ACADIA Pharmaceuticals Inc.

Good day, ladies and gentlemen, and welcome to the Acadia Pharmaceuticals second quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Mark Johnson. Vice President of Investor Relations at Acadia. Please go ahead, sir.

Thank you. Good afternoon, and thank you for joining us on today's call to discuss Acadia's second quarter 2022 financial results. Joining me on the call today from Acadia are Steve Davis, our Chief Executive Officer, who will provide an overview of our second quarter performance and a review of our business. Mark Schneier, our Chief Financial Officer, will discuss our financial results and guidance. Brendan Thien, our Chief Operating Officer, Head of Commercial, will provide updates on our commercial performance, and Kathy Bishop, our Chief Scientific Officer and Head of Rare Disease, will provide an overview on tryptophan. Dr. Serge Stankovich, our President, will then discuss our pipeline progress before turning it back to Steve for final remarks and opening the call-up for your questions. I would also like to point out that we're using supplemental slides, which are available on the Events and Presentations section of our website. Before we proceed, I would first like to remind you that during our call today, we'll be making a number of forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, or future results, are based on current information, assumptions, and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made Your caution not to place under-reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve.

Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Please turn to slide five. Our business plan is focused on the following priorities. Maximize the value of our Parkinson's disease ectosis franchise with new plazas. Delivered to refinentad to the market as our second commercial product. in the first FDA-approved treatment for Rett syndrome, complete our second pivotal study in negative symptoms of schizophrenia, discipline early-stage development to selectively advance molecules into late-stage development, and finally, positioning ourselves to leverage an increasingly attractive opportunity set in business development by carefully allocating capital as we fund our current business from our existing balance sheet and move to becoming cash flow positive. Let me get into these in greater detail. Let's start with our Nuplizit PDP performance on slide six. For the second quarter of 2022, Nuplizit achieved $134.6 million in net sales, representing a 17% year-over-year increase. Importantly, Nuplizit continues to outperform the basket of top-branded drugs in the neurology segment, the PD market, and in long-term care facilities. I'm proud of our execution to continue to outperform market comparators and grow market share in a Parkinson's market environment, which continues to be negatively impacted by the pandemic. Given the current PD market dynamics, we have been and continue to be focused on efficiently managing and optimizing our PDP commercial spend. As Mark will describe in a moment, by carefully allocating capital to PDP opportunities with the highest ROI, We expect to keep overall SG&A relatively flat in 2023, while funding the projected launch of terpenetide in Rett Syndrome. Longer term, our outperformance against market competitors and ability to continue to gain share in what is currently a downsized market is of confidence in our ability to continue to grow the brand while maximizing the value of Nuclizate and PDP. Before leaving Nuclizate, I want to provide some clarity on our patent protection for the franchise. Our Composition of Matter Patent in the Orange Book was recently updated with patent term extension out to the end of April 2030. In addition, we are conducting clinical work in pediatric autism that should result in a six-month pediatric extension, taking our Composition of Matter Patent to the end of October 2030. As a reminder, we have additional method of use and formulation patents that protect the currently marketed tablets and capsules of Nucleazid out to 2037 and 2038 respectively. Let's now move to slide seven. As announced last month, we submitted our NDA for trofenetide for the treatment of Rett syndrome in adults and pediatric patients two years of age and older. The submission is based on our pivotal phase three Lavender study, which delivered positive top line results on its co-primary endpoints and on the key secondary endpoint. Trofenetide has been granted fast track status and orphan drug designation for Rett syndrome, and it's also been granted rare pediatric disease designation by the FDA. As such, we expect this NDA to receive a priority review with an action date most likely in the first quarter of 2023. And if approved, we would expect to receive a pediatric priority review voucher. Our commercial medical teams are working diligently on preparing for launch, including market development, disease state education, customer profiling, and broader care team identification. As a reminder, our patent protection for Trofinetide consists of a method of use patent with expected patent term extension out to early 2036, with additional patents pending. Moving now to Pim Evanson for the treatment of negative symptoms of schizophrenia. Pim Evanson has already completed one positive pivotal study, Advance 1. As we previously noted, negative symptoms has been a particularly difficult area for the industry with many failed studies and no FDA approved therapies. Our second pivotal study, Advance 2, is ongoing. Advance 2 is virtually identical to Advance 1 with one important difference. In Advance 1, we explored a range of doses and determined that the top dose, 34 milligrams, the same dose approved for PDP, performed meaningfully better than lower doses. So in Advance 2, we are only using the 34 milligram dose. As Serge will discuss, as a result of the ongoing Russia-Ukraine war, we are extending our projections to complete enrollment to around the middle of next year. As a reminder, this is a study with a six month treatment period. Let's now turn to slide eight to discuss the further evolution of our early stage portfolio. One early stage program we've not previously discussed is an internally developed new molecule, ACP204, which is currently in phase one development. ACP204 builds on the learnings of PIM of answering. At this point, the compound is looking very good. and if phase one is successful, we plan to develop it as a potential treatment in neuropsychiatric symptoms, which may include Alzheimer's disease psychosis. We expect ACP 204 to complete phase one development around year end. Of course, making disciplined decisions in early development is a threshold requirement to success in late stage development. We've also made the decision to discontinue the development of ACP 044 in acute and chronic pain based on an evaluation of the final data set from a previously completed Phase II bunionectomy study. We're also discontinuing ACP319, an M1 PAM modulator, based on a profile that does not support advancement to Phase II. Moving to the bottom of the slide, I just want to go back to a point I made when I opened my remarks, and that is that we are positioning ourselves to leverage what we believe will be an increasingly attractive business development environment. We're positioning ourselves by being very focused in our investments in PDP, prioritizing investments with ISROI. As I mentioned, this will enable us to appropriately fund our launch in Rett syndrome while keeping SG&A relatively flat. We will also continue to be very disciplined in allocating capital in our R&D portfolios I've described above. If the capital market stage disjointed, and it appears they will for the foreseeable future, What we've seen in the past in these cycles is that the tables tilt dramatically in favor of companies like us, companies with a strong balance sheet, solid revenues, and established commercial and R&D infrastructure. In addition, we've established an infrastructure across all four quadrants you see here, in both psychiatry and neurology, and across broad indications and rare disease. Of course, terpenazide is a good example of our past success in business development. Our strong financial position and established infrastructure position us extremely well to leverage the evolving business development opportunity set for further success. With that, I'd like to now turn the call over to Mark to discuss our financial position, guidance, and strategy in more detail.