Juan Sanchez - VP, Corporate Communications and IR Sharon Mates - Chairman and Chief Executive Officer Kimberly Vanover - SVP Clinical Development Larry Hineline - VP and Chief Financial Officer Cedric O'Gorman - VP Medical Affairs.

Charles Duncan - Piper Jaffray Adnan Butt - RBC Capital Markets Ritu Baral - Cowen & Company Yun Zhong - SunTrust Robinson Humphrey.

Good morning, ladies and gentlemen, and welcome to Intra-Cellular Therapies' Third Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, today's conference call is being recorded.

I'd 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 all 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 ended September 30, 2016, crossed the wire a short time ago. This press release is available on our website at intracellulartherapies.com.

Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Dr. Kimberly Vanover, Senior Vice President of Clinical Development; Larry Hineline, Vice President and Chief Financial Officer and Dr. Cedric O'Gorman, Vice President of Medical Affairs.

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 product candidates, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, plans regarding 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 risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements and the Company disclaims any obligations to update such statements. I will now turn the call over to Sharon..

Thanks, Juan. Good morning, everyone, and thank you for joining us for today's conference call. Today we will provide an update and overview of our development programs for ITI-007, also known as Lumateperone and our PDE 1 inhibitor program. Larry will then review our financial results and we will open the line for Q&A.

Our clinical development program for the treatment of schizophrenia with ITI-007 includes three large randomized double-blind placebo-controlled trials, studies 005, 301 and 302.

In two studies, the efficacy of ITI-007 60 milligrams was demonstrated showing a statistically significant separation from placebo on the primary endpoint Positive and Negative Syndrome Scale or PANSS total score. Across all three studies, ITI-007 was found to be well tolerated with a placebo-like safety profile.

This is so important for patients who currently suffer from side-effects that lead them to discontinue their medication.

Importantly, in two studies where risperidone was used as an active control, ITI-007 was statistically significantly superior to risperidone on several key safety and tolerability parameters such as triglyceride, cholesterol, glucose, prolactin and weight gain.

Across all three studies, ITI-007 60 milligrams dose once-daily in the morning with no titration required showed itself to be devoid of clinically relevant adverse events including movement metabolic disturbances, commonly observed with other anti-psychotic and which often results in non-adherence and poor outcome for patients.

ITI-007 consistently demonstrated lower rates of akathisia and other movement disturbances than risperidone and was placebo-like on all these parameters. Furthermore, in the 005 study, in which both ITI-007 and risperidone were tested, the efficacy of ITI-007 60 milligrams and risperidone the active control were similar if not the same.

In all three schizophrenia efficacy studies, the trajectory and magnitude of improvement on total PANSS and baseline seen with ITI-007 was the same demonstrating a robust and consistent result with ITI-007 in all three studies.

What changed over these three studies was the placebo response going from an approximate 7 point change from baseline to a 10 point change over 15 points in the 302 study.

We believe that in part, a heightened placebo response in the 302 study made it difficult to interpret the efficacy of ITI-007 in this study in which ITI-007 did not separate from placebo.

In addition, other compounding factors played a role including differential dropout rates across treatment arms, expectation bias and the potential for functional unbinding. We presented these data at a recent medical meeting, CNS Summit and the details can be found on our website.

We believe the totality of the data from all studies in our ITI-007 late-stage clinical development program supports the efficacy and safety of ITI-007 for the treatment of schizophrenia representing an advancement for patients. We have requested a meeting with the FDA to discuss the submission of our NDA for the treatment of schizophrenia.

We expect to providing update on the status of our discussions with the FDA in the first quarter of 2017. Moving to our bipolar depression program, clinical conduct is ongoing in two Phase 3 clinical trials. Bipolar disorder affects approximately 2.6% or 5.7 million adults in the US according to the National Institute of Mental Health.

Bipolar depression represents the most common clinical manifestation of bipolar disorder and is associated with a worse prognosis than bipolar mania. There are few approved therapies for the treatment of bipolar depression.

We believe ITI-007 has the potential to serve a broad patient population suffering from depressive episodes associated with bipolar disorder. Moreover, we believe the placebo-like safety profile of ITI-007 will translate favorably to people living with bipolar depression who have few treatment options available.

Our ITI-007 Phase 3 development program for the treatment of agitation in patients with dementia including Alzheimer’s disease is ongoing. Swift resolution of symptoms about the patient and aggression in this patient population is important.

ITI-007 has shown rapid reduction of symptoms of schizophrenia within the first week of treatment with no dose titration needed and we believe this rapid action will be reflected in the resolution of agitation and aggression associated with dementia as well.

Importantly, there are no treatment currently approved for the treatment of agitation and aggression in this patient population. Currently, medications are being prescribed off-label to manage these behavioral symptoms.

These medications are frequently ineffective and are known to be associated with deleterious side-effects including those leading to falls and fractures and increased mortality.

We believe that low-dose ITI-007 is uniquely positioned to address this unmet need for the favorable safety and tolerability profile and provide relief of a broad array of behavioral symptoms associated with dementia due to the novel pharmacologic profile of ITI-007.

Our goal is to reduce the significant and costly burden on patients, care givers and families by delaying or preventing nursing home placements.

As a reminder, ITI-007 is a first-in-class molecule which provides selective and simultaneous modulation of serotonin, dopamine and glutamate, the three neurotransmitter pathways implicated in severe mental illness.

Unlike existing schizophrenia treatments, ITI-007 dopamine receptor, phosphoprotein modulation or DPPM acts as a pre-synaptic partial agonist and post-synaptic antagonist at D2 receptive.

This mechanism along with potent interactions at the 5HT 2A receptors serotonin transporters and D1 receptors with indirect glutamatergic modulation likely contributes to the efficacy of ITI-007 across a broad array of symptoms with improved psychosocial functions and favorable tolerability.

We are excited about the mechanism of action of ITI-007 and its potential to benefit patients suffering from a broad array of neuropsychiatric and neurodegenerative diseases. Within our ITI-007 portfolio, we continue to advance our ITI-007 long-acting injectable program to provide additional treatment options to patients.

The highly differentiated safety and tolerability data to-date with ITI-007 suggest that a long-acting injectable option may lend itself to being an important formulation choice for some patients. Turning to our PDE program, we continue to advance this innovative platform.

We believe that the lead compound in our PDE 1 portfolio, ITI-214 is the first elective PDE type 1 inhibitor to be tested in human. Today, ITI-214 has been studied in four Phase 1 clinical trials and has been found to be safe and generally well-tolerated.

We expect to advance ITI-214 into additional clinical development trials later this year or early 2017 in both CNS and non-CNS indications. Finally, we ended the quarter in a strong financial position with $412.8 million in available cash and investments placing us in a very strong position to advance our research and development programs.

I will now turn the call over to Larry who will review the financial results for the third quarter. .

Thanks, Sharon. I will be reviewing our financial results for the third quarter ending September 30, 2016, and provide an overview of our expectations for the use of our cash and investments. The net loss for the third quarter of 2016 was $30.3 million, compared with a net loss of $32.2 million for the third quarter of 2015.

Basic and diluted net loss was $0.70 per share for the third quarter of 2016, compared to a basic and diluted net loss of $0.91 per share for the third quarter of 2015. Research and development expenses for the third quarter of 2016 were $23.9 million, compared to $28.5 million for the third quarter of 2015.

The decrease is primarily due to lower cost associated with the completion of the second phase III clinical trial for ITI-007 in patients with schizophrenia completed in the third quarter of 2016, offset impart by the Phase 3 clinical trials of ITI-007 in bipolar depression and agitation in dementia including Alzheimer’s disease and increased manufacturing cost for ITI-007.

General and administrative expenses for the third quarter of 2016 were $6.3 million, compared to $3.9 million for the prior year period. The increase is primarily the result of higher stock-based compensation expense and to a lesser extent, professional fees, pre-commercialization activities and increased salaries.

Cash and investments totaled $537.8 million at September 30 2016. This amount included short-term borrowings of $125 million that was repaid in October 2016. The resulting net cash available for operations at September 30, 2016 was $412.8 million, compared to $475.2 million at December 31, 2015.

We expect that existing cash and investments of $412.8 million will be dedicated primarily to the ITI-007 development program, including to fund clinical trials of ITI-007 in bipolar depression, behavioral disturbances in patients with dementia, depressive disorders and other ITI-007 clinical trials and related clinical and non-clinical activities; to fund pre-commercial activities for ITI-007 for the treatment of schizophrenia and, if ITI-007 receives regulatory approval, initial commercialization efforts; to fund pre-clinical and clinical development of the Company's ITI-007 long-acting injectable program; and to fund non-clinical activities, including the continuation of manufacturing activities in connection with the development of ITI-007.

Funds will also be used for other clinical and pre-clinical programs, including the Company's PDE development activities.

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

Thank you. [Operator Instructions] Our first question comes from Charles Duncan with Piper Jaffray. Your line is open..

Hey, good morning guys. Thanks for taking the questions.

Sharon, I am wondering, regarding that request for a meeting with the FDA, wondering if the FDA has granted a meeting and if it seems to be fully engaged in discussing the drug and understanding the development of drugs in the schizophrenia patient population, what’s the feedback been thus far?.

Thanks, Charles. So, so far we’ve requested a meeting and we’ll update you as we know more information. But so far the status is that we have submitted our request and we’ll update you when we have more information..

Okay and then, with regard to the meeting, I am sure this is going to be a difficult one to answer, but could you outline the data or at least new analyses that you’ve conducted in preparation for that meeting or will present to the FDA at the time of the meeting?.

So, we are presenting to the FDA on entire package. Yes, this is Sharon and then, if Kim, if wants add anything, I’ll ask her to, but we are – we have a total program that includes three efficacy studies and other supporting studies within the ITI-007 program.

So, we have – within that, as you know, we have the positive efficacy studies and the study that was just done with, yes, we continue to analyze that data and we have the safety data across all of these studies.

Kim, do you want to add anything?.

No, I think that’s right. We are confident in our package with two positive studies and as Sharon said, the whole package going in with a strong safety profile. .

Okay, and then, my last question is on the bipolar depression program, I am wondering – I might have missed it out. Little distracted this morning with the stuff going on in the world.

I am wondering if I missed, did you say how enrollment is progressing and if you’ve taken any steps to look at blinded baselines or other indications of patient quality, especially at the sites that overlap was a 302 study?.

Okay, I’ll take – I’ll start and then, Kim if you have anything to add maybe you can. So our bipolar program is on track. We always look at all of our studies. As you know, these studies are blinded. So, there really – I think, that’s the whole point of a blinded study is that, you don’t – you can’t unblind it.

So, there is really not much to tell you other than that we just need to involve patients and we think that it’s a robust study and nothing has changed along that program’s line. .

Okay, and just to check my memory and definition of on track, that you said, suggesting completing enrollment by the end of this year or ….

No, at the end of last year, yes, the end of next year, right..

Okay, thanks for taking my questions. Good luck for this upcoming meeting. We’ll all look forward to hearing the outcome of it. .

Thank you..

Our next question comes from Adnan Butt with RBC Capital Markets. Your line is open..

Hey, everyone and thanks. Sharon, so following-up on the bipolar depression question.

If enrollment completes by the end of 2017, that puts data out further, is that a definite or could enrollment complete sooner than the end of 2017?.

We haven’t changed any of our guidance too. So, I think that what we are looking at is the end of 2017 for the bipolar depression study to conclude. .

Okay.

So, does that mean that there might be a top-line release by the end of 2017 or could it be beyond that?.

I think that, we’ve given you the guidance, so to the end of 2017 and that’s where we are..

Okay, great.

Then on the FDA conversation, assuming the conversation and favorably, I was going to ask you, could you file the NDA and do you have all the data in hand to be able to file such as the longer-term safety follow-up and carcinogenicity studies, et cetera?.

So, as we have said in our previous quarters, we intend to file the first half of 2017 and that guidance has not changed. Again, we will update you on – on our progress to that extent and we expect to have what we need at the time of filing in order to be able to file.

So, nothing has changed from our guidance from before and we’ll update you as we go forward..

Okay, last question here.

Could you expand into an additional indication in 2017 such as major depressive disorders or is that to be determined?.

So, thank you for the question. No, we do believe that our package to the FDA is robust and that our studies to-date supports the efficacy and the safety of ITI-007 for the treatment of schizophrenia. We do however; always continue to expand the label both even within schizophrenia as well as in other disorders.

So, yes, we will be conducting other studies as well for label expansion..

Okay, thanks..

Our next question comes from Ritu Baral with Cowen. Your line is open..

Hi, Sharon, hi, Kim, hi everyone. Thanks for taking the question. Sharon, can you give us any additional color or any additional analysis that you guys might have cleaned from further analysis of the relapsed Phase 3 on the placebo effect.

Do you have any driving theory at this point and does that theory sort of bleed into any concerns you might have about the placebo effect of your bipolar depression or your agitation studies?.

So, I am going to start going backwards and then I’ll ask Kim to comment. But no, we don’t have a concern about the placebo effect in bipolar agitation for several reasons. First, these are different patient populations. Secondly, we do different surveillance methods. So they are not same, same.

So, I think that, you don’t necessarily translate from what happened in the second – in the Phase 3 study. I do remind you that, again, we had two positive studies as well in schizophrenia. So, I think that, no, we don’t have a fear in – for bipolar and agitation. I think, I’ll ask Kim, if don’t even remember the first part of your question now..

The first part of the question, I think, hi, Ritu, this is Kim, was about a further analyses….

Yes. .

Data and we continue to look at the 302 data. Right now, we believe that there are several factors that contributed to the unusual effect that we saw with the high placebo response and really we think that these are related to the disproportional completion rate across the treatment arm in the study that affected the different treatment responses.

The expectation bias in the study and then also, the potential for functional unblinding. .

Got it and is there – are there statistical ways to adjust for this and could you either announce or present some of that whole stock analysis at any point?.

Yes and yes. There are some ways to look at this statistically and we will in the future present some of these analyses. .

Got it and then, my last question has to do with the safety profile as presented in your last scientific presentation, that poster you laid out the cardio metabolic safety profile especially versus risperidone very clearly.

But is there a way to quantify say, the akathisia and potential for tardive dyskinesia in a similar sort of continuous variable sway or is it really just incidents at this point with your treatment experience?.

So, we do look at akathisia in the way it can and I think we’ve reported on that in a favorable way for ITI-007 and then, you asked about tardive dyskinesia and tardive dyskinesia develops later on.

So, we don’t have data on tardive dyskinesia other than the literature suggests that those antipsychotic that have akathisia and Parkinsonism associated with them also are the same drugs that have the tardive dyskinesia. So the more movement disturbance that you have and the more you appear to have tardive dyskinesia developing over time.

So without the akathisia, we don’t believe that we will have the tardive dyskinesia that you see with other drugs. .

Got it. Thanks for taking the questions. I’ll get back in the queue. .

Our next question comes from Edward Nash with SunTrust. Your line is open..

Hi, this is Yun for Edward. Thanks for taking the question.

Just a question about the placebo effect that you saw from the second Phase 3 study, I wonder, all the hypothesis that you had, now that you have that information and looking back, is there anything that you could have done in terms of trial design to maybe it could have helped avoid this kind of issues, like the running period to reduce placebo effects?.

Hi, this is Kim and thanks for the question. We don’t think we could have done anything differently. We applied the same methods, the same control and the same oversight in the study for 302 as we did in our previous two studies that were a positive.

So, it’s an unusual effect that we saw here with the placebo treatment arm having the highest treatment completion rate in the 302 study and we don’t think we’ve applied all the same methods and it worked in two of the studies. .

Right, and I don’t think it fits well on that. I think that we have reported the information to you. I do think that we have learnt some things from it. We continue to analyze that data and we will present it to you.

But, again, this is not uncommon in CNS drug development and certainly not uncommon in the development of drugs for schizophrenia and we have the two positive studies..

Okay.

And well, I understand that you do not expect to have to run another study, but in case that you just assume that you are going to run in the study, it appears just to confirm that there is probably nothing that you could change to, to try to improve the outcome?.

No, that’s not what Kim said. I think that first of all, we – as you know, we do believe that our data is robust and that the three studies that we have done supports the efficacy and the safety of ITI-007 for the treatment of schizophrenia. We have also said that we – this is a first-label and we wanted to have label expansion.

We do think we have several learnings from this most recent study and we will continue – we will use those learnings in designing new studies for our label expansion. .

Okay..

So, what you said before though, was, would we have done anything different, that’s a different question than what have you learned from a study and what will you do in the future. .

Alright, okay.

And so, I think we have learned some things and I think we can do, we can do some other things in the future. .

Okay.

Last question, so, just wonder if there is anything that can potentially, due to the execution of the study and wanted to know, I guess, just want to confirm, do you use the same CRO for the second Phase 3 Study as compared to the Phase 2 and first Phase 3?.

I am not sure I understand your question about – I think that, I don’t understand your question, Kim, do you want to try that?.

The trial….

Other than, I understand the question on the CRO..

Okay..

And on the CRO, the 301 and 302 studies both used the same CRO and your - other part of your question? I am sorry. .

That was just – so the execution as compared, versus to the placebo effect from the study?.

What about it? I am sorry, I don’t get it. I think we have already talked about the placebo response. We think that it was unusually high in this study. But other than that, I don’t understand your question..

Okay, okay, yes, that’s helpful. Yes, thank you..

Okay..

Thank you. That concludes the Q&A session. I’ll now turn the call back over to Sharon Mates for closing remarks. .

Thank you, operator, and thank you all for joining the call. We remain committed to the development of ITI-007 for patients suffering from schizophrenia, bipolar depression, dementia and other neuropsychiatric and neurodegenerative conditions.

Patients suffering from these conditions are in urgent need of medications that are safer, effective and better tolerated over standards of care. We are excited about the potential constitution of ITI-007 to improving the lives of patients and their care givers. Operator, you may now disconnect the call..

Thank you, ladies and gentlemen. That does conclude today’s conference. You may all disconnect and everyone have a great day..