Thank you for standing by and welcome to the Intra-Cellular Therapies Fourth Quarter 2022 Earnings 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]. As a reminder, today's program is being recorded.

And now I would like to introduce your host for today’s program, Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Please go ahead. .

Good morning and thank you all for joining us on our fourth quarter and full year 2022 earnings call. Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Mark Neumann, Chief Commercial Officer; Dr. Suresh Durgam, Chief Medical Officer; and Larry Hineline, Chief Financial Officer.

As a reminder, during today's call, we will be making certain forward-looking statements.

These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and impose a number of risks and uncertainties that might 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 obligations to update such statements. Sharon..

Thanks Juan. Good morning everyone and welcome to today’s call. We are excited to share with you our results for the fourth quarter and the full year 2022. I am pleased to report that we achieved strong sales growth of CAPLYTA and we continue to advance our promising pipeline.

2022 was an exceptional year for the growth of CAPLYTA as we successfully launched our new indication for bipolar depression. CAPLYTA’s prescriptions tripled in 2022 compared to 2021. We have received very positive feedback from physicians and patients on CAPLYTA’s efficacy, tolerability and ease of use.

We believe CAPLYTA is having a positive impact on patients. For 2022, our total revenues were $250.3 million. CAPLYTA net sales were $249.1 million versus $83.8 million in 2021, representing a 205% increase. CAPLYTA’s net sales for the fourth quarter 2022 were $87.4 million representing a year-over-year increase of 243%.

Demand for CAPLYTA has been consistently strong and we are confident of continued growth for CAPLYTA. With this in mind, we are pleased to provide revenue guidance for the first time. In 2023, we expect CAPLYTA net sales to be between $430 million and $455 million. In 2023, we continue to invest in our near-term and future growth.

In the near-term, our commercial team is focused on maximizing the significant potential for CAPLYTA in our current indications of schizophrenia and bipolar depression. Our future growth will be driven by the continued success of CAPLYTA as well as the execution of our clinical programs. Let me elaborate further on our clinical programs.

We are excited about the potential for label expansion of CAPLYTA in major depressive disorders and other mood disorders, ITI-1284, PDE1 inhibitors, ITI-333, and our long acting injectable program for lumateperone.

Beginning with major depressive disorder, which effects about 21 million Americans who experience at least one major depressive episode each year. Many of these patients don't respond or only respond partially to first line treatment.

Our global pivotal program evaluating lumateperone as adjunctive treatment for major depressive disorder in patients who partially respond to antidepressants is ongoing. Patient enrollment continues in studies 501 and 502, two global six week randomized double-blind placebo-controlled Phase 3 trials to assess efficacy and safety.

We expect to file a supplemental new drug application with the FDA for the approval of lumateperone as an adjunctive therapy to antidepressants for the treatment of MDD in 2024. Additionally, we are pleased to announce today we are initiating a third global Phase 3 adjunctive MDD study, Study 505.

This study is similarly designed to our ongoing studies and we plan to begin patient enrollment shortly. This approach is consistent with the way we conducted programs for our previous indications and is common strategy in the development of mood disorder programs. Let's now move on to our mixed features program.

Study 403 is our global clinical trial evaluating lumateperone 42 milligrams in patients with MDD and patients with bipolar depression who exhibit mixed features. This patient population has more severe symptoms, more comorbidities, and a higher risk of suicide attempts than patients without mixed features.

This results in higher healthcare utilization and associated costs. We anticipate announcing top line results later this quarter. Now let's talk about ITI-1284.

This year, we are advancing 1284 programs into Phase 2 clinical development in multiple highly prevalent conditions with unmet needs, including education in Alzheimer's disease, psychosis in Alzheimer's disease, and generalized anxiety disorder or GAD.

Alzheimer's disease affects 6.5 million Americans over age 65 and will increase further with the aging population. Agitation is experienced by greater than 50% of Alzheimer's patients and psychosis occurs in 30% to 50% of patients. These symptoms are difficult to treat and there is an urgent need for medicines to treat these symptoms.

Our other Phase 2 program for ITI-1284 is in GAD. GAD effects approximately 7 million adults in the U.S. each year, with three quarters of these patients experiencing moderate or severe functional impairment. Half of patients do not respond to initial therapy. We look forward to updating you on the progress of these studies.

We continue to advance the development of our lumateperone long acting injectable program. In 2022, we completed a Phase 1 study with our initial formulation. We plan to initiate Phase 1 studies with several LAI formulations in 2023.

The goal of this program is the development of LAI formulations that are effective, safe, and well tolerated with treatment durations of one month and longer. Moving to our PDE1 inhibitor program. PDE1 is an enzyme highly expressed in certain brain regions, certain cancer cells and immune cells, including macrophages and microglia.

In disease states, PDE1 becomes highly active and uncontrolled, preventing cells ability to respond appropriately to its environment. Inhibition of this enzyme in a pathological state restores normal function.

For example, in Parkinson's disease, dopamine pathways are affected, and PDE1 inhibitors restore normal function in these pathways by strengthening dopamine signaling. PDE1 inhibitors can also function as immunomodulators in neurodegenerative diseases and cancer, where important pathways are compromised in immune cells.

We are evaluating our PDE1 inhibitor Lenrispodun in a Phase 2 study for the treatment of motor symptoms and cognitive impairment in Parkinson's disease. We expect to begin enrollment later this month. Parkinson's is the second most common neurodegenerative disease after Alzheimer's disease.

For our newest PDE1 inhibitor ITI-1020, we recently received a you may proceed letter from the FDA and now have an active IND to evaluate this compound. As a novel cancer immunotherapy, we plan to start a Phase 1 study in healthy volunteers in the first half of 2023.

Finally, ITI-333 has the potential to treat opioid use disorder as well as pain and mood disorders. Opioid use disorder continues to be at epidemic levels. The number of opioid involved overdose deaths in the U.S. continues to increase with more than 80,000 deaths reported in 2021, up from 21,000 in 2010.

We have completed a Phase 1 single ascending dose study and recently started a multiple ascending dose study. We also have an ongoing neuroimaging study looking at receptor occupancy.

We are excited about the potential for our development programs as they have the potential to serve patients who currently suffer from serious disorders in areas of unmet needs. Our company is in a strong financial position, ending the year with $593.7 million in cash, cash equivalents, and investment securities and we have no debt.

We're very proud of our performance across the company and look forward to continued growth and sharing our progress with you. I'll now turn the call over to Mark to further discuss CAPLYTA’s performance and commercial opportunity. Mark..

Thanks, Sharon and good morning, everyone. As Sharon noted 2022 was an exceptionally strong year for CAPLYTA as we successfully launched our new bipolar depression indication. Since launch, total prescriptions have tripled and new patient starts are now at levels five times higher than before the bipolar depression label expansion.

For the full year 2022, CAPLYTA’s total and new prescriptions increased 193% and 220% respectively over the prior year. This growth is being driven by a compelling product profile, broad market access, and strong commercial execution by our experienced sales and marketing team.

CAPLYTA has been well received in the marketplace and we are gratified by the overwhelmingly positive feedback from both prescribers and patients regarding their experience with the product.

We continue to see strong underlying demand and prescriber adoption for CAPLYTA as we consistently increase both the breadth and the depth of our prescriber base, adding significant numbers of unique new prescribers and expanding the average number of prescriptions per prescriber. We delivered another great quarter for CAPLYTA.

CAPLYTA’s prescriptions again significantly outperform the antipsychotic market. Total CAPLYTA prescriptions grew 21% sequentially versus Q3, while the overall antipsychotic market was essentially flat during that same time.

We've carried this positive momentum into 2023 and the strength of our commercial fundamentals and metrics gives us confidence that CAPLYTA will achieve sustained growth throughout the year.

We have taken several steps in our prescriber and consumer promotional activities for 2023 to ensure a continuation of the robust growth we have experienced since the launch of bipolar depression.

First, commensurate with the strong demand and positive reception of CAPLYTA to date, we have increased our commercial footprint and recently added 50 highly experienced neuroscience sales representatives to our team.

This larger team allows us to connect more frequently with prescribers and continue to expand our reach, increasing our market share and penetration into the market.

Secondly, we recently launched the next iteration of our lead in the light direct to consumer campaign and are implementing broad national advertising through television, digital, and social media platforms to continue to raise awareness about the unmet need in bipolar I and bipolar II depression and educate potential patients about the benefits of CAPLYTA.

All of these efforts are supported by strong market access coverage across all three payer channels. CAPLYTA has maintained broad coverage in the Medicare Part D and Medicaid channels, with more than 98% of lives covered. We have further expanded coverage in the commercial channel, which is the primary payer for patients living with bipolar disorder.

We expect to achieve commercial coverage for approximately 90% of lives by the end of this quarter. While we are very pleased with the uptake of CAPLYTA at this stage of the launch, we have a strong belief that there remains plenty of room to grow and we are investing behind the brand accordingly.

The bipolar depression market is large and has a significant remaining unmet need. Our current label, which includes the use of CAPLYTA as both monotherapy and as adjunctive treatment in bipolar I and bipolar II depression allows us to address large patient populations with tens of thousands of prescribers.

As prescribers continue to acquire positive experience with CAPLYTA, the depth and breadth of utilization increases. This dynamic is building sustained demand for our medicine.

This is in line with historical precedents for antipsychotics approved for mood disorders, where branded antipsychotics have long growth trajectories and generate positive volume growth for years. We expect the same dynamic for CAPLYTA. In summary, 2022 was a tremendous year and we look forward to another successful year in 2023.

Our team has been executing extremely well and we are building on our growth momentum. I'm confident that we will continue to grow robustly in the coming year as we remain laser focused on executing our commercial plan. We're excited to continue improving the lives of as many patients as possible.

Now, I'll hand the call over to Larry to detail our financial performance. Larry..

Thank you, Mark. I will provide highlights of our financial results for the fourth quarter and year ending December 31, 2022 and our outlook for 2023.

Starting with our fourth quarter results, net product sales of CAPLYTA were $87.4 million compared to $25.5 million for the same period in 2021, representing a year-over-year increase of 243% and a 22% increase over the third quarter of 2022. Our gross to net percentage remained in the low 30s in the fourth quarter, consistent with our guidance.

Inventory levels in the trade measured by days on hand of CAPLYTA at the wholesale level remained consistent throughout the quarter. For the full year 2022, total revenues were $250.3 million compared to $83.8 million in 2021.

Net product sales of CAPLYTA were $249.1 million for the full year 2022 compared to $81.7 million for 2021, representing an increase of 205%. Selling, general, and administrative, SG&A expenses were $94.6 million for the fourth quarter of 2022 compared to $79.7 million for the same period in 2021.

For the full year SG&A expenses were $358.8 million compared to $272.6 million in 2021. Research and development, R&D expenses for the fourth quarter of 2022 were $33.9 million, compared to $29.5 million for the fourth quarter of 2021. R&D expenses for the full year 2022 were $134.7 million compared to $88.8 million in 2021.

Cash, cash equivalents, and investment securities totaled $593.7 million at December 31, 2022 compared to $412.3 million at December 31, 2021. Turning to our outlook for 2023, as Sharon mentioned, we expect CAPLYTA net sales to be between $430 million and $455 million reflecting continued strong growth.

This sales guidance takes into account our expectation that CAPLYTA’s gross to net percentage will increase to the mid-30s in 2023. For 2023, we estimate SG&A expenses to range between $420 million and $450 million, which includes approximately $29 million of non-cash share based compensation expense.

This reflects our commitment to support CAPLYTA commercialization through investments in our sales organization and marketing activities. For 2023, we estimate R&D expenses to range between $195 million and $220 million, which includes approximately $17 million of non-cash share based compensation expense.

Our R&D guidance reflects investments to support our robust pipeline, including multiple studies in our lumateperone clinical programs and our three other developmental platforms. In 2023, we anticipate that a substantial portion of our total R&D expenditures will be related to our lumateperone development programs.

This concludes our prepared remarks. Operator, please open the line for questions..

[Operator Instructions]. And our first question comes from the line of Andrew Tsai from Jefferies. Your question please..

Thanks. Good morning and uh big congratulations on the great quarter and a great guidance. So I'll kick things off and ask about the guidance overall for 2023.

Team, what drove your decision to guide on revenue? And secondly is your revenue guidance provided in such a way that we can expect potentially beaten raises throughout the year, so just trying to gauge whether you're giving a more conservative, more accurate or more aggressive type of guidance here? Thank you..

Thanks, Andrew and thanks for the kind words. This is Sharon and I'll start and then I'll turn it over to Mark. Obviously, we're giving guidance now because we're confident in our trajectory and what we've seen with our very strong launch for CAPLYTA. So that's the overall statement.

And then rather than stealing Mark’s thunder, why don't I ask Mark to comment further and then maybe I'll come back if there's anything else to add..

Yeah. Sure, Sharon. And thanks for your question, Andrew.

Yeah, to pick up where Sharon left off, what we've been seeing with CAPLYTA is we've been consistently increasing both the breadth and the depth of CAPLYTA prescribing month over month and to provide a little context around that date there have been over 22,000 unique prescribers of CAPLYTA and we're adding over 1200 new first time prescribers every month.

And in addition to that, the depth of their prescribing is increasing as well, so we're also expanding the average number of prescriptions per prescriber.

And while we're really pleased with this update to date and it supports the trajectory that you've seen throughout the course of the year, we strongly believe that there's still plenty of room to grow for a lot of the reasons that we talked about in our prepared remarks. These are large patient populations.

We have a large prescriber base with tens of thousands of prescribers and a significant remaining unmet need. And so we've taken some steps in 2023 that I detailed in the prepared remarks to invest behind the brand to really fuel this growth further.

And I'd say that we just -- we have a strong belief and a high degree of confidence that we'll continue to experience this robust growth this year..

Thank you. And our next question comes from the line of Brian Abrahams from RBC. Your question, please..

Hey, good morning. Thanks for taking my question. And my congrats as well on all the progress. Maybe another question with regards to your CAPLYTA guidance.

Can you talk a little bit more about maybe some of the puts and takes within the guidance and the different ends of the ranges, you mentioned gross to net expectations, but also wondering, I guess, what the guidance contemplates with regards to additional demand growth, any changes in the overall dynamics with additional generic entrants, and just I guess, curious the scenarios that would steer you -- that would I guess, steer towards the low end versus the high end of the range? Thanks..

Mark, do you want to take that?.

Yeah, I think Brian, it's simply looking at the trends that we've had to date with the bipolar launch, and an expectation that those trends will continue throughout 2023. We've said before and we continue to believe that the generic entries of lurasidone from Latuda should not have a significant impact on CAPLYTA.

Historically, in this category, when products go generic, the remaining branded products are not significantly impacted. So for example, when Abilify and SEROquel went generic, the growth of VRAYLAR and Latuda was not impacted, and they continued their growth trajectory. So we anticipate a similar dynamic with lurasidone going generic.

And then I think just the belief with the increased investment in our sales force, the continued investment in DTC and across our marketing mix, that we feel that the trend should continue throughout 2023 and build especially towards the latter part of the year..

Got it.

And in terms of just the variance?.

Yeah, I think it's just -- we don't expect a great deal of variance, we expect the trend to continue. And I think, specifically with the incremental investments that we're making in the sales force as those and we just recently added them, so they literally are just out in the field this month.

As they get more and more comfortable in their territories, that will accelerate the growth. Our DTC throughout the year should continue to raise awareness among patients, educate them on the benefits of CAPLYTA, and we'll see that continue to go.

As well as in the market access space, we've always had good broad access, particularly in Medicare and Medicaid with over 98%. With commercial, we had been at 85%, through the balance of last year, and more recently now have increased that to 90%, which we expect to be implemented by the end of the month.

So I think all of those things should drive real robust growth throughout the year..

And I would just like to remind you, this isn't a variance, it's just telling you that we expect the momentum to build over the course of the year with growing revenue, as we go from quarter-to-quarter.

Obviously first quarter has some first quarter seasonal dynamics built in, and then less so in the second quarter and then building further into the third quarter and fourth quarter..

Thank you. One moment for our next question. And our next question comes from the line of Jessica Fye from J.P. Morgan Chase. Your question please. .

Hey guys, this is Masan [ph] on for Jessica. Congratulations on the fantastic guide. Could you provide your latest expectations on when we can hear the top line results from the adjunctive MDD trials and can you talk about -- give us a little bit color on the reasonings for starting another adjunctive trial this year? Thank you..

Yeah, sure. This is Sharon and I'll start and then I'll ask Suresh if he wants to add. We guided you to a filing of an SNDA in 2024 for our adjunctive MDD and that's based on studies 501 and 502 and 503. We have said that, I think was your other question, just repeat your other question for me please. Operator, anybody there. .

You may proceed. .

She may have disconnected Sharon..

Oh, she got disconnected. Okay. Well, I think her question was, why are we -- just does anybody want to paraphrase it or should we just go on to the next question, and then we'll come back to it. Hopefully she re-engages..

Certainly one moment for our next question. Our next question comes from the line of Umer Raffat from Evercore ISI. Your question, please..

Hi, guys, this is Mike DiFiore in for Umer. Thanks so much for taking our questions and congrats on the quarter and progress. Just two for me; one clinical one commercial. The clinical one regarding your mixed features trial, I know, top line results are due sometime this quarter.

But at a recent broker conference, you mentioned that the placebo group index patients may be very different from what we've seen in depression patients.

So how do we think about that, is our depressed patients -- patients were being treated as adjunct of depressed patients, since they're already experiencing a partial response could we expect a greater placebo response in these patients, just any thoughts on how to frame that? And the commercial question is regarding your guidance, it seems pretty conservative.

At the high point, your guidance that assumes roughly around 80 new prescriptions adds added every week on average, which seems pretty doable. I think since the beginning of the year, there's been around an average of 200 prescriptions added weekly, just any thoughts along those lines? Thanks..

So let's start with the commercial question. And I'll ask Mark, do you want to take that and then we'll go to Suresh or I'll take the -- one of us will take the clinical question..

Yeah, Mike, I don't know that I have much more to add other than what we've said that we have a high degree of confidence in the continued growth of CAPLYTA and we set the range at what we thought was the appropriate range, given the growth that we've been seeing.

So overall, I would just say we're -- we have a high degree of confidence that we've got the range, right..

Okay. And also on the clinical question on placebo, I think all studies have placebo effects. I'm really not certain there would be any more or less here than any other study. But I'll ask Suresh, if he wants to comment any further..

Yes, good morning. These are different populations. One is the mixed future study is the monotherapy study. And the adjunctive treatment study is adjunctive to other antidepressants. That is patients who are already partially responded to the antidepressant. These are two different populations and there are several differences within the populations.

Also that each individual study has its -- comes with its own set of issues that is the patients, what kind of patients deviated they are coming from, what concomitant medications they have been on. All these play a role in determining how the study reads out.

So you cannot make comparisons between one study to another especially when they are not similar designs when there are two different populations. And that’s the reason why you had to look at those in two different sets of individual studies..

Got it, thank you..

Thank you. One moment for our next question. And our next question comes to the line of Marc Goodman from SVB Leerink. Your question please..

Yes, good morning.

Can you give us a little more color on these Phase 2 programs for 1284 AD agitation, AD psychosis, how are these patients different and what endpoints you're looking at that will be different here in the anxiety one? And then just very just quickly, the sales reps that were added to 50 reps, are they getting added in 2023 or were any of them added in the fourth quarter? Thanks..

Suresh, do you want to take the definition versus [Multiple Speakers] versus psychosis?.

Yes. So for the 1284 OTD [ph] we are progressing with studies in three different indications. One, the first one is agitation in Alzheimer's disease. This is purely looking at patients who have agitation. It's common for other MS patients to have behavioral symptoms, both agitation and psychosis.

But there are different indications and they have different endpoints. So the first study we would be looking at the agitation part of the study. And regarding the details of the endpoints and the study designs, as we come closer to starting the trial, we will let you know.

In terms of the next indication that is talking about psychosis in Alzheimer's disease, that endpoints also are different from this basically looking at psychotic symptoms within the Alzheimer's patients who have Alzheimer's disease. And that study also is going to start this year.

And the GAD, generalized anxiety disorder, and there has been as we have indicated in our call, that there is a lot of treatment failures and patients only respond partially to some of the drugs. And there is still an unmet need in this population.

And adding this drug to those populations will help with treating the anxiety symptoms, and there is a big unmet need. And the details of all of individual designs of these studies will be communicated once the study is closed at the start..

Thank you one..

Sharon, there is a question for Mark. .

Yeah, Mark, I can answer the sales representative timing question. All of the representatives were brought on in 2023. So they had start dates, in a couple of ways in the latter part of January and pretty much for the month of February had been on boarded and getting trained up.

And only recently in the last week or two have they been out in the field selling. So that's the timing..

Thank you. One moment for our next question. Our next question comes from the line of Ami Fadia from Needham. Your question, please..

Hi, good morning. Thanks for taking the question.

Can you share with us the rationale for initiating a third adjunctive MDD study and why stay sharp prior to the readout of the ones that are ongoing? And then just with regards to the mixed feature study that we're going to read out soon, help us understand sort of what you think that you need to be able to demonstrate, to move ahead and seek sort of registration, seek approval in that indication.

You have indicated in the past that data will drive further discussions with the FDA.

What I'm trying to understand, you think that maybe at least in -- they had run a study, but then they did not end up getting approval, it appeared to us that the bar was probably high to seek an approval in that patient subset, so we'll be pleased to get your thoughts on that? Thanks..

Okay. I don't know Suresh, do you want to start and then I can chime in..

Yes, regarding the first question you asked about why starting the third study. In deciding when to start the third study when you look at the landscape, including how many studies are being run right now and what countries they are running and what have been conducted, we believe this is the appropriate time to initiate this study.

And major depressive disorder in adjunctive treatment is a great near-term opportunity. Similar to our clinical development strategies followed in our other mood disorders program, for example, the bipolar depression program, it is prudent to add additional trials.

It's a good decision and it highlights our commitment to expanding applied kind of integration. In terms of the second question about the mixed features, as we have indicated, the readout of the study we're expecting in this quarter, and the readout will depend on how strong the results are.

As we have indicated in the previous times, it depends on what the results show and we will have to go to the FDA and discuss presentable data, that's what we have indicated to the FDA. Once we go and discuss based on the results, we will know the next path.

I want to also remind that there has not been a path established for approval in mixed features. While there is path established for adjunctive treatment the mixed features approval, there is no one with that indication, especially for the bipolar depression with mixed features or MDD with mixed features. Now, there is not an indication for that yet.

So we would like to discuss that with the FDA. And our strategy is mainly to expand across the mood disorder spectrum, both in unipolar and bipolar disorder.

I think you had a question about other some -- some other company doing this study and not having an approval, but I cannot speak to that, because I don't know what relations were made internally..

Understood, thank you so much..

Thank you. One moment for our next question. And our next question comes from the line of Charles Duncan from Cantor. Your question, please..

Yeah, from Cantor. Thanks, Sharon and team for taking our question. And congratulations on a transformative year last year. I think these are or this is a commercial question with two parts. One is actually related to the last question in terms of the mix feature readout and strategy.

We recently conducted a KOL call that suggested -- the KOL suggested that even a date of publication would be picked up by prescribers, and I know that you would mark it off label.

But do you think that the label could encompass prescribing in mixed features patients? And the second part is, what are you doing to prepare for the coming wave of muscarinic modulators, is mono therapy and schizophrenia or do you think that that's a non-event for your commercial franchise?.

Mark, do you want to start or do you want me to?.

Why don't you go ahead and start and I'll add some color if necessary, Sharon..

Okay, I'll start with the label and I think that really what we need to do, and you're right, we do not promote anything off label. So what we would do is we're going to wait and we're going to see the data.

And we are going to go to the FDA with the data and assuming that it's very good, which we're of course hopeful for that might guide us towards a particular path. We will publish the results and again, we're hopeful that the data is very good. And physicians can read the papers.

And I guess on -- I think it's a little premature to talk about and comment on label expansion based on these results, because we don't know the results. On the [indiscernible], I don't think again.

So our first approval wasn't specifically our next approval and the direction of the company is schizophrenia is important, but mood disorders are much larger populations and the indications that we are moving in with our expansion. We do think that -- so we do think that anything that's approved for patients with schizophrenia is a good thing.

We look for anything that can help patients. Remember patients cycle through all of these drugs and we would look forward. We don't expect there to be any negative impact on us at all. First of all, they're still in the future. But we -- all I can say is we look forward to having more options to treat patients.

Mark, do you want to add anything to that?.

No, I think that's great..

Thanks, Sharon, for the color..

Thank you. One moment for our next question. And our next question comes from line of Jason Gerberry from Bank of America. Your question, please..

Hey, good morning, guys. Thanks for being my question.

So, just wanted to drill in a little bit more on the selling and marketing investments step up, and really is sustained sales growth contingent on this sort of level of investment or is there a possibility as we get into 2024, you can level off that investment and really kind of leverage this big step up in selling and marketing investment that we've seen in the last two years? And then as I look at like 2022, half of the script growth came from nurse practitioners, roughly.

And so it's a broader trend we see in mood disorder drugs in general.

So just wondering if there's a connection at all, to this sort of dynamic and the step up in selling and marketing investment?.

Yeah, I can take that Sharon. Yeah, so when we made the decision to expand the sales force, what we were seeing is very strong demand for CAPLYTA, very positive reception in the marketplace. And as we analyze the data, we saw there was an opportunity to continue to fuel incremental growth.

We've been pleased with the growth that we've been seeing but as we always do with all of our investments, we're good stewards of the investment dollars that we have. And we always look for opportunities that might yield even incremental growth for us.

And so in adding these 50 additional neuroscience specialists, what it will allow us to do is more frequently connect with high volume prescribers and also expand our reach deeper into our target audience.

And you mentioned NPs and PAs, and we would agree with you, certainly over the last couple of years NPs and PAs in disease states, like schizophrenia and especially bipolar depression, have become a very important audience for us.

They are very much a part of our target audience and will continue to reach out to them to educate them on the disease and the benefits of CAPLYTA. So hope that answers your question, Jason..

Thank you. One moment for our next question. And our next question comes from the line of David Amsellem from Piper Sandler. Your question, please..

Hey, thanks. So I wanted to ask you about LAI limits up around and get your thoughts behind the rationale there. My understanding is that the LAIs are primarily in the schizophrenia and bipolar, more mania population.

So, as you're leaning more and more into depression and bipolar depression, and then MDD, how do you think about the significance of an LAI form of lumateperone and I guess, in the grand scheme of things in your pipeline, how important is it? Thank you..

Sure. Thanks for the question. I'll take that. So I think that when we started looking at an LAI, we didn't have all the data that we have now as to why does safety and tolerability profile and which as you know, has turned out to be very good.

So we are developing an LAI, we don't expect it to take over 50% of the population because of the fact that our oral drug has such a great efficacy and safety and tolerability profile.

However, we do think that it's an option for patients and can be an important option for some patients who either are not compliant to once a day dosing or who simply just don't want to take drugs every day. So we think that it's nice to have, we don't think that, again, that it's going to take over our oral franchise.

We are also in our development profile, though we are seeking not only a one-month delivery, but we're seeking a longer period of time, a two months delivery. So hence, we are delivering -- we are developing a product that can be useful in both one and two months deliveries..

So Sharon, can you say if it's a SUBQ or an intramuscular, I don't know if you've ever mentioned that?.

I have mentioned it. The Phase 1 study that we did was a SUBQ. We've been looking at other ways of administering the drugs. So we are looking at both SUBQ and IM.

And so it turns out from a patient perspective, it isn't -- it is really depending upon your formulation, sometimes they are like one over the other, but patients don't seem to mind an IM injection. So we're looking at both SUBQ and IM. .

Thank you..

Thank you. One moment for our next question. And our next question comes from line Graig Suvannavejh from Mizuho. Your question please..

Thanks. Good morning. Thanks for taking the questions and congrats on the progress. I've got two pipeline questions. My first just has to do with the mixed features study that we're about to get data for.

And my question is just given the trial design, where you do have Madris [ph] as an endpoint and given that it's likely to be mainly in MDD patients or many MDD patients in the study.

Is there a possibility that you could consider or you could propose to the FDA that this perhaps should be counted more as an MDD trial, so just wanted to get your thoughts around if that's part of the thinking? And then secondly, I did also want to revisit the new 505 study that you've announced.

And I'm curious if the desire to add a study in any way is perhaps hedging against perhaps a negative result in 501 or 502? Thanks..

I'll start with the second part, and then I'll turn it over to Suresh. So the start of a new study is prudent. It is simply the way the CNS trial are run. It's the way we've conducted our other programs. We did this in bipolar, we did it in schizophrenia, you see every sponsor conduct several trials within an indication.

So I don't think there's anything, any magic here, anything special here. I think we -- you always think it's prudent to have several shots on goal. And so we thought it prudent to have started -- and into the timing of the study, you look around at the different countries you look at how many other studies are ongoing.

And we thought that this is the right time to do this, hence the start of the study.

And Suresh, did you want to take the other part of the study of the question?.

Question. Yeah, I think the next -- the first question was about the mixed features can then be used as a MDD study. So the mixed feature study is designed especially to two populations, we have the bipolar depression population and we also have the major depressive population that is a unipolar depression.

So we have approximately, similar patients between age groups. And also this patient population has been enriched for mixed feature. So we use the diagnostic features of DSM 5 for specifically indoor patients only who meet the criteria for mixed features.

So it would be difficult and if not, I don't think that it will be agreeable by the FDA to use that as a MDD study..

Nor would we want to. These are patients with mixed features, that need to be….

In the population, yes. .

Right, and just to tell you, I mean obviously we don’t have any of the results yet, but the way the study was designed, patients were stratified. So we should have roughly equal patient population in the bipolar and the MDD patient populations. .

Thank you. One moment for our next question, and our next question comes from the line of Ash Verma from UBS. Your question please..

Hey, thanks for taking my question. Congrats on the quarter.

I had two, first just can you elaborate on the new DTC [ph] campaign that you launched, seems like it is making a decent buzz based on some of the downstream metrics that we track, anything that you can share on how much of the spend is baked in for the DTC in your SG&A guidance for this year? That's first and then the second one.

So all mixed features like the feedback that we've heard from physicians indicates that patients are not specifically treated for mixed features, at least not extensively. And this would require some sort of like an indication establishment.

Want to understand if you think differently and can you provide any kind of an example of where psychiatry indication went through a similar path when it was undertreated to begin with and became a bigger market eventually? Thanks..

We may need for you to I -- you blanked out on me a couple of times. I couldn't hear what you were saying. I don't know if anybody else could hear at all. .

I heard the first part of the question, Sharon on DTC. I could start there, if you'd like. .

Okay, sure. .

So yeah, hi Ash. We did recently launch the next iteration of what we call our lead in the light DTC campaign. This is a broad national campaign that we're implementing.

We're implementing it through television ads, digital platforms, social media platforms, all with the intention of seeking to continue to raise awareness of the very significant unmet need, both in bipolar I and in particular bipolar II depression and educate patients on the potential benefits of CAPLYTA.

And yes, we'd agree we're seeing the same positive metrics that you're seeing, which is the reasoning behind continuing the campaign and evolving it, and building upon it. Our media is successfully targeting and reaching the bipolar depression audience. We know that from the metrics we're looking at.

When we're on air, we drive substantially more visitors to our website, looking for information about CAPLYTA and bipolar depression. And also on the back end when we survey physicians, an increasing number of physicians are reporting an increasing number of patient requests for CAPLYTA and we would expect this to increase as our ad continues to air.

So yes, we've been pleased with the campaign. We're seeing the positive metrics and that led to the decision to continue it. I don't know, I can turn it over to Larry. I don't know if Larry has a comment on the spend. We don't typically, specifically talk about the components of our selling and administrative spend.

But Larry, I don't know if you have any comments that you'd like to add to that..

No, I have nothing to add to that..

Okay. And then Ash, we're going to have to ask you to repeat, I know you had a bunch of questions in there. I'm sorry.

We couldn't, I guess none of us could understand what was being asked, so if you could ask it again please?.

Sure, yeah. So just on mixed features, this is feedback that we have heard from physicians that patients are now specifically treated for this indication, at least not extensively.

Do you agree or disagree to that and any example that you can give on other psychiatry indication that went through a path of being undertreated to becoming a bigger market?.

Sure. So I would agree with you that -- I do think that many psychiatrists do understand mixed features and see patients and treat those patients with whatever they think might be beneficial that's currently available. But you're right, there is no label for it. Until the DSM 5, MDDD with mixed features wasn't even specified.

And bipolar depression was a much looser definition. So DSM 5 has allowed physicians to see a tighter definition and to be more educated. We agree with you that it is an education process just like bipolar II. Physicians see bipolar II patients, they know it when there's nothing to treat patients with, it's more difficult.

So having the label for bipolar II is very helpful to physicians. And we would look forward to educating on this indication as we go forward. So we think there's a lot of opportunity here for education and to expand the awareness of the disease. I think, bipolar II is a great example where it's now quite well defined with only a few treatments.

I don't know, Suresh if you have any other examples off the top of your head..

Other examples, not exactly the same, or at least something closer to that would be, if you think about the psychosis in Parkinson's disease, there was nothing approved. But once that is there, that took off. Similarly, cardio dyskinesia, it's a market that Eurokind [ph] has done extensively well with.

Again, they have done a lot of educational campaign to highlight that, importance of that..

Those are great points Suresh. Thank you. Okay, operator, I think that it's time for us to wrap up, one more question..

Certainly then. One moment for our final question. And our final question for today comes from the line Corinne Jenkins from Goldman Sachs. Your question please..

Hi, this is Sadaf [ph] on for Corinne. Just a couple from us.

I believe you guided GAD [ph] to the mid-30s range for 2023, but what you anticipate in terms of cadence over the course of the year?.

Yeah, hi, hopefully I heard you, it was in -- you were asking the gross to net the guidance for the year and a cadence for that, is that what you said?.

Yeah..

Yeah. I think our guidance, gross to net will fluctuate as it does throughout the year. But I think, you can be as -- we're comfortable in our mid-30s guidance here, I can't give any more granularity to that. .

Got it. Okay, thanks.

And on just the second question, was that for MDD data, could it come as early as your end, or should we expect that in 2024?.

So, what we've said on the MDD is that we expect to file in 2024. And that's I think the guidance that we're giving..

Got it. Okay. Thank you. .

Okay, operator I think with that it’s time for us to wrap up and we thank everybody for joining us today. We think 2022 was a terrific year for us and for the launch of CAPLYTA in bipolar depression. We look forward to more progress this year in 2023, and we look forward to update you on a quarterly basis.

So thanks everybody for participating and operator, you can now disconnect..

Certainly. Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..