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Executives

Lisa Barthelemy - Former Director of Investor Relations

Uli Hacksell - Chief Executive Officer, President and Director

Roger G. M. Mills - Chief Medical Officer and Executive Vice President of Development

Thomas H. Aasen - Chief Financial Officer, Chief Business Officer, Principal Accounting Officer, Executive Vice President and Treasurer

Analysts

Jason N. Butler - JMP Securities LLC, Research Division

Thomas Wei - Jefferies & Company, Inc., Research Division

Alan Carr - Needham & Company, LLC, Research Division

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Juan F. Sanchez - Ladenburg Thalmann & Co. Inc., Research Division

George B. Zavoico - MLV & Co LLC, Research Division

ACADIA Pharmaceuticals Inc. (ACAD) Expedited Path to NDA Filing for Pimavanserin Following Meeting with FDA Conference April 11, 2013 8:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals Conference Call. My name is Angela, and I'll be your coordinator today. [Operator Instructions] I would now like to turn the presentation over to Ms. Lisa Barthelemy, Director of Investor Relations at ACADIA. Please proceed.

Lisa Barthelemy

Good morning and welcome to ACADIA's conference call and webcast to discuss this morning's announcement regarding our recent meeting with the U.S. Food and Drug Administration, or FDA, and the resulting expedited NDA filing path for pimavanserin and Parkinson's disease psychosis, or PDP. This call is being recorded and an archived copy will be available on our website through April 25, 2013.

Joining me on the call today from ACADIA are Dr. Uli Hacksell, our Chief Executive Officer; Dr. Roger Mills, our Executive Vice President of Development and Chief Medical Officer; and Tom Aasen, our Executive Vice President and Chief Financial Officer.

Uli will begin our call today with some introductory remarks and Roger will then provide you with more background on our interaction with the FDA and our plans for the pimavanserin program. We will then open the floor to your questions.

Before we proceed, I would first like to remind you that during our call today we will be making a number of forward-looking statements. Statements that are not strictly historical in nature are forward-looking statements. These include: statements regarding our development program and plans for pimavanserin, including remaining development activities; timing of pre-NDA meetings, NDA filings and other future FDA interaction; and expediting of the registration and potential approval of pimavanserin. These statements also include statements regarding the potential savings of time and money in our development program, and the benefits of pimavanserin as a potential first-in-class therapy for PDP.

These forward-looking statements are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements including: risks inherent in drug development; regulatory approvals and commercialization; the uncertainty of whether the results from testing of pimavanserin to date will be predictive of results in future development; and risks that FDA ultimately may not accept or approve an NDA for pimavanserin.

These factors and other risks associated with our business can be found in our filings made with the SEC, including our annual report on Form 10-K for the year ended December 31, 2012, and other filings. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. ACADIA's disclaims any obligation to update these forward-looking statements.

Today's conference call and Q&A session is scheduled to run approximately 30 minutes in total. I'll now turn the call over to Uli Hacksell, our Chief Executive Officer.

Uli Hacksell

Thank you, Lisa, and good morning. Let me first take this opportunity to thank all of you for joining us on today's call. The last several months have been an exciting period for ACADIA, beginning with the successful top line results from our pivotal -020 Phase III trial with pimavanserin for Parkinson's disease psychosis, or PDP, which we announced late last year. We are delighted to now build on this positive momentum with today's announcement from an expedited path to NDA filing for pimavanserin.

Following the outcome of our -020 Study, we have been focused on advancing our Phase III program toward the registration for PDP. As part of this effort, our development team has been busy finalizing preparations for the -021 Study, which was planned as a confirmatory trial and was scheduled to start later this month. We have also been continuing to conduct our open-label safety extension study and preparing for other supporting development needed as part of the pimavanserin registration program.

In parallel with these efforts, given the strong and consistent date that we observed in the -020 Study, we also felt that we have an opportunity to approach the FDA to determine whether the agency would accept and review pimavanserin NDA that relied on the positive results from the single -020 Study along with supportive data from our other studies. We had a meeting with the FDA earlier this week and I'm pleased to report that the agency agreed that the data from our -020 Study, together with supportive efficacy and safety data from our other pimavanserin studies, are sufficient to support the filing of an NDA for pimavanserin for the treatment of PDP.

As a result, we will not conduct the planned -021 Study. We expect that this positive change in the pimavanserin development program will save considerable time and money. As Roger will share with you later, we are now focused on the additional development that is necessary to complete our PDP program before we will be in a position to submit an NDA for pimavanserin to the FDA.

The outcome of this week's meeting represents another important milestone for our pimavanserin program. Most importantly, we believe that it will expedite the path for registration and potential approval of pimavanserin for PDP, so this -- so that this innovative therapy may be available to treat this serious, unmet medical need.

Before I turn the call over to Roger to give you some additional background on our interaction with the FDA and the impact on our PDP program, let me take this opportunity to thank our employees once again for their dedication and their extraordinary efforts. I know that they share my excitement regarding today's news and the opportunities that lie ahead with pimavanserin.

Let me now turn the call over to Roger.

Roger G. M. Mills

Thank you, Uli, and good morning, everyone. This is another exciting day for the pimavanserin program and for all of us here at ACADIA. As Uli mentioned, the robust and consistent results in our pivotal -020 Study afforded us the opportunity to meet with the FDA to discuss the PDP regulatory path. Thus, we requested a Type C meeting with the agency, whilst we continued full-scale preparations for planned confirmatory study.

Our objective is straightforward: Determine whether the agency will be willing to accept and review our pimavanserin NDA for PDP that was based on the results of our single, positive, pivotal study together with supporting data from other -- our other studies.

FDA has established criteria for a single study to be considered for approval, one of which must be met. We believe that the -020 Study met several characteristics identified in the FDA guidance for single-study approval. The pivotal -020 Study was a large, multicenter study with statistically very persuasive results that were consistent across study subsets. The -020 Study also assessed multiple endpoints involving different events including not only antipsychotic efficacy, but also positive effects on nighttime sleep, daytime wakefulness and on caregiver burden.

We held our Type C meeting with the FDA earlier this week. We are very pleased to announce that the agency has agreed that they would file an NDA based on data from a single positive -020 Study, together with supportive efficacy and safety data from our other studies. We believe this reflects both the strength of results demonstrated in the -020 Study and the fact that PDP is a serious, unmet medical need without any approved treatment option. Whilst we expect the outcome of this meeting will have a positive impact on our development plan, we are continuing to assess the extent of this impact. Importantly, we will no longer conduct the planned confirmatory -021 Study and are now focused on completing the remaining PDP development program.

We have additional standard development studies that need to be completed before submitting an NDA including supportive studies such as drug-drug interaction studies and final aspects of CMC development, including stability testing of pimavanserin registration batches. We intend to request pre-NDA meetings with FDA later this year to discuss our plans for the NDA submission and to ascertain whether all aspects of our development program, including all clinical and preclinical studies, as well as chemistry and manufacturing, will be sufficient to support a filing.

Subject to changes that could result from our future interactions with the FDA or other developments, we are currently targeting an NDA submission near the end of 2014.

Whilst the FDA has agreed to accept and review an NDA on the basis of our pivotal -020 Study, along with supportive efficacy and safety data from our other studies, the NDA filing will naturally be subject to FDA review to determine whether the package is adequate support approval in PDP. We are very encouraged by this positive development in our PDP program. Most importantly, we believe that we'll expedite the path to registration and potential approval for this indication, and potentially enable pimavanserin to be available sooner to help Parkinson's patients suffering from psychosis.

Let me now turn the call back over to Uli.

Uli Hacksell

Thank you, Roger. We're obviously very pleased with the expedited path forward for pimavanserin in PDP. Recall that PDP is a serious disorder that develops in up to 60% of Parkinson's patients. It adds substantially to the burden of Parkinson's disease and it is the major cause of nursing home patients among Parkinson's patients. We believe that pimavanserin, with its innovative and well-tolerated non-dopaminergic profile, has the opportunity to be the first-in-class therapy that can effectively treat psychosis in Parkinson patients without compromising motor control.

In closing, this new step forward in our pimavanserin program is particularly exciting to all of us here at ACADIA, several of whom have been involved with this compound since its initial discovery in our research laboratories. With each important step, we are getting closer to our ultimate goal of bringing innovative compounds like pimavanserin the market to improve the lives of patients with neurological and related central nervous system disorders.

Before we move to the question-and-answer session, I want to take this opportunity to thank Roger and the entire development team for their dedicated efforts leading to this important advance in the program. It has been a remarkable period for ACADIA, starting with the great data from the -020 Study in late November and culminating with the positive news from our interaction with the FDA. We are now set to build on this momentum and continue on our journey towards making pimavanserin available to patients and growing ACADIA into a commercially successful company.

Operator, you may now proceed with the Q&A session.

Question-and-Answer Session

Operator

[Operator Instructions] And your first question comes from the line of Jason Butler, JMP Securities.

Jason N. Butler - JMP Securities LLC, Research Division

Just wondering if you could talk about what the time-gating items are that need to be completed before NDA submission? It just seems like the end of 2014 is a long way out, I'm wondering if there's a chance or any potential for the -- for filing to happen sooner?

Uli Hacksell

Yes. What -- we have a number of things remaining that needs to be done, which are standard studies. We need to do additional NDA-enabling studies including drug-drug interactions studies. And we also need to do CMC studies that are required for approval. These things take time, and we still save a lot of time compared to the previous scenario where we would have had to conduct the -021 study as well. So we are very excited about this expedited path to NDA submission.

Jason N. Butler - JMP Securities LLC, Research Division

Great. And then just secondly, have you spoken to any regulatory authorities outside of the U.S? And has there -- is there a similarly favorable outlook anywhere else?

Roger G. M. Mills

During the development program, we've actually interacted with a number of regulatory authorities outside of the USA. We've not had opportunities following -020 to continue that discussion and that is something that we are now planning to do.

Operator

The next question comes from the line of Thomas Wei from Jefferies.

Thomas Wei - Jefferies & Company, Inc., Research Division

Just a couple of follow-up items on the last question. So the drug-drug interaction studies are relatively quick to complete, so is it the manufacturing stuff that's now the rate-limiting stuff?

Uli Hacksell

Yes. Clearly, the -- what we have to do is additional stability testing of regulatory batches, and that could take some time.

Thomas Wei - Jefferies & Company, Inc., Research Division

And so it sounds like have you actually completed the 3 validation batches on commercial manufacturing? And you're just waiting for stability now?

Roger G. M. Mills

The -- I think what is reasonable to say is that we are well on underway in the preparations to run the stability studies.

Thomas Wei - Jefferies & Company, Inc., Research Division

So that actually sounds like you have the material in hand and it's really the stability study that needs to be started and completed?

Roger G. M. Mills

There are a number of preparatory studies, small studies in setting these batches up. And the program is well underway.

Thomas Wei - Jefferies & Company, Inc., Research Division

I guess what I'm confused about is that if you're talking about a filing in late 2014, a good 21 months from now, I thought that these stability studies lasted for a much shorter period of time than that, because you're also testing at accelerated conditions, those things are usually less than like 12 months. What am I missing about the timeline?

Uli Hacksell

I think, first of all, there are number of things that you need to do in order to conduct the stability testing of these batches properly, both in preparation of the batches and the analytical testing of the batches. In addition to that, it takes a while to put the NDA together. I think the important thing for us is that we are well ahead on putting everything together that is needed for the NDA submission. And again, the fact that we saved a considerable amount of time, perhaps up to a year, by having this expedited path to the NDA.

Roger G. M. Mills

I think it's also fair to say that we've had extended experience with not only the drug as a -- for its effect, but also, importantly, in manufacturing multiple lots of the drug for our clinical trials. We are very comfortable with the chemical characteristics of the drug. We've made many batches in the past and we know that this -- that the drug is very stable and -- in multiple conditions. We're not anticipating any problems in the program, but we want to ensure that it is done smoothly and we don't run into problems at the NDA from the CMC program.

Thomas Wei - Jefferies & Company, Inc., Research Division

Maybe just in a slightly different tweak of the question. If -- what is the kind of standard minimum amount of stability testing typically desired or required by the agency to approve a drug with the decent shelf life? Is it 6 months at accelerated conditions? Nine months? 12 months? Maybe that would be helpful to give us a sense.

Roger G. M. Mills

Yes. It's between 6 to 12 months.

Thomas Wei - Jefferies & Company, Inc., Research Division

Okay. And then just lastly on this whole thing about the x-U.S. strategy. So I guess I'm curious why it makes sense that you're not going to run -021 because the FDA doesn't need that. But are you potentially impairing the regulatory pathway internationally by not running that confirmatory study? Is it standard practice outside of the U.S. to accept a single positive study?

Roger G. M. Mills

The EU regulations do allow a single study approval similar to the U.S.

Operator

The next question comes from Alan Carr, Needham & Company.

Alan Carr - Needham & Company, LLC, Research Division

I'm wondering about the FDA's view around the -020 trial and what they consider supportive? Which data did they, I guess, won them over from this collection-supported data you have? Was it the U.S. data from -020? Is it the schizophrenia Phase IIb trial? What got them over?

Roger G. M. Mills

Thanks, Alan. It was -- I think just for a moment that -- I think what won them over was a very, not only the compelling clinical data from -020 with the very significant statistical improvement seen and the consistency of the data across the multiple endpoints from different raters, and obviously, assessing different outcomes not only with psychosis but also the sleep. And the consistency of each of those factors, together with obviously the response of the caregivers. I also want to pay credit to our head of regulatory and her staff and also the development team for really putting together what was a very comprehensive packaging, encompassing not only the efficacy data from -020 together with the previous studies, but also, a comprehensive package around our safety data from the program in total. I think in terms of winning them over, it really was the fact that all of this combined, makes a very strong argument for the fact that there is clear evidence of benefit to patients together with a very acceptable safety profile for the potential of this drug to be used in this patient population.

Alan Carr - Needham & Company, LLC, Research Division

I misspoke earlier. I wasn't referring to -020, but the previous Phase III trials that had unfavorable results in the U.S. But -- so it primarily rested on the strength of the data from this first one. And the reason why I'd asked was you had mentioned that supportive data was helpful here for the FDA, and I was just wondering if they were drawn into this by, at least in some part, by some of that positive data from the previous trials.

Roger G. M. Mills

No, that's a good point. I mean, I think the -- one of the very interesting and clear aspects of this program is that -020, the design of -020, was based on our experience in those previous studies and the signals that we were able to see there. And then take the analyses from those previous studies and to build them into -020. I think one of the key elements of the argument is that what we did was to really enable or to perform a clinical experiment that allowed the drug to show what it's capable of doing. And that is a very -- something that we shouldn't forget in these dates. So they're not just positive, but they really arose from the fact that we performed an experiment that was able to restrain the placebo response, allowing the drug to show that it has a very clear benefit in these patients. One of the elements that FDA have always been interested in -- and they are as frustrated as many in the industry are by the placebo responses that we see across many, many different programs, especially in the neuropsychiatry field. And it's a challenge to them as well as to those of us developing drugs. And I think they -- the steps that we took to manage the placebo response were well-received, encouraged, and supported by FDA. But previously, and obviously, in our very recent interactions with them, I think there are many things that not only can we take forward in our future programs, but also can be applied across not only other programs in the neuropsych field, but also across other elements of drug development in different therapeutic areas.

Alan Carr - Needham & Company, LLC, Research Division

Okay. And then one follow-up here. Does this affecting any of your plans for ADP and any changes to burn for -- cash burn for 2013?

Uli Hacksell

So not what -- we are clearly still planning to conduct the ADP study. The proof-of-concept Phase II study. And we are planning to start that study in the second half of this year. So that's something that we are very excited about. Really, ADP is an indication where we want to move as quickly as possible, and this will be a first step in that direction. When it comes to burn, perhaps you can take that, Tom?

Thomas H. Aasen

Yes. Alan, obviously we're still assessing the impact of the outcome of this on the program as it relates to timing cost of various studies. Clearly, I can say that we expect it'll save considerable cost related to the -021 Study, which we will no longer conduct. We will, however, accelerate certain other aspects in pre-commercial activities as well. I would say, we'll expect to provide more information on our spending in connection with our upcoming quarterly calls.

Operator

The next question comes from Bert Hazlett from Roth Capital.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

In terms of the discussion with the FDA. Obviously, some positive developments here. Why not expedite a review? You were pretty clear that it doesn't appear that that's going to be the case. And do you expect the panel coming through with regard to this indication?

Roger G. M. Mills

I think we expect to get a standard review of the package. Obviously, that's something that is usually discussed prior -- closer to the NDA itself. And then sort of the second part of the question?

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Would you expect a panel?

Roger G. M. Mills

Yes, the answer is yes. This is -- as a standard, this is a new indication for FDA, and therefore, the standard approach would be to go to an advisory committee.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Okay. And then just one more. Maybe if you could, Tom. Could you give us a little more granularity on how this might affect your commercialization, either strategy or timing or the way in which it might have -- it might play in terms of the models? Again, just a little bit more granularity in terms of how you're thinking about commercialization given this advancement?

Thomas H. Aasen

Sure. I mean, clearly, this doesn't, in itself, change our thoughts on commercialization. Obviously, we have the opportunity for an expedited path. And obviously, that could mean things can happen quicker. We're still very, very excited. We think it's the ideal kind of indication. We're well underway with pre-commercial preparations and activities and we'll continue to be ramping those up over time. When it comes to the specific spending, again, I'd like to defer to the future quarters that we can comment more on that. But clearly, from our standpoint, we're excited to commercialize in the U.S., building a specialty neurology franchise around it. We just think this is the ideal kind of drug that can be served as a great foundation and then can be expanded throughout a variety of related indications.

Robert Cummins Hazlett - Roth Capital Partners, LLC, Research Division

Okay. And just to be clear, as I'm writing down my answers. Roger, on -- your answer on expedited review, is that something you will be pursuing at a later date, just to be clear?

Roger G. M. Mills

I think we are considering the various processes as we move forward. I think we are very pleased today to be able to announce that following our request to the FDA for the single study approval for the basis of that we gained, I would sort of just thank the FDA, actually, because they gave us a very, very clear response.

Uli Hacksell

So we have time for 2 more questions?

Operator

The next question comes from Juan Sanchez from Ladenburg.

Juan F. Sanchez - Ladenburg Thalmann & Co. Inc., Research Division

Just a couple of questions as a reminder. How many sites were in study for -020 and how much intersite variability there was in the results? And how many patients -- the site that involved the most patients, how many patients did it involve?

Roger G. M. Mills

Thanks, Juan. In terms of sites, we had just over 50 sites in the study who enrolled. And to your question -- I mean, I think what you're really asking was, was there any site that was a driver of the results. And the answer is no. The site with the highest involvement, I think it's about 14 or 15 patients came from that site. And I can very clearly say that the data from that site didn't drive the results of the -020 Study.

Operator

The final question comes from George Zavoico from MLV & Co.

George B. Zavoico - MLV & Co LLC, Research Division

A quick -- just a couple of quick questions regarding the studies, the CMC and the drug-drug interactions. Are you -- because you're going to run the -021 Study trial starting fairly soon, were you going to run those in parallel anyway? Or are you accelerating the timeline for those studies?

Roger G. M. Mills

So the -- our drug-drug interaction studies have been planned and are actually underway, and that was part of the original planning. Those aren't influenced by the -021 timing or efforts. I think it's also fair to say that in terms of those -- they're very standard studies, they're what we expected to do, planned to do and will do. And it's worthwhile bearing in mind that all our patients in the PDP program are on multiple other therapeutics, but managing that, that Parkinson's disease, and obviously, many of the other aspects of the lives of the elderly people with multiple issues ongoing.

Uli Hacksell

And when it comes to the CMC program, that was started, clearly, before we knew the outcome of the FDA meeting.

George B. Zavoico - MLV & Co LLC, Research Division

Okay. So it's already in the works. With regards to manufacturing, do you have redundancy built into that? Do you have multiple manufacturers? Is the batch and the CMC is going to be solely to one manufacturer? Or -- and these are, I imagine, are all contracted out?

Uli Hacksell

It's all contracted out to the one manufacturer. Correct.

Roger G. M. Mills

I think it's -- just to note, that obviously, we've made multiple batches of this drug through our clinical program, and we've worked with our manufacturers throughout in a very consistent and good manner.

Uli Hacksell

So thanks again, everyone, for joining us on today's call and for your continued support. Thank you so much and goodbye.

Operator

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.

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