ACADIA Pharmaceuticals Inc.

Good day, everyone, and thank you for standing by.

Welcome to the Acadia Pharmaceuticals first quarter 2024 financial results and operating overview 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.

To participate, you will need to press star 11 on your telephone.

You will then hear a message advising your hand is raised. To withdraw the question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Al Kildani, Senior Vice President of Investor Relations and Corporate Communications. Please proceed.

Thank you. Good afternoon, and thank you for joining us on today's call to discuss Acadia's first quarter 2024 earnings. Joining me on the call today from Acadia are Steve Davis, our Chief Executive Officer, who will provide some opening remarks, followed by Brendan Tian, our Chief Operating Officer and Head of Commercial, who will discuss our strong commercial franchises, Debut and New Plaza. Also joining us is Kimberly Manhart, Senior Vice President of Global Strategic Planning and Execution, who will provide an update on our pipeline programs.

And Mark Schneier, our Chief Financial Officer, will review the financial highlights.

provide some closing thoughts before we open the call up for your questions. In addition, Parag Naspwani, Senior Vice President, Trophinatide Rare Disease Franchise will be available for the Q&A session. We are using supplemental slides which are available on our website's events and presentations section. Before proceeding, I would like to remind you that during our call today, we will be making several forward-looking statements within the meaning 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 several risks and uncertainties that may cause results materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve for opening remarks. Thank you, Al. Good afternoon, everyone, and thank you for joining us. Please turn to slide five. The foundation of Acadia's business is built on our two first-in-class drugs on the market, a robust pipeline of late-stage assets with more behind them, and a strong balance sheet that allows us to invest in future growth. During the first quarter, our commercial franchises delivered total revenues of $205.8 million, increasing 74% from the first quarter of 2023, which did not yet include sales at debut. Duplassit remains a strong cash flow generator franchise that delivered first quarter sales of $129.9 million, up 10% from the first quarter of last year, as we continue to grow volume and gain share in the Parkinson's disease psychosis sector. We look forward to expanding on this growth. Sales of debut were $75.9 million in the first quarter, first time completing this calendar period since our April 2023 launch. As we'll discuss on this call, one year into the launch, approximately one in four diagnosed RET patients have initiated therapy with Debut. The remaining three-quarters of diagnosed patients and those not yet diagnosed represent a very large opportunity to continue to grow this drug and reach families not yet benefiting from the only drug approved to treat RET syndrome. We also have two commercial franchises. We have a deep and growing pipeline, including our Phase III Prader-Willi Syndrome Program and our seamless Phase II and Phase III Program in Alzheimer's Disease Psychosis. Acadia continues to operate from a position of financial strength. Revenues from our two commercial franchises enabled us to add $30 million to our cash position in the first quarter, which is traditionally the seasonally weak quarter of the year in our industry. As a result, we continue to maintain a very strong balance sheet with a total cash of $470.5 million as of March 31st. Turning to slide six, I'll now provide a high-level update on Debut that both Brendan and Mark will expand on in their sections. We've just completed one year into the launch of Debut. Let me take a moment to recap where we stand today. As you know, after launch, we experienced a surge of patients that initiated therapy quickly in the first several months of debut's availability. As I referenced a moment ago, we have a sizable population to continue building SHARE. Out of 5,000 diagnosed red patients in the U.S., as I mentioned, approximately one in four of these patients have initiated therapy with debut. In addition, we believe the prevalent population of red patients in the U.S. is between 6,000 and 9,000 patients. We expect as debut is on the market longer, we will see more and more of the undiagnosed patients get diagnosed. Importantly, we continue to see real-world persistency rates track about 10 percentage points above the time-based rates of persistency observed in the most relevant populations from our clinical studies. We believe that on average, the dose patients take following any period of titration up or down is approximately 75 to 80% of the labor dose. Today, we've established a very broad prescriber base with over 650 individual riders. Brendan will speak to the shift in mix of perspectives we've observed since launch together with our expectations going forward. We've established a broad access to Debut with over 80% of rent lives covered and conversion metrics that are consistent with industry norms and seasonality. Let me turn to a few of the key dynamics we see today as we enter our second year on the market. In the last year, we've now accumulated a substantial body of real-world experience with Debut. We're seeing more and more stories shared on both the medical and caregiver communities regarding the benefits of Debut, including alertness, engagement, communication, and motor benefits. On the dosing and GI management front, while our data indicate the average dose patients take longer term, continues to be in the 75 to 80 percent range, we are seeing some variability in the application of strategies for titration and dose adjustments getting to the longer-term dose. This represents an opportunity where we are focused on supporting dialogue in both the medical and caregiver communities regarding the establishment of consistent application of GI management strategies and best practices. Brendan will speak to both the observed benefits of debut and GI management practices in his section. During most of the first quarter, we saw a decline in active patients on therapy as we experienced first-time seasonal dynamics, together with an increase in numerical discontinuations.

Primarily associated with the higher rate of new patient starts,

in the preceding two quarters. In other words, there is somewhat of a lag between numerical new patient starts and numerical discontinuations.

Just to be clear, our overall rate of persistency continues to track well above our clinical trial experience despite the fluctuation of numerical discontinuations we see

in any given month or quarter. Importantly, we now see net patient additions in each of the last six weeks and believe the lag-based increase in numerical discontinuations we observed in the first quarter has peaked and is now largely digested. To recap, on debut, one year prior to the launch,

establish very healthy share with one in four diagnosed patients on therapy.

Key long-term value drivers include a very large opportunity to continue adding share and rates of persistency track approximately 10 percentage points above our clinical trial experience and are supported by a large prescribing population and broad pay

Let's turn to a snapshot of our current products and pipelines on slide seven.

As it continues to contribute substantial revenues and share growth, furthering our strategic objective of optimizing cash flow in this franchise. In addition to our two successful commercial franchises, we have numerous late and early stage pipeline assets representing important opportunities.

These include important. where we are currently enrolling subjects in our syndrome. where we are currently enrolling subjects in our study. Part of Willie's rare and debilitating genetic disease where patients have an unrelenting drive to eat called hyperphagia. Sadly, the severity of this disorder translates into an average lifespan of only 30 years.

Here, too, there are no FDA-approved treatments. We are currently enrolling our seamless Phase II and Phase III program with ACP-204 in Alzheimer's disease psychosis patients, another disorder where there are no approved treatments. ACP-204 is our second generation 5-HT2A blocker, where we are leveraging our learnings from PIM Advanced Training.

And behind that, we have a rich... Disclosed and undisclosed programs that position us for future growth. I'll now turn it over to Brendan to discuss our commercial performance beginning on slide eight. Thank you, Steve. Please turn to slide eight, beginning with debut. Let me We start by discussing the three key drivers of long-term value for day PQ and the continued growth potential they represent. First,

With now one out of four diagnosed RET patients having received treatment, we still have a large remaining patient population in the market that has significantly higher physician and caregiver awareness about the product one year post-approval. Launched to date, we've been successful penetrating centers of excellence. where we now have approximately 50% share of patients treated. So we have a lot of room to grow . In addition, we're also focusing on driving depth of prescribing outside of COEs, where the majority of our patient potential exists. We're already seeing a shift in the source of prescriptions today and expect an increasing share to come from non-center of excellence high volume institutions and community practices moving forward. Second, a year into launch, we now have a foundation of real world evidence providing us the following levers. Number one is real world benefits. We are describing the real world benefits patients and families are seeing across a wide range of ages, as well as various services, serving as examples of successful treatment with Debut. In a moment, I will share some quotes from caregivers about the meaningful benefits they're seeing in their patients. Number two is GI management. We're sharing key learning outcomes with successful GI management strategies. We've observed a wide range of GI management approaches, and we see an opportunity to further enhance and accelerate the establishment of best practices in the community.

Number three is that time to benefit is a key consideration. We know a majority of patients with their doctor's guidance are starting treatment by and of course, When you titrate over a period of several weeks, it may take longer to get to a therapeutic dose. It's therefore important to ensure that families and physicians have the right expectations regarding the type

it may take to observe benefits. We have observed that many discontinuations happen early in a patient's treatment, a time frame that may not have been sufficient to get to a dose that produces benefits or work out an appropriate GI management regimen. To further support these families, our messaging on treatment expectations emphasizes the importance of HCPs and caregivers working together on setting the appropriate timeline to realize the benefits of debut and determine the appropriate GI management strategy for each patient. Our third driver is persistency on therapy. We now have data out to the nine month mark that demonstrates persistence tracking 10 percentage points above what was observed in the Lilac Open Label Extension Study for Placebo Rollover Patients. This continues the consistent persistency curve we've seen from the time of launch. I'd like to take a deeper dive into each of these drivers. First, let's discuss market penetration and growth potential.

One year into launch, we've started

more than 1,300 patients on debut in a market with 5,000 diagnosed RET patients. Many of these patients come from COEs where we have approximately 50% patient share, which leaves us ample opportunity for growing in that setting. Our mix is shifting to an even more split of prescriptions, with one-third of prescriptions coming from centers of excellence, one-third from non-center of excellence high-volume institutions, and one-third from community practices. Since the level of experience with treating RET patients outside of Centers of Excellence is lower, we're delivering enhanced messaging to these prescribers on both clinical benefits to expect from DayVu as well as tolerability management strategies. Our second key driver is the real-world evidence and the success stories those to motivate both HCPs and families to initiate debut. Broad prescribing early post-launch has led to many debut treatment success stories across a range of ages and disease severities. We're now utilizing these successes to educate prescribers and caregivers on what to expect when starting and staying on debut, which will encourage broader adoption. Looking at GI management strategies, we've seen a pretty wide range of approaches. Some physicians and practices, particularly a few of the COEs, feel they have this very much dialed in, utilizing product labeling and GI management strategies to achieve success.

However, implementation of these strategies in the broader community is variable, telling us there is an opportunity to educate further on these guidelines.

While we continue to be very encouraged by the longitudinal rate of persistence, we believe that in addition to communicating Davey's clinical benefits, implementation of more consistent best practices in GI management will further further support for building a sizable base of enduring patients over time.

This leads to our next driver, persistency, where we've seen a very consistent pattern when comparing the post-launch rate of persistence to our clinical trial experience.

Let me now share our latest persistence data. With patient cohorts now out to nine months, the real-world persistency rate is 58%.

Compared with 47% seen for placebo roll-over patients in LILAC in nine months. As we've described on

In our last call, approximately 40% of patients that initiated therapy on day view in phase three remain on therapy today.

And have been on therapy for more than two and a half years. This compares and underscores the opportunity we see to build a sizable, enduring population on debut.

If we can continue to track approximately 10 percentage points above our clinical trial experience,

We believe the enduring population could be approximately half of patients to initiate therapy. Half of patients to initiate therapy. Let me touch on the number of patients we have on therapy.

As of the week ending May 3rd, we have 862 patients active on debut therapy compared with the figures we shared on February 27th of 860.

During the most...

find inactive patients on therapy due in part to an increase in numerical discontinuations Steve described earlier. We've now seen net patient additions in each of the last six weeks, and we believe the increase in numerical discontinuation we observed in the first quarter has peaked and is now largely digested. I'd like to recap our view of the U.S. opportunity as we now commence our second year on the market. With over 3,500 diagnosed patients who have not yet tried Debut and several thousand RET patients who have not yet been diagnosed, we have an opportunity to continue to substantially grow Debut. Our persistency experience to date indicates we can build a sizable, enduring population benefiting from Debut. We have a strong foundation to build on, including a large

and broad payer access.

Please turn to slide 10 for a discussion of our plans on Dayview outside the United States. Looking beyond the U.S., we are rapidly advancing toward making Dayview available in additional markets. Our Pediatric Investigation Plan, or PIP, which detailed the previously completed clinical trials for debut, has been agreed upon with the pediatric committee of the EMA, paving the way for an anticipated filing in the first quarter of 2025.

In Japan, we now have a formal meeting scheduled with the PMDA later this quarter to discuss our proposed clinical plan. And in Japan, recently announced that our new drug submission was accepted for filing and granted priority review by Health Canada, potentially leading to an approval in that market around the end of this year.

Let's now turn to slide 11. Here you see quotes from caregivers reinforcing some of the observations described above, each consistent with the feedback we've been hearing for many months. Such as caregivers noting higher levels of engagement, improvement in speech with a broadening vocabulary and improved engagement in conversations, more purposeful use of hands and decreased hand-wringing

We also regularly hear feedback about the loved one's increased cognitive ability or increased alertness with patients now being able to better follow conversations.

Caregivers tell us they view these improvements as meaningful enhancements in quality of life for the patients in their care as well as their families these testimonials all speak to the promise of treatment with debut and underscore exactly why we at acadia do what we do to support and benefit those with greatest needs let's turn to slide 12 for a discussion of our new plaza franchise i'll start by reiterating that our Our primary financial objective with NewPlaza is to optimize cash flow, and we do that in two ways.

First, we're continuing to grow and market share in our eighth year on the market for PPP. The most effective lever to drive growth recently has been the

broad educational campaign we launched last year, bringing attention to our real-world evidence studies. These efforts have allowed us to grow new patient starts faster than the market. The second way we optimized the New Plaza franchise cash flow is by carefully managing expenses, and we'll continue to do that throughout 2024. These combined efforts have enabled us to generate over $300 million on a standalone, fully burdened basis in annual cash flow. Now let's turn to slide 13 to review our quarterly performance. In the first quarter of 2024, New Plaza delivered $129.9 million in net product sales. As evidenced in the prescription data presented on this slide, The Parkinson's disease market remains largely flat with both carbidopa, levodopa, TRXs essentially flat versus their prior quarter, while other antipsychotics and Nuplazid both increased by 4% and 6% respectively in the first quarter compared with the fourth quarter of last year. Importantly, Nuplazid outperformed growth in the PD market in both the office-based and long-term care channels. We are encouraged by these recent trends and look forward to continuing to grow this franchise. I'll now turn it over to Amberlee Manhard, Senior Vice President of Global Strategic Planning and Execution.

Starting on slide 14.

Thank you, Brendan. In addition to our commercial products, we have a strong pipeline of late stage clinical programs and early stage disclosed and undisclosed programs, providing us with several opportunities to further expand our growth. I'll review our two late stage programs. Please turn to slide 15 to discuss our ACPP 101 program, the treatment of hyperphasia and Prader-Willi syndrome, or PWF.

Let me start with just a brief background on the disease.

Prader-Willi syndrome is a rare genetic neurobehavior disorder that affects approximately 8,000 to 10,000 patients in the U.S. The defining characteristic of PWS is hyperphagia. The defining characteristic of PWS is hyperphagia, which commonly begins between the ages of three to eight. Hyperphagia is characterized by unrelenting hunger that often leads to obesity and behavioral challenges such as anxiety and aggression.

As you can imagine, it is extremely distressing for patients

as well as parents and caregivers of patients with PWS. To illustrate just how devastating this disorder is, the average life expectancy is 30 years, largely due to obesity and the resulting cardiovascular related diseases. Hypertension in PWS represents a significant unmet need, as there are currently no therapies approved to treat it. Let's now turn to slide 16, where we describe our clinical program in Prader-Willi syndrome. Last year, we initiated a phase three study of ACP-101 for the treatment of hyperphasia in PWS. This study builds on the prior Phase III experience and includes the 3.2 milligram dose that was shown to significantly reduce hyperphasia-related behaviors. As you see on this slide, the COMPASS PWS is our Phase III global, multicenter, randomized, double-blind, 12-week placebo-controlled study evaluating efficacy and safety of ACP101 in approximately 170 Prader-Willi patients. The primary efficacy endpoint is improvement of hyperphagia, as measured by the Hyperphagia Questionnaire for Clinical Trials, or HQCT scale, also used in the prior Phase III study.

Those patients who complete this study are

ABLE LONG-TERM EXTENSION STUDY. IF DATA FROM THE PHASE 3 STUDY ARE POSITIVE, WE PLAN TO SUBMIT A NEW DRUG APPLICATION FOR THE TREATMENT OF HYPERFASIA AND PWS TO THE FDA. THE PRADERWILLA COMMUNITY HAS INCREDIBLY HIGH LEVEL OF ENTHUSIASM FOR THIS OPPORTUNITY AND INTEREST IN OUR STUDY. WE LOOK FORWARD TO WORKING WITH THEM AND WITH CLINICAL EXPERTS AS WE CONTINUE TO ADVANCE THIS PROGRAM. please turn to slide 17 to review our second late stage clinical program, ACP204. ACP204 is our next generation 5-HT2A compound that we're developing as a potential treatment for Alzheimer's disease psychosis.

ACP204 works primarily

at the 5-HT2A receptor. With ACP204, we are seeking to build on our learnings from Pimivanserin and believe it is an exciting product opportunity. Our work completed to date includes a comprehensive Phase I program that supports our target product profile for ACP204, including no sign of QT prolongation at planned doses in our studies, a wide dose range established, supporting the potential for a dose equivalent to approximately two times the approved Pemivanserin 34-milligram dose, and steady-state PK achieved in less than half the time of Pemivanserin, suggesting potential for an earlier onset of activity.

ACP-G2O4 profile could represent a significant improvement over the

already strong project profile for Pema Vantran. Please turn to slide 18. Our seamless phase two, phase three program for ACP204, which we have aligned on with the FDA, builds on our clinical experience with Pema Vantran and is now underway. Our plan includes a phase two study with over 300 patients, This is designed to roll seamlessly into two Phase III studies. This Phase II study is ongoing and is designed and sized in such a way that if successful, it could be considered an adequate and well-controlled registrational trial. Once the full study allocations for Phase II is complete, we will analyze and report Phase II results.

by which time the two Phase III studies will already be underway.

We are pleased to be advancing both of these promising late-stage clinical assets and look forward to providing future updates. And now, I'll turn it over to Mark for a financial update beginning on slide 19.

Thank you, Kimberly. Let's review our quarterly financial performance on slide 20.

In the first quarter, we recorded $205.8 million in total revenue, up 74% from the first quarter of last was worth $75.9 million in the first quarter, which was a sequential decline of 13% as compared to the fourth quarter of 2023.

The sequential quarterly change was comprised of a 10% reduction in bottles sold and a 3% reduction in net price due to higher gross to net.

In terms of the reduction in bottles sold, on our last call, we described the seasonal dynamics that were affecting our business in the first quarter, including fewer and patient visits,

as well as reductions in refills and conversion rates due to the beginning of the year insurance reauthorization and re-enrollment process. In addition, for a period of time, numerical discontinuations outpaced new patient starts, the dynamics of which were described earlier by Steve and Brent. As we are now back to a period of net patient ads and the first quarter seasonal dynamics are behind us, We are confident in our ability to grow debut sales on a quarter-by-quarter basis through the remainder of the year. New Placid net product sales were $129.9 million in Q1, up 10% versus the prior year's first quarter. Growth to net for New Placid was 33.1% in Q1. Our New Placid franchise... percent demand and bottle growth year-over-year driven by increases in new patient starts in both segments. Sell-in growth increased by 6 percent, benefiting from the impact from a larger reduction in in-channel inventory in the first quarter of last year as compared to the level of in-channel inventory reduction we experienced in the first quarter of this year. R&D expenses decreased $59.7 million in the first quarter of 2024 from $69.1 million in the first quarter of 2023. The decrease was mainly due to the tropinotide commercial supply build in Q1 2023 that was accounted for as R&D expense as those expenditures took place prior to the FDA approval of debut.

We had a similar in the first quarter of 2024 from $101.2 million in Q1 2023.

The increase was primarily driven by by annualization of debut expenses, as well as foundational investments to commercialized outside the US. We ended the quarter with a cash balance of $470.5 million, which increased by $31.6 million from our 2023 year-end balance of $438.9 million. Turning to slide 21,

you can see that we are reiterating our guidance for 2024. And now I'll turn the call over to Steve for closing remarks. Thanks, Mark. Now please turn to slide 22. Looking to the future and beyond, we are focused on penetrating the significant opportunity that remains in front of us for debut in the United States. Together with the President, we expect our commercial franchises to drive strong growth. We're excited to bring Debut to the markets outside of the U.S., and we're making strong progress already this year. We look forward to further

We look forward to further enrolling our two late-stage programs, including our Phase III program for Carter-Willis Syndrome and our seamless Phase II, Phase III program in Alzheimer's disease psychosis. We're pleased to have these terrific opportunities ahead of us, while at the same time being in a position to generate sustainable and growing cash flow from operations to fund future growth. With that, I'll turn the call over to our operator for Q&A. Operator?

Thank you so much. And as a reminder, press star 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1

Hi, good afternoon, guys. Thanks for taking our question. On the business development front, curious, you've previously talked a lot about an interest in rare disease and neuro. Just curious, how would you characterize your appetite today here? And can you speak to the amount of capital you would ideally allocate to BD activities and the amount of risk you would be willing to take on in terms of stage? And then quick follow-up just on debut. We talked about net patient ads in each of the last six weeks.

We just wanted to confirm that you expect this to continue

such that you are comfortable to reiterate the guide today. Thanks, guys.

Thanks much, Jess. I'll take the BD front question, and I'll ask Mark to comment on your debut question. So in terms of BD, nothing's changed. It continues to be a very important part of our strategy. We are... You know, it's always a little bit difficult to predict the timing of transactions because a lot of things have to come together, obviously. But we continue to be very active on the BD front and looking at what I would characterize as some really interesting opportunities.

You know, it is also likewise a little bit difficult to predict

to project exactly how much capital we would allocate to an individual deal or deals, because it's really, you know, kind of fact-dependent. But what I would say is we do see a, what I would characterize as a very interesting opportunity set, and, you know, we will execute on deals that we think are additive and obviously add value to our base. I think that was in on BD. Mark, you want to take the debut guidance question?

Yeah, on guidance, thanks for the question. Your interpretation is correct. we do expect to have net patient as we do expect we do expect we do expect to have net patient as continue in a positive direction going forward. And reports through reiteration of our guidance.

Yes, I just want to confirm. Did you have a third question on DB? Excuse me. I think I captured all of it. I want to make sure.

Yeah, thanks, Steve. Thanks, Mark. Just on kind of stage of asset on the BD side that you'd be contemplating, how early would you go versus something more late stage?

Thanks. Yeah, no, thanks. I appreciate the question. You know, also very opportunity dependent. I would say You know, we, as an industry, we worked through several years there where the biggest challenger that we and other companies had were honestly the capital markets because, you know, things, you know, there was, you know, capital was readily available and that just made it, you know, more challenging or more expensive to do partnerships or acquisitions. you know, it's a little bit different environment today, and I'm seeing, you know, a much more fertile environment for deal-making. And so having said that, you know, historically, because it was very challenging in very robust capital markets, we and other companies did a lot of early, tended to, you know, produce more, that environment produces more early-stage deals.

I guess this is the way to say it.

I think the sweet spot of our capability translates to more of a focus on pre-commercial assets, although we do from time to time look at commercial assets. products that are already commercialized. And so I would say we're agnostic, more or less, to the stage of development of an asset. We have a strong balance sheet. We have strong capabilities.

We certainly would love to do more late-stage assets.

You know, Debut and ACP 101 and Prader-Willi are two examples of deals that we've done at the late stage.

And, you know, we certainly be eager to do more. More function of the kinds of opportunities that exist in the market. Thank you.

Thank you.

One moment for our next question, please.

And it comes from the line of . Please proceed.

Hi, guys. Thanks for taking the question. I apologize for any background noise. Can you guys talk about, if you have this number, the percentage of diagnosed patients that have started debut at any time?

Given the 50% long-term persistent trait, does that mean that market share, 50% of patients have attempted to start debut.

And can you speak a little to what you know about restart rates and how the GDI management plan might factor into that? Thank you.

I'm not sure we understood the full question, but I think Brent didn't think so. He caught it all, so I'm going to let him answer.

I think I did reach you, and thanks for both portions of the question. So the first is the percentage of patients, diagnosed patients that are on debut. As Steve pointed out, a quarter of patients, so 25, actually a little north of 25% of patients are on debut. That would, I would discuss that in terms of diagnosed RET patients, forgive me, are on debut. We have initiated therapy on debut. Have initiated therapy, sorry, on debut. We have prescriptions, obviously, for more. As you know, we work them through the payer access process. So we would expect that we will, as we have said with conversion rates, continue to those prescriptions we have on hand as we continue to get additional prescriptions in. Your second question was around restart rates. We do see restarts of patients, and that happens for a variety of reasons. In some cases, a patient and family may have gone to a prescriber that is not necessarily a RET expert but is close by. They may have started on the full dose and may not have had the best of experiences. That's one group that tends to come back as they've heard a bit more about titration as a potential strategy for starting. So we see that. We also see patients that have gone through significant medical procedures and honestly take a break and then come back to therapy. That often happens. And as we've discussed, because of our family access manager team, we stay very close in proximity to each of these families. offering support whether they have decided to initiate debut or in some cases if they have decided at least to take a temporary pause or to just keep them up to date on what we're seeing and opportunities to restart.

Got it.

On the first question, I don't think it was perfectly clear on my part, but is the 25% the number, I'm sorry, the proportion of patients that have attempted to start on debut, or is it a bigger number of the percentage of diagnosed patients that have at one point started on debut? but may not have remained due to long-term compliance reasons.

Thank you. Yeah, thanks for the clarification. It is the former. 25% of patients, of the 5,000 diagnosed patients, or as Brenda said, slightly more than 25%, have initiated therapy on debut. We do obviously have some of those that have discontinued, but 25% have started therapy.

Thank you, one moment for our next question please. And as a reminder. We ask that you please keep your questions to one. Our next question is from Gregory Rensa with RBC Capital Markets. Please proceed. Markets, markets, markets. Please proceed. Yes, hey, Steve and team.

Good afternoon. Congrats on the progress. Thanks for taking my question. Just when it comes to the new patient starts, my question is just really around the rate of that. Certainly appreciate the discontinuations in the bullets that you commented on and kind of thinking those up with the totals. I'm just curious to what extent then did you think there would be some degree of predictability or maybe some stability on anticipating a more stable rate of new starts, especially as you think about broadening to beyond the centers of excellence? Thanks so much.

Yeah, thanks so much for the question, Greg. Brendan? Yeah, thanks for the question, Greg. So in terms New patient starts, as we described in the first quarter, it was slow in January but did begin to pick up in February, March, again in April. As we discussed in our guidance range, we do anticipate continuing an upward increase in new patient starts. The two factors I would say that factor in most notably for us will be new patient starts and net patients. So as we've also described, we've seen continuations, which we think is logical based on the bolus of patients that started, and now a more consistent rate of patient ads week over week.

Thank you. One moment for our next question, please. And it comes from Ami Fadia with Needham and Company. Please proceed.

Hi, thanks for taking my question. You mentioned in your remarks that going forward, you expect a significant portion of the growth to come from non-COE high-volume centers as well as community centers, which often tend to be more sort of spread out

how are you thinking about sort of the commercial effort in educating and reaching these patients so that they can start patients on therapy appropriately with the titration schedule that works and enables patients to stay on drugs longer.

Thanks much for the question, Ami. Brendan, do you want to take that?

Yeah, sure. Thanks for the question. And maybe from my prepared comments, I would say that obviously in the early days, we had a substantial number of patients come from centers of excellence, but we already had a good number of patients that were coming from those high-volume institution non-COEs. and from the community. And what I think we've seen is a very logical migration of where prescriptions are coming from. So well over 50% coming from COEs in the earliest of days, now more like a third coming from COEs and two thirds coming from the others. From there, I think we have a base of experience in those two latter segments. What we're really focused on are the real-world benefits that have been seen for debut, because I think the tangible conversations that take place with caregivers are more around what I'm going to see in my patient. What am I going to see in my loved one? So we've created vignettes that look at patients over the age of 20, teenagers, as well as preteens and 2- to 5-year-olds. to give a much clearer perspective on what the treatment opportunity looks like and the benefits that they can expect to see in debut. And then I think embedded in the question was a question about our ability to get to these patients wherever they are. We have a great footprint to cover all of the RET treaters, and we also have claims data that helps us more deliberately track down those physicians that will be the point person, either at a high-volume institution or the community, for us to engage in those conversations.

Thank you. One moment for our next question. And it comes from Yatin Suneo with Guggenheim. Please proceed.

Hey, guys. Thank you for taking my question. Could you clarify what is gross to net right now? And then, you know, since you have reached 50% penetration in COEs, could you just comment on the level of penetration that you could reach in non-COEs over time and then where you can push the COEs? You know, when you're at 50, where can you go then?

Thanks much for the question. Mark, you want to take the first question, Brendan?

I presume you mean the question on gross net is related to debut.

Yeah.

So I think for us, as we talked about in the last call, we're tracking towards 20% for the year, and we don't expect that to fluctuate on a quarter-by-quarter basis. So We're not going to disclose it as we go along, and I would just say maybe qualitatively in the first quarter, we're just slightly below that target.

And for the second part of your question, I think in two parts. For COEs, with 50% patient penetration, I think we have tremendous momentum in these core areas of where these patients are treated. We'll continue to

that population.

I think that as you get further and further up the curve, obviously the engagement of those families with COEs is a critical factor for how far we'll get for penetration there. But we do see that in high volume institutions and in the community, Some of these conversations are easier for us to engage in in terms of our ability to get face-to-face with those physicians to talk about the benefits that they see for debut. And then it's really a function of working very closely with them to make sure that they can get to their families, alert them that a therapy is available, and get them in for treatment.

In terms of the penetration,

I think we expect to have similar rates of, I think we expect to see rising rates of penetration of high volume institutions. More closely replicating what we see in COEs and then in the community, it really depends on kind of the physician level of engagement that we're seeing. and the proximity of the last kind of discussions they've had with their RET patients. But we're encouraged by what we're seeing early on.

Thank you. One moment for our next question, please. This one is from David Wong with Citigroup. Please proceed.

Hi there. Thanks for taking the question. I just wanted to ask about whether you had any insight on whether persistency differs between COEs and the, you know, the non-COE community segment.

And if possible, tie that back to their GI management strategies. You know, how are docs managing it in the non-COE segment, and how much room is there to improve? Thanks. much for the question Brendan you want to take yeah sure David thanks thanks for the question yeah yes thanks thanks for the question

At the top, I'll say that there are not wide disparities in persistency rates between COEs and non-COEs. What I think we see is more the proximity to the patient and the work done on a GI management strategy so that there's a clear discussion up front with the families about the treatment journey

that are available to make sure they manage that. So the more experienced I think their approach to GI management becomes the better persistence. So I think it's more. function of that than it is whether you're in a COE or not. Thank you.

One moment for our next question. And it's from the line of Joel Beatty with Baird. Please proceed.

Thanks for taking the question. For the net numerical discontinuations in the first six weeks of the year or so, could you characterize those a little bit more, such as what was the cause and was it driven more by lower patient starts during that time or higher than usual discontinuations?

Thanks much for the question, Joel. Brendan, do you want to take it?

Yeah, Joel, thanks for the question. Numerical discontinuations were largely what we would expect, which is why we reiterated the point around the consistency of our persistency curve. We do think from a seasonal perspective, there were some patients that started perhaps in the fourth quarter that discontinued early.

It may not have been consistent. timing for them to have started debut around the holidays, for example.

That may have contributed from a seasonal perspective to slightly higher numerical discontinuations than anticipated.

Thanks. Thank you. One moment for our next question. And it is from the line of Jeffrey Hong with Morgan Stanley.

Please proceed.

Hi, good afternoon. This is for Jess. Thank you so much for taking our question. Just another one on the centers of excellence from us.

Now that we're a year into launch, have you observed increasing the number of clinic days

in the once monthly you mentioned last quarter to a more frequent basis? And do you have an updated average number here?

Thanks much for the question.

Thanks for the question. In most cases, I would say that COEs are maintaining the process that they've had to engage families. There are a handful of centers that have increased RET clinic days. There are a couple that have specific debut clinic days as well. But generally, I would say it's been consistent with how they've seen patients over time.

Thank you. One more moment for our next question please.

And it is from the line of Charles Duncan with Cancer. Please proceed.

Hi, this is Elaine for Charles. Thank you for taking our questions. I just wanted to ask, I think at the last update you said that the age range was comparable or spread throughout. for debut, would you say that the key drivers for demand such as real world benefit and establishing GI management strategies, does it depend per age range?

Thanks much for the question, Brendan. Yeah, sure. Thanks so much for the question, Elaine. I would say that we're still seeing largely what we expected in terms of the existing prevalent population for RET, meaning that we're getting the age range and the respective weights that we would expect to see in terms of a patient mix. If anything, in the first part of 2024, we've seen slightly older and heavier patients that have been started on debut in terms of the patient mix, which might lead to somewhat of an increase in average dose as a function of that.

Thank you.

Thank you. One moment for our next question, please. And it's from the line of Jason Butler with Citizens JMP.

Good afternoon, this is Joseph for Jason. Thanks for taking our question. How do you think about the role of gene therapy syndrome and how could JV be used alongside it? These are pretty early in development, but we're just curious about your thoughts.

Thank you. Yeah, thanks much for the question. I'll start by saying we hope that Debut is the first of multiple drugs approved to treat this highly debilitating disorder. As it relates to gene therapy, I think that we know that gene therapy can be very challenging. We've even seen some of the challenges played out just in the last week with gene therapy, generally speaking. In RET, it's a little bit more, there's a little bit of an additional hurdle here because with RET, there's kind of a Goldilocks level of gene therapy or of expression that you want to with them because if you have too much expression, you get the same symptoms, you give them too little. And so there are a couple of companies that are in very early stages of testing on gene therapy, and I think there's just a lot more to come. It won't be rapid. Nothing is in this industry. It will take some time, but we're certainly hopeful that there will be

Again, that will be the first of many therapies for this population. Having said that, as we think about additional therapies drugs become available, including gene therapy, we don't see any reason that Debut couldn't be prescribed alongside other drugs as well. And so these patients are so highly symptomatic.

that if you had another therapy, gene therapy or otherwise, that reduced symptoms by 50% or even 75%, they would still be highly, highly symptomatic and in need of therapy. And so we envision they view operating in a world where if there are other therapies down the road, we believe that it'd be very compatible with those therapies and have the potential to provide additive benefit. Very helpful. Thank you.

Thank you. One moment for our next question, please. And it's from Ash Verma with UBS. Please proceed.

Hi, thanks for the question. I had to. So for debut, I know in prior instances, you have actually for subsequent quarters. This time, I think you just left it at sequential growth.

Is there any reason for that? If anything, you sound very

confident on the rebound so this curious was sort of driving that damage dynamic and then secondly I wanted to ask about your cost structure like have you considered revisiting that I mean compared to last year this year we've seen new plasma negative symptoms not working out favorably and the debut persistency coming in below I'm guessing where you would have originally assumed does that make you rethink where your cost structure is thanks yeah mark

Thanks much, Ash, for the questions. Mark, I'll let you take both of them.

Yeah, sure, sure.

On the guidance, as we transition to annual guidance, you're no longer going to give the kind of one quarter forward guidance. I guess the unique thing about the first quarter of this year is that we were expecting a sequential down quarter. So we thought that was just helpful in

in giving the full financial expectations for the year to give the first quarter guidance for this year as well as annual guidance. We don't expect to see sequential declines going forward, so we're going to keep the annual guidance just like we do for New Claset. On the cost structure, thanks for the question. As Chief Financial Officer, of course I look at the cost structure every day. structure for the business and the investments that we're making, there's no change there. Yes, we had, unfortunately, our negative symptoms of schizophrenia trial was not positive.

We had made investments in commercial investments in negative symptoms of schizophrenia. So there really is nothing to unwind. Our business is expanding. We're making investments for ex-U.S., or a debut that didn't exist last year.

So that's kind of a new leg to the business that requires investment. And we're still investing as appropriately for growth and debut in the U.S. So all of that together leads us to supporting the investments that we're making. But as we've done Over the last couple of years in New Plaza, we've looked at that franchise of making efficiencies, and we look to make the right investments as additional investments or reduction investments across our entire cross-structure on an ongoing basis.

Thank you. One moment for our next question, please.

And it comes from the line up. Yes, my question is around the Prader-Willi trial.

I'm curious if GLP-1 uptake has been hindering enrollment and just your general thoughts around how GLP-1s will play into potentially not needing as much therapy for Prader-Willi and the eating disorder. And then secondly, can you just give us a sense of how many patients are on new plazas these days? We haven't talked about it yet. Thanks.

Thanks much, Mark, for the question. I'll take the first one. So in Prader-Willi, we've seen no impact at all of GLP-1 utilization. In fact, as Kimberly mentioned earlier, We have a very enthusiastic patient population and medical community. We're enrolling ahead of plan, so we haven't seen any impact of GLP-1 or anything else, honestly. I'm sorry, second question. Brendan, do you want to take that on new plans? Yes.

Yeah, sure. Thanks for the question, Mark. We're continuing to see increases in patients on therapy on a quarterly basis. So between the community and LTC in long-term care, obviously we have great visibility into the community. And so we've added patients in the first quarter over the fourth quarter to the order, on the order of about 8,500 in total. and then an LTC, that's obviously more like a quarter of our business, but you know that prescriptions are often split between patients. So we don't have absolute visibility into the number in long-term care.

Thank you. One moment for our next question, please. And he's from Sumant Kulkarni with Kanakor Genuity. Please proceed.

Good afternoon. Thanks for taking our question. On debut discontinuations, is there a sweet spot in terms of months on drugs? where discontinuations tend to cluster, and if a patient remains on drug after that, they tend to do so more easily after they pass that point? And are most discontinuations confirmed by clinical visits, or are they patients that have gone greater than 60 days without a refill?

Thanks much. I'll answer the first part, and then I'll ask you to answer the second part in terms of the split on discontinuation. So, Sumant, we do see, we touched on this on the call, so let me just expand on it a little bit. We do see more discontinuations in the first two fills of drugs. So there's a disproportionate number of discontinuations there. Now, some of that you would expect. We see this pretty routinely with drugs that have subjective endpoints. We see it all the time in neuropsychiatry where you have a steeper level of discontinuations in the first two to three months. So we do see some of that. We do feel, however, though, as we parse through that data, that given the level of titration that we're seeing across the brand, and just recognizing that it takes longer than to get to therapeutic levels, that we do think that some patients are discontinuing prematurely before they have an opportunity to see those benefits. And there's an opportunity for us there

And it's a high area of focus for us to down as discussed on the call, particularly around educating caregivers and medical professionals around their expectations around time.

Setting the right expectations about time to get to the benefits. And then managing to that is a very important area of focus for us. Brendan, do you want to take the other question?

Yeah, so Steve obviously did a great job of kind of articulating where we are with when discontinuations take place. And it's probably intuitive, but the further out we get in fills, the flatter the curve gets, right?

There are fewer discontinuations. When you get beyond four and five, it fills with debut.

And I think we're encouraged by that on two levels. Number one is obviously our FAMs are very close with these families. We have weekly conversations with them, so we have good confidence that once they get through the early part of that patient journey and tolerability, GI management strategies, we do a nice job of keeping them on therapy. And we also know from talking to centers of excellence how often they're seeing these patients. Many of the physicians want to see their patients regularly after they start. The vast majority of them, I think, want to see patients at the month three time period. partially because that's the length of the clinical trial, partially because some payers are asking for that information. And then I think they make judgment calls on how well the patient is doing, how often they want to see them after that. But with persistency rates now out to nine months in what we're seeing, I think we feel confident in what we're seeing in terms of patients being able to start and stay on therapy after they get through the early part of the treatment journey.

Thank you. I think I'll just add one thing to that. I think the question was also, are more discontinuations happened because they're confirmed versus going over 60 days? And I think you asked it in the context of, is it a clinical decision? I think for us, with the connectivity we have with our FAMs, we do find for the data we receive, The majority of discontinuations are confirmed discontinuations, and it's the minority of discontinuations that, you know, are discontinued for greater than 60 days, many of which of those subsequently become confirmed when spoken to the caregiver. Thanks for that clarification, Mark.

Thank you. And we have... one moment for one more question. One moment, please. And it comes from the line of Uy Air with Ms. Dujo. Please proceed.

Hey, guys. Thanks for including me. Yeah, just some question on New Plaza. So you indicated that, you know, real-world evidence has sort of grown a new start, I'm just wondering, like, is it, what exactly is it, is there anything that's kind of like, that's changed in practice or patients, I don't know, less scared to come back into the office, the physician's office, or is there anything fundamentally in the physicians offers in the long-term care that is perhaps increasing the number of patients? And secondly, would you consider perhaps increasing your investment to drive further growth?

Thanks. Thanks much for the question, Brittany. You want to take the first question? For sure.

I think there are a couple of dynamics. If you'll recall, carbidopa levodopa scripts in the peak of the pandemic and even towards the end were declining over time, and declining would suggest fewer Parkinson's disease patients overall. Even today, we'd say that's flat, so I wouldn't call that a rebound by any stretch of the imagination. I would call that stability. But I think also easing safety measures that have patients returning to clinics and hospitals are certainly giving us more shots on goal for New Plaza as the choice for PDP. I think that combined with real-world evidence has given us a very compelling story on why we should be the first and best choice, and it's given us an opportunity to grow share. And what we've seen in long-term care, I think, has been pretty logical in terms of resident counts in long-term care facilities. They obviously plummeted during the pandemic. Towards the latter part, they have increased. They have continued to increase, but New Plaza's performance has outpaced both the resident counts and APs in that space.

I'll take the second part of that. So as Brendan mentioned, when we look at metrics like Carbidopa, Levodopa, it looks like the overall PDP market is relatively steady or flat, but we are seeing growth with New Plaza there. And I think that's the genesis of your question. So would we consider increasing our investment? And I think the answer is we do monitor that too on a day-to-day, week-to-week basis, we look for opportunity. We're constantly assessing, is this the right level of investment given the opportunity? And as we've said before, if we feel like there's opportunities to produce an appropriate ROI, we may make those investments. But at this juncture, that's just a key element of our overall objective of optimizing cash flow.

Thank you. And with that, I will conclude a Q&A session and pass it back to Steve Davis for final comments.

Thank you, operator. Thanks again, everyone, for joining us today. We look forward to updating you on our progress next quarter.

And with that, we thank you all for participating, and you may now disconnect.