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Executives

Lisa Barthelemy – Director, IR

Uli Hacksell – CEO

Tom Aasen – EVP, CFO and Chief Business Officer

Roger Mills – EVP, Development

Analysts

Jason Butler – JMP Securities

Charles Duncan – Piper Jaffray

Alan Carr – Needham

Bob Hazlett – ROTH Capital

Jason Napodano – Zacks

Juan Sanchez – Ladenburg

Brian Lian – SunTrust

George Zavoico – MLV & Company

ACADIA Pharmaceuticals, Inc. (ACAD) Q1 2013 Earnings Call May 7, 2013 5:00 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals Third Quarter 2013 Financial Results Conference Call. My name is Sue and I will be your coordinator for today. (Operator Instructions).

I would now like to turn the presentation over to Lisa Barthelemy, Director of Investor Relations for ACADIA. Please proceed.

Lisa Barthelemy

Good afternoon, and welcome to ACADIA’s first quarter financial results conference call. This call is being recorded and an archived copy will be available on our website at www.acadia-pharm.com through May 21, 2013.

Joining me on the call today from ACADIA are Dr. Uli Hacksell, our Chief Executive Officer; Tom Aasen, our Executive Vice President and Chief Financial Officer; and Dr. Roger Mills, our Executive Vice President of Development and Chief Medical Officer. Uli will begin our call today with some introductory remarks and then Tom will be briefly comment on our first quarter financial results. Following this Roger and Uli will provide you with an update on our development program and we 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 including statements regarding our research and development programs and plans, including the timing, design and results of clinical trials, the timing of regulatory filings or approvals, the benefits to be derived from, future approval of and the commercial potential for our product candidates in each case including pimavanserin, plans regarding the development of and future commercialization of pimavanserin, the value of pimavanserin, and our future expenses, collaboration and grant payments, cash usage, stock performance and growth potential.

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.

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 disclaims any obligation to update these forward-looking statements.

I’ll now turn the call over to Uli Hacksell, our Chief Executive Officer.

Uli Hacksell

Thank you, Lisa, and good afternoon. Let me first take this opportunity to thank all of you for joining us on today’s conference call. Following an exciting close to the 2012 year highlighted by the impressive results from our pivotal PDP 33 trial with pimavanserin for Parkinson’s disease psychosis or PDP and our successful financing we are off to a very strong start to the 2013 year.

While the last several months have been a transformative period I believe this is just the beginning for ACADIA as we enter a new phase in which we are focused on building additional value in our advanced franchise.

During that first quarter data from our -020 Study were presented at the 65th American Academy of Neurology Meeting. The -020 data is robust and consistent efficacy of pimavanserin across platforms and confirmed the positive top line results that we had previously announced.

More recently in April we met with the U.S. Food and Drug Administration to discuss the PDP regulatory act. We were delighted to announce that the FDA agreed that the data from our -20 Study together with supportive data from other studies with pimavanserin would be sufficient to support the filing of a new drug application or MDA for the treatment of PDP.

This represented another important step forward in the pimavanserin program and its expected to expedite the path to MDA filing and potential approval of pimavanserin. Most importantly this may enable pimavanserin to be available earlier than previously expected to help Parkinson’s patients suffering from pyschosis. As Roger will share with you later following this positive outcome we are now busy completing the remainder of our pimavanserin PDP development program needed for MDA submission.

Currently there is no FDA approved therapy for PDP. We are convinced that pimavanserin’s clinical profile is ideal to address this large unmet medical need. And that it has the potential to gain the first drug approval through the U.S. to tread patients with PDP.

Additionally we believe that pimavanserin has broad potential and may provide a suitable therapy for a range of neurological and psychiatric disorders that are poorly served by assisting antipsychotics. While pimavanserin provides the foundation of our product pipeline we have several additional products in our R&D portfolio. Our pipeline also includes two clinical stage programs in the areas of chronic pain and glaucoma in collaboration with Allergan and two programs in advanced preclinical stages directed at Parkinson’s disease and other neurological disorders.

All of our programs have been generated from internal discoveries and offer what we believe are innovative approaches that may address large potential commercial market opportunities. Overall our pipeline of product candidates led by our Phase III PDP program with pimavanserin, plus the – from ACADIA with multiple product and commercial opportunities and significant growth potential.

Before we review our programs in a bit more detail, let me ask Tom to comment on the first quarter results.

Tom Aasen

Thank you, Uli, and good afternoon. Our revenues totaled $417,000 for the first quarter compared to $450,000 for the first quarter of 2012, and were derived from our collaborations with Allergan, as well as our research grants. Our R&D expenses decreased to $4.4 million for the first quarter from $5.0 million for the comparable quarter of 2012, primarily due to decreased external costs following the completion of our -020 Study.

We expect our R&D expense to increase in future quarters, as we continue to conduct the remaining supporting studies and CMC development necessary to advance our Phase III PDP program to registration. T&A expenses increased to $2.2 million for the first quarter from $1.7 million for the comparable quarter of 2012 reflecting increased personnel costs, as well as increased professional fees.

Finally, let’s turn to our cash position and guidance. We closed the first quarter with $101.5 million in cash and investment securities compared to $108 million at December 31, using $6.5 million of net cash to fund our activities during the quarter.

Looking ahead, following the positive outcome of our FDA meetings last month, we will see a shift in our expenditures in future quarters. While we will save costs as a result of no longer conducting a confirmatory PDP trial, this will be offset by additional costs associated with accelerating the remaining development and pre-commercial activities as a result of our expedited path to NDA filing.

We currently anticipate using a total of between $28 million and $32 million in cash resources to fund our activities for the 2013 year. Importantly, we remain positioned with a solid cash run wake that we believe will enable us to continue to advance and build value in our PDP program, while at the same time, beginning to strategically broaden the clinical profile of pimavanserin.

Let me now turn the call over to Roger who will provide you with an update on our Phase III PDP program.

Roger Mills

Thank you, Tom, and good afternoon. The last several months have been an exciting period for all of us at ACADIA, beginning with a successful result from our -020 Study that we announced late last year. During the first quarter, we completed our analysis of the -020 data set in which we continued to see robust data aligned with the top-line efficacy results.

Dr. Jeff Cummings, who is the Director of the Cleveland Clinic, Lou Ruvo Center for Brain Health, and an internationally-renowned clinician presented detailed results from the -020 Study at the 65th American Academy of Neurology meeting in March. The -020 data showed robust and consistent efficacy of pimavanserin across a wide array of splitting measures. Pimavanserin demonstrated highly significant antipsychotic efficacy in patients with PDP and allowed for maintained motor control.

Highly significant improvements were also seen in all secondary efficacy measures. In addition, significant benefits were observed in exploratory measures of nighttime sleep, daytime wakefulness and caregiver burdens.

Importantly, regardless of whether assessments were performed by independent blinded raters, site investigators or caregivers, clear benefits of pimavanserin were observed. Consistent with previous studies, pimavanserin was safe and well-tolerated in this Phase III study.

The robust and consistent results observed in a pivotal -020 Study afforded us the opportunity to meet with the FDA to discuss the PDP regulatory path. Meanwhile in parallel we continued full-scale preparations during the first quarter for what had been planned as a complementary PDP trial. Our objective for the FDA interaction was straightforward: determine whether the agency would be willing to accept and review a pimavanserin NDA for PDP that was based on the results of our single positive PIVOTAL study together with supporting data from others – from our other studies.

In April, we held a meeting with the FDA. We were delighted the agency agreed that they would file an NDA based on data from the positive -020 Study, together with supportive efficacy and safety data from our other studies. We believe this reflects both the strength of the results demonstrated in the -020 Study along with supporting efficacy and safety data and the fact that PDP is a serious unmet medical need without any approved treatment option.

Importantly, we believe this positive outcome will 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.

With this expedited path our team has been focused on completing the remaining elements of our pimavanserin PDP development program that are needed for submission of an NDA. This includes customary supported studies, including drug to drug interaction studies that are intended to provide appropriate label information for doctors to treat patients in this elderly population who are commonly on several medications. We also have final aspects of the CMC development, including stability testing of pimavanserin registration batches. I’m pleased to report that we continue to make solid progress with these remaining development activities.

We’re also continuing to conduct our Phase III, open-label, safety extension trial, referred to as the -015 Study. This trial involves patients who completed our Phase III efficacy studies and who, in the opinion of the treating physician, may benefit from continued treatment with pimavanserin.

This study, along with a similar extension study from our earlier Phase II trial, has allowed us to generate a large amount of valuable, long-term safety data regarding the use of pimavanserin in patients with PDP. Importantly, we have far exceeded ICH guidelines for required one-year exposures with well over 200 patients having been treated for one year or longer. We also have well over 100 patients who’ve been treated with pimavanserin for at least two years and our longest single patient exposure is over seven years.

Our experience to date continues to suggest that the long-term administration of pimavanserin appears to be generally safe and well tolerated in this often fragile and elderly patient population. We believe that this safety profile provides support for potential of pimavanserin to offer significant advantages relative to current anti-psychotics used off-label for the treatment of PDP.

As we move forward, we intend to request pre-NDA meetings with the FDA later this year to discuss our plans for the NDA submission. Subject to changes that could result from our future interactions with FDA or other developments, we continue to target an NDA submission near the end of 2014.

I’ll now turn the call over to Uli.

Uli Hacksell

Thank you, Roger. This important step forward in our pimavanserin program brings us closer to our ultimate goal of bringing innovative components, like pimavanserin, to the market to improve the lives of patients with neurological and related central nervous system disorders.

PDP represents a large unmet medical need and what we believe is an ideal lead indication, a specialty market opportunity for pimavanserin. PDP is progressive and it’s a persistent condition that recurs in an estimated 40% of Parkinson’s patients and deeply affects the quality of life, if it’s associated with increased mortality, caregiver burden and it’s the major cause of nursing home placements among Parkinson’s patients.

The FDA has not approved any right to treat PDP and neurologists currently face difficult challenges in managing patients with this debilitating disease. We believe that pimavanserin with its well-tolerated, non-dopaminergic profile has the opportunity to be the first in class territory that will effective treat psychosis in Parkinson’s patients without compromising motor control.

While our primary focus is on our first-rate PDP program, we are also preparing to use this program as a foundation to develop and commercialize pimavanserin for other neurological and psychiatric disorders that are under-served by currently available and psychotic drugs. Alzheimer’s disease psychosis, or ADP, is one such indication in which we believe pimavanserin may provide important benefits to patients. ADP affects an estimated 25% to 50% of the more than 5 million Alzheimer’s patients in the U.S.

Similar to PDP, there is currently no therapy route to treat ADP in the United States. Current as with PDP physicians frequently resort to off-label use of anti-psychotic medications to treat ADP. However, existing anti-psychotic drugs may exacerbate the cognitive disturbances associated with Alzheimer’s disease and are associated with numerous side effects. In addition, all existing anti-psychotic medications have a black box warning for use in elderly patients with dementia-related psychosis due to increased mortality and morbidity.

Because of its non-dopaminergic mechanism of action and the favorable safety profile observed to date in elderly patients with Parkinson’s disease, we believe that pimavanserin may also be ideally suited to address the need for a novel ADP treatment that is safe, effective and well-tolerated.

We are planning to initiate the Phase II feasibility study the second half of this year to evaluate the potential of pimavanserin as a treatment for ADP. In this trial, which we refer to as the -019 Study, we plan to evaluate multiple endpoints and use these tricks toward the potential benefits of pimavanserin in this patient population, and to inform us an optimal design for future studies in this program.

We believe that pimavanserin also has considerable commercial potential in schizophrenia and related psychiatric disorders. Last year data from our earlier Phase II co-therapy trial was published in the Journal’s Schizophrenia Research. This trial demonstrated that co-therapy with pimavanserin and a sub-therapeutic dose of risperidone provided an attractive clinical profile.

The treatment, equally effective at higher standard dose of risperidone, but with a much improved side-effect profile and the pass-around set of action. As we advance our Phase III PDP program and prepare for initiation of our ADP trial we will plan for additional studies that we may pursue with pimavanserin in schizophrenia.

Let me now touch briefly on the other programs in our pipeline. Through our long-standing alliance with Allergan, we have two clinical stage product candidates in the areas of chronic pain and glaucoma. In addition, we have two advanced preclinical programs which offer – which may offer new disease-modifying approaches to treat Parkinson’s disease and other neurological disorders.

We come back to initial research in our ER-beta program in the area of Parkinson’s disease through a grant from the Michael J Fox Foundation and we have ongoing preclinical studies for this program as a novel pain treatment supported by a grant from the National Institute of Neurological Disorders and Stroke.

In addition, we are collaborating with Dr. Rhonda Voskuhl of UCLA, a recognized expert in EMD Serono protection, on research aimed at evaluating our ER-beta compound as an innovative approach to targeting neuro-degeneration associated with multiple sclerosis.

In our second preclinical program, Nurr1, our elite program which activates Nurr1-RXR complexes most effective in restoring nurture faction and neuroma health in a preclinical model of Parkinson’s disease. We are continuing preclinical studies in this program under a grant from the Michael J. Fox Foundation. We expect to advance a compound from one of these two programs into development this year in preparation for future clinical trials.

In closing, our success of the past several months sets the stage for what we believe will be a new phase for ACADIA. Our pipeline of product candidates, led by our Phase III pimavanserin program, positions ACADIA with multiple attractive product and commercial opportunities and significant growth potential. We are focused on building additional value in our pimavanserin franchise. And most importantly, all of us at ACADIA remain committed to advancing innovative therapies that will improve the lives of patients suffering from neurological and psychiatric disorders.

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

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). And your first question comes from the line of Jason Butler, JMP Securities. Please go ahead.

Jason Butler – JMP Securities

Hi. Thanks for taking the question. Just wondering if you could give us any more color with the progress on the manufacturing stability studies? For example, have you now completed the manufacture of the three commercial lots? And just if you could give us any more color on when you think you’ll have sufficient stability data to submit the NDA?

Uli Hacksell

Yeah. So first of all, you may recall that the CMC program is the – on the critical timeline for our NDA submission. We have said that what we will need to do is to do stability testing on the regulatory batches and of course we need to manufacture these as well. We haven’t provided any specific details on where we are in this program. All we have said is that it is time limiting for us and it sets the timeframe for NDA to near the end of 2014.

Jason Butler – JMP Securities

Okay, great. Thanks for the added color.

Uli Hacksell

Sure.

Operator

Thank you. And your next question comes from Charles Duncan, Piper Jaffray. Please proceed.

Charles Duncan – Piper Jaffray

Hey, guys. Thanks for taking my question and congratulations on the recent progress.

Uli Hacksell

Thank you, Charles.

Charles Duncan – Piper Jaffray

I appreciate the – all the commentary on the progress to the NDA filing, but I’m wondering if you’ve had any further discussions with European regulatory authorities? And what your thoughts are on next steps in that region?

Uli Hacksell

Yeah. So what, Charles, what we have said is that we will initiate contact with the EMA this year and we expect to have some information about the requirements in Europe next year, so that is clearly very important for us to see if the FDA will follow – if the EMA will follow the lead from the FDA or not. We know that they may do assume, they have the opportunity to do assume, but we clearly cannot predict what the response will be more than – I think that what we are convinced about is that our development program that we are preparing for the FDA will provide a very solid foundation for other regulatory submissions as well.

Charles Duncan – Piper Jaffray

Uli, I know that in the recently read all Phase III, all the sites were from the states. I’m wondering if you have any insights into the standard of care. Are patients similarly treated in Europe with atypical antipsychotics as they are here? And do the regulators over there also have kind of a negative bias towards that practice?

Roger Mills

So, Charles, it’s fair to say that in fact a lot of the recent emergence of concerns around the off-label use of atypicals in these elderly patients, actually a lot of it originated in Europe. So I think it’s pretty fair to say that there is a – at least a similar level of concern for the regulators in the EU as there is in the USA.

And obviously not just the regulators but in a similar manner to the USA, there are many questions asked at parliamentary level in the different countries sort of regarding how patients are under the chemical cautious it’s termed, were basically using the sedative properties of the atypicals to knock the patients out and make them more manageable.

So in terms of sites, we have the standards for care is much the same in Europe as here in all aspects of the patient’s management. And in fact, the – there are, in a number of countries, restrictions on the use of clozapine as an agent due to the very clear safety concerns regarding the usage of that drug.

In our program we have included a good number of European sites in the earlier studies, so we do have good experience of European investigators and we received a great deal of interest from the leading experts in Europe following the – following the announcement of our data at the end of last year and subsequently.

Charles Duncan – Piper Jaffray

That’s very helpful, Roger. Thank you. Perhaps the last question for Tom on the commercial strategy, you folks are very busy getting ready for your first NDA. I’m wondering if you’re still thinking the U.S. market concentration is still pretty good and therefore one in which you might be able to mount a commercial effort. And how is that impacting, if at all, your discussions with potential commercial partners?

Tom Aasen

Yeah, Charles, I think you hit it on the head. I think we believe that this particular market is really ideal for commercialization. It’s really a classic specialty neurology market, very centralized and can be focused and addressed with a very effectively with a dedicated sales force.

So that’s clearly our strategy. And now our focus is on building the value in the pimavanserin program, not only advancing it clearly through the NDA and preparing ourselves with the pre-commercial activities for a successful launch, but also to begin the strategy of lifecycle management of the drug to extend it into these other indications, since we believe it has broad potential. So that’s clearly the focus we have, and I think we’re excited about preparing for that next stage of ACADIA.

Charles Duncan – Piper Jaffray

Thanks, Tom, Uli, Roger, for taking the questions.

Operator

Thank you, and your next question is from Alan Carr, Needham. Please go ahead.

Alan Carr – Needham

Taking our questions. I just wanted to dig a little bit more into the commercial opportunity that you guys see, and I’m wondering if you could give us some comments on how you see things breaking out between nursing homes versus a more retail opportunity? Which do you guys think you’re going to go after first?

Uli Hacksell

So, we think the manufacturers will look specifically at the kind of patients that we have recruited for our -020 Study on previous studies. These are not patients from nursing homes. And we think that’s the ideal-term initial population for pimavanserin. In fact, we believe that we may delay the placement to nursing homes by providing pimavanserin as a therapy for the psychosis.

So, clearly as you know, eventually these patients are likely to have been to nursing homes, and in that case it will clearly continue with our pimavanserin therapy. We believe that pimavanserin will be a daily chronic therapy for patients with Parkinson’s psychosis.

Alan Carr – Needham

Great. And then just one clarifying question on the cash spend guidance. Was that for the rest of the year or is that total for the year?

Uli Hacksell

That’s total for the year.

Alan Carr – Needham

Total for the year, okay. Thanks very much for taking my questions, guys.

Uli Hacksell

Thank you.

Operator

(Operator Instructions). Your next question comes from the line of Bob Hazlett, ROTH Capital. Hey, your line is open. Please go ahead.

Bob Hazlett – ROTH Capital

Finish conducting the next Phase III before really considering licensing in Europe, so the question is, now that you don’t have to do it, at what point would you be engaging in those types of discussions? Thanks. I also have another question.

Uli Hacksell

So Bert, I think we missed the first part of your question, so could you please repeat that?

Bob Hazlett – ROTH Capital

Sure. Sorry about that. The question is really I believe in terms of licensing and partnering internationally, the strategy I believe was to finish the second Phase III and then engage licensing partners overseas. Now that you don’t have to do that, how has that strategy with regard to international markets, in particular with regard to licensing the compound, how has that changed?

Tom Aasen

Sure. I think Bert, as we said, our current focus right now is on building the value of the program. That’s where we’re at, so clearly moving the program forward for the NDA, we – as Uli mentioned earlier we believe that will be a strong foundation for regulatory submissions in the other regions. We clearly will, as part of our process, go through the dialog with the EMA to understand how they will view again whether or not we’d have the opportunity to submit on the basis of one study as we have in the U.S. We’ll determine that later.

I think as it relates to our view we want to continue to move the program forward, build value in it. As we move toward the NDA, we certainly have the opportunity to consider partners that could help us position for commercialization X-U.S. That’s something that we have the flexibility of time to consider and clearly as we move the program, we believe we’re adding additional value. And we’ll do so not only in the U.S. but in other regions as well.

Bob Hazlett – ROTH Capital

Okay. And thank you. Just one on Allergan and the collaborations there, you’ve mentioned it again, in terms of timing for when we might hear anything with regard to those collaborations, you’ve long said that Allergan is in control of that data release. Is there any expectation that we should hear anything for those collaborations in the next 12 months or 24 months? Or can I pin you down at all with regard to any type of data release or movement there? Thanks.

Uli Hacksell

Let me take the question. In reality, as we have said previously, Allergan is in control of data announcements here. And we will simply come back to you with more information when we are able to do so.

Bob Hazlett – ROTH Capital

Thanks very much.

Operator

Thank you. And your next question comes from Jason Napodano with Zacks. Please go ahead.

Jason Napodano – Zacks

Hey, guys. Thanks for taking the question. With the potential of – could you talk a little bit about the potential for pricing for a drug like pimavanserin? You mentioned the safety concerns with clozapine, we know antipsychotics are used off-label with limited efficacy and the lack of any approved treatment option for PDP or ADP, so it seems like there would be some pretty strong pricing mechanisms here, but I’m wondering if you could talk about that a little?

Uli Hacksell

Yeah. So while we don’t want to comment specifically on pricing, but I think we can’t really say, but we believe that PDP represents a major unmet medical need. And at the same time, there is nothing approved for this indication. We are the first in a completely new class of antipsychotics that represent safe, well-tolerated and effective therapy for this.

So taking this all together, we believe that that in itself can be used to make a point for significant pricing. But when it comes to the specific amounts that we expect for the future, we have to come back to that at a later stage. The important thing is that we deal with a major unmet medical need without any available therapy today.

Jason Napodano – Zacks

Thanks, guys.

Operator

Thank you. And your next question comes from Juan Sanchez, Ladenburg.

Juan Sanchez – Ladenburg

Good afternoon, guys. My question is what kind of surprises do you think will emerge from the pre-NDA meeting with the FDA? In other words, what kind of topics are you going to discuss that you didn’t already discuss in the April meeting, and whether or not the – how much liability work do you need to have pre-filing is one of the topics for discussion in the upcoming meeting?

Roger Mills

So just to maybe approach it this way, but in the meeting we’ve just held with FDA, we submitted a substantial briefing package encompassing all the efficacy and safety data we’ve generated in the program, and it was on the basis of the totality of that briefing package that FDA agreed to file the NDA. Obviously, in the background with any drug development there are a number of other factors that we need to complete to ensure a complete NDA.

We’ve discussed the CMC earlier and also the clinical studies such as the drug-drug interactions. These are very standard and important in the population such as patients with Parkinson’s disease because they’re on many other medications to treat various aspects and facets of their Parkinson’s disease and also the many other issues that they face, cardiovascular, et cetera, et cetera.

So we really do the drug/drug interaction studies to enable the label guidance to facilitate safe prescribing of not only pimavanserin, but other agents when used in conjunction in these fairly complex patients. This is pretty standard. In the meetings with FDA, we’ll go through to ensure that we’ve got all the boxes checked and therefore that we will be able to file the NDA in the manner that they require. We’re not anticipating there will be any issues in that. I think as I started out, the FDA agreed to file the NDA based on the complete, fairly comprehensive briefing package that we supplied to them.

Juan Sanchez – Ladenburg

Thank you, guys.

Uli Hacksell

Thank you.

Tom Aasen

Thanks.

Operator

Thank you. And your next question is from Brian Lian, SunTrust.

Brian Lian – SunTrust

Hi. Thanks for taking the question. Roger just touched on this a little bit in his last answer, but I’m curious if there are any unique drug/drug interaction studies required ahead of the initiation of the Alzheimer’s Disease Psychosis trial?

Roger Mills

There are no specific requirements ahead of doing that. It is very similar populations in so many ways, and we’ve already discussed with FDA the option of combining the databases because really the challenges faced by patients with late-stage Alzheimer’s disease is very similar to the challenges faced by late-stage Parkinson’s Disease patients. So we’re not anticipating there that there needs to be any preliminary studies before embarking on that study.

Brian Lian – SunTrust

Okay. Thanks. And then with the – the Alzheimer’s disease psychosis trial initiating a – I think Uli mentioned that multiple end points were planned, but I just wanted to clarify if the SAPS would still be the primary efficacy measure for Alzheimer’s disease psychosis?

Roger Mills

No, you wouldn’t be using the SAPS, we’re using the NPI as the primary end point in this population. It’s well tried and tested in the Alzheimer’s arena and well-validated in that arena. The SAPS really lent itself very much to the Parkinson’s patients that we’ve looked at.

These patients that are far more demented with Alzheimer’s, it’s impossible for the patient to input into the rating scales and therefore we’ll use the NPI which, as I say, is well-validated and very nicely offers us a broad array of indicators and potential benefits of the drug in the population. And then this is the first opportunity we’ve had to really explore the potential utility. We’d really like to have a look and see where the best bang for the buck will be with the drug in this population.

Brian Lian – SunTrust

In the NPI, are some of those components similar to some of the components that were evaluated in the -020 Study? Or in any of the other studies?

Uli Hacksell

Oh, absolutely. I think in terms of the clinical expression of the psychosis and Alzheimer’s disease, I think as we already mentioned, it’s very similar to that, that you see in PDP. It’s driven by hallucinations and delusions. It’s probably more prominent in respect to delusions to hallucinations in PDP.

Certainly earlier on, hallucinations tend to be the dominant element of the psychosis though even in PDP, as patients become more demented, delusional symptoms become more prominent. So again, there’s a lot of similarities between the two and the key area we’re looking at is the psychosis, which is so similar between the two, hallucinations and delusions.

Brian Lian – SunTrust

Okay. Thanks very much.

Operator

Thank you. And the next question comes from George Zavoico, MLV & Company.

George Zavoico – MLV & Company

Hi. Good afternoon, and congratulations on the tremendous progress you’ve made in the last quarter and subsequent to that. As a follow-on to Brian’s question, when you did the SAPS in PDP, you clearly found some elements in the SAPS that weren’t related to the PD psychosis. Do you expect the same sort of thing in NPI? Is that a measure of more than just the psychosis and Alzheimer’s disease patients, and is that metric applied by caregivers as well as the physician investigators?

Uli Hacksell

The difference between the two, the NPI was specifically developed for patients with Alzheimer’s. SAPS was developed for schizophrenia patients, focused around the positive symptoms. Therefore, the adoption of that from schizophrenia meant that inherent within the scale, there were still some remaining items that really reflected schizophrenia psychosis as opposed to the neurogenesis psychosis that we saw with PDP. Hence, as we acquired experience using the SAPS in the PDP population.

We were able to adapt that and refine it to really reflect the symptoms that patients with PDP were suffering from. The NPI, as I mentioned, was developed for patients with dementia, and therefore is more specific and we wouldn’t expect to see or wouldn’t expect to have the need to further refine the endpoint to reflect the benefits that we expect to see.

George Zavoico – MLV & Company

Okay. And just like with PDP, I expect you’ll have a number of other, I think you already mentioned, the secondary endpoints like caregiver burden and that sort of thing for the ADP as well. I mean you’re going to be as thorough as you possibly can be, as you were with PDP, I imagine?

Roger Mills

Yes, and we want – as I was saying earlier in terms of the endpoint, it does enable us to look at different aspects of the patient’s condition. However, one of the key things we have learned on the way through is that we do try to restrict interaction between the caring staff, the professional staff and the patients because we’ve found that that actually enhances placebo response, which is clearly something we don’t wish to do.

We want to be comprehensive in the way that we look for improvements in symptomatology, but at the same time there is often, sort of frequently, a great danger of employing too many assessments of patients that actually may not offer a great deal more information, but may actually add to placebo response. So it will be a considered balance in how we rate these patients.

George Zavoico – MLV & Company

And so, having said that though, I think you’ve mentioned previously that the ADP psychosis – sorry, the AD psychosis, differs from PDP in certain respects, so the NPI would not have been applicable to Parkinson’s disease in hindsight?

Roger Mills

Yeah. I mean, you can use it in PDP, but it was more developed for patients who have a higher degree of dementia.

George Zavoico – MLV & Company

Oh, okay. I see. And finally, just to the...

Roger Mills

And let me just state that both, both sets of patients, the dementia increases in each of them. Obviously in Alzheimer’s, the initial characterization of the disease is by dementia. But even in PDP, as the brain further degenerates, dementia becomes more important in those patients.

George Zavoico – MLV & Company

Okay, and then on a final brief question for the ADP trial that you projected to begin in the second half, would that be just North America? Or would you include some European sites as well?

Roger Mills

We’re actually assessing the sites right now, but it will likely certainly include some European.

George Zavoico – MLV & Company

Okay. Thank you very much. Look forward to the next update.

Roger Mills

Thank you.

Uli Hacksell

Thanks so much.

Operator

Thank you. Dr. Hacksell, please proceed to closing remarks.

Uli Hacksell

Well thanks again to everyone for joining us on today’s call and for your continued support. We look forward to updating you in the future on our ongoing progress. Thank you so much.

Operator

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

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