Juan Sanchez - VP, Corporate Communication and IR Sharon Mates - Chairman and CEO Kimberly Vanover - VP of Clinical Development Larry Hineline - CFO.

Seamus Fernandez - Leerink Bert Hazlett - Ladenburg Jason Butler - JMP Securities.

Good morning Ladies and gentlemen and welcome to the Intra Cellular Therapies First Quarter Results Conference Call. At this time all participants are in a listen only mode. Later we will conduct the question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder today's conference all is being recorded.

I would now like to turn the conference over to your host Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Please go ahead..

Thank you, operator. Good morning and thank you for joining us for today's conference call. Our earnings press release providing a corporate update and details of the company's financial results for the quarter ending March 31, 2015 [Indiscernible] a short time ago. The press release is available on our website at www.intracellulartherapies.com.

Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Dr. Kimberly Vanover, Vice President of Clinical Development; Larry Hineline, Chief Financial Officer and Dr. Allen Fienberg, Vice President of Business Development, Dr.

Cedric O'Gorman, Vice President of Medical Affairs and Michael Halstead, Senior Vice President and General Counsel. As a reminder during today's call we will be making certain forward-looking statements.

These statements may include statements regarding among other things, the efficacy, safety and intended utilization of the company's present candidates, the anticipated conduct and results for future clinical trials, plans regarding the regulatory filings, future research and development and possible uses of existing cash and investment resources.

These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risk and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These another risk are describe in our periodic filings made with the Securities and Exchange Commission including our Form 10-Q for the quarter ended March 31, 2015 which is expected to be filed with the SEC later today and our Annual Report on Form 10-K for the year ended December 31, 2014.

You are cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligation to update such statements. I will now turn the call over to Sharon..

Thanks, Juan. Good morning everyone and thank you for joining us on the call today. I will begin with the review of our recent progress and will provide an overview of current and upcoming programs. Kim will then give an update on our lead clinical program ITI-007 for the treatment of Schizophrenia. Lastly Larry will review our financial results.

After that we will open the call for questions. Intra-Cellular Therapies was founded with the vision of bringing innovative medicines to patients suffering from neuropsychiatric and neurodegenerative diseases including diseases of the elderly.

Having advanced our Schizophrenia program into Phase 3, we are now advancing the ITI-007 platform to include late stage studies, which evaluate ITI-007 for the treatment of behavioral disturbances and patients with dementia and the treatment of bipolar disorder.

On today's call we will provide a detailed update of our Phase 3 Schizophrenia program and an overview of our ITI-007 strategy in these other areas. With our advanced position in these programs deliver clear plan for future developments, we believe we are closer than ever to realizing our vision.

In the fourth quarter of 2014, we initiated patient enrollment in our Phase 3 program for the treatment of Schizophrenia. Clinical conduct of the trial is proceeding well and we expect to complete patient enrollment in the first half of 2015 with top line results in the second half of this year.

We will provide an update upon the completion of enrollment in this trial. Additionally, we remain on track to commence the second Phase 3 ITI-007 clinical trial and patients with Schizophrenia in the first half of this year.

Based on ITI-007 unique pharmacology and supporting clinical results, we believe the administration of ITI-007 results in a differentiated efficacy and safety profile, which will allow patients to live their lives to the fullest.

Other anti-psychiatric drugs caused deleterious side effects including metabolic syndrome, lot of disturbances such as EPS [Indiscernible] cognitive impairment and social withdraw.

We believe that ITI-007 with its novel mechanism of action and attractive safety and tolerability profile will provide a superior monotherapy alternative to presently available anti-psychiatric drugs for patients with Schizophrenia. A significant issue for these patients is the failure to adhere to their medication regimen.

Based on data from our completed studies to date we believe that ITI-007 is a medicine that will improve patient compliance due to its favorable efficacy and tolerability profile.

This will allow patients to benefit from ITI-007's ability to control psychotic symptoms while also improving social functioning, allows fuller integration with their families and society. We believe these pro-social benefits are not provided by existing approved therapies.

Now I would like to discuss the potential for ITI007 for the treatment of bipolar disorder. In our phase two schizophrenia trial, a 60 milligram dose of ITI-007 not only resulted in strong antipsychotic efficacy but also demonstrated a robust anti-depressant effect in those patients who had comorbid depression.

These exciting results have contributed to our decision to select bipolar depression as a first indication in our ITI-007 bipolar disorder program. According to the National Institute of Mental Health the 12 month prevalence of bipolar disorder in the U.S. adult population is 2.6%.

Bipolar disorder is characterized by changes in mood with episodes of depression interposed with maniac or hyper maniac episodes along with changes in activity and energy. Depressive symptoms represent the predominant clinical presentation in patients with bipolar disorder.

These depressive episodes can last longer recur more often and are associated with a worst prognosis than maniac or hyper maniac episodes. Bipolar depression remains an undeserved medical need with only a few FDA approved treatment options available.

We believe that ITI007 will be an efficacious well tolerated medication with high patient compliance without the metabolic [motor] or cardiovascular adverse events.

Turning now to our low dose strategy, last year we presented positive results from the phase 1/2 ITI-007 safety intolerability clinical trial in elderly healthy volunteers and patients with dementia. We believe these results support the use of a wide range of low doses of ITI-007 in this population.

In this trial ITI-007 was also shown to improve cognition. A robust clinical trial evaluating ITI-007 for the treatment of behavioral disturbances associated with dementia including Alzheimer's disease is planned to begin this year.

A significant proportion of patients with dementia have neuropsychiatric symptoms, such as agitation, aggressive behaviors, depression, sleep disorders, sundowning and psychosis. These behaviors often lead to early institutionalization, increased healthcare costs and a shortened progression to severe dementia and death.

There are apparently no approved treatments for these patients. Existing treatment strategies involve the use of off label medication which can cause stroke and cardiovascular events. In addition, these medications have also been associated with an increase in falls, motor related adverse events and cognitive impairment.

Based on the mechanism of action and favorable safety profile of ITI-007, we believe this medication will benefit this patient population. Upon commencement of our next study in this patient population later this year, we will provide an overview of the trial design.

Switching to our earlier development programs, the transition of ITI-214 and the PDE1 program previously partnered with Takeda is progressing. The completion of the transfer of the program will be later this year.

We are excited about the opportunity to move forward our PDE program and multiple CNS and Non CNS disorders and look forward to providing updates on our progress in this program. Lastly, with the expensive expansion of our program, we've recently hired talented individuals including psychiatrist Dr.

Cedric O'Gorman as our Vice President of Medical Affairs and he joins us on this call today. Dr. O'Gorman previously worked at Genentech, the U.S. affiliate of Roche. As we continue to move ahead with these programs we look forward to continue to hire additional individuals to help us achieve our goals.

I will now turn the call over to Kim, who will discuss our ITI-007 Phase 3 clinical development program for the treatment of schizophrenia..

Thanks Sharon. For those who may not be familiar with our ITI-007 program, I would like to provide a brief overview. ITI-007 is our first-in-class anti-psychotic with broad therapeutic potential. ITI-007 simultaneously modulates serotonergic, dopaminergic and glutamatergic neurotransmission with different pharmacology emerging with increase in doses.

ITI-007 is a potent serotonin 5-HT2A receptor antagonist with wide separation between 5-HT2A and its affinity for other neuropharmacological target. As the doses increase ITI-007 engages dopamine D2 receptors as a pre-synaptic partial agonist and post-synaptic antagonist.

Indirectly enhances glutamatergic neurotransmission and inhibits serotonin reuptake. Together these data suggest different therapeutic utility for ITI-007 across a wide range of doses which will allow us to pursue different neurological and neuropsychiatric indications.

I will focus the rest of my remarks on the status of our ITI-007 Phase 3 program in schizophrenia. As a result of our successful Phase 2 trial in schizophrenia, we designed our Phase 3 trial similarly.

The Phase 3 trials include the same acutely exacerbated schizophrenia patient populations, the same primary endpoint using the same primary statistical analysis method and will evaluate the same 60 milligram ITI-007 dose that was shown to be effective in our Phase 2 trial.

The primary endpoint for both Phase 3 clinical trials is changed from baseline on the positive and negative syndrome scale or PANS total score compared to placebo.

Secondary endpoints include the PANS positive and negative subscales and other measures to highlight the key differentiating features of ITI-007 including the favorable safety profile, the pro-social and antidepressant effects observed in Phase 2.

Our Phase 3 program includes two randomized double blind and placebo controlled clinical trials of ITI-007 in patients with schizophrenia. The first Phase 3 trial ITI-007-301 or the 301 trial initiated patient enrollment in November 2014.

The 301 trial is evaluating ITI-007 over a four week treatment duration with more than 400 patients being randomized to ITI-007 60 milligrams, 40 milligrams of placebo.

The second Phase 3 trial or 302 trial is a randomized double blind placebo and active controlled trial evaluating antipsychotic efficacy of two doses of ITI-007 versus placebo and includes risperidone as the active control over six weeks of treatment. We expect to randomize over 500 patients in this study.

As you may recall our Phase 2 trial similarly included four treatment arms, two doses of ITI-007 placebo and risperidone as the active control.

At the recent International Congress on Schizophrenia Research held in Colorado Springs in March we presented data supporting rationale at doses as well as 20 to 60 milligrams of ITI-007 will have antipsychotic efficacy. Again in our Phase 2 study 60 milligrams was shown to be effective.

The 301 trial is currently evaluating the efficacy of 60 milligrams and 40 milligrams of ITI-007, the 302 trial will evaluate 60 milligrams and 20 milligrams of ITI-007. There are very strong translational data including both preclinical and clinical data supporting these dose selections.

Based on these data and on the unique first in class pharmacology of ITI-007 acting synergistically through serotonin dopamine glutamate we believe that ITI-007 will bring about efficacy in schizophrenia at D2 receptor occupancy levels only previously seen with clozapine one of the most if not the most efficacious schizophrenia drug available while avoiding unwanted safety and tolerability issues.

This would be a groundbreaking development for patients. Together, the three efficacy trials provide a robust assessment of ITI-007 over broad range of doses. I will now turn the call over to Larry who will review the financial results for the first quarter..

Thanks Kim. I will be reviewing our financial results for the first quarter ending March 31, 2015 and provide an overview of our expectations for the use of our cash and investments. The net loss for the first quarter of 2015 was $22.3 million compared with the net loss of $4.5 million for the first quarter of 2014.

Basic and diluted net loss was $0.72 per share for the first quarter of 2015 compared to a basic and diluted net loss of $0.17 per share for the same period in 2014. R&D expenses for the first quarter of 2015 were $18.6 million compared to $2.8 million for the first quarter of 2014.

The increase in R&D cost year-over-year is primarily due to cost associated with the ITI-007 Phase 3 clinical trial in schizophrenia which is initiated in late 2014. G&A expenses were $3.8 million for the first quarter of 2015 compared to $1.9 million for the same period in 2014.

The increase in G&A expenses was primarily due to increased stock based compensation expense and to a lesser extent salaries and professional fees and cost due to the activities associated with being a public company. Cash and investments totaled $235.2 million at March 31, 2015 compared to $129.6 million at December 31, 2014.

On March 11, 2015, the company completed an underwritten public offering of its common stock for gross proceeds of approximately $130 million and net proceeds of approximately $121.8 million.

Finally, we expect that existing cash and investments will be dedicated primarily to the ITI-007 program including clinical trials of ITI-007 in schizophrenia bi-polar disorder, behavioral disturbances in dementia, depressive disorders and related clinical and non-clinical activities.

To a lesser extent, funds will be used for other clinical and pre-clinical programs, including the company's phosphodiesterase PDE development activities.

With that operator could you please open the line for questions?.

Thank you [Operator Instructions]. And your first question comes from [indiscernible] from RBC Capital Markets. Your line is now open. Please go ahead..

Let me start with two first on the clinical side, for the second Phase 3 study in schizophrenia what’s the rationale underlying the use of an active control and will the study be [powered] to show a difference versus the active control? And then secondly on the R&D expense side, so expenses nationally ticked up.

Is that sort of the run rate we should assume going forward for 2015? Thanks..

I’ll ask Kim to take the first question and then I can take the second question..

In the second Phase 3 trial we have included risperidone as an active control, this is similar to what we included for the Phase 2 study and this helps demonstrate that you have an assay sensitivity which you can detect antipsychotic effects.

This will be a six week treatment duration and so we think it’s important to include risperidone in this for this reason and also we believe that ITI-007 will show a beneficial safety profile compared to risperidone.

The study is now powered statistically to compare ITI-007 to risperidone but the trial is powered to show superiority of ITI-007 compared to placebo..

And for your second part yes our expenses has ticked up and as Larry mentioned it is primarily associated with the clinical trial expenses. We do guide you that for the rest of the year of 2015 we expect to spend between $70 million and $80 million..

Thank you. And your next question comes from Seamus Fernandez from Leerink. Your line is now open. Please go ahead..

So, Kim maybe you can walk us through some of the reasons behind the selection of the 20 milligram dose, and my understanding would be that -- and maybe Sharon you can help us understand a little bit more how the regulatory situation will work with the 60 milligram and then the other doses that are being utilized in the two Phase 3s for schizophrenia.

More from the perspective of showing two positive Phase 3 studies, it doesn’t have to be at the same dose or can it be a two doses? And then I assume that the alpha is being split given the fact that you’re exploring two doses. But just wondering how we should be thinking about the issue of multiple comparisons.

And then lastly, it’s really exciting to see that starting the program in the dementia or in the behavioral disturbances or dementia. Can you maybe give us a little bit of visibility or at least some color on how are you thinking about the specific endpoints in that study? Thanks a lot..

Okay, that was a bunch of questions. Seamus and thanks for your questions. Those are bunch of questions and I didn’t have a pen in my hand, so I am going to turn it over to Kim for the first question. And then we can go from there..

So, right, so first doctors never want to give more medication to patients than necessary to improve their symptom. So we have strong preclinical and clinical data that indicate doses as well as 20 to 60 milligrams of ITI-007 it should be efficacious for the treatment of schizophrenia.

And this is where we what has guided our dose selection for Phase 3. While we could have just taken the 50 milligram dose forward for approval we have decided to evaluate a range of doses in Phase 3 that we believe will give doctors and their patients more dose choices.

Post approval we can continue to evaluate even wider range of doses, but we’ve designed this program to take what we call our anchor dose of 60 milligram forward in each of the efficacy studies and then to continue to evaluate the lower dose range that were predicted to be efficacious according to our earlier clinical and preclinical data..

And if we can just slip in the answer to one of his other questions here, so you are correct. The 60 milligram is our anchor dose and we can go forward with filing an NDA on one dose on 60 milligram assuming other doses are efficacious as well we can pursue the application with those doses as well..

So then one of your other questions was on the dementia program. We believe that ITI-007 will improve a range of symptoms given its first in class pharmacology and the clinical data that we have on ITI-007 to-date. And we’ll be providing further details on the study design before we start that later this year..

Right. I think until we are ready to start the study, we were not going to provide further color on the end points that will be used in that study, but we will do that shortly. .

Thank you. And your next question comes from Bert Hazlett from Ladenburg. Your line is now open. Please go ahead..

Thank you. Thanks for taking the question I have a just one quick one follow up to others, what dose [indiscernible] be considering that was spread on 4 milligrams like in the Phase 2.

Then with regard to the second Phase 3 can you say anything or congratulations on the [ramp and room] out in the first one and what have you learned about the conduct of the first study that you can apply to the second Phase 3 that you might think be able to expedite the enrollment in the conduct of that study.

And then sorry for the multiple questions, but in terms of the bipolar depression indication how do we think given the unique pharmacology of all those 007 -- how do we think about dosing of the molecule in that study? Thank you..

So, business camp and for risperidone yes we have chosen a dose of 4 milligrams of risperidone which is the most frequently prescribed dose of risperidone..

And the same dose that we choose in the Phase 2 study..

That's right. And I would tell you we've learned a lot from our Phase 2 study and from our first Phase 3 and we have design the second Phase 3 very similarly to the first two efficacy studies and we continue to anticipate that trial conduct will go well. .

And will enroll in a similar fashion to the way the Phase 2 and the first Phase 3 study have enrolled and fro your question on bipolar depression, I think that this will be [Indiscernible] will be once a day dosing as well and did you ask any other question about that?.

Well.

Yes are you moving toward a higher dose? Are you are considering a 60 milligrams or 80 milligrams or higher dose versus lower dose? I know you are considering a lower dose in the behavioral disturbances in dementia, how do we think about dosing with regard to bipolar depression?.

I think, we should think similar to Schizophrenia for bipolar depression similar within the range for testing for bipolar Schizophrenia..

Okay and then while I still got the mic, can you just refresh us with regard to your current thinking regarding the international markets and the clinical and strategic development of 007? Thank you..

I think that to date we have focused on the U.S. markets and I think we'll update you on the international markets, as we progress with studies in those international markets..

Thank you. And your next question comes [Indiscernible] from Cowen and Company. Your line is now open. Please go ahead..

Hi guys. Thanks for taking the question.

I wanted to ask you about, what your expectations are around the pet study data that you I think will come whether this year, how are you ready for that to inform the forward trials both in our e-commerce behavioral disturbance and would it also helped inform your bipolar depression program going forward?.

We have essentially taken the data that we have collected to date and as we continue to collect more data on the studies that are ongoing then we use those data in order to inform each of the next step certainly we take all that into consideration each step of the way we do anticipate to have data later this year in the pet occupancy data in patients with Schizophrenia in this will be at the 60 milligram dose at plasma study state that we believe will be important for determining the really the target occupancy that we have in our patient population for Schizophrenia.

We're very excited about those data because we believe those will help really differentiate ITI-007 among others [indiscernible]. .

Got it. And can you talk about why your dosing 302 for six weeks versus four weeks for 301 can you elaborate on that..

Six weeks is one of the standard durations of treatment for evaluating antipsychotic, this has been accepted by the regulatory and we have a like we believe that the regulatory of third parties if you remember we had an end of Phase 2 meeting with the FDA and our Phase 3 program has been based on that meeting and we have proceeded with a fourth week and a six week study in that regard.

.

Got it, okay. And then I just want to ask quick follow up on your all timer's behavior or disturbance program. You have mentioned a range of sequential indications from education aggression on disorder etcetera.

Is it possible to investigate two or more of those applications within one preliminary study or will you be looking at potentially multiple smaller studies to be initiated at the same time?.

Usually -- this is Sharon. Usually one has a primary endpoint and you can have secondary endpoints as well. I think that’s what you should expect to see from us as well..

Got it.

And last question as far as life cycle management for 007, any thoughts on potential long acting formulation or depot formulation as those formulas make it onto the market?.

Thank you for asking that question. Yes, we are proceeding with the preclinical development of our long acting injectable and we are hoping to enter the clinic with a long acting and injectable later next year, hopefully next year..

Thank you. And your next question comes from Jason Butler from JMP Securities. Your line is now open. Please go ahead..

Just a follow up on the 20 milligram dose inclusion for the second Phase 3.

Can you talk a little bit about, based on the preclinical data, what you’d expect the effect of that lower dose to be on dopamine and the [dopamine] receptors and whether you actually still think you’ll see [indiscernible] an efficacy on the dopamine receptor or whether these things at that level it will be the primarily serotonin driven response?.

So I think that’s a really good question. We do know that at 20 milligrams of ITI-007 in healthy volunteers the ITI-007 enters the brain and it engages the target. We have occupancy of dopamine receptors at a lower level and higher occupancy at the 5-HT2A receptors.

So we think this balance gives us not only antipsychotic efficacy against the positive symptoms of schizophrenia, but will also be able to provide the benefits of the negative symptoms, the pro-social effects that we’re seeing without having higher D2 occupancy that maybe overshadowing some of those other types of symptoms that we see with other antipsychotics..

However, to-date, all drugs that treat the psychosis seen in schizophrenia all occupy the dopamine receptor. We believe we can occupy -- since we occupy that receptor in a different fashion that we can have a lower occupancy but we still have dopamine blockade.

And that is the rationale for keeping dopamine blockade but we believe that we can have a lower occupancy than others due to the unique mechanism of our compound..

And then just one last question.

Are you making any other changes in the second Phase 3 trial in terms of the inclusion and exclusion criteria or patient screening protocols?.

No, those are primarily the same as we’ve had in our other efficacy trials..

Thank you [Operator Instructions]. And we have a follow up from [indiscernible] from Lautenberg. Your line is now open. Please go ahead..

Maybe you mentioned it Sharon or Kim or others why not we expecting data for the other indications beyond schizophrenia? I know we’ve got plenty of schizophrenia data coming up in the near term.

But the other indications beyond that, is that a 2016 second half event or should we look into 2017 for those studies to read out?.

Maybe you could just wait till we post those studies on clinicaltrials.gov and we’ll give you an update at that time..

And I am not showing any further question in queue at this time. I would now like to turn the call back to Sharon Mates for closing remarks..

Thank you. In closing, we’ve made great progress in advancing our development pipeline. Our Phase 3 program in schizophrenia is ongoing and we are on track to announce results from the first Phase 3 trial later this year. We expect to initiate patient enrollment in our second Phase 3 trial shortly.

Later this year, we plan to initiate clinical trials evaluating ITI-007 in patients with behavioral disturbances associated with dementia including Alzheimer’s disease and studies in patients with bi-polar depression. We are continuing the development of our PDE platform and the preclinical development of our ITI-007 long acting injectable program.

Looking to 2016 and beyond, we will work to expand the indications for ITI-007 to include the treatment of behavioral disturbances in autism and in depressive disorders. We firmly believe that ITI-007 presents a meaningful advancement in the treatment of schizophrenia and other psychiatric and neurological indications.

With ITI-007 in late stage clinical development in several indications, we believe we are making significant progress towards our goal of allowing patients to live better life, more connected with their families and society. We look forward to reporting on our further progress as we advance our programs.

Thank you for your participation on our call and operator you may now disconnect..

Alright ladies and gentlemen, thanks for participating in this conference. You may now disconnect, everyone have a great day..