ACADIA Pharmaceuticals' Management Presents at Morgan Stanley Healthcare Conference (Transcript)

Sep. 9.13 | About: ACADIA Pharmaceuticals (ACAD)

ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)

Morgan Stanley Healthcare Conference

September 09, 2013 09:25 am ET

Executives

Uli Hacksell - President, Chief Executive Officer, Director

Thomas Aasen - Executive Vice President, Chief Financial Officer and Chief Business Officer

Analysts

Sara Slifka - Morgan Stanley

Sara Slifka - Morgan Stanley

All right, I think, let's go ahead and get started here. Welcome, everyone, to the 2013 Morgan Stanley Global Healthcare Conference. I am one of the biotech analysts at Morgan Stanley, Sara Slifka and I am joined here on stage with ACADIA Pharmaceuticals.

Just a few things before we get started. This is open Q&A, so feel free to ask questions. Then, all disclosures, personal holdings disclosures are on the Morgan Stanley website, www.morganstanley.com.

With that, we have Uli Hacksell, CEO and Thomas Aasen, CFO, with us today. I think, maybe just to start to get everyone on the same page, Uli, we can just start with the brief overview of the company and what's been going on recently.

Uli Hacksell

Thank you. We gave you a short presentation on ACADIA. You see it's a biopharmaceutical company with an interesting pipeline of drug candidates that address major pharmaceutical markets.

Our pipeline is led by pimavanserin, which is currently in Phase III clinical study or a Phase III stage for Parkinson's disease, psychosis.

Pimavanserin is a proprietary drug. We have kept all the rights to pimavanserin and it has very strong intellectual property position. Like all these drug products in our pipeline, pimavanserin loss is carried by ACADIA.

We have had some quite exciting news about pimavanserin recently, starting out with the data from a Phase III clinical trial that we presented in November, last year. Data were stellar, showed a highly significant and antipsychotic activity of pimavanserin in a six-week study of patients with Parkinson's disease psychosis for PDP.

Regardless how we measured the antipsychotic activity and regardless of who measured the antipsychotic activity, we had highly significant improvement in psychosis as compared to placebo.

In this study, we also saw significant benefits on nighttime sleep by the Parkinson's psychosis patients and we also saw an improvement in daytime wakefulness. These observations are important, because Parkinson's patients in general and Parkinson's psychosis patients in particular, suffer from great sleep problems, so we think that the sleep benefits of pimavanserin represents another beneficial action of the drug for these particular population.

We also saw a highly significant improvement in caregiver burden. This is important, because caregivers suffer a lot when the patient has Parkinson's psychosis. In fact, the psychosis is the major reason why Parkinson's had to go to a nursing home. The caregivers cannot deal with the patients any longer and there is no therapy for Parkinson's psychosis today.

The antipsychotic drugs are now tolerated by the patients after patients at effective doses, because they counteract the therapy for Parkinson's disease itself, the dopamine replacement therapy, so we think that we have something very exciting to offer with pimavanserin, which is safe, well-tolerated and effective, when it comes to treating the psychosis in these patients.

More recently, we had another interesting piece of news based on our discussions with the FDA. The FDA agreed with us that we could file, or that they would file an NDAs for pimavanserin based on the one pivotal study that I just spoke about, and supportive studies that we had conducted previously.

This is something that doesn't happen and almost never has happens or never has happened in the site creation of the FDA, so I think it's a reflection of the strength of our data and of the high unmet medical need for this indication.

With this, we are moving on towards completing what remains to be done before we can submit an NDA. That includes some additional CMC studies, which are essentially box checking activities and some remaining drug-drug interaction studies, which are also box checking activities, so we are very excited about the progress with pimavanserin for Parkinson's psychosis.

Now, another reason why we are excited about pimavanserin is that, the pharmacological mechanism of pimavanserin is that of a selective, non-dopaminergic serotonin antagonist. That particular mechanism of action and the consequential safety and tolerability and efficacy makes it very interesting through wide range of neurological indications, which are currently searching for a good therapy. Antipsychotics drugs have the black box label for use in these patients.

They increase the mortality of these patients. They increase the dementia of patients with dementia and pimavanserin doesn't have these weaknesses, so we are therefore excited first about moving onto a secondary indication, Alzheimer’s psychosis or ADP, starting later on this year with a Phase II study that will really relieve, we hope, the efficacy, safety and tolerability of pimavanserin for this indication as well.

I want to mention that, also in ADP we lacked any approved therapy (Inaudible) just like in PDP. We think there are many additional opportunities to build the pipeline, to grow the pipeline of pimavanserin for a range of indications.

Our third priority will be to explore the full potential of pimavanserin. That's in adjunctive schizophrenia therapy. That's an adjunctive to low doses of antipsychotics to obtain a better and well-tolerated antipsychotic therapy in Schizophrenia.

We also see a range of other neurological indications that we want to explore with pimavanserin, including Lewy body disease psychosis. This is an area where antipsychotics are particularly fully tolerated under pimavanserin key provide the very nice additional advantage.

I think that as we are looking forward to some very exciting time ahead, first, of course moving towards the NDA submission as we have guided will happen near the end of 2014.

Moving into the Alzheimer's disease psychosis study that would start later on this year. Finally also starting to think about more in detail about schizophrenia study with pimavanserin.

That concludes my quick presentation.

Sara Slifka - Morgan Stanley

Okay. Wonderful. Great. Maybe we can start with the NDA filing. You mentioned you have some CMC studies lapping some DDI studies. What's really the rate-limiting steps to getting this NDA?

Uli Hacksell

When we were planning our Phase III program initially, we did not expect that the FDA would give us the opportunity to buy based on bond pivotal studies, so the whole program was planned based on two pivotal studies and those would be done sequential.

When we heard from FDA that we would be able to file based on only bond pivotal, we of course tried to squeeze all remaining activities as much as possible, but one thing that you cannot squeeze is, stability testing. What is on the critical timeline here is the CMC studies that remains to be done to fulfill the requirements by the FDA, and those include generation and stability testing of regulatory batches.

We also had to conduct, as I mentioned, some additional box checking activities and these include DDI studies, drug-drug interaction studies. I say box checking activities basically because, we have already tested drug-drug interaction to rely in our long-term study.

All those patients are on L-DOPA, other dopamine agonists and on additional medications and we have not seen any problems of the tolerability or safety nature of pimavanserin.

Sara Slifka - Morgan Stanley

Okay. Great. You recently hired a Chief Commercial Officer, maybe suggesting the beginning of your building out your kind of marketing strategy here. What is your marketing strategy and how many factors you are going to need? What physicians are you targeting? Can you speak to that?

Uli Hacksell

Yes. Let me first say that we are very excited about having hired Terry Moore as the Chief Scientific Officer. He has a great experience with multiple drugs, which are relevant to pimavanserin and antipsychotic drugs, antidepressant drugs et, cetera, so Terry will be responsible for ensuring that all the premarketing activities that are required for a successful launch.

We intent to launched pimavanserin ourselves in the U.S. We think that PDP, Parkinson’s psychosis is a perfect indication for us. We can address big prescribing doctors with a relatively small sales force ranging from somewhere between 70 to 80 representatives, state representatives and that's perfect for us to entering for the commercial base, so we are very excited about this.

We have the fantastic situation with pimavanserin that we own all these intellectual rights worldwide. We can decide what we want to do outside of the U.S. If we want to partner or not, we don't have to partner, but we can if we wish to, so that's a great position to have. In the U.S., our clear intention is to move forward alone.

Sara Slifka - Morgan Stanley

Are there any questions in the audience? What are your thoughts around pricing?

Uli Hacksell

We think that based on the large unmet medical need for Parkinson's psychosis, based on the fact that there is nothing approved for this indication and that we have the new type of drug with the new mechanism of action for this indication, I think all of these things will justify very significant pricing. We think that thinking about pricing, the ballpark of new branded antipsychotic drug is a reasonable thing.

Sara Slifka - Morgan Stanley

Then in terms of the market, how many Parkinson's patients have moderate to severe PD psychosis and do you have a sense as to how many of these patients are currently being treating, being treated off label with antipsychotics?

Uli Hacksell

Let me start to talk about the size of PDP population in the U.S. In the U.S., we have about 1 million patients suffering from Parkinson's disease. We know that about 40% of these patients suffer from psychosis. We also know that also out of these psychosis patients, we have about one-third mild, one-third moderate and one-third severely psychotic patients.

We expect that therapy for these patients will occur in all three segments, particularly in the moderate and severe segments, but also in the milder patients, because if you read the more recent literature, it's apparent that the experts believe that early prevention here will be important.

The reason is that psychosis in Parkinson's patients is a progressive and constantly worsening condition and the belief is, if you address it quickly at the mild stage, it will have a much better kind of positive outcome than you see today.

When it comes to the last part of your question, how many of these patients that are treated, we don't have the answer to that. We know that (Inaudible) was frequently used psychotic drug to treat this indication with today or I should say not treat, I should say to give these patients because if you look at the literature again and you look at the controlled studies that have been done with (Inaudible) for patients with Parkinson's psychosis.

You will find out that in these studies, (Inaudible) has not shown any effects at all. It's used at very low doses, so it's tolerated by the patients, but at these low doses, it's not effective. It's really not a good therapy and we hope that with pimavanserin, we can provide a safe, well-tolerated and effective therapy.

Sara Slifka - Morgan Stanley

Okay. Great. You hinted at Europe before in some of the comments you made and that there is this possibility of partnering versus not. Is your kind intent to partner and is the 020 study sufficient for approval there or we need another study for Europe?

Thomas Aasen

Let me address the partnering first. Right now, the focus we have is marching to the NDA in the U.S. As Uli said, having all the rights, we like that a lot.

We believe as we move forward, we are building value not only in the PDP program, but we are also branching out starting with the lifecycle extension moving in the Alzheimer's psychosis as well, so that's where our focus is.

We believe as we along at any stage, we can elect a partner if that make sense, but we don't have the burden or we don't need to do that. We are in a great position in terms of capital, we can move forward and build all the value ourselves. Ultimately, we think it make sense commercially in some of the regions, particularly Asia to link up with the partner to help us commercialize.

The second part of the question maybe Uli wants to address just with respect to where we stand in the E.U. except one of the studies.

Uli Hacksell

We cannot really predict what the EMA will do with pimavanserin. We certainly believe that we have a very strong package that we will provide to the FDA.

We think that we have very strong arguments by the EMA, would follow the lead by the FDA, but that's what we think. The EMA is a different organization than the FDA. We know that they have the ability based on their regulations to approve a drug based on one pivotal study, but whether they will do that or not is something that we cannot really answer today. We have to really start the interaction with EMA later on this year and over time, we will, of course, learn much more.

Sara Slifka - Morgan Stanley

If EMEA wanted another study is that something that you think you would run and see the market potential in Europe as similar to that in the U.S.?

Uli Hacksell

Well, when it comes to market potential in different parts of the world, really the biggest market is in the U.S. It will dominate the market for any drug, in fact, in the way it is today and Asia and Europe represents perhaps equally launch additional opportunities.

Clearly, it's very hypothetical to think about what the EMA may ask us for, so I cannot really answer your question before understanding exactly what they would ask us. Now, we don't expect that even in the worse case that what EMA would ask us for a lot of things, but I could prefer to wait for that session to be a little bit more certain about.

Sara Slifka - Morgan Stanley

Okay. All right. Any questions? Yes. Down here. I think, we may have them coming. In the third row, here.

Question and answer session

Unidentified Analyst

The timetable you say the CMC studies will take about how long and then can you actually get the NDA, which timetable?

Uli Hacksell

What we have guided timing for submission on the NDA is near the end of the 2014, based on the 12 months stability testing requirements.

Sara Slifka - Morgan Stanley

Any other questions? Yes.

Unidentified Analyst

Can you just discuss the addressable market for Alzheimer's?

Uli Hacksell

Alzheimer's disease psychosis, because I guess that's your question. Alzheimer's disease psychosis is a huge market opportunity, so PDP is a large market. ADP is the huge market, three to five times larger than PDP.

If you think about the U.S. only, we have about 5.3 million patients with Alzheimer's disease in the U.S. and somewhere between 25% to 50% of these patients suffer from psychosis. There is no acceptable therapy for these patients.

Today there is an overuse of antipsychotic drugs that have black box label for use in these patients and the black box label is there, because the antipsychotic drugs that are used increase the mortality of the patients.

In addition to that, they worsen the dementia in the patients, so there is an overuse of drugs which are clearly unsuitable for these patients and we are talking about the lots of patients and we believe that pimavanserin with its safe, well tolerated profile, will provide the first really acceptable therapy for these patients and it's a huge market.

Unidentified Analyst

Can you talk about the difference between Parkinson's disease psychosis, Alzheimer's disease and why they are similar different and how the drug should or may not work as well, or differently between these two conditions?

Sara Slifka - Morgan Stanley

Let me try to make it this in a simple and a understandable way. First of all, there are key differences between Parkinson's psychosis and Alzheimer's disease psychosis.

The major difference is that the Alzheimer's psychosis patients are very demented. Okay? Parkinson's disease patients maybe demented after late stage of the disease, but initially they may not be much demented at all.

For example in our studies that we have conducted, we had only included mildly demented Parkinson's patients, so there is big difference between the two diseases, the pathophysiology is different, so the Parkinson's disease, as you are probably are aware, you have dopaminergic neurons style.

In Alzheimer's disease, they have initially mainly colonology and eventually all times of the neuron style, so you have different types of brains in the two cases, but the symptoms have similarities between ADP and PDP.

For example, the most typical hallucinations that you see in these diseases are visual in character, so patients see things that don't exist. We know that visual hallucinations emanate from stimulation of the 5-HT2A receptor, the receptor which is the target for pimavanserin, so this is the same receptor that is activated when people take hallucinations like LSD for mescaline and see things that don't exist.

We know that some of the symptoms from these diseases come from the same kind of receptor activation and we know that the brains that I am talking about, the Parkinson's brain and the Alzheimer's brain are different in the way that cause an overstimulation of the 5-HT2A receptors, so we think that's a very important receptor in causing the symptoms of those indications.

I think the key thing to understand here is that we don't treat the diseases themselves. We treat the symptoms of the disease and the symptoms emanate from the 5-HT2A receptor in both, the disease although the types of physiologies are different, but they coincide with 5-HT2A receptor.

Sara Slifka - Morgan Stanley

Okay. Is there any reason why Alzheimer's patients might respond differently on the safety side than Parkinson's patients?

Uli Hacksell

Not at all. We have in fact discussed ADP with the FDA, previously. We know that when it comes to safety population, the FDA has said that and we submit an NDA for ADP, we can use the safety population that we have generated for PDP, so they look at the populations as very similar or identical in terms of safety.

Sara Slifka - Morgan Stanley

Okay. Great. What are your kind thoughts around the path forward in ADP? What end points are you most focused on in your ongoing Phase II and what do you expect registrational studies to look like there?

Uli Hacksell

Let me say first of all that we have not yet started the ADP study. We will do that later on this year. When we initiate that study, we will come up with much more detail about the time and the thinking around the Phase II study in particular. The way we have designs the Phase II study is so that it will teach us as much as possible about how to optimally design the Phase III study.

We look at the pivotal study as way for us to learn much more about the deal design of the study, so what we are using now as the end point for the ADP studies in nursing home variation of the MTI scale and that's a scale that addresses a lot of things, not only hallucinations and illusions which are part of the psychosis, but also other behavioral symptoms of patients with ADP. That include insight aggression, anxiety, et cetera, we will look at these things in total and see what are the most appropriate endpoints to use in Phase III, and we will come back with much more information about this later on this year.

Sara Slifka - Morgan Stanley

Great, and so if you were to reach the market in ADP, would you need a significant increase in you sales force or is this a situation where you might need to bring a partner on board or is this still manageable as a solo company?

Thomas Aasen

Yes. It's very interesting. First, there is a lot leverage that exists within the targeted market for PDP, which is the neurologist. You see a lot of these centers that see the Parkinson's patients with psychosis also have Alzheimer's patients, so we see a lot of synergies and leverage ultimately that win the ADP is a much larger population as Uli was mentioning and so you are now branching out much more broadly. There will be a more of a nursing home angle to it and more geriatric site, so we will need additional sales efforts at that time.

The way we view it now is, we have the luxury of time to determine how we want to approach that. We certainly could expand our sales efforts or we could chose to team up in some way to address a portion of it and we could maintain with a broader specialty neurology, so we can determine that over time, but initially the focus is on the PDP market and we will then be able to prepare ourselves for ADP as well.

Sara Slifka - Morgan Stanley

You mentioned schizophrenia has the potential (Inaudible) beyond PDP and ADP. When is it that can move forward with trials there? What are they rate-limiting steps to getting that moving along?

Thomas Aasen

We are excited about schizophrenia based on the previous Phase II studies that we have reported and published last year. We want to do everything that we do well.

So far we are focused on PDP, we are on the way to put the NDA together, the next focus area is ADP, we want to make sure that we do the ADP study in the best possible way. When we are up and running the ADP study, it's time for us to take the next step and look at schizophrenia, so it's nothing else that is time-limiting more than our focus.

We know a lot about schizophrenia. We have learned a lot from our previous Phase II and we believe that schizophrenia is a great opportunity for pimavanserin, but we want to take one thing at a time. Schizophrenia is our third objective, third priority.

Sara Slifka - Morgan Stanley

Okay. Great. We have another question.

Unidentified Analyst

A couple of questions, so what is the actually overlap between the Alzheimer's disease and Parkinson's disease? I assume there is some overlap between the two.

In terms of off-label usage, from what I understand in this area, people basically are trying everything under the sun to manage these patients and what is your view on what's kind of been done in terms of off-label usage and where that could fit in, in terms of the flexibility of physicians' position to try to approach?

Thomas Aasen

Let me start to address the first question, overlap between ADP and PDP. Not so much. There is a lot of overlap between Lewy body dementia and Alzheimer's disease and the psychosis in the two interactions, so that's where you would expect to see overlaps and in fact mild Alzheimer's disease and Lewy body dementia are recently we diagnosed and it takes time until you realize that the Lewy body dementia patient is impact that's an optimal patients, but we don't have that kind of mix up when it comes to psychosis, so that is not the problem.

When it comes to open-label, you will see we don't speculate on that, so what I can say is that we believe that pimavanserin will be an ideal drug, essentially to treat all psychosis for older patients with neurodegenerative disease and that we hope to get that kind of label with the drug. It will take some time for us to get there.

Sara Slifka - Morgan Stanley

Okay. Great. Unfortunately, we are out of time so we have to leave it there, but thank you so much for joining us and thank you Uli and Thomas for the update.

Uli Hacksell

Thank you.

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