Good morning, ladies and gentlemen, and welcome to the Intra-Cellular Therapies' Fourth Quarter and Year End 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's conference call is being recorded..

Good morning and thank you all for joining us for today's conference call. Our earnings press release provides a corporate update and details of the company's financial results for the fourth quarter and year ended December 31st, 2020. A press release crossed the wire a short time ago and is available on our website at intracellulartherapies.com.

Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Mark Neumann, Chief Commercial Officer; Dr. Suresh Durgam, Senior Vice President and Chief Medical Officer and Larry Hineline, Senior Vice President and Chief Financial Officer.

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 use of the company's product development candidates, our clinical and non-clinical plans, our plans to present or report additional data the anticipated conduct and results of ongoing and future clinical trials, plans regarding regulatory filings, future research and development, our plans and expectations regarding the commercialization of CAPLYTA, potential impact of COVID-19 pandemic on our business 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're 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 and welcome everyone to today's call. 2020 was a transformational year for Intra-Cellular Therapies and I'm proud of our teams' successful execution of our commercial objectives and development programs particularly given the challenging environment that COVID-19 has caused.

We successfully launched our first FDA approved product CAPLYTA for the treatment of schizophrenia in adults, just as the pandemic began to cause major disruptions in patient care..

Thank you, Sharon and good morning, everyone. Looking back on the year, ITCI delivered strong commercial execution, enabling successful launch of CAPLYTA even in the midst of the COVID-19 pandemic. In late March, we pivoted from an in-person commercial launch to an all virtual one in very short order.

Our team demonstrated agility, creativity and ingenuity to adapt to the new commercial environment that COVID-19 created..

Thank you, Mark. I will review our financial results for the fourth quarter and for the year ending December 31, 2020. In the fourth quarter we recorded net product revenue of CAPLYTA of $12.4 million compared to $7.4 million in the third quarter. No net product revenues were reported in the same period of 2019.

Research and development expenses in the fourth quarter of 2020 were $14.3 million kormaed to $19.1 million for the same period in 2019. This decrease is due primarily to a decrease in manufacturing expense and a decrease of lumateperone clinical and non-clinical expenses.

Selling, general and administrative expenses totaled $58.3 million for the fourth quarter. This is compared to $22.8 million for the same period in the prior year. This increase is primarily due to an increase in sales related labor expenses and commercialization expenses.

Net loss in the fourth quarter was $60.7 million compared to a net loss of $40.6 million for the same period in 2019. For the year total revenues were $22.8 million and CAPLYTA net revenues were $22.5 million. No net product revenues were reported in 2019.

Research and development expenses for the year ended 2020 were $65.8 million compared to $89.1 million for 2019. Selling, general and administrative expenses for the year ended 2020 were $186.4 million compared to $64.9 million for 2019.

Selling expenses for 2020 were $132.5 million as compared to pre-commercialization expenses of $32.5 million in 2019. General and administrative expenses for the year were $53.9 million as compared to $32.4 million for 2019.

Net loss for the year ended 2020 was $227 million or a loss of $3.23 per share compared to a net loss of $147.7 million or $2.68 per share for 2019. Cash, cash equivalents restricted cash and investment Securities totaled $658.8 million at December 31, 2020. This concludes our prepared remarks.

Operator, could you please open the line for questions?.

our first question comes from Umer Raffat with Evercore. Please go ahead..

This is Bo for Umer. Thanks for taking our questions. Two, if I may. First is, could you give us some color on the data package for the bipolar depression sNDA? And particularly, we're curious to know whether there is any updated drug interaction study of the UGT inhibitor such as co-administered with lumateperone.

And maybe a follow-up question for Mark is on the commercial. Could you give us some updated thoughts on the duration of treatment and you mentioned continued prescription rate in your prepared remarks which is comparable for Latuda and Vraylar. Should we then think about the duration of treatment is also similar to these antipsychotics? Thanks..

Thanks, Bo, for the question. I'll start, this is Sharon and then I'll ask Suresh, if he'd like to add anything. So you've asked us for some color on our data package.

So yes, we have submitted our sNDAs for the treatment of bipolar depression and yes, there's updated information on the UGT interaction and in our studies, we have not seen interaction and we think this is great news. So we have submitted all of our data and of course this will be part of label discussions.

Suresh, would you like to add anything on that?.

No, nothing further to add. In fact, that we did submit the information to the FDA..

Yes, and then I think the second part, so I hope that answers the first part of your question and then the second part of the question, is you directed towards Mark.

So Mark, would you like to take that please?.

Yes, sure. Thanks Sharon and good morning, Bo. Thanks for your question about duration of therapy. And yes, this has been a very encouraging part of the launch thus far with CAPLYTA. And what I would say is, it is still too early to do sort of your classical compliance and persistency curves. We'll need several more months to be able to do that.

However, what we're tracking very closely as an interim metric is the TRx to NRx ratio. And when we do that for CAPLYTA and we compare that to other recently launched oral antipsychotics at the same time in their launch.

We find that CAPLYTA is actually outpacing those antipsychotics' in terms of refill rate and in terms of TRx to NRx ratio and we find that very encouraging and consistent with the hypothesis that we had that the safety and tolerability profile for CAPLYTA would be received well by patients and allow them to stay on their therapy.

So it's something we'll continue to watch and as we get more information around compliance and persistency curves. We'll share that information with you as well..

Thank you very much..

Thank you. Your next question will come from Charles Duncan with Cantor Fitzgerald. Please go ahead..

Sharon and team congrats on a great quarter and the pipeline expansion. I had a question on commercial and then one on the pipeline. Quickly, on commercial regarding the traction you're getting with prescribers looks good.

But I'm wondering, if for this year your goal is to focus on new prescribers or deepening the use prescription of lumateperone or CAPLYTA within a prescriber space and then I'll come back and ask the pipeline question..

Mark, do you want to take that?.

Yes, sure. Thanks Charles and what I would say is, we have been pleased overall when we look at both the breadth and the depth of prescribing that support. The growth trajectory that we've seen on CAPLYTA thus far in launch. The answer to your question is, we will continue to look to both extend the breath of prescribers.

But also those have who have already tried CAPLYTA. We will be seeking to increase their depth of prescribing as well.

and one of the things that is very encouraging to us is, the really favorable feedback that we get on the experience that both patients and physicians have been having with CAPLYTA early on in the launch as you know early on in the launch, you want them to have a very positive experience with the medicine and when they do, then they're more likely to increase their depth of prescribing and that's something that will build upon that success that we had in 2020 as we go throughout 2021 as well..

That makes sense. Thanks for the added color, Mark. On the pipeline just quickly it's a two-part question. I apologize for that. One is, bipolar. I'm trying to work out the timing and it seems like a recent press release was very likely driven by the acceptance of filing.

So could I assume timelines if and sNDA takes only roughly six to 10 months, PDUFA date could in the third quarter.

and then as a follow-up to that, in terms of pipeline expansion the DRP , the 1284 program looks very interesting to me and I'm just wondering if you could provide a little more color on the target product profile for a deuterated or an ODT form of lumateperone and what is that you do, really like to achieve for that particular the elderly patient population? Thank you..

Okay, so you asked a bunch of questions. I'll start with the bipolar timing. I can then either go onto the 1284 question or maybe both Suresh and I'll take that one. I'm not sure, I wrote down the entire question. But on the bipolar timing on our press release what we announced was that, we submitted recently.

So I think that and we have guided you to expect a standard review which is a 10-month review. So you can work out the numbers and see where that takes you..

That's helpful. Yes..

So that's on the bipolar timing. On our ODT. It is 1284 as you know is a new molecular entity and we believe it is well suited to study in the elderly population based on its pharmacologic characteristics.

And our recently completed Phase 1 program we did find that 1284 was rapidly absorbed into the systemic circulation with metabolically stable and resulted in high systemic exposure.

In these studies, we didn't report - there were no serious adverse events in either group and in the elderly cohort that reported adverse events were in frequent with the most common adverse event being transient dry mouth.

Suresh, did you want to add to that at all about 1284?.

Yes, in terms of the safety profile you're correct. There was safe and well tolerated. There was no serious adverse events. And in fact, the elderly population had infrequent common adverse events what mainly transient dry mouth and we're also - the orally disintegrating it allows for use in elderly population.

They're pursuing indication in the elderly population. And we're mainly looking at behavioral differences in patient with dementia. Treatment of dementia related psychosis and treatment of certain depressive disorders in the elderly..

Okay, that's helpful. Look forward to seeing that get under way in terms of clinical studies. Thanks for taking my questions..

Thank you. Our next question will come from Brian Abrahams with RBC Capital Markets. Please go ahead..

This is Leo, on for Brian. Thanks for taking my question. I guess I was curious about thinking ahead to commercial performance in 2021.

How are you thinking about adjusting your hybrid strategy or a potential shift in the pandemic towards greater reopening to try to drive a greater sales inflection in CAPLYTA? And then sort of as a follow-up to that, as you look ahead to the bipolar launch and you've been interacting with prescribers.

What's the sort of physician interest on the ground for the bipolar launch? Do these physicians care equally for the same factors as in schizophrenia like to lower e profile or might be interested in other aspects such as the ease of doing or the efficacy? Thanks..

Hi, Leo. Great questions.

I'll ask Mark, would you like to address them please?.

Yes, sure Leo. Thanks for your questions.

What I would say about our commercialization model is, we feel very good at this stage about the hybrid model that we have in place and again the hybrid model means that both our sales representatives as well as our speakers who do our promotional talks about CAPLYTA are equipped to do that either in an in-person environment which is what they've always traditionally done over the years or because of what's happened with COVID to pivot to a virtual environment if they can't access physicians in an in-person manner.

Now we would always prefer the interaction to be in-person. There's no substitute for that. But our representatives and speakers have become very adept at delivering their presentations in a virtual environment through Zoom, telephone other mechanisms like that.

And so what I would say is, we're actually I would say we're optimized for regardless of the environments that transpires with COVID. So COVID continues to be with us. It continues to impact patient care and our representatives are operating very effectively.

There's reasons for optimism that COVID cases are beginning to come down and we'll begin to see the market open back up, physician offices become more accessible, clinics becoming more accessible etc. and when they do, our representatives and our speakers will pivot back to in-person engagements.

But we do believe that there will be a permanent change in the commercialization model where we will supplement those in-person engagements with active digital engagements both by the representatives as well as through our other digital marketing initiative.

So we think we're poised and we're well placed to make that transition back to a post-COVID world, if you would and be very effective in doing that. The second part of your question around bipolar from a commercial perspective prior to an approval our salesforce speakers etc do not engage on bipolar depression at all as it would be off label.

So I can't really comment on any feedback that we're getting in the field on bipolar depression.

I can say in the market research that we do physicians recognize that some of the dynamics that exist in the schizophrenia marketplace where you have limitations of the current antipsychotics because of side effects and cycling of those patients through other antipsychotics also exists in bipolar depression and we believe that the favorable safety and tolerability profile that was seen in our bipolar clinical trials pretty much replicates, what we saw in schizophrenia and that safety and tolerability profile has been very well received by physicians in the marketplace for schizophrenia and we would expect that to continue once we get the indication for bipolar depression as well.

So I hope that answers your two questions. If there's anything that I can clarify just let me know..

Thank you. Our next question will come from Ashwani Verma with Bank of America. Please go ahead..

So I had two. For the ITI-333 which you're pursuing for opioid use disorder. Is that similar to the target product profile of which is for opioids dependence or are you using a slightly different approach? That's one.

And as far as the LAI, are there any specific attributes to the molecule that make it easier, difficult to formulate in this kind of formulation? You're aiming for one month dosing, so is that driven by Luma's profile or also factors in the competitive landscape?.

Great. So I'll take that. ITI-333 is a very different molecule from trial. First of all, it is a new opioid partial agonist with very low intrinsic activity. It does not have any substance use associated within at all. It is also 5HT2A antagonist. So it is totally different mechanism of action from trial, so no comparison there.

In terms of the LAI, yes there are some characteristics we have several formulations of our LAI and that's because it wasn't - this was not an easy molecule to formulate for an LAI, it took a lot of development. But we do believe that we have as I said we have several formulations.

However we do think that the formulation that we're testing is an optimal formulation and it is administered subcutaneously. So we think that is an advantage. Patients have expressed a choice for a subcutaneous over an IM injection. If you asked another part of the question, I can't remember it.

Maybe - does that answer your question? The first formulation is, that we're testing is as one month formulation and we will go from there to other durations..

Got it. Okay. Thank you..

Thank you. Our next question comes from Jessica Fye with JP Morgan. Please go ahead..

This is Daniel Roy for Jessica Fye. Thanks for taking our question. Two questions from me, one while we understand that you haven't provided guidance for 2021 revenue. How comfortable are you with consensus numbers? And two, regarding 1284, how does the PK profile compare with that of lumateperone.

Besides that you'll be developing, are there any other properties that makes it amenable to treat the indications that you're currently interested in dementia and others ?.

So, thank you. Daniel. Earlier this year, we did say that we were comfortable with consensus numbers which are about $110 million and we remain comfortable with those numbers. So that's your first question.

We anticipate a strong build over the course of the year and particularly in the second half of the year when as Mark stated we anticipate COVID disruptions to be improving remarkably. So we're comfortable and we're comfortable with our numbers.

Moving to 1284, I think that we said that we do believe that both the molecule and the formulation of 1284 has some advantages to it for use in especially in particularly in elderly patients because it's rapidly absorbed into the systemic circulation. It's metabolically very stable and it results in high systemic exposure..

Thank you..

Thank you. Our next question will come from Sumant Kulkarni with Canaccord. Please go ahead..

My first one is actually a very specific one on 1284, could you frame how dosing may have looked like relative to regular lumateperone in Phase 1 data that you've generated so far? And then most specifically going forward was it the low dose that was used in the prior trial in older patients.

And the second part of that is, is it fair to assume that you'll be using 505b2 pathway for this new molecular entity?.

Hi, Sumant. That's a lot of questions. So in dosing relative to Phase 1. We did a single ascending dose study. So we did test two doses in a single ascending dose study and then in a multiple ascending dose study as well. Where it was dosed once a day for seven days. I think as far as the regulatory pathway. This is a new molecular entity.

We will have discussions with the appropriate regulatory authorities on that regulatory pathway as we move forward. And we'll let you know as soon as we know..

Got it and then just on the dosing in a Phase 2 or Phase 3 trial relative to the low dose of lumateperone that was used in the early patients in the prior trials?.

Can you wait till we put it on clinicialtrials.gov? Please what our dosing strategy is going to be? I think we'll do that soon and I would rather - I'm always uncomfortable of saying what we're going to do until we do it. So you know that from us.

We're very conservative and we will publish it on clinicaltrials.gov as we go forward into Phase 2 studies on these different indications which may be the same or may differ in the indication. The dose may differ depending on the indication and we'll let you know..

Got it. Thanks. Will check every day..

Thank you. Our next question will come from Bert Hazlett with BTIG. Please go ahead..

I just have another question on 1284, two actually. First of all, you talked about it the stabilizing lumateperone, does it specifically alter the formulation persistence or behavior of any of the metabolized lumateperone. And then secondly, could you remind us of the IP that you expect for lumateperone? How long do you expect exclusivity? Thanks..

Can you state the first part of your question again? I missed it?.

Lumateperone has a number of metabolites as you're well aware. I'm just wondering whether the deuterated version alters the formulation persistence or any of the behavior, any of metabolites of Luma. And then again, the IP, how long you're expecting exclusivity for lumateperone? Thanks..

For lumateperone or for 1284, I can tell you both. So there are no new metabolites in 1284 and we qualify all metabolites and again as we go forward. We can describe the metabolite profile for you. We do have robust patent profile for both lumateperone and 1284.

So I think that if you're asking 1284, is into the 2040s and lumateperone is very solid into the mid-to-late 2030s..

Okay, thank you for that. Look forward to the characterization of the metabolites. Thank you..

Thank you. Our next question will come from Greg with Goldman Sachs. Please go ahead..

I've got two please, one. I know its early days but I'm curious about your MDD program and I know you're expected to initiate studies '501 or '502. I was wondering if you could just help us think about what that clinical Phase 3 trial program overall is going to look like in terms of expected timelines.

If we were to start thinking about perhaps adding revenue just trying to get a sense of what the timeline looked like here and how does the '403 Study if at all fit in supporting that registrational program. And then my second question is, maybe more on the financials and looking at 2021.

Was wondering if you could provide a view on what the quarterly progression of OpEx spend will look like with respect to R&D and SG&A. thanks..

So our adjunctive Study '501 and '502 are studies looking at major depressive disorder as adjunctive to standard of care. And as we said they are two studies, clinical conduct will begin this year and I think you should expect two years for enrollment and readout of these studies. That is what is typical for these kinds of studies.

They're conducted globally including the US and we will post them on clinicaltrials.gov as we start each of these studies. Then I think you asked before you get the financials. I think the easy one of the financials as we're not giving quarterly guidance on our projections and maybe, if Larry has anything to add, he can add to that..

Yes, we can't give quarterly guidance. But I think it's safe to say that from the R&D perspective we will see expenses increase over last year's expenses, 2020 expenses and I will see them increasing in quarter-to-quarter. So no particular guidance but certainly see an incline as we go through 2021..

And Sharon just to ask if you could comment on how the '403 Study fits in the context of what you're trying to do to expand the opportunity for lumateperone?.

Right. So it is an expansion. I'm glad you came back to that. It is an expansion of the opportunity for lumateperone. It is not part of the adjunctive studies in MDD. The Study '403 is looking at both bipolar and major depressive disorder in patients with mixed features.

So before we go further into that maybe I'll ask Suresh, can you please define for the audience what mixed features are both in major depressive disorder and bipolar disorder and then I'll come back and talk about what we think, the opportunity is again, okay?.

Yes, thank you. We have mixed features is a condition specified within the DSM-5 for both major depressive disorder and also bipolar disorder. Patients with MDD with mixed features have increased severity of illness. They also have high rate suicide ideation, high rates of suicide, also high rates of recurrence of episodes.

And also there's higher co-morbidities and these are difficult to treat patients. And if these patients are not followed and treated, patients with MDD have a potential to be diagnosed with bipolar disorder later on. Now coming to the patients with mixed features in the bipolar depression.

They also are having the same features mainly having some symptoms of symptoms of mania or hypomania and have a full episodes of depression. And about third of the patients in both populations, both in MDD and in bipolar depression have mixed features.

Since these patients are difficult to treat and right now this time there's no specific medication to these conditions. This is a study we're following the '403 which was amended to include this patient and this is a fully powered study as registration study and is being conducted as to - once the studies are done.

We will speak to the FDA on the next steps regarding this..

So just to follow-up on that. We think this is a large unmet medical need about a third of patients in MDD and about a third of patients in bipolar disorder exhibit these features. And these patients as Suresh said are more difficult to treat, have more co-morbidities and have increased rates of suicide and suicidal ideation.

So we think that these are important patient population within each of these domains and there are no approved drugs to treat these patients. So they keep cycling through all available alternatives until that are - and it's all of course off label until hopefully you stumble on something that is helping the patient.

So we think that with a third of each patient populations, that this is a huge unmet medical need and that we will look at the results of Study '403 and we'll go to the FDA with these results and discuss the path forward for the indication. So we're very excited about that as adding this to our label for lumateperone.

I think operator, we might have time for one more question. If there's a last question..

Yes, we do have a follow-up question from Umer Raffat with Evercore. Please go ahead..

I've a couple, if I may, Sharon. One, theoretically given everything we know about the aniline metabolites formation and how it blended itself more to that formation in non-human models than it did in humans.

Is there any sort of mechanistic reason to expect the deuteration will change that just given everything we know from the past? And then secondly, as you're thinking about MDD studies going forward and indication expansions. Would there be a consideration for possibly promoting the 1284 for those indications and not CAPLYTA. Thank you very much..

So first of all, you can't improve on nothing. So as you know, in human beings as you said those anilines are seen in species that are not humans and so you can't improve on a lack of seeing something. So 1284 does not have aniline formation, neither did lumateperone in humans. So that is not a question.

And question about other indications for 1284, we are very pleased and comfortable with lumateperone in the present indications that we're studying. We're very excited about the studies that we've mentioned to you with 1284. As we go forward, we'll keep you apprised of any other indications that we decide to go into with 1284.

But for the moment, what we're launching with and the path we're going down right now is the stated pathway that we told you, the lumateperone and the stated pathway that we told you about for 1284. So stay tuned..

Thank you..

And by the way, Evercore still on, I hope. I answered both question in beginning about the UGT's. Yes, we're very comfortable. We'd conducted all of our studies. We've submitted all the information to the FDA. So that's kind of dovetails with your questions..

Okay, then. I think we're over our time. I want to just thank everybody for participating on the call. Thank you for all of your questions. They were very good questions and we look forward to keeping you apprised. It's a very, very busy year for Intra-Cellular and we look forward to updating you as we go forward with all of your programs.

Thanks very much and operator, you can now disconnect..

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect..