Intra-Cellular Therapies Inc.

Good morning, ladies and gentlemen, and welcome to Intracellular Therapy's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A slide deck that you may find helpful while you listen to this call is available on the investor relations section of the company's website. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Start 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Sir, you may begin.

Good morning, and thank you all for joining us on our second quarter 2024 earnings call. Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer, Mark Newman, Chief Commercial Officer, Dr. Suresh Durgaon, Chief Medical Officer, and Larry Heinlein, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions, and expectations. Those statements are subject to change and involve a number of risks and uncertainties, that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. Your caution not to place reliance on these forward-looking statements. These statements are made only as of the date of this conference call, and the company disclaims any obligations to update such statements. I will now turn the call over to Sharon.

Thanks, Juan. Good morning, and thank you for joining us today. We are pleased to report our strong progress in Q2. In addition to Keplida's impressive growth trajectory, during the quarter we announced robust positive results from our two phase three clinical trials in major depressive disorder, or MDD. These results form the basis for an expanded label for Keplida, and we are on track to submit a supplemental MDA for Keplida for the adjunctive treatment of MDD later this year. In addition, we continue to advance our broad development pipeline, which I will discuss later. We are very pleased with the company's progress. Our vision has been to establish Keplida as a first choice treatment across multiple depressive disorders, and we are well on our way to achieving this goal. Keplida has already become an important treatment option for schizophrenia and bipolar depression, and we now have generated strong efficacy data and favorable safety and tolerability data in our phase three studies in MDD. Pending FDA approval, we are confident in Keplitis potential to become a leading medication for the treatment of MDD and a commercial success in this large market. This confidence is bolstered by our proven commercial capabilities and our strong financial position. Before discussing progress with our pipeline, let me list highlights of our second quarter financial performance. In the second quarter, Keplighta net product sales increased to $161.3 million, representing a 46% growth versus the same period in 2023. The uptake of Keplighta remains strong, and we look forward to continued growth. Consequently, we are increasing our Kaplida net product sales guidance range for the full year 2024 to $650 to $680 million. As we continue to maximize Kaplida's opportunity in bipolar depression, we plan to expand our reach in primary care during this quarter. Mark and Larry will provide further details on our expansion plans during their remarks. I would now like to further discuss our adjunctive MDD program. Last quarter, we announced robust positive top line results from studies 501 and 502. These studies evaluated rumeteperone 42 milligrams as an adjunctive treatment to antidepressants in patients with MDD. We are particularly proud to have two global phase three studies with robust and consistent positive results. Both studies demonstrated robust efficacy of Lumotepirone added to an antidepressant for the treatment of MDD in the primary endpoint, the Madras total score with a large separation versus placebo of 4.9 points in study 501 and 4.5 points in study 502. And a robust effect size of 0.61 in study 501 and 0.56 in study 502. In both studies, symptom improvement occurred as early as one week. Both studies also met the key secondary endpoint, CGIS, and showed statistically significant efficacy in the patient's self-reported measure of symptom severity of depression, or the QID score. The favorable safety and tolerability profile for lumatepolone in these studies was consistent with our other capillitis studies. We previously described the metabolic profile of Lumetepirone in Study 501. We are now pleased to share the Lumetepirone metabolic profile in Study 502. Similar to Study 501, mean changes in key metabolic parameters, including glucose, insulin, triglycerides, and total cholesterol, including LDL and HDL cholesterol, were similar between Lumetepirone and placebo. Importantly, mean changes in weight were also similar to placebo. Our team is currently preparing our supplemental NDA submission, which we expect to file with the FDA later this year. We look forward to sharing additional results from study 501 and 502 with the medical community this fall at upcoming conferences, including ACNT and PsychCongress. The opportunity for Capilita and MVD is sizable. Current antidepressant therapies do not adequately address depressive symptoms in more than half of patients receiving treatment. We believe these patients deserve new treatment options. Depression now represents about 30% of all antipsychotic prescriptions in the U.S., similar to the percentage of antipsychotic prescriptions generated for bipolar disorder. We are very excited about the possibility of bringing teplida to patients with MDD and believe its efficacy, tolerability, and safety profile, coupled with its convenient dosing, have the potential to make it a first choice for adjunctive treatment of MDD. We continue to invest in ometepirone's development with the objective of helping a greater number of patients. To that end, our pediatric program is underway. This pediatric program includes an open-label safety study in schizophrenia and bipolar disorder, a double-blind placebo-controlled study in bipolar depression, and two double-blind placebo-controlled studies in irritability associated with autism spectrum disorder. Currently, pediatric patients have limited treatment options. There are only two antipsychotics approved for the treatment of irritability associated with autism spectrum disorder, and two antipsychotics approved for the treatment of bipolar depression in the pediatric population. These treatments are associated with treatment-limiting side effects. Given the characteristics of this patient population and Keplita's favorable profile, we believe Keplita may play an important role for this patient population. In addition, we have initiated two phase three studies evaluating rumetepirone for the acute treatment of manic or mixed episodes associated with bipolar I disorder, commonly known as bipolar mania. Our adult bipolar mania program is the result of an agreement with the FDA in connection with our Lumetapiron pediatric exclusivity program. This agreement provides that pharmacokinetic studies in adolescents and children, together with bipolar mania studies in adults, would be sufficient to satisfy our obligations with respect to obtaining pediatric exclusivity. Completing the overview of our Lumateparone programs, we continue to advance our long-acting injectable Lumateparone program and expect to initiate phase one studies with several formulations shortly. I also want to share updates on other candidates in our pipeline. ITI1284 represents the most advanced product candidate in our pipeline. I am pleased to point out that we recently initiated patient enrollment in our Phase II clinical trial evaluating ITI1284 for generalized anxiety disorder, or GAD, as adjunctive therapy to generalized anxiety medications. We also initiated patient enrollment in our Phase II clinical study evaluating 1284 as monotherapy for psychosis associated with Alzheimer's disease. We also anticipate commencing patient enrollment in our phase two program with 1284 for agitation in Alzheimer's disease shortly. These studies are large and designed as potential registration studies. In our GAD study, we expect to enroll approximately 705 patients randomized to three arms, placebo and two doses of 1284. The primary endpoint of the study is the improvement of anxiety symptoms versus placebo at week six, as measured by the Hamilton Anxiety Rating Scale, or HAM-A. The key secondary endpoint is the CGIS. We expect to initiate a second GAD study evaluating ITI1284 as monotherapy later this year. In our Alzheimer's disease psychosis study, we expect to enroll approximately 370 patients randomized to two arms, placebo and a flexible dose of ITI-1284. The primary endpoint is to evaluate the efficacy of ITI-1284 versus placebo as measured by change from baseline to the end of week six in the behavioral pathology in Alzheimer's disease rating scale, or BEHAVE-AD. psychosis subscale score. The key secondary endpoint is the CGIS. Continuing with our pipeline, next year we expect to report top line results from our ongoing phase two study with lenmisipodin in Parkinson's disease. The primary endpoint of the study relates to motor symptom improvements, and we are also exploring the effects of lenmisipodin in cognition, a key non-motor manifestation of the disease and measuring biomarkers of neuroinflammation to help inform next steps. ITI1020, our second PDE1 inhibitor, is being developed for oncology indications and continues in a phase one single ascending dose study in healthy volunteers. Regarding ITI333, our multiple ascending dose study and a positron emission tomography study are both ongoing. ITI 1549 continues to advance in preclinical development, and we expect to begin clinical testing in 2025. ITI 1549 is a non-hallucinogenic psychedelic, which we now refer to as a neuroplastogen, that we believe lacks hallucinogenic and cardiovascular side effects associated with psychedelics. Certain neuropsychiatric diseases, including MDD and anxiety, are associated with loss of synaptic connectivity, primarily in prefrontal cortical regions of the brain. These drugs have the potential to restore lost functional activity. Therefore, ITI 1549 has the potential to be a safe, effective medicine with a novel mechanism of action that can be safely and conveniently administered to patients for the treatment of these disorders. In summary, we are thrilled with our second quarter results and progress with our pipeline. We are in a strong financial position, ending the second quarter with approximately $1.025 billion in cash, cash equivalents, and investment securities, and we have no debt. Lastly, we are excited to welcome Sanjeev Narula as our Chief Financial Officer later this month. Sanjeev is a finance leader with extensive experience in the pharmaceutical industry, and I look forward to working with him as we continue to build on ITCI's success. You can read more about Sanjeev's background in the press release we issued earlier this morning. I also want to thank Larry for his significant contributions and wish him all the best in his well-deserved retirement. I'll now turn the call over to Mark to provide details on Kaplita's performance and our expansion plans. Mark?

Thanks, Sharon. Good morning, everyone. It's great to be with you today. Kaplita's strong performance continued in Q2 with robust year-over-year growth in total prescriptions of 36% and an acceleration in quarter-over-quarter sequential growth of 10%. Once again, Kaplan's quarterly prescription growth outpaced both the branded and overall antipsychotic, reflecting its continued strong uptake and market share gains in bipolar depression. We have also seen significant strength in new-to-brand prescription, hitting new all-time highs several times during the quarter, which is a leading indicator of robust future growth. This growth is being driven by increases in both the breadth of our prescriber base, which now stands at nearly 43,000 unique healthcare providers since launch, having added more than 3,600 new first-time prescribers in Q2, as well as an increase in the average depth of prescribing as healthcare providers continue to identify more and more patients who are appropriate for capillitic treatment. The commercial opportunity for Capilito within its current indications of schizophrenia and bipolar depression is large, with those two indications representing nearly 50% of the approximately 68 million annual antipsychotic market prescriptions in the U.S. An important dynamic in the bipolar market has been the increasing role of primary care in treating bipolar depression. Capilito's broad label, which includes both bipolar I and bipolar II depression, provides us with an opportunity to expand our reach and educational activities with primary care physicians. We believe Capilita's clinical profile, including strong efficacy and a very favorable metabolic weight and movement disorder profile, coupled with once-daily dosing with no titration, will be beneficial attributes for these providers in treating patients with bipolar depression. To capitalize on this opportunity and optimize the growth of Capilita in our base business, We are expanding our sales force by approximately 150 representatives during the third quarter of this year. Through this sales force expansion, we will be increasing our reach into this increasingly important prescriber segment and expanding our overall target audience to over 70,000. Once our new sales representatives are onboarded and trained by the end of the third quarter, they will promote Capilito for bipolar depression in primary care offices. It will take some time for these representatives to be fully optimized in their territories, so while we expect some positive effect in the fourth quarter this year, most of the impact will be seen in 2025. We have also made substantial progress in our commercialization planning for a potential label expansion in MDD, which would increase our total addressable market for Capilita from nearly 50% of antipsychotic prescriptions for schizophrenia and bipolar depression to nearly 80% with the addition of MDD. To fully optimize the launch in MDD, we expect to further expand our sales team next year, and we will share more details of those plans with you as we get closer to potential approval by the FDA. In summary, we are very pleased with the continued adoption of Capilita and are highly confident in continued growth in both the short and longer term. I'll now turn the call over to Larry to further discuss our financial performance.

Larry? Thank you, Mark. I will provide highlights of our financial results for the second quarter ending June 30, 2024. In the second quarter, net product sales of Cap Lido were $161.3 million, compared to $110.1 million for the same period in 2023, representing a year-over-year increase of 46%. Our net sales grew 11% sequentially versus Q1 2024, primarily driven by increased prescription demands. Our gross-to-net percentage in the second quarter was in the mid-30s and consistent with our guidance for the full year. We expect our gross-to-net percentage to be in the mid-30s for the remainder of the year. We believe underlying demand for Capileto will remain strong, and thus we are raising our Capileto full-year 2024 net product sales guidance range to $650 to $680 million. Selling general and administrative expenses were $121.6 million for the second quarter of 2024 compared to $101 million for the same period in 2023. Research and development expenses for the second quarter of 2024 were $56.2 million compared to $49.8 million for the same period in 2023. As Sharon and Mark described, we expect to increase our sales force during the third quarter to continue to maximize capillitis opportunity and bipolar depression. And as a result, we are increasing our full year SG&A expense guidance range to $480 to $510 million. This increase is primarily the result of sales, marketing, and other expenses associated with our Salesforce expansion in the primary care segment in the second half of 2024. We are also reducing our full year R&D expense guidance range to $210 to $230 million. Our financial position remains strong. Cash, cash equivalents, investment securities, and restricted cash totaled $1.025 billion at June 30, 2024, compared to $499.7 million at December 31, 2023. This concludes our prepared remarks. Operator, please open the line for questions.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 11 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Andrew Tai with Jefferies. Your line is open.

Hi. Good morning. Congrats on the strong quarter. Thanks for taking my question. So the first one is, as we think about your revised guidance range, do you expect Scripps in Q3 to grow at a similar pace or even a stronger pace than what you saw in Q2? Or are you factoring in some potential slowdown due to summer seasonality, holidays, and vacations? And then secondly, for MDD, it's very clear you're preparing for that potential approval and launch. So the question would be, would you expect the potential script inflection in MDD to be larger than what you saw in the bipolar depression launch, say, within the first 6 to 12 months? Thank you.

Great. Thanks, Andrew. Maybe, Mark, do you want to take the first question, and then you can also take the second, and then I'll chime in?

Yeah, sure, Sharon. So, Andrew, thanks for the question. As you know, our guidance has been increased for 2024, and we're confident in that guidance and in both the near-term and the long-term growth prospects for Cap Lida. As you know from past years, typically we see some summer seasonality during the third quarter, and then we have a stronger fourth quarter. So, I would say that that's all factored into the guidance that we've provided. for the year. And then in terms of our preparations for MDD, they are well underway. We do expect, if and when we get approved for MDD, that we will see a significant increase in the trajectory of prescriptions, similar to what we saw with bipolar depression. And I think if you look back at some of the recent launches in MDD, the kind of uplift that you get from a new indication in MDD is quite significant, and we would expect to see another inflection upon approval with MDD as well.

Sharon, was there anything you wanted to add to that? Yep. Okay.

No, I think that covers both of your questions, Andrew. So, operator, then we can move to the next question, please.

Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Jessica Phi with JPM Chase. Your line is open.

Hey, guys. Good morning. Congrats on the results, and thanks for taking my question. First, with respect to the Salesforce expansion, can you confirm what that will bring your total Salesforce size to? And what's the right way to think about the additional Salesforce expansion plan for next year? Could that be similar in size to this increase? larger smaller and then separately the press release mentions that you received notice from cms that cup flight are qualified for the specified small manufacturer exception under the ira can you confirm what you expect that to mean for the product thank you mark i think this goes to you as well yeah sure thanks for the questions uh jess uh yes in terms of the size of the sales force we'll be adding approximately 150

sales representatives, so that will take us north of 500 representatives out in the field for us. Could you just repeat your second question on MDD, Jeff?

Next year's expansion that you alluded to, should we think of that as similar in size, larger, smaller?

Yep, so what I would say is we're excited about the commercial opportunity of a potential label expansion in MDD, and we will be looking to invest behind the brand at a level that we feel optimizes the launch and the growth prospects for the brand. As we've done in the past, we'll share more details of those efforts with you as we get closer to potential approval by the FDA. Okay.

And then you asked about what we put in the press release about being a specified small manufacturer and having the exemption. Uh, so we, uh, that status. And so, uh, what it means is that we would be assessed minimal phase in rebates. So we don't expect to have a big impact on the company, um, at all, at least until the end of the decade into the next decade.

Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Brian Abraham with RBC Capital Markets. Your line is open.

Hey, guys. Congrats on the quarter. Thanks for taking my question, and congrats and best of luck to Larry as well. So I guess I'm curious, as we look to the presentations of the MDD data this fall, I'm curious the key things that you're looking to highlight to the community and how we should be thinking about potential for an inflection once those data are in the scientific literature versus potential label expansion. And then, I guess, as a follow-up on the label expansion, I'm curious, the key elements that you're thinking about as you build out commercial infrastructure, what are the key elements towards achieving a comparable share of voice to competitors? Is it all about boots on the ground, or are there other important elements as well that you're considering strategically as you look towards next year? Thanks.

Great. Thanks, Brian. That's a lot of questions, so hopefully we remember all of them. We'll try and take them one by one. Maybe Suresh, would you like to start talking about what we're going to be highlighting to the medical and scientific community as we go forward?

Yes, in terms of the data from the two studies, we will be presenting at different conferences starting, you know, this second half of this year right now. And then we also have going to highlight the robust efficacy of the study, both studies we have seen in terms of what we have seen in an objective setting. These are unprecedented results we have seen, and we'll be highlighting those. And also the safety profile that we have seen, which was similar to placebo in key aspects for antipsychotics, mainly the cardiometabolic side effects, the prolactin issues, weight gain, all these things will be highlighted at conferences.

As well as what will be highlighted is the lack of movement disturbances as well, such as athesia, Parkinsonism, etc., And then I guess going to the label expansion, talking to what we'll be looking at in terms of Salesforce and how we will maintain our equal share of voice. Mark, would you like to address that?

Yeah, sure, Brian. When we think about achieving a comparable share of voice in an area, it's really across the whole promotional mix that we have, with the main elements being some of the ones that you cited, Certainly the size and the activities of our sales force is an important one. Our activities around medical education and educating physicians on the profile of Kaplida. And then on the consumer side, maintaining a comparable share of voice in our DTC efforts and our digital presence. I think those are the three that are probably the main ones that we look at, but it really is across the whole promotional mix that we have.

That's really helpful. Thanks so much.

Thank you. Please stand by for our next question.

Our next question comes from the line of Jason Gerberry with Bank of America. Your line is open.

Hi, good morning. This is Dena Romadine on for Jason Gerberry. Congrats on the quarter and thank you so much for taking our questions. We just had a couple on IPI 1284. Do you view the Rook Salty launch as a representative comp for an atypical launching into the Alzheimer's disease neuropsych space? And I'd be curious what your thoughts are on the challenges in displacing generics and the resistance to prescribing atypicals in a nursing home setting. Um, and, and just, you know, how, how do you think limit Tepperon could win in a market with these barriers? Thank you.

So I'll start, I'll then ask Mark or Suresh if they want to chime in. Um, first on the Rick Salty launch, I think it's early days. And so I think what we're only seeing, um, is exactly that. And sometimes these markets take time to develop. And there is a great medical need in these patient populations. And I think that there is a large opportunity for a product with the right profile. And I'd like to emphasize, again, the safety and tolerability profile of Lumotepirone across every area where we have been investigating the use of Lumotepirone. And I think that... we will see in larger studies whether the side effect profile we've seen in our early studies, whether this in elderly patients that this again holds true as we are in larger patient populations. I think then maybe Mark, did you want to add anything to that?

Yeah, I think you're exactly right, Sharon. And this is a launch that we're watching carefully and seeing how the market there evolves. I would reemphasize the point that Sharon made that we believe it is still in the early innings for the use of antipsychotics in a chronic sense for agitation. And it takes some time for treatment paradigms like this to develop. So I think the story still needs to be told there.

And we're watching that very carefully.

Thank you.

Thank you.

Please stand by for our next question.

Our next question comes from the line of Charles Duncan with Cantor. Your line is open.

Hey, morning, Sharon and team. First of all, congratulations on a really nice quarter and thanks for taking our questions. I had a question on regulatory strategy in adjunctive MDD. You may not answer it, but I was curious as to what indications you'll be seeking. Will it be adjunctive MDD alone, or would you include mixed features, or would you seek to just have that data in the label? And then I did have a question on 1284.

So I'm going to take that and then I'll ask Suresh if he wants to add anything. So just to remind you, the clinical studies, the phase three program was in adjunctive treatment of MDD. So you can assume that that is the label that we are going for. I think it's a little bit early for us to discuss any more about the label other than that it's for the adjunctive treatment of MDD.

Rush, did you want to add anything? No, that's good.

Okay. Got it. And then I did have a question on 1284, and it kind of dovetails into your Lumateprone expansion. On 1284 use or study in generalized anxiety disorder, it seems to me that given the that that's often a comorbidity of depression. I'm wondering why you're not looking at Lumateprone in that indication and what it is about 1284 that you think suits it well for generalized anxiety disorder. And then on Lumateprone in terms of pediatric data, do you think that we could see some pediatric information in 2025?

Suresh, did you want to take that or would you like me to?

Yes. In terms of the last question about the pediatric indications, you're talking about, so we have posted on printouts.gov. These are pediatric studies. It takes a little longer time than adults. So we will not be seeing the results in 2025. It's a little bit later than that. In terms of your question on looking at other indications for 1284, We are going to be looking at, we are constantly re-evaluating new indications. Right now, our first indication, as we said, we started the GAD program, an adjunctive program in GAD. We have also started the psychosis in Alzheimer's patients. We have indicated that, we have announced that we are going to start soon the agitation program as well as the monotherapy in GAD. Other indications, stay tuned. We will, as we reevaluate, we will keep updating.

As we go forward, we will be announcing new studies, other studies that we'll be doing with 1284. So, as Suresh said, just stay tuned. Have a little bit of patience. We'll tell you as soon as we get very close to or start enrolling those patient populations.

Absolutely. Thanks for taking the question.

Thank you. Please stand by for our next question. Our next question comes from the line of Mark Goodman with Lee Ring. Your line is open.

Thanks, Sharon. Can you talk about how you're thinking about business development these days and obviously a massive sales force you'll have in a year with one product? Just curious how you're thinking about leveraging that sales force and then Just secondly, how are you thinking about Capilita XUS and if there's any partnership arrangements that you're thinking about? And thanks.

Sure.

So we have, we do look at DD opportunities constantly. And obviously the, what would be terrific would be if we, are able to find a product that fits into the present sales force. We continue to look for that. And then we have also moved to adjacencies. So far we haven't found products that we think fit the bill there. But we do continue to look. In addition, we look earlier, as you heard on this call today, we have a very, very robust internal pipeline. And while we progress that internal pipeline, we do also look to supplement it with external opportunities. So we look at all opportunities. Our head of external innovation is in charge of doing that. And we will keep you informed on our progress there. Additionally, XUS, We continue to evaluate that. It is a landscape that has been rapidly changing, and so we will keep you updated as we go forward in the XUS landscape as well.

Thank you. Please stand by for our next question. Our next question comes from the line of Michael DeFerrari with Evercore ISI. Your line is open.

Hi, guys. Thanks so much for taking my question, and congrats on all the progress this quarter. Two questions for me. Number one, with regards to the NDD trial study 505, any plan to shut this trial down? And if so, how should we think about R&D spend throughout the balance of the year? And my second question is on ITI 1284, specifically the Phase II

trial what's your powering and expectations for placebo response here and how you're controlling for it especially since the trial has two active arms thank you maybe we want to go in Reverse since that's top of our mind Suresh you want to talk about the powering that we do I can give you a very broad summary and that's we always power our study well why don't I let Suresh take it

Yeah, so these studies are powered as registration studies, so all of them are powered at 90% power. That's what we typically do. And in terms of controlling for placebo response, we adjudicate every patient that goes into the trial to make sure that they actually meet the criteria, and there is different levels of that, and we do... adjudicate each patient that is coming into the trial so that they have the correct symptomatology, and also the severity also is there. And throughout the study, we monitor for any inconsistencies across different scales and things like that. So that we have done in other trials, and we'll continue to do that in these upcoming studies also.

And I'll address the study 505. We are coming down the home stretch in our evaluation. of what will happen, what will be the fate there. But why don't you just give us just a little bit more time and we'll update you on the fate of 505. And then I think you had another question in there, but I'm not sure I remember it.

No, that's it. Thank you very much.

Okay.

Great. Thanks.

Thank you. Ladies and gentlemen, due to the interest of time, We ask that you limit yourself to one question only. Please stand by for our next question. Our next question comes from the line of Jeff Hung with Morgan Stanley. Your line is open.

Thanks for taking my questions. I guess for 1284 and Alzheimer's disease psychosis, can you just talk about your approach versus what others are doing for the indication and then your confidence in 1284 for AD psychosis? Thank you.

So, thanks for the question, Jeff. Maybe I take it you're referring to the scale that we're using. Is that correct?

I mean, partially, but then also just in terms of the candidate itself, your confidence in that versus competing approaches for treating AD psychosis.

Okay. Maybe, Suresh, would you... Would you like to give just notes on what we're doing? That would be great. Thanks.

So for psychosis and Alzheimer's, first point, based on the mechanism of action of the drug, we believe that based on its influence, its effect on the dopamine system, serotonin and glutamate system, we believe that this will be effective in psychosis of Alzheimer's disease. In terms of the study itself, we have, this is a six-week study that is going to be four weeks of spin period followed by six weeks of double-blind treatment and a follow-up period of 30 days. And in terms of the study scales, we have picked the BEHAVE-AD psychosis subscale, which focuses mainly, the subscale focuses mainly on the psychosis element of the disease, and it has 15, sorry, it says 12 items, seven items from the paranoid and delusional ideation domain, five items from the hallucination domain. And then we have a total score of 36. And we also have a key secondary as the CGIS, that is the global severity improvement in patients with psychosis and Alzheimer's dementia. All these are the design elements. And in terms of, again, I have indicated that in terms of the patients that get into the trial, we ensure that patients have the right diagnosis and also the right severity. And that is very key to successful of any clinical trial to make sure that the patients have enough severity so that we can detect the change at the end of the study.

Thank you. Thank you. Will you stand by for our next question?

Our next question comes from the line of Amy Fadea with Needleman Company. Your line is open.

Hi, good morning. Thanks for taking my question. Maybe just with regards to 1284, what doses will you be evaluating across the three indications, and what's your rationale for evaluating two doses, as well as in mono and adjunctive treatment in GAD? And maybe just to follow up to the previous question on Alzheimer's disease psychosis, you explained the endpoint that you're using, but why do you believe that that is the appropriate one for 1284 versus what some of the other companies are using? Thank you.

So I'm going to start because I need, and this goes to Jeff's question as well, I need to understand a little bit better. There are a few different studies, but very few. And so I think we have chosen our parameters after interactions with the FDA and conclusions about the best design for our studies, which includes the best scales to use or the appropriate scales to use, as well as the different doses. that we're doing. So that's why we say we think we have early evidence of safety of efficacy with different doses. And so now we're testing them. You get a lower range, you get an upper range. And that's the reason for choosing two doses. I don't know, Suresh, do you want to add anything?

Yeah, and yeah, the scale, you know, definitely this scale, as we have, you know, you have indicated that this was based on discussions we had with the agencies.

If there's another question about the trials that were missing, maybe you could let us know and we can try and address it.

Just with regards to GAD, the thought process behind evaluating it both as a mono and adjunct therapy.

Thank you.

We think it's appropriate.

As you know, there are very few drugs that are approved for GAD and there are a few clinical studies ongoing and we think that there's an opportunity for a drug with a good tolerability and safety profile as well as demonstrated efficacy. So I think that's why both a monotherapy and an adjunctive therapy.

Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Joseph Stone with TB Cohen. Your line is open.

Hi there. Good morning, and thank you for taking my question. Maybe on the what proportion of bipolar depression patients are treated by primary care physicians, just to get a little bit of an idea of what growth you could see from this expanded sales force. And was the expansion related to something that you're seeing in the field specifically, or is this because of the MDD trial or just a normal cadence of launch? Thank you.

Laura?

Yeah, I can take that, Sharon. Thanks for your questions. So the primary care, as we said, is playing an increasingly important role in the treatment of bipolar depression, and we believe that they account for about 25% of all the prescriptions written for bipolar depression. So they play an important role. Psychiatry is still the main treater of the disease, but they play an important role, and that role has been increasing over time. And so, for us, this was a couple things. Up until this point, our primary promotional efforts have been concentrated on psychiatrists and the nurse practitioners that support them. However, we've also been targeting a smaller segment of primary care that represents the highest volume prescribers in primary care. And we've actually had good success with the primary care physicians. We've seen that Catholic is a broad label. including both bipolar I and bipolar II depression, coupled with the strong efficacy and favorable safety and tolerability, and the convenient once-daily dosing with no titration, is a very compelling profile for primary care treating patients with bipolar depression. So to fully leverage that growing opportunity, this expansion is allowing us to go deeper into primary care and extend our reach and frequency in this setting, And to your other point, yes, the robust results that we've seen in the two phase three MDD studies gives us a high degree of confidence in the long-term growth prospects of Capilita and gives us increased confidence to invest in the brand today at an even higher extent for our base business in bipolar depression. So for all those reasons, we believe now is the right time to be extending our reach in the primary care.

Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Greg Sabanovich, Mizzou Hold Securities. Your line is open.

Thank you very much. Thanks. And congrats on the progress in the quarter, and congrats, Larry, on your retirement. Maybe, Sharon, this question is for you. It's a bigger picture strategy question. As you think about the pipeline that you have, which is quite extensive, and with increased investment in either additional studies with Lumateparone or 1281, I'm sorry, 1284, I'm just trying to think about how you're thinking about some of the other programs, whether it be the 333 program or 1020 or the Parkinson's program and kind of the interest in getting the data but then either investing further in those assets or perhaps using those assets as opportunities to perhaps find a partner to offload some of the R&D spend in order to advance those programs. So just philosophically how you're thinking about the pipeline.

So first, thank you for acknowledging that we have a very robust pipeline and we are very data driven. So the first thing to do is get the data. And these early studies with 1020, with 333, with you didn't mention, but a program we're extremely excited about, 1549, while they will generate extremely valuable data, they're your earlier phase studies. And they are less costly. than your later stage program. So I think the first thing for us to do is get the data and see if the data looks robust and is both in efficacy and also what the safety and tolerability profile looks like. And we'll make our decisions as to do we move it along alone or do we move it along with a partner. or do we not move it along? Based on data. This company was founded on data-driven events, and we continue to look at the science and drive our decisions based on data that we get.

Okay, thank you.

Please stand by for our next question. Our next question comes from the line of Corrine Johnson with Goldman Sachs. Your line is open.

Hi, this is Palak on for Kevin. Just one question from us. How are you thinking about the path to profitability from here as you sort of balance building out the commercial infrastructure and your identity efforts against the backdrop of continued revenue growth?

Wait, I'm sorry. You came through very muffled. I could not understand. Yeah, I couldn't either.

Can you repeat, please? Sure, I can go again. Is this better? Much better. Thank you. Awesome.

I was just asking, how are you thinking about the path to profitability from here as you sort of balance building out a commercial infrastructure and R&D efforts against the backdrop of continued revenue growth?

I think you're asking about our path to profitability and balancing it against R&D and our continued growth. Larry, do you want to take that?

Yeah, sure. We haven't given any guidance as far as profitability. I mean, we feel we're very excited about the growth in Scripps and the path that that's taking. We've given you guidance on R&D spend for the rest of this year. We intend to, you know, finance these R&D projects to the best of our ability. And so having said that, we are focused on becoming profitable, but at this point, we can't give you any guidance. We'll keep you updated on the components of that as we go further.

Understood.

Thank you. Please stand by for our next question. Our next question comes from the line of Joel Beattie with Bayer. Your line is open.

Thanks. For the next question, As far as expansion, is that something you're looking to do early in 2025 or later around the time of MDD approval?

Mark?

Yeah, so as I mentioned in my prepared remarks, we're very excited about the commercial opportunity of this potential label expansion in MDD for Capilita, and we intend to invest behind the brand at a level that will help us optimize the launch and our longer-term growth prospects. As we've done in the past, we'll share more of those details, both in terms of the magnitude of the expansion and the timing of the expansion as we get closer to potential approval by the FDA. So, hang in there for a little while, and we'll come back to you as we get closer to that launch.

Thanks. Thank you.

I think we have time for one more question, if there is one. Our final question will come from the line of David Amsell with Piper Stanley. Piper Stanley, David, your line is open.

Hey, thanks. Just a quick one from me. Just a quick one from me on the Bipolar Mania program. Can you talk about how additive you think it is to the overall sales potential of CapLighter? Or maybe put it differently. I mean, what's the extent to which you're getting usage in patients who are manic? And just help us understand your rationale for doing that program and getting that into the label. Thanks.

Rush, do you want to start? And I'll chime in.

Yes, I can. We are looking at adults and pediatrics for any unmet needs that we have for drugs, for looking for any drugs with efficacy, safety, and tolerability needs. Coming specifically to your question on bipolar mania, we have an agreement with the FDA in connection with our pediatric exclusivity program. This agreement provides that the PK studies in adolescents and children together with the bipolar mania studies in adults, would be sufficient to satisfy the obligations with respect to obtaining pediatric exclusivity. And that is the reason we were planning and conducting these studies.

Thank you.

At this time, I would like to turn the call back over to Sharon for closing remarks. Great. Thanks, everybody.

As you can see, I think we've had a great quarter and we're moving forward. And we really look forward to our, to an approval and the launch in Adjunctive Treatment and MDD and to advancing all of our other programs. So we thank you for your support and for listening and We have great opportunities ahead of us, and we look forward to informing you of yet more progress from ITCI as we move forward. With that, operator, you can disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you. Thank you. Thank you. Bye. Good morning, ladies and gentlemen, and welcome to Intracellular Therapy's second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A slide deck that you may find helpful while you listen to this call is available on the investor relations section of the company's website. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Start 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Sir, you may begin.

Good morning, and thank you all for joining us on our second quarter 2024 earnings call. Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer, Mark Newman, Chief Commercial Officer, Dr. Suresh Durgaon, Chief Medical Officer, and Larry Heinlein, Chief Financial Officer. During today's call, we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions, and expectations. Those statements are subject to change and involve a number of risks and uncertainties, that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. Your caution not to place a new reliance on these forward-looking statements. These statements are made only as of the date of this conference call, and the company disclaims any obligations to update such statements. I will now turn the call over to Sharon.

Thanks, Juan. Good morning, and thank you for joining us today. We are pleased to report our strong progress in Q2. In addition to Keplida's impressive growth trajectory, during the quarter we announced robust positive results from our two phase three clinical trials in major depressive disorder, or MDD. These results form the basis for an expanded label for Keplida, and we are on track to submit a supplemental MDA for Keplida for the adjunctive treatment of MDD later this year. In addition, we continue to advance our broad development pipeline, which I will discuss later. We are very pleased with the company's progress. Our vision has been to establish Keplida as a first choice treatment across multiple depressive disorders, and we are well on our way to achieving this goal. Keplida has already become an important treatment option for schizophrenia and bipolar depression, and we now have generated strong efficacy data and favorable safety and tolerability data in our phase three studies in MDD. Pending FDA approval, we are confident in Keplitis potential to become a leading medication for the treatment of MDD and a commercial success in this large market. This confidence is bolstered by our proven commercial capabilities and our strong financial position. Before discussing progress with our pipeline, let me list highlights of our second quarter financial performance. In the second quarter, Keplida net product sales increased to $161.3 million, representing a 46% growth versus the same period in 2023. The uptake of Keplida remains strong, and we look forward to continued growth. Consequently, we are increasing our Kaplida net product sales guidance range for the full year 2024 to $650 to $680 million. As we continue to maximize Kaplida's opportunity in bipolar depression, we plan to expand our reach in primary care during this quarter. Mark and Larry will provide further details on our expansion plans during their remarks. I would now like to further discuss our adjunctive MDD program. Last quarter, we announced robust positive top line results from studies 501 and 502. These studies evaluated Lumotepirone 42 milligrams as an adjunctive treatment to antidepressants in patients with MDD. We are particularly proud to have two global phase three studies with robust and consistent positive results. Both studies demonstrated robust efficacy of Lumotepirone added to an antidepressant for the treatment of MDD in the primary endpoint, the Madras total score with a large separation versus placebo of 4.9 points in study 501 and 4.5 points in study 502. And a robust effect size of 0.61 in study 501 and 0.56 in study 502. In both studies, symptom improvement occurred as early as one week. Both studies also met the key secondary endpoint, CGIS, and showed statistically significant efficacy in the patient's self-reported measure of symptom severity of depression, or the QUID score. The favorable safety and tolerability profile for lumatepolone in these studies was consistent with our other capillitis studies. We previously described the metabolic profile of Lumetepirone in Study 501. We are now pleased to share the Lumetepirone metabolic profile in Study 502. Similar to Study 501, mean changes in key metabolic parameters, including glucose, insulin, triglycerides, and total cholesterol, including LDL and HDL cholesterol, were similar between Lumetepirone and placebo. Importantly, mean changes in weight were also similar to placebo. Our team is currently preparing our supplemental NDA submission, which we expect to file with the FDA later this year. We look forward to sharing additional results from study 501 and 502 with the medical community this fall at upcoming conferences, including ACNT and PsychCongress. The opportunity for Capilita and MDD is sizable. Current antidepressant therapies do not adequately address depressive symptoms in more than half of patients receiving treatment. We believe these patients deserve new treatment options. Depression now represents about 30% of all antipsychotic prescriptions in the U.S., similar to the percentage of antipsychotic prescriptions generated for bipolar disorder. We are very excited about the possibility of bringing Keplida to patients with MDD and believe its efficacy, tolerability, and safety profile, coupled with its convenient dosing, have the potential to make it a first choice for adjunctive treatment of MDD. We continue to invest in ometepirone's development with the objective of helping a greater number of patients. To that end, our pediatric program is underway. This pediatric program includes an open-label safety study in schizophrenia and bipolar disorder, a double-blind placebo-controlled study in bipolar depression, and two double-blind placebo-controlled studies in irritability associated with autism spectrum disorder. Currently, pediatric patients have limited treatment options. There are only two antipsychotics approved for the treatment of irritability associated with autism spectrum disorder, and two antipsychotics approved for the treatment of bipolar depression in the pediatric population. These treatments are associated with treatment-limiting side effects. Given the characteristics of this patient population and Keplita's favorable profile, we believe Keplita may play an important role for this patient population. In addition, we have initiated two phase three studies evaluating rumetepirone for the acute treatment of manic or mixed episodes associated with bipolar I disorder, commonly known as bipolar mania. Our adult bipolar mania program is the result of an agreement with the FDA in connection with our Lumetapron pediatric exclusivity program. This agreement provides that pharmacokinetic studies in adolescents and children, together with bipolar mania studies in adults, would be sufficient to satisfy our obligations with respect to obtaining pediatric exclusivity. Completing the overview of our Lumateparone programs, we continue to advance our long-acting injectable Lumateparone program and expect to initiate phase one studies with several formulations shortly. I also want to share updates on other candidates in our pipeline. ITI1284 represents the most advanced product candidate in our pipeline. I am pleased to point out that we recently initiated patient enrollment in our Phase II clinical trial evaluating ITI1284 for generalized anxiety disorder, or GAD, as adjunctive therapy to generalized anxiety medications. We also initiated patient enrollment in our Phase II clinical study evaluating 1284 as monotherapy for psychosis associated with Alzheimer's disease. We also anticipate commencing patient enrollment in our phase two program with 1284 for agitation in Alzheimer's disease shortly. These studies are large and designed as potential registration studies. In our GAD study, we expect to enroll approximately 705 patients randomized to three arms, placebo and two doses of 1284. The primary endpoint of the study is the improvement of anxiety symptoms versus placebo at week six, as measured by the Hamilton Anxiety Rating Scale, or HAM-A. The key secondary endpoint is the CGIS. We expect to initiate a second GAD study evaluating ITI1284 as monotherapy later this year. In our Alzheimer's disease psychosis study, we expect to enroll approximately 370 patients randomized to two arms, placebo and a flexible dose of ITI-1284. The primary endpoint is to evaluate the efficacy of ITI-1284 versus placebo as measured by change from baseline to the end of week six in the behavioral pathology in Alzheimer's disease rating scale, or BEHAVE-AD. psychosis subscale score. The key secondary endpoint is the CGIS. Continuing with our pipeline, next year we expect to report top-line results from our ongoing Phase II study with lenmisipodin and Parkinson's disease. The primary endpoint of the study relates to motor symptom improvements, and we are also exploring the effects of lenmisipodin in cognition, a key non-motor manifestation of the disease and measuring biomarkers of neuroinflammation to help inform next steps. ITI1020, our second PDE1 inhibitor, is being developed for oncology indications and continues in a phase one single ascending dose study in healthy volunteers. Regarding ITI333, our multiple ascending dose study and a positron emission tomography study are both ongoing. ITI 1549 continues to advance in preclinical development, and we expect to begin clinical testing in 2025. ITI 1549 is a non-hallucinogenic psychedelic, which we now refer to as a neuroplastogen, that we believe lacks hallucinogenic and cardiovascular side effects associated with psychedelics. Certain neuropsychiatric diseases, including MDD and anxiety, are associated with loss of synaptic connectivity, primarily in prefrontal cortical regions of the brain. These drugs have the potential to restore lost functional activity. Therefore, ITI 1549 has the potential to be a safe, effective medicine with a novel mechanism of action that can be safely and conveniently administered to patients for the treatment of these disorders. In summary, we are thrilled with our second quarter results and progress with our pipeline. We are in a strong financial position, ending the second quarter with approximately $1.025 billion in cash, cash equivalents, and investment securities, and we have no debt. Lastly, we are excited to welcome Sanjeev Narula as our Chief Financial Officer later this month. Sanjeev is a finance leader with extensive experience in the pharmaceutical industry, and I look forward to working with him as we continue to build on ITCI's success. You can read more about Sanjeev's background in the press release we issued earlier this morning. I also want to thank Larry for his significant contributions and wish him all the best in his well-deserved retirement. I'll now turn the call over to Mark to provide details on Kaplitis performance and our expansion plans. Mark?

Thanks, Sharon. Good morning, everyone. It's great to be with you today. Kaplitis' strong performance continued in Q2 with robust year-over-year growth in total prescriptions of 36% and an acceleration in quarter-over-quarter sequential growth of 10%. Once again, Kaplan's quarterly prescription growth outpaced both the branded and overall antipsychotic, reflecting its continued strong uptake and market share gains in bipolar depression. We have also seen significant strength in new-to-brand prescription, hitting new all-time highs several times during the quarter, which is a leading indicator of robust future growth. This growth is being driven by increases in both the breadth of our prescriber base, which now stands at nearly 43,000 unique healthcare providers since launch, having added more than 3,600 new first-time prescribers in Q2, as well as an increase in the average depth of prescribing as healthcare providers continue to identify more and more patients who are appropriate for capillitic treatment. The commercial opportunity for Capilito within its current indications of schizophrenia and bipolar depression is large, with those two indications representing nearly 50% of the approximately 68 million annual antipsychotic market prescriptions in the U.S. An important dynamic in the bipolar market has been the increasing role of primary care in treating bipolar depression. Capilito's broad label, which includes both bipolar I and bipolar II depression, provides us with an opportunity to expand our reach and educational activities with primary care physicians. We believe Capilite's clinical profile, including strong efficacy and a very favorable metabolic weight and movement disorder profile, coupled with once-daily dosing with no titration, will be beneficial attributes for these providers in treating patients with bipolar depression. To capitalize on this opportunity and optimize the growth of Capilite in our base business, We are expanding our sales force by approximately 150 representatives during the third quarter of this year. Through this sales force expansion, we will be increasing our reach into this increasingly important prescriber segment and expanding our overall target audience to over 70,000. Once our new sales representatives are onboarded and trained by the end of the third quarter, they will promote Capilito for bipolar depression in primary care offices. It will take some time for these representatives to be fully optimized in their territories, so while we expect some positive effect in the fourth quarter this year, most of the impact will be seen in 2025. We have also made substantial progress in our commercialization planning for a potential label expansion in MVD, which would increase our total addressable market for Capilita from nearly 50% of antipsychotic prescriptions for schizophrenia and bipolar depression to nearly 80% with the addition of MVD. To fully optimize the launch in MDD, we expect to further expand our sales team next year, and we will share more details of those plans with you as we get closer to potential approval by the FDA. In summary, we are very pleased with the continued adoption of Capilita and are highly confident in continued growth in both the short and longer term. I'll now turn the call over to Larry to further discuss our financial performance.

Larry? Thank you, Mark. I will provide highlights of our financial results for the second quarter ending June 30, 2024. In the second quarter, net product sales of Cap Lido were $161.3 million, compared to $110.1 million for the same period in 2023, representing a year-over-year increase of 46%. Our net sales grew 11% sequentially versus Q1 2024, primarily driven by increased prescription demands. Our gross-to-net percentage in the second quarter was in the mid-30s and consistent with our guidance for the full year. We expect our gross-to-net percentage to be in the mid-30s for the remainder of the year. We believe underlying demand for Capileto will remain strong, and thus we are raising our Capileto full-year 2024 net product sales guidance range to $650 to $680 million. Selling general and administrative expenses were $121.6 million for the second quarter of 2024 compared to $101 million for the same period in 2023. Research and development expenses for the second quarter of 2024 were $56.2 million compared to $49.8 million for the same period in 2023. As Sharon and Mark described, we expect to increase our sales force during the third quarter to continue to maximize Capilita's opportunity in bipolar depression. And as a result, we are increasing our full year SG&A expense guidance range to $480 to $510 million. This increase is primarily the result of sales, marketing, and other expenses associated with our Salesforce expansion in the primary care segment in the second half of 2024. We are also reducing our full year R&D expense guidance range to $210 to $230 million. Our financial position remains strong. Cash, cash equivalents, investment securities, and restricted cash totaled $1.025 billion at June 30, 2024, compared to $499.7 million at December 31, 2023. This concludes our prepared remarks. Operator, please open the line for questions.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone and then wait to hear your name announced. To withdraw your question, please press star 11 again. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Andrew Tai with Jefferies. Your line is open.

Hi. Good morning. Congrats on the strong quarter. Thanks for taking my question. So the first one is, as we think about your revised guidance range, do you expect Scripps in Q3 to grow at a similar pace or even a stronger pace than what you saw in Q2? Or are you factoring in some potential slowdown due to summer seasonality, holidays, and vacations? And then secondly, for MDD, it's very clear you're preparing for that potential approval and launch. So the question would be, would you expect the potential script inflection in MDD to be larger than what you saw in the bipolar depression launch, say, within the first six to 12 months? Thank you.

Great. Thanks, Andrew. Maybe, Mark, do you want to take the first question, and then you can also take the second, and then I'll chime in?

Yeah, sure, Sharon. So, Andrew, thanks for the question. As you know, our guidance has been increased for 2024, and we're confident in that guidance and in both the near-term and the long-term growth prospects for Cap Lida. As you know from past years, typically we see some summer seasonality during the third quarter, and then we have a stronger fourth quarter. So, I would say that that's all factored into the guidance that we've provided. for the year. And then in terms of our preparations for MDD, they are well underway. We do expect, if and when we get approved for MDD, that we will see a significant increase in the trajectory of prescriptions, similar to what we saw with bipolar depression. And I think if you look back at some of the recent launches in MDD, the kind of uplift that you get from a new indication in MDD is quite significant, and we would expect to see another inflection upon approval with MDD as well.

Sharon, was there anything you wanted to add to that? Yep, okay.

No, I think that covers both of your questions, Andrew. So, operator, then we can move to the next question, please.

Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Jessica Phi with JPM Chase. Your line is open.

Hey guys, good morning. Congrats on the results and thanks for taking my question. First, with respect to the Salesforce expansion, can you just confirm what that will bring your total Salesforce size to? And what's the right way to think about the additional Salesforce expansion plan for next year? Could that be similar in size to this increase? larger, smaller, and then separately, the press release mentions that you received notice from CMS that Cup Flight are qualified for the specified small manufacturer exception under the IRA. Can you confirm what you expect that to mean for the product? Thank you.

Mark, I think this goes to you as well.

Yeah, sure. Thanks for the questions, Jess. Yes, in terms of the size of the sales force, we'll be adding approximately 150 sales representatives, so that will take us north of 500 representatives out in the field for us. Could you just repeat your second question on MDD, Jeff?

Next year's expansion that you alluded to, should we think of that as similar in size, larger, smaller?

Yep, so what I would say is we're excited about the commercial opportunity of a potential label expansion in MDD, and we will be looking to invest behind the brand at a level that we feel optimizes the launch and the growth prospects for the brand. As we've done in the past, we'll share more details of those efforts with you as we get closer to potential approval by the FDA.

And then you asked about what we put in the press release about being a specified small manufacturer and having the exemption. Uh, so we, uh, that status. And so, uh, what it means is that we would be assessed minimal phase in rebates. So we don't expect to have a big impact on the company, um, at all, at least until the end of the decade into the next decade.

Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Brian Abraham with RBC Capital Markets. Your line is open.

Hey, guys. Congrats on the quarter. Thanks for taking my question, and congrats and best of luck to Larry as well. So I guess I'm curious, as we look to the presentations of the MDD data this fall, I'm curious the key things that you're looking to highlight to the community and how we should be thinking about potential for an inflection once those data are in the scientific literature versus potential label expansion. And then, I guess, as a follow-up on the label expansion, I'm curious, the key elements that you're thinking about as you build out commercial infrastructure, what are the key elements towards achieving a comparable share of voice to competitors? Is it all about boots on the ground, or are there other important elements as well that you're considering strategically as you look towards next year? Thanks.

Great. Thanks, Brian. That's a lot of questions, so hopefully we remember all of them. We'll try and take them one by one. Maybe Suresh, would you like to start talking about what we're going to be highlighting to the medical and scientific community as we go forward?

Yes, in terms of the data from the two studies, we will be presenting at different conferences starting, you know, this second half of this year right now. And then we also have going to highlight the robust efficacy of the study, both studies we have seen in terms of what we have seen in an objective setting. These are unprecedented results we have seen, and we will be highlighting those. And also the safety profile that we have seen, which was similar to placebo in key aspects for antipsychotics, mainly the cardiometabolic side effects, the prolactin issues, weight gain, all these things will be highlighted at conferences.

As well as what will be highlighted is the lack of movement disturbances as well, such as athesia, Parkinsonism, etc., And then I guess going to the label expansion, talking to what we'll be looking at in terms of Salesforce and how we will maintain our equal share of voice. Mark, would you like to address that?

Yeah, sure, Brian. When we think about achieving a comparable share of voice in an area, it's really across the whole promotional mix that we have, with the main elements being some of the ones that you cited, Certainly, the size and the activities of our sales force is an important one. Our activities around medical education and educating physicians on the profile of Kaplida, and then on the consumer side, maintaining a comparable share of voice in our DTC efforts and our digital presence. I think those are the three that are probably the main ones that we look at, but it really is across the whole promotional mix that we have.

That's really helpful. Thanks so much.

Thank you. Please stand by for our next question.

Our next question comes from the line of Jason Gerberry with Bank of America. Your line is open.

Hi, good morning. This is Dena Romadine on for Jason Gerberry. Congrats on the quarter and thank you so much for taking our questions. We just had a couple on IPI 1284. Do you view the Rook Salty launch as a representative comp for an atypical launching into the Alzheimer's disease neuropsych space? And I'd be curious what your thoughts are on the challenges in displacing generics and the resistance to prescribing atypicals in a nursing home setting. Um, and, and just, you know, how, how do you think limit Tepperon could win in a market with these barriers? Thank you.

So I'll start, I'll then ask Mark or Suresh if they want to chime in. Um, first on the Rick Salty launch, I think it's early days. And so I think what we're only seeing, um, is exactly that. And sometimes these markets take time to develop. And there is a great medical need in these patient populations. And I think that there is a large opportunity for a product with the right profile. And I'd like to emphasize, again, the safety and tolerability profile of Lumotepirone across every area where we have been investigating the use of Lumotepirone. And I think that... we will see in larger studies whether the side effect profile we've seen in our early studies, whether this in elderly patients that this again holds true as we are in larger patient populations. I think then maybe Mark, did you want to add anything to that?

Yeah, I think you're exactly right, Sharon. And this is a launch that we're watching carefully and seeing how the market there evolves. I would reemphasize the point that Sharon made that we believe it is still in the early innings for the use of antipsychotics in a chronic sense for agitation. And it takes some time for treatment paradigms like this to develop. So I think the story still needs to be told there.

And we're watching that very carefully.

Thank you.

Thank you.

Please stand by for our next question.

Our next question comes from the line of Charles Duncan with Cantor. Your line is open.

Hey, morning, Sharon and team. First of all, congratulations on a really nice quarter and thanks for taking our questions. I had a question on regulatory strategy in adjunctive MDD. You may not answer it, but I was curious as to what indications you'll be seeking. Will it be adjunctive MDD alone, or would you include mixed features, or would you seek to just have that data in the label? And then I did have a question on 1284.

So I'm going to take that and then I'll ask Suresh if he wants to add anything. So just to remind you, the clinical studies, the phase three program was in adjunctive treatment of MDD. So you can assume that that is the label that we are going for. I think it's a little bit early for us to discuss any more about the label other than that it's for the adjunctive treatment of MDD.

Rush, did you want to add anything? No, that's good. Okay.

Got it. And then I did have a question on 1284, and it kind of dovetails into your Lumateprone expansion. On 1284 use or study in generalized anxiety disorder, it seems to me that given the that that's often a comorbidity of depression. I'm wondering why you're not looking at Lumateprone in that indication and what it is about 1284 that you think suits it well for generalized anxiety disorder. And then on Lumateprone in terms of pediatric data, do you think that we could see some pediatric information in 2025?

Suresh, did you want to take that, or would you like me to?

Yes. In terms of the last question about the pediatric indications, you're talking about, so we have posted on printouts.gov. These are pediatric studies. It takes a little longer time than adults, so we will not be seeing the results in 2025. It's a little bit later than that. In terms of your question on looking at other indications for 1284, We are going to be looking at, we are constantly re-evaluating new indications. Right now, our first indication, as we said, we started the GAD program, an adjunctive program in GAD. We have also started the psychosis in Alzheimer's patients. We have indicated that, we have announced that we are going to start soon the agitation program as well as the monotherapy in GAD. Other indications, stay tuned. We will, as we reevaluate, we will keep updating.

As we go forward, we will be announcing new studies, other studies that we'll be doing with 1284. So, as Suresh said, just stay tuned. Have a little bit of patience. We'll tell you as soon as we get very close to or start enrolling those patient populations.

Absolutely. Thanks for taking the question.

Thank you. Please stand by for our next question. Our next question comes from the line of Mark Goodman with Levering. Your line is open.

Thanks, Sharon. Can you talk about how you're thinking about business development these days and obviously a massive sales force you'll have in a year with one product? Just curious how you're thinking about leveraging that sales force and then Just secondly, how are you thinking about Capilita XUS and if there's any partnership arrangements that you're thinking about? And thanks.

Sure.

So we have, we do look at DD opportunities constantly. And obviously the, what would be terrific would be if we are able to find a product that fits into the present sales force. We continue to look for that. And then we have also moved to adjacencies. So far we haven't found products that we think fit the bill there. But we do continue to look. In addition, we look earlier, as you heard on this call today, We have a very, very robust internal pipeline. And while we progress that internal pipeline, we do also look to supplement it with external opportunities. So, we look at all opportunities. Our head of external innovation is in charge of doing that. And we will keep you informed on our progress there. We continue to evaluate that. It is a landscape that has been rapidly changing, and so we will keep you updated as we go forward in the XUS landscape as well.

Thank you. Please stand by for our next question. Our next question comes from the line of Michael DeFerrari with Evercore ISI. Your line is open.

Hi, guys. Thanks so much for taking my question, and congrats on all the progress this quarter. Two questions for me. Number one, with regards to the MDD trial study 505, any plan to shut this trial down? And if so, how should we think about R&D spend throughout the balance of the year? And my second question is on ITI 1284, specifically the Phase II What's your powering and expectations for placebo response here and how you're controlling for it, especially since the trial has two active arms? Thank you.

Maybe we want to go in reverse since that's top of our mind. Suresh, you want to talk about the powering that we do? I can give you a very broad summary, and that's we always power our study. Well, why don't I let Suresh take it?

Yeah, so these studies are powered as rigid facial studies, so all of them are powered at 90% power. That's what we typically do. And in terms of controlling for placebo response, we adjudicate every patient that goes into the trial to make sure that they actually meet the criteria, and there is different levels of that, and we do... adjudicate each patient that is coming into the trial so that they have the correct symptomatology, and also the severity also is there. And throughout the study, we monitor for, you know, any inconsistencies across different scales and things like that. So that we have done in other trials, and we'll continue to do that in these upcoming studies also.

And I'll address the study 505. We are coming down the home stretch in our evaluation. of what will happen, what will be the fate there. But why don't you just give us just a little bit more time and we'll update you on the fate of 505. And then I think you had another question in there, but I'm not sure I remember it.

No, that's it. Thank you very much. Okay, great. Thanks.

Thank you. Ladies and gentlemen, due to the interest of time, We ask that you limit yourself to one question only. Please stand by for our next question. Our next question comes from the line of Jeff Hung with Morgan Stanley. Your line is open.

Thanks for taking my questions. I guess for 1284 and Alzheimer's disease psychosis, can you just talk about your approach versus what others are doing for the indication and then just your confidence in 1284 for AD psychosis? Thank you.

So, thanks for the question, Jeff. Maybe I take it you're referring to the scale that we're using. Is that correct?

I mean, partially, but then also just in terms of the candidate itself, your confidence in that versus competing approaches for treating AD psychosis.

Okay. Maybe, Suresh, would you... Would you like to give just notes on what we're doing? That would be great. Thanks.

So for psychosis and Alzheimer's, first point, based on the mechanism of action of the drug, we believe that based on its influence, its effect on the dopamine system, serotonin and glutamate system, we believe that this will be effective in psychosis of Alzheimer's disease. In terms of the study itself, we have, this is a six-week study that is going to be four weeks of screening period followed by six weeks of double-blind treatment and a follow-up period of 30 days. And in terms of the study scales, we have picked the BEHAVE-AD psychosis subscale, which focuses mainly, the subscale focuses mainly on the psychosis element of the disease, and it has 15, sorry, it says 12 items, 7 items from the paranoid and delusional ideation domain, 5 items from the hallucination domain, and then we have a total score of 36. And we also have a key secondary as CGIS, that is the global severity improvement in patients with psychosis and Alzheimer's dementia. All these are the design elements. And in terms of, again, I have indicated that in terms of the patients that get into the trial, we ensure that patients have the right diagnosis and also the right severity. And that is very key to successful of a clinical trial to make sure that the patients have enough severity so that we can detect the change at the end of the study.

Thank you. Thank you. Will you stand by for our next question?

Our next question comes from the line of Amy Fadea with Needleman Company. Your line is open.

Hi, good morning. Thanks for taking my question. Maybe just with regards to 1284, what doses will you be evaluating across the three indications? And what's your rationale for evaluating two doses as well as in mono and adjunctive treatment in GAD? And maybe just to follow up to the previous question on Alzheimer's disease psychosis, you explained the endpoint that you're using, but why do you believe that that is the appropriate one for 1284 versus what some of the other companies are using? Thank you.

So I'm going to start because I need, and this goes to Jeff's question as well, I need to understand a little bit better. There are a few different studies, but very few. And so I think we have chosen our parameters after interactions with the FDA and conclusions about the best design for our studies, which includes the best scales to use or the appropriate scales to use, as well as the different doses. that we're doing. So that's why we say we think we have early evidence of safety of efficacy with different doses. And so now we're testing them, you get a lower range, you get an upper range. And that's the reason for choosing two doses. I don't know, Suresh, do you want to add anything?

Yeah, and yeah, the scale, you know, definitely this scale, as we have, you know, you have indicated that this was based on discussions we had with the agencies.

If there's another question about the trials that we're missing, maybe you could let us know and we can try and address it.

Just with regards to GAD, the thought process behind evaluating it both as a mono and adjunct therapy.

Thank you.

We think it's appropriate.

As you know, there are very few drugs that are approved for GAD and there are a few clinical studies ongoing. And we think that there's an opportunity for a drug with a good tolerability and safety profile as well as demonstrated efficacy. So I think that's why both a monotherapy and an adjunctive therapy. Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Joseph Thome with TB Cohen. Your line is open.

Hi there. Good morning, and thank you for taking my question. Maybe on the what proportion of bipolar depression patients are treated by primary care physicians just to get a little bit of an idea of what growth you could see from this expanded sales force and was the expansion related to something that you're seeing in the field specifically or is this because of the MBD trial or just a normal cadence of launch? Thank you.

Laura?

Yeah, I can take that, Sharon. Thanks for your questions. So the primary care, as we said, is playing an increasingly important role in the treatment of bipolar depression, and we believe that they account for about 25% of all the prescriptions written for bipolar depression. So they play an important role. Psychiatry is still the main treater of the disease, but they play an important role, and that role has been increasing uh over time and so for us this was a couple things at up until this point our primary promotional efforts have been concentrated on psychiatrists and the nurse practitioners that support them however we've also been targeting a smaller segment of primary care that represents the the highest volume prescribers in primary care and we we've actually had good success with the primary care physicians we've seen that cathletic broad label including both bipolar I and bipolar II depression, coupled with the strong efficacy and favorable safety and tolerability and the convenient once-daily dosing with no titration is a very compelling profile for primary care treating patients with bipolar depression. So to fully leverage that growing opportunity, this expansion is allowing us to go deeper into primary care and extend our reaching frequency in this setting And to your other point, yes, the robust results that we've seen in the two phase three MDD studies gives us a high degree of confidence in the long-term growth prospects of Capilita and gives us increased confidence to invest in the brand today at an even higher extent for our base business in bipolar depression. So for all those reasons, we believe now is the right time to be extending our reach in the primary care.

Thank you.

Thank you. Please stand by for our next question. Our next question comes from the line of Greg Sabanovich, Mizzou Health Security. Your line is open.

Thank you very much. Thanks. And congrats on the progress in the quarter and congrats, Larry, on your retirement. Maybe, Sharon, this question is for you. It's a bigger picture strategy question. As you think about the pipeline that you have, which is quite extensive, And with increased investment in either additional studies with Lumateparone or 1281, I'm sorry, 1284, I'm just trying to think about how you're thinking about some of the other programs, whether it be the 333 program or 1020 or the Parkinson's program, and kind of the interest in getting the data but then either, you know, investing further in those assets or perhaps using those assets as opportunities to perhaps find a partner to offload some of the R&D spend in order to advance those programs. So just philosophically how you're thinking about the pipeline.

So first, thank you for acknowledging that we have a very robust pipeline and we are very data driven. So the first thing to do is get the data. And these early studies with 1020, with 333, with you didn't mention, but a program we're extremely excited about, 1549, while they will generate extremely valuable data, they're your earlier phase studies. And they are less costly. than your later stage program. So I think the first thing for us to do is get the data and see if the data looks robust and is both in efficacy and also what the safety and tolerability profile looks like. And we'll make our decisions as to do we move it along alone or do we move it along with a partner. or do we not move it along? Based on data. This company was founded on data-driven events, and we continue to look at the science and drive our decisions based on data that we get.

Okay, thank you.

Please stand by for our next question. Our next question comes from the line of Corrine Johnson with Goldman Sachs. Your line is open.

Hi, this is Balakantur Karim. Just one question from us. How are you thinking about the path to profitability from here as you sort of balance building out a commercial infrastructure and your identity efforts against the backdrop of continued revenue growth?

Wait, I'm sorry. You came through very muffled. I could not understand. Yeah, I couldn't either.

Can you repeat, please? Sure, I can go again. Is this better? Much better. Thank you. Awesome.

I was just asking, how are you thinking about the path to profitability from here as you sort of balance building out a commercial infrastructure and R&D efforts against the backdrop of continued revenue growth?

I think you're asking about our path to profitability and balancing it against R&D and our continued growth. Larry, do you want to take that?

Yeah, sure. We haven't given any guidance as far as profitability. I mean, we feel we're very excited about the growth in Scripps and the path that that's taking. We've given you guidance on R&D spend for the rest of this year. We intend to, you know, finance these R&D projects to the best of our ability. And so having said that, we are focused on becoming profitable, but at this point, we can't give you any guidance. We'll keep you updated on the components of that as we go further.

Understood.

Thank you. Please stand by for our next question. Our next question comes from the line of Joel Beattie with Bayer. Your line is open.

Thanks. For the next question, forms expansion, is that something you're looking to do early in 2025 or later around the time of MDD approval?

Mark?

Yeah, so as I mentioned in my prepared remarks, we're very excited about the commercial opportunity of this potential label expansion in MDD for Capilita, and we intend to invest behind the brand at a level that will help us optimize the launch and our longer-term growth prospects As we've done in the past, we'll share more of those details, both in terms of the magnitude of the expansion and the timing of the expansion as we get closer to potential approval by the FDA. So, hang in there for a little while, and we'll come back to you as we get closer to that launch.

Thanks. Thank you.

I think we have time for one more question, if there is one. Our final question will come from the line of David Amsell with Piper Stanley. Piper Stanley, David, your line is open.

Hey, thanks. Just a quick one from me. Just a quick one from me on the Bipolar Mania program. Can you talk about... how additive you think it is to the overall sales potential of CapLighter, or maybe put it differently. I mean, what's the extent to which you're getting usage in patients who are manic? And just help us understand your rationale for doing that program and getting that into the label. Thanks.

Rush, do you want to start? And I'll chime in.

Yes, I can.

We are looking at adults and pediatrics for any unmet needs that we have for drugs, for looking for any drugs with efficacy, safety, and tolerability needs. Coming specifically to your question on bipolar mania, we have an agreement with the FDA in connection with our pediatric exclusivity program. This agreement provides that the PK studies in adolescents and children, together with the bipolar mania studies in adults, would be sufficient to satisfy the obligations with respect to obtaining pediatric exclusivity. And that is the reason we were planning and conducting the studies.

Thank you. At this time, I would like to turn the call back over to Sharon for closing remarks. Great. Thanks, everybody.

As you can see, I think we've had a great quarter, and we're moving forward, and we really look forward to an approval and a launch in Adjunctive Treatment and MDD, and to advancing all of our other programs. So we thank you for your support and for listening, and we have great opportunities ahead of us, and we look forward to informing you of yet more progress from ITCI as we move forward. With that operator, you can disconnect.

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