by 50% or even 75%, they would still be highly, highly symptomatic and in need of therapy. And so we envision DAYBUE operating in a world where if there are other therapies down the road, we believe that it'd be very compatible with those therapies and have the potential to provide additive benefit.

Thank you. One moment for our next question, please. And it's from Ash Verma with UBS. Please proceed.

I had two. So for DAYBUE, I know in prior instances you have actually self-guided the sales for subsequent quarters. At this time, I think you just left it at sequential growth. Is there any reason for that? If anything, you sound very confident on the rebounds. I was just curious what sort of driving that dynamic. And then, secondly, I wanted to ask about your cost structure. Like have you considered revisiting that. I mean, compared to last year, this year we've seen new positive, negative symptoms not working out favorably and the DAYBUE persistency coming in below, I'm guessing where you would have originally assumed. Does that make you rethink where your cost structure is? Thanks.

Yes. Thanks much, Ash, for the questions. Mark, I'll let you take both of them.

Yes. Sure, sure. On the guidance, as we transition to annual guidance, you're no longer to give the kind of one quarter forward guidance. I guess the unique thing about the first quarter of this year is that we were expecting a sequential down quarter. So we thought it was just helpful in giving the full financial expectations for the year to give the first quarter guidance for this year as well as annual guidance. We don't expect to see sequential declines going forward. So we're going to keep the annual guidance just like we do for NUPLA

Thank you. One moment for our next question, please. And it comes from the line of Marc Goodman with Leerink.

Yes. My question is around the Prader-Willi trial, and I'm curious if GLP-1 uptake has been hindering enrollment and just the general thoughts around how GLP-1s will play into potentially not needing as much therapy for Prader-Willi and the eating disorder there. And then, secondly, can you just give us a sense of how many patients are on NUPLA

Yes. Thanks much, Marc, for the question. I'll take the first one. So in Prader-Willi, we've seen no impact at all of GLP-1 utilization. In fact, as Kimberly mentioned, we have a very enthusiastic patient population and medical community, and the enrollment is moving very well. We're enrolling ahead of plan. So we haven't seen any impact of GLP-1 or anything else, honestly. I'm sorry, second question. Brendan, you want to take that on NUPLA

Yes, sure. Thanks for the question, Marc. We're continuing to see increases in patients on therapy on a quarterly basis. So between the community and LTC in long-term care, obviously, we have great visibility into the community. And so we've added patients in the first quarter over the fourth quarter on the order of about 8,500 in total patients. And then in LTC, that's obviously more like a quarter of our business, but you know that prescriptions are often split between patients. So we don't have absolute visibility into the number in long-term care.

Thank you. One moment for our next question, please. And it's from Sumanth Kulkarni with Canaccord Genuity. Please proceed.

On DAYBUE discontinuations, is there a sweet spot in terms of months on drug where discontinuations tend to cluster, and if a patient remains on drug after that, they tend to do so more easily after they pass that point? And are most discontinuations confirmed by clinical visits, or are there patients that have gone greater than 60 days without a refill?

Thanks much. I'll answer the first part. Brendan, I'll ask you to answer the second part in terms of the split on discontinuations. So Sumanth, we do see, we touched on this on the call, so let me just expand out a little bit. We do see more discontinuations in the first two fills of drugs. So there's a disproportionate number of discontinuations there. Now, some of that you would expect. We see this pretty routinely with drugs that have subjective endpoints. We see it all the time in neuropsychiatry. We have a steeper level of discontinuations in the first two to three months. So we do see some of that. We do feel, however, though, as we parse through that data, that given the level of titration that we're seeing across the brand, and just recognizing that it takes longer than to get to therapeutic levels, that we do think that some patients are discontinuing prematurely before they have an opportunity to see those benefits. And there's an opportunity for us there to improve on that, and it's a high area of focus for us to now, and as Brendan discussed on the call, particularly around educating caregivers and medical professionals around their expectations around time, setting the right expectations about time to get to benefits, and then managing to that is a very important area of focus for us. Brendan, do you want to take the other question?

Yes. So Steve obviously did a great job of kind of articulating where we are with when discontinuations take place, and it's probably intuitive, but the further out we get in fills, the flatter the curve gets, right? There are fewer and fewer patients that are discontinuing when you get beyond four and five fills with DAYBUE. And I think we're encouraged by that on two levels. Number one is obviously our fams are very close with these families. We have weekly conversations with them, so we have good confidence that once they get through that early part of that patient journey and tolerability, GI management strategies, we do a nice job of keeping them on therapy. And we also know from talking to Centers of Excellence how often they're seeing these patients. Many of the physicians want to see their patients regularly after they start. The vast majority of them, I think, want to see patients at the month three time period, partially because that's the length of the clinical trial, partially because some payers are asking for that information at that point. And then I think they make judgment calls on how well the patient is doing, how often they want to see them after that. But with persistency rates now out to nine months in what we're seeing, I think we feel confident in what we're seeing in terms of patients being able to start and stay on therapy after they get through the early part of the treatment journey.

I think I'll just add one thing to that. I think the question was also, do we -- or more discontinuations happened because they're confirmed versus going over 60 days? And I think you asked it in the clinical decision. I think for us with the connectivity we have with our fams, we do find for the data we received, the majority of discontinuations are confirmed discontinuations. And it's the minority of discontinuations that are deemed discontinued for greater than 60 days, many of which of those then subsequently become confirmed when spoken to the caregiver.

Thank you. And we have one moment for one more question. One moment, please. And it comes from the line of Uy Ear with Mizuho. Please proceed.

Yes, just a question on NUPLA

Thanks much for the question. Brendan, you want to take the first question?

For sure. So I think there are a couple of dynamics. If you'll recall, carbidopa-levodopa scripts in the peak of the pandemic and even towards the end were declining over time. And declining would suggest fewer Parkinson's disease patients overall. Even today, we'd say that's flat. So I wouldn't call that a rebound by any stretch of the imagination. I would call that stability. But I think also easing safety measures that have patients returning to clinics and hospitals are certainly giving us more shots on goal for NUPLA

I'll take the second part of that. So as Brendan mentioned, when we look at metrics like carbidopa-levodopa, it looks like the overall PDP market is relatively steady or flat, but we are seeing growth with NUPLA

Thank you. And with that, I will conclude our Q&A session and pass it back to Steve Davis for final comments.

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