ACAD - NASDAQ

Good day ladies and gentlemen, and thank you for standing by. Welcome to the ACADIA Pharmaceuticals Second Quarter 2024 Financial Results 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, ACADIA. Please go ahead.

Thank you, Daniel. Good afternoon and thank you for joining us on today's call to discuss ACADIA’S second 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 commercial products, NUPLA

Thank you, Steve. Today I'll be focusing my comments on the current state of business in our NUPLA

Thanks Brandon. I'd like to start out by saying that it's a pleasure to be with you all today. I'm pleased to be joining the Acadia team. I came here based on my enthusiasm for what our marketed medicines are bringing to patients, for the potential of our pipeline and the opportunity to continue to feed and grow that pipeline. I look forward to our conversation today and going forward now turning to today's content, we continue to make progress on enrollment in our late stage clinical programs. First, let's turn to Slide 16, which gives an overview of our ACP-101 program in Prader-Willi syndrome. Let me start with some background on the disease. Prader-Willi is a rare genetic neurobehavioral disorder that affects approximately eight to 10,000 patients in the United States. Its defining characteristic is hyperphagia, which is an unrelenting hunger, a constant craving for food that never ends because patients living with Prader-Willi never feel full. This manifests very early in life and can lead to obesity and myriad complications like type two diabetes or heart disease, as well as behavioral changes like aggression and anxiety. And unfortunately, life expectancy is currently only around 30 years old, largely due to cardiovascular disease. Please turn to slide 17 as a reminder, we're currently running a Phase 3 study called Compass PWF. This study is global, multicenter, randomized, double blind and placebo controlled. Building on the prior Phase 3 experience. This trial focuses on the 3.2 milligram dose that was previously shown to reduce hyperphagia related behaviors. We also utilize the same primary endpoint as was used previously, the hyperphagia questionnaire for clinical trials. We anticipate giving more specific guidance on timing as we get further into enrollment, but thus far it is proceeding well. We've been truly pleased with the enthusiasm we're seeing in the Prader-Willie community, and we look forward to continuing to work with them and clinical experts as we advance through the study. And of course, if data from this Phase 3 study are positive, we plan to submit a new drug application for the treatment of hyperphagia and PWS to the FDA. Turning to slide 18 now on our second late stage clinical program, ACP-204. You've heard from both Steve and Brendan today about the strong growth in NUPLA

Thank you, Liz. Let's review our quarterly financial performance on Slide 22. In the second quarter, we recorded $242 million in total net sales, up 46% from the second quarter of last year. DAYBUE net product sales were $84.6 million in the second quarter, up from $23.2 million in the second quarter of last year. Sequentially DAYBUE net sales were up 11% from the first quarter, comprised of 7% follow growth and a 4% increase in net price. NUPLA

Thanks much Mark. Please turn to slide 24. We have a strong foundation for our business today and are excited to build on our successes and drive future growth. We're focused on continuing to execute on the significant opportunity that remains in front of us for both DAYBUE and NUPLA

[Operator instructions]. And our first question comes from Ritu Baral with TD Cowen. Your line is open.

Good afternoon, everyone. Thanks for taking the question. I guess I wanted to ask about the difference that you guys are seeing in the ongoing discontinuation rate and the new start rate between the community and the COE. I believe you said that two thirds of the new prescriptions were coming from the COE, like high volume in the community. But, how are those centers and doctors managing discontinuations versus the COEs? And then I was wondering, second part of this 1Question, how the dose titration discussion that was featured significantly at IRSS factored into that as well. Thanks.

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

Sure. Thanks, Ritu. So, first, just in terms of discontinuation rates between COEs and non COEs, we see it's reasonably steady between the both, meaning to say that there's more consistency that we see in our persistency curves, whether you're in a COE or a high volume institution. From a new patient start perspective, our audience will recall that we started in COE's and had excellent uptake. Obviously, these were the practices that were involved in our clinical trials, the vast majority of them. So our penetration of COEs was and is significantly higher than it is outside of those COE. So it's logical that as we continue to talk about the DAYBUE message and expand our breadth, the majority of our prescriptions are going to, over time, begin to come from non COEs and from the community. As a reminder, about a quarter of all Rett patients will be found in centers of excellence, of which there are now 21. So it gives you a sense for just patient processing ability from that segment. And then the other 75% are going to be found in these high volume and community practices. So we continue to increase our penetration there. Two thirds of our new starts come from there. And we still have a steady flow -- flow of about a third of our prescriptions coming from COEs. I think you also made a reference to IRSF for dose titration. I'll try to touch on that, if I don't answer your question. Please ask it differently. But we did speak at IRSF about dose titration and the ability of physicians, if they deem it appropriate, to start at a slower dose, a lower dose and titrate up. We are definitely seeing that. And we're seeing that both in COEs and outside of COE's. We also have been encouraging families to stay in close contact with their physicians to make sure that if there are needs to make any adjustments to their GI plan, they do that in the first two to four weeks. All of that is intended to help increase the ability of patients and families to stay on therapy through those first early couple of weeks on treatment with DAYBUE and get out to the benefits that we expect they'll see with longer term treatment.

Thank you. And our next question comes from Charles Duncan with Cantor. Your line is open.

Hi. Yes, thanks for taking the question. Unfortunately, it's a two parter and that is related to the bookends in terms of DAYBUE guidance. Now that we're in the third quarter, I guess I'm wondering what gives you confidence to hit one end versus the other? What has to happen? And then just a clarification from Liz. I wasn't sure I understood. Are you going to read out the Phase 2 from the ACP-204 study and then the Phase 3? Could you go back and repeat your comments there? Thanks.

Yes. Thanks much for the two part question. Charles. Mark, you want to answer the first part?

Yes, sure. Thanks for the question. I guess in terms of day view guidance, where we're tracking today with kind of all the key metrics, I would say we're tracking towards the lower half of our revised guidance range. With all the initiatives that we have in place and the new information and data that we're going to share with HCPs and caregivers about benefits and GI management plans, we think all of that can take us to increasing our metrics and getting towards the high end of the range and the low end of the range would need to see our metrics turn a little backwards from what we're achieving today.

Okay, Liz?

Absolutely. So for clarification there, So how this is going to work is that sites can enroll in the Phase 2 and then sites that are not in the EU, once they're done enrolling in the Phase 2, move over and start enrolling in the Phase 3. So what that means, practically speaking, is that Phase 2 data are going to come out while the Phase 3 is still enrolling. So we think that's actually going to be helpful thing to then continue to spur enrollment thereafter. And it will help the EU to come on quickly because Phase 2 data are always motivational for physicians and for patients. So hopefully that clarifies it.

Thank you. Our next question comes from Gregory Renza with RBC Capital Markets. Your line is open.

Hi, guys, it's Anish on for Greg. Thanks for the updates from this quarter and for taking our question just on DAYBUE, how are you thinking about the potential impact of the summer months with respect to drug holidays? Time to start and even restarts. What are you seeing so far into the summer months? And as a supplement, could you quantify for us what percentage of patients that have taken DAYBUE, that have stopped, have not restarted? Thanks so much.

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

Sure. Thanks. So I would say that the summer looks like the summer in terms of what we see for just patient cycling July, there are patients that are taking holidays. There are also HCPs taking holidays, but COEs are operating at the same cadence. And we would expect that we will, as families come back from vacations and get into the regular preparation for the upcoming school year that we would expect to see our new patient starts continue to progress as we get into August and September. The second question was around discontinuations. There are really two different types that we've described. One is a discontinuation where a family has told us, and as we have really exquisite relationships with our patients and families. We have our fam team that's out in the field with them, as well as our clinical nurse coordinators that speak with them on a regular basis. So we know a patient is discontinued. But there are also those who may just be taking a pause, maybe having a medical procedure, and may just have a lapse in treatment. What we've seen over time is if you have, if you've gone out past 60 days, there's still about 20% of those patients that will come back to refill, if that gives you some sense for it. In terms of actual discontinued patients, fewer patients that discontinued have, at least to date returned to DAYBUE treatment.

Thank you. Our next question comes from Joel Beatty with Baird. Your line is open.

All right, congrats on the progress, and thanks for the detailed update. For the 70% of diagnosed patients who have not initiated on DAYBUE, are you able to break that group down into any market segments that might be helpful for thinking about that opportunity, such as perhaps, what percent have awareness of DAYBUE? Or what percent have discussed it with a physician? And then as a second part, you mentioned a survey that mentioned that over the next 24 months, healthcare professionals expect to increase the prescriptions to DAYBUE to more than 70% for their patients. Anything about what percent of that surveyed population they were currently at that point in time of the survey? Thanks.

Yes. Thanks much for the question, Brendan?

Thanks. I may ask you to repeat the second question. You trailed off at the end. I wasn't sure what that was, but I can answer the first one for sure. So in terms of the 70% of the population that remains first, I would remind everyone that DAYBUE has a very broad label. It is for ages two and up. We see both male and female patients being treated. And thus far, the patient population is very much reflective of the prevalent population. So we see a wide range of ages and disease severities treated. In terms of the remaining 70%, unsurprisingly, the highest penetration that's expected is in the two to 20 year old range. It's slightly lower in the 21 plus percent range, but it's still substantially higher than what physicians have been treating to date. And then for the second question, I didn't hear precisely how it was stated.

If the docs expect to be treating 70% of their patients in the future, what percent of their patients are they currently treating today according to the survey?

Sorry. Good. Thanks for the repetition. So we know that we have prescriptions. We've started 30% of patients. We have prescriptions for more than that. And the physicians that responded felt that their patient population, they had treated about 40%. So when I say 70% in aggregate, that's stating that they would have increase from their 40% to a total of their total addressable population of approximately 70%, which varies by age category.

Thank you. Our next question comes from Marc Goodman with Leerink. Your line is open.

Yes, we've talked a lot about DAYBUE, but can you talk about new closet a little bit? Just the rest of the year, the puts and pulls on making the high-end and low end the numbers?

Thanks. Yes, thanks much for the question. Mark Schneyer, you want to take that?

Yes. Thanks, Mark. On NUPLA

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

Thanks for taking my question for ACP-101. And Prader-Willi, can you just talk about your confidence in your approach versus what, excuse me, what competitors are doing? What is your current thinking about potentially expanding development into other indications with hyperphagia or obesity? Thanks.

Yes. Thanks much for the question. I'm going to ask Kimberly Manhard to take that.

Yes.So, with respect to Prader-Willi, you're probably aware of Selena's compound, DCCR, which is Dizoxide Choline control release. Diazoxide, actually originally approved for hypoglycemia. So it's been out in the market for some time. But this is a different form, colonized oxycholine. And they have indicated back in late June that they filed their NDA, and so they had a randomized controlled trial that was not positive for the overall data set. But when they looked at it in patients and data up through the start of COVID they were able to see statistically significant difference between the placebo and active. And then they conducted an open label extension, and from that open label extension, gained agreement to do a randomized withdrawal period of the open label extension and saw positive benefits. But we think that there are a lot of opportunities for treatment of hyperphagia and Prader-Willi syndrome. It's a very devastating disease, and new treatments are needed. If the product is approved, then we've done an analysis to show that they should be able to be given together, since there are very different mechanisms of action and also there's no PK interaction or no overlapping toxicities. Their main toxicities were hypertrichosis and pulmonary edema and hyperglycemia. So we don't see those in our trials.

And, Jeff, maybe just to annotate that a little bit, I think that the confidence in our making an investment here and in running a Phase 3 study really comes from the data. It comes from the Phase 2 data, where we see a nominally significant reduction in hyperphagia associated with Barter Lilly syndrome At the dose that we're testing. It's the same primary endpoint in the Phase 3 studies, the Phase 2. And so there are lots of things that go into these assessments, but the principal data that we're resting on is that phase II data.

Thank you. Our next question comes from Keith Tapper with BMO Capital Markets. Your line is open.

Hi, team. Congrats on the quarter, and thanks for taking my questions. Congratulations to Liz on the transition to Acadia. First question on Dave, would it be helpful to understand the impact of the community engagement and, how that's underway to address discontinuations? Just wondering, on the effort or the impact of GI management efforts on patient dynamics, could you provide color on when the efforts began to reach the community and when the impact should feel fully realized? And is there an effort to drive restart, maybe through patient claims, surveillance, or revisiting providers? Thanks.

Yes, thanks much for the question. I'm going to ask Parag Meswani to address those questions. Parag?

Yes, thanks for the question. So, as a reminder, in our last call, we talked a lot about the consistent application of GI management and GI mitigation strategy. That's an ongoing effort. We do that with physicians on a regular basis, and we're doing that with caregivers on a regular basis as well. So it's ensuring consistent implementation of simple things like stopping constipation medications, adding fiber to your diet, hydration, and use of loperamide. Dose modification is a new part of the algorithm that's now being utilized more and more often as well. We're starting to see the impact of that. You saw that in the second quarter. We've begun to implement a more consistent message to providers and caregivers on that. We've started to see some of the benefits of that, just in terms of the total active patients on therapy and the decline in numerical discontinuation that we saw in the past quarter. And we'll continue to reinforce that for the remainder of this year. On restarts, we're beginning to see some patients begin to come back onto therapy, but our focus has been on ensuring a very positive treatment initiation. It's important for those patients that have been on therapy for the long term.

Thank you. Our next question comes from David Hoang with Citigroup. Your line is open.

Hi there. Thanks for taking my questions. So I wanted to ask about patients on DaVU long-term. Do you have any data points or maybe kind of the earliest patients that initiated therapy have any reached a year or more? And do we have any visibility on, I guess, twelve month persistency rate compared to nine months? And then just one follow up would be on ACP-204 if I heard correctly, it sounded like EMA did not agree to a seamless Phase 2 three protocol. And so I'm just curious as to kind of why that might be. What was the pushback and how might that impact the regulatory path in Europe? Thank you.

Yes, thanks much, David. Brendan, you want to take the first question? And then Liz, you want to take the second one?

For sure. Thanks, David, for the question. And as I said in my prepared remarks, we actually have a number of patients that are out past two or three years that are on day view. And actually in some of our programming, we have caregivers of those loved ones that speak about the benefits they're seeing at six months, at a year and two years, often providing really the marker for other families on what they might hope to see with longer term treatment. You also asked about persistency curve. So the Lilac one study, the placebo rollovers are the ones that we're using to look at our performance in the real world, as opposed to that study where we tracked ten or more percentage points above that, out to nine months. And at twelve months, we don't have a comparator to give you, but are still seeing excellent persistency rates, well above 50%, that give us that confidence in the longer term persistency we're expecting to see in the real world with the support we're able to give.

And just one additional point there. Of all the patients that started DAYBUE in our Phase 3 program, 40% of them are still on DAYBUE today. So again, they've been on therapy for three plus years. And of all of those patients that rolled over on the commercial drug, they've all stayed on therapy during the 15 months that we've been on the market, with exception of one patient that discontinued.

And for the 204 point, just to clarify. So how we were doing this is running it under a master protocol. And it was really just a master protocol concept that the EU had an issue with at this point. So we fully anticipate running Phase 2 and then running a separate, rolling them into Phase 3 at a later time. So Europe will participate in the Phase 3. We anticipate that this is going to be acceptable for regulatory purposes, but it's really just that they can't go straight through with the seamless enrollment under a master protocol right now.

Thank you. Our next question comes from Paul Mannis with Stifel. Your line is open.

Hey, this is James. I'm for Paul. Thanks for taking our question. Maybe one on NUPLA

Yes, I'll take the first question mark. I'll ask you to answer the second. We've run DTC campaigns previously in the NUPLA

And I can jump into, to address the question on gross to net. So, for next year, starting 2025, we expect the Medicare part d redesigned to take place. And as part of that, we will qualify for the specified small manufacturer phase in, as I mentioned in the prepared remarks. So as we look from gross to net for this, from this year to next year for NUPLA

Thank you. Our next question comes from Yatin Suneja with Guggenheim Securities. Your line is open. Great.

Thanks for taking our question. This is Eddie. On for Yatin. For DAYBUE, were there any gross to net differences from 1Q to 2Q, how much of that revenue growth came from an increase in net price versus patient growth? And then on the patient number you told us there was 900 as of August 1. Are you able to give us a sense of how many of those came in July? Thank you.

Yes, I'm going to ask Mark to take the first question. Bring in the second.

Yes. So as we said in the prepared remarks, our volume and price split sequentially for DAYBUE was 7% bottle growth. So essentially volume and patient growth and 4% net benefit from price as we took a price increase midway through the second quarter.

And for the second question, around the 900 patients, just a couple of things. There's, as a reminder, it was towards the end of the first quarter that we hit sort of our low point for patients, active patients on treatment throughout that time period. Moving forward, we've seen nice incremental month over month growth in active patients. So, 900 wasn't a sudden overnight thing. This was a fairly steady progression. Of those 66 patients added over a 90 plus day period. And I might just add to that, that if you start looking at things on a daily or weekly basis, which we do every day, of course, things move around a little bit. Last week was one of the best weeks we've had in a couple of quarters. So we're hesitant to try to break things down in two shorter period. But as Brendan mentioned, the trend that we've seen has been a consistent trend throughout the quarter.

Thank you. Our next question comes from Tessa Romero with JPMorgan. Your line is up.

Hi. Good afternoon, Stephen team. So specifically, where are you most focused with respect to your commercial strategy for the second half year, particularly accelerate ads and for DAYBUE. And have you thought about altering or changing your sales infrastructure to best target key providers or new providers? And can you also just remind us what is your current prescriber base number and where that is sitting versus your overall target? Thanks.

Thanks much. Keep us honest here. Make sure we answer. I think it was a three part question I'm going to ask.

Yes. So I'll start with the first question, which I think was where are we going to source growth from here, from an ACP perspective, one thing I'll say the outset is there's still plenty of opportunities at the centers of excellence. They are still a core constituent in driving prescriptions and patient ads. But we have been pivoting our business and our priorities outside of the centers of excellence for all the reasons that we've talked about before. Three out of four patients are being seen outside of COEs. They are getting more and more comfortable with this new tool in their toolkit. And at this stage, we're seeing a very even distribution of where our prescriptions are coming from. About a third from COE, about a third from that middle bucket of high volume institutions, and a third from the community. And we're going to continue to fish where the majority of patients are being seen. And so our priority has been, and continue to be for the remainder of Q3 and into Q4, growing our business and getting our fair share of business from the rep population that is being treated outside of the rep centers of excellence. And we expect to see continued breadth of prescribing in those account settings, but also depth of prescribing. We have well over 700 unique prescribers at this point. Some of just prescribed AB to a single patient. And our goal is to continue to get more physicians to prescribe and for those that have more than a patient, and prescribe it to more of the patients that they are currently treating.

Thank you. Did we catch all aspects of your question? I think Brendan maybe has.

I can speak. Yes, I think, Tess, you spoke a little bit to structure and frog. If I miss anything, feel free to add to it. But yes, I think 16 months in, we've seen a couple of great opportunities that have emerged. We put a team out there called the pace team. That's the patient and community education team. This is for families that have expressed a lot of interest in DAYBUE and more information, but have not yet signed up for a prescription. Unsurprisingly, as people learn more and more, they have a lot of questions, some of which clinicians can clearly answer, but others, they just want to know about the access and reimbursement process. They want to know what's the support they're going to be able to get from Acadia along the journey, which gives us a chance to talk about our FAM team and others. So we've had already successes of families meeting with our pace team members and then deciding to get started on a prescription. We have them all placed regionally so that they can be face to face with families, either individually or at community gatherings. And as so we're heading into Rett awareness month or really what I would call more like Rett awareness quarter because it happens between September and November really where we'll have lots of opportunities to engage those families. Then we also have TLL's or thought leader liaisons that are engaging with thought leaders in Rett, but also thought leaders that have a lot of experience with DAYBUE to help just better describe the treatment journey, the do's and don'ts, and how to be successful in starting patients on therapy. So a couple of enhancements to our promotional field footprint.

Yes, the only thing I'll add Tess to what Brendan said is we currently have with our field sales footprint, 100% coverage. So with the 5000 plus patients that are out there, we have 100% coverage of the treating physician. For all of those with the field footprint that we have, we continue to fine tune that model. And Brendan mentioned a couple of fine tune adjustments to that, which is the addition of new roles that give us great opportunities to engage with the prescriber base on the keeping and leader side, but also to have a new resource that can engage directly with caregivers and help them better understand JB's product profile and whether it's right for the long term.

Thank you. This concludes the question and answer session for today's call. Mr. Davis, please proceed to closing remarks.

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