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Neurocrine Biosciences, Inc. (NASDAQ:NBIX)

Q1 2014 Earnings Conference Call

April 30, 2014 5:00 PM ET

Executives

Kevin Gorman – President and CEO

Jane Sorensen – IR

Tim Coughlin – CFO

Chris O’Brien – Chief Medical Officer

Analysts

Ian Somaiya – Nomura Securities

Robyn Karnauskas – Deutsche Bank

Thomas Wei – Jefferies

Phil Nadeau – Cowen & Company

Operator

Good day everyone and welcome to today’s program. At this time, all lines are in a listen-only mode. However, later in the program, you will have the opportunity to register to ask a question. Today’s conference is being recorded.

And now, it is my pleasure to turn the conference over to Kevin Gorman. Please go ahead sir.

Kevin Gorman

Thank you very much, and welcome everyone to Neurocrine’s Q1 earnings call. I’m joined today by Tim Coughlin, our CFO; and Chris O’Brien, our Chief Medical Officer.

We’ll go through an update of the financials and also our R&D programs. Before we get started, I would like to Jane to read our Safe Harbor statement.

Jane Sorensen

Good afternoon. I want to remind you of Neurocrine’s Safe Harbor caution. Certain statements made in the course of this conference call that state the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements, which are subject to risks and uncertainties.

Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company’s SEC filings, including but not limited to the company’s Annual Report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the Investor Relations page on the company’s website at neurocrine.com.

Any forward-looking statements are made only as of today’s date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Kevin?

Kevin Gorman

Thank you, Jane. Tim, do you want to give a financial update?

Tim Coughlin

Sure, good afternoon everyone and thank you for joining us today. Our first quarter operating results were exactly what we had expected, our net loss for the quarter is $11.8 million or $0.17 per share, net loss from the first quarter of last year was $12.1 million or $0.18 per share. There are two main drivers in our financial results when comparing the first quarter of 2013 to the first quarter of 2014. The primary drivers lower external development cost.

During the first quarter of 2013, we had our two Phase II studies in tardive dyskinesia Kinect 1 and Kinect 2 in the midst of recruiting in treatment. The placebo controlled portion of both of these studies were substantially completed in December of last year, and that first quarter of 2014 has been devoted to ramping up these two studies as well as preparing for the End-of-Phase II meeting with the FDA. Both of these efforts are more internal focused with our employees completing a lot of the work, thus resulting in lower external development expenses, we typically see during the quarter.

Now external development cost for the first quarter of 2014 were $2.5 million lower than the same quarter in 2013. This decrease in external development cost was offset by an increase in share-based compensation expense. We typically grant annual equity awards in the first quarter of the year, this year we granted approximately the same number of time based equity awards as we had in prior years.

However, because of our stock price on the date of the grant the Black-Scholes valuation for each equity award more than doubled over 2013 levels resulting in a significant increase in non-cash expense for the same number of awards. Additionally, I should add that our average option burn rate over the past three years as been less than 3%, which is well below -which is below the meeting option burn rate for industry growth.

As a result of the entire Black-Scholes valuations, we expect a share-based compensation expense to increased $10.8 million for all of 2014 compared to the $6.8 million, we expensed last year. The increase in share-based compensation expenses also the primary reason for the increase in G&A expense quarter-over-quarter.

Now looking forward to expect our R&D expenses increased during the year as we move into Phase III development for tardive dyskinesia. Our G&A cost should remain in this relative $4.2 million range per quarter for the balance of the year. In February, we raised approximately $133 million through a fully marketed equity offering will replace 8 million shares of common stock.

We launched the offering on February 25, and priced at the following day. After one day of marketing this offering was multiples oversubscribed with high quality long focused investors. The proceeds from the offering significantly bolstered our balance sheet that we now expect in 2014 with approximately $230 million in cash in investments.

Our net operating burn for 2014 remains unchanged approximately $43 million to $47 million for the year and the net loss remains unchanged estimated currently at $56 million to $61 million. Our expected loss per share has been updated to range from $0.75 to $0.81 per share based upon approximately $75 million average shares outstanding.

In closing, we planned to filing our 10-Q tomorrow with the SEC. And with that, I’ll turn it back over to Kevin.

Kevin Gorman

Thanks Tim. So early in the year, we released the positive results from Kinect 2 and since then we’ve been working diligently on all facets of the business to set the stage for pushing VMAT2, the entire program forward Tim just talked about, how we thought prudent in order to raise additional capital to be able to do this. And now Chris will take us through the activities that have been taking place for the balance of this quarter to get us ready for Phase III.

Chris O’Brien

Thanks Kevin. And good afternoon, thanks for joining the call. So as Tim and Kevin have mentioned, we’ve been intensely focused internally on getting ready for our upcoming End-of-Phase II meeting for tardive dyskinesia. What that means is that we’ve spent the early part of this year working on closing out the safety follow-up and the closeout activities around the Kinect and Kinect 2 study. We’ve spent a lot of time working on the PK, PD modeling that is the basis for dose selection and dose justification that we will bring to the FDA in our proposal for Phase III. We’ve been completing some study reports, doing some additional integration of Phase I, Phase II safety data set and working with our regulatory and other consultants preparing for this End-of-Phase II meeting.

As you may be familiar, the process for this type of meeting is a type of AbbVie meeting and we have successfully submitted our meeting request to the FDA with the specific questions that we seek there consensus on those kinds of questions relate to the nature of the Phase III trial and the Phase III program, the population of subjects that were interested in studying the duration of the trial, the number of subjects, the primary end point, the statistical methodology, the dose and dose regimen, the way we collect safety data, the skills that we use and all the things that constitute a registration or pivotal trial.

So that meeting request has gone in and we successfully received and as it is a Type-B meeting request, the agency regulations or guidelines are they grant that meeting within 60 days, so we’re waiting to hear exactly what data will be in June, but looking forward to that meeting with a well prepared set of materials. Once we get the exact date, 30 days and the grant for that meeting we submit a briefing package with all the extensive materials and details covering the things that I have just mentioned.

So that’s going on as we speak and while that End-of-Phase II preparation is under way, we are also in the process of identifying qualified sites for the conduct of the Phase III trial that we planned to start in the fall and currently we’re in the process of basically interviewing or qualifying more than 60 sites here in the U.S. and Canada for the Phase III program. And this will put us in a good position after the End-of-Phase II meeting to begin the process of working with the IRBs and signing the contracts for these sites and getting up in running for the Phase III trial in the fall.

In addition, the data from the Kinect and the Kinect 2 trial, as you know, I think we’ve mentioned before, have been submitted as for presentation at the international congress for Parkinson Disease and Movement Disorders, this is the Movement Disorder Society international congress, this is taking place in June in Stockholm, Sweden and we will be presenting along with our co-authors both the Kinect 12-week data and the Kinect 2 efficacy and safety data that’s two postures on the 11th of June in Stockholm, Sweden and we look forward very much to having a chance to talk with my colleagues and then moving to sort of community about these data and to that is a good time for getting a little bit more public attention as we get ready to launch the Phase III program.

Well that is, well that’s going on for tardive dyskinesia, we are also very happy we have a meeting with the FDA coming up shortly and in the next few weeks where we are discussing the Tourette syndrome program in more detail, as you know we had discussions with the FDA about the Tourette’s program and we were able to do some of our preliminary work particularly with pre-clinical juvenile toxicology and other safety work under our existing IND but we want to open the new IND under the Tourette syndrome indication, and we will be discussing that with the FDA and the plan is to open the IND in the summer and to start the clinical trials in the target population of Tourette syndrome subjects in the fall.

And so that work is going on, we have engaged clinicians and clinical research experts in the Tourette field and the same process of identifying and qualifying sites for clinical trial working on protocol details and working on a pediatric formulation of our VMAT2 inhibitor NBI-98854 for those non-adult trials. So a lot of work going on with our small group here in San Diego, very good progress looking forward to our interactions with the FDA over the next few weeks and moving on to getting these programs off to the next step.

The other things to mentioned that are VMAT2 related obviously, we’re keen on the progress that AbbVie is making with elagolix both the Violet Petal Study, which is the U.S. Phase III endometriosis trial, they have completed screening and recruitment and the so-called Solstice study which is the primarily ex-U.S. pivotal trial Phase III study in endometriosis and those studies are ongoing, we look forward to update from AbbVie as they become available. The Phase IIb fibroids trial is also well underway, unlike as we look forward to update from AbbVie as become available.

In the past, we’ve got a little bit about some of the activities that are occurring in our discovery research and pre-clinical groups only to the senses for the same that we have a lot of activities we at any given time having about eight programs that are being pursued, as I think most people are well aware pre-clinical and discovery research programs frequently are terminated and because they are early stage science and we’ve made actually some good progress moving couple of compounds into late pre-clinical stage and we will obviously, when they cross that point of completing successful GLP talks and we’re ready to open an IND that’s when we talk about them.

But, we’re very pleased that from that ongoing set of activities, we’ve moved a couple of programs along and ideally those will is something we can talk about in the upcoming quarters. So that’s VMAT2 that’s elagolix, is that our pre-clinical activities. I think I’ll pause there and turn it back over to Kevin.

Kevin Gorman

Thank you, Chris. So, we’re very pleased with the -with the progress that’s going on both with our partner and also our internal projects just to add on a couple of things, as we go forward into our End-of-Phase II meeting on PD, we completed the manufactured drug substance, we are manufacturing the drug product right now as Chris said, we’ve also developing the pediatric formulations for going into Tourette in addition.

And we’ve had good interactions with agency, the carcinogenicity committee at the agency and so we’ve reached full agreements on the two year carc trial design – study design and that was kicking off just next month as when we get going with those and I’ll remind you that we do have Fast Track with the PD indication and that is lead to enhance interaction with the agency that’s been very useful to us over the last couple of years.

So with that, I would like to open the lines up for your questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And we’ll go first to Ian Somaiya with Nomura Securities. Your line is open.

Ian Somaiya – Nomura Securities

Thanks, just a couple of questions. First on the VMAT2, can you walk us through your base assumption for the Phase III trial design and then maybe highlight any areas or opportunities to accelerate the program? And then I just had one follow-up.

Chris O’Brien

Hi Ian, thank you. So the base assumption going into our discussion is that the Phase III design is a 12-week trial to see both control one-to-one randomization of active and placebo. The primary end point is the change -change from baseline in the triple blinded video rating as the abnormal and voluntary movement skill. And that will have two doses of drug, everybody will start on one and there is an opportunity for a single titratable fixed dose adjustment after a certain period of time.

The – after the 12-week double blind placebo controlled period, there is an opportunity for a continued dosing with active drug through the end of the year, one year time period. Now, so that’s the general outline of the program, it’s a study that would include a study population of moderate and severe tardive dyskinesia subjects screened by external reviewers not the investigators using the video screening method and that this will allow subjects into the trial with a multitude of underlying psychiatric diagnosing. So, we’re not segregating by pull their subjects, depression subjects, dyskinesia subjects they are all potentially eligible for the trial as moderate and severe tardive dyskinesia. We will stratify by underlying diagnosis, but we will approve them all in this trial.

Now, you asked about opportunities to accelerate the program, there are couple of possibility here, one is that, we still don’t know whether we can have a single fit Phase III trial or whether we would need two Phase III trials, this would be a point of discussion. Obviously, if we have one it goes faster than if we have two. Another question is, as Kevin mentioned, we do have Fast Track status on this drug, the question will be if I have a separate kind of open label safety trial ongoing how much of that will have to complete before we submit the NDA.

So, we’ll see what the divisions position as on the total number of subjects that we will need for the safety data set that could allow us to accelerate things a little bit. Obviously, recruitment time things that we can do to address the recruitment of subjects into the trial could speed up how quickly we complete this pivotal study and we are aggressively working with some external vendors and partnering activities to aid our recruitment initiatives. The last been about the Fast Track that is important not only does it give us opportunity for more frequent interactions with the division at the FDA, but Fast Track also in certain cases allows for rolling submission, meaning that sometimes you can submit, your efficacy data, your CMC package and your carcinogenicity study results saw a different time point. So that is something we obviously, we’d have to have agreement from the FDA, but at this consumable for example that you could submit your clinical safety and efficacy data and your CMC data prior to read out of the carcinogenicity study for example. But those are all -all things that we will -and that discussing and we’ll let you know.

Ian Somaiya – Nomura Securities

Okay, one related question just based the comments, I think in prior calls you mentioned that, the classic challenge of keeping these patients motivate to involve in a 12-week trial design, just can you give us a sense of how you’re going -or how you’re going to treat patients that potentially drop out or go ahead?

Chris O’Brien

Sure. So obviously, there are two aspects to this question, one how do we work on retaining patients and so, the study design is such that we’ve chosen good investigators that know how to engage these subjects and they have so far we’ve seen a very good retention rate both in the 6-week placebo controlled trials and the 12-week open label extension.

Our goal here is to use those same methods going forward and offering all subjects including those placebo subjects, the potential to get active drug out through one year. So there is an incentive you can’t get that open label extension unless you’ve completed the 12-week placebo control.

The flip side of that is more of the statistical question, which is how do you statistically treat subjects who are drop out and in this particular trial, we will be looking at the primary endpoint that is the AIMS at multiple time points during the 12-week randomized double blind placebo controlled portion. And because, we have multiple time points, the statistical method used here is a multiple times repeated measure statistical model which means that every subject contributes to the statistical analysis.

So that if you have a subject to drops out at week 10 or at week 6 as long as they’ve had an AIMS assessment one or more AIMS assessment they contribute to the model. And that means you don’t have to do any amputation or LOCF or anything like that and that is becoming the chronic repeated assessment studies that is becoming the preferred method for the FDA.

Ian Somaiya – Nomura Securities

Okay, and then just one question for Kevin. In our model, we continue to assume that your VMAT2 outside the U.S. given the cash on hand, given the proximity to some of the data for elagolix, is that still a fair way to think about VMAT2?

Kevin Gorman

We will look for a partner at the appropriate time where we’re not currently actively engaging any partners. We plan on keeping this in the U.S. completely ourselves and getting approval and marketing it here alone. Ex-U.S. we -well we are talking to certain parties that have contacted us, do not look for a partnership from us this year.

Ian Somaiya – Nomura Securities

Okay, just longer term strategies is that something you are willing to comment today or just?

Kevin Gorman

No longer term strategy I certainly think, certainly in Asia, we would be partnering and then we’ll look at Europe also.

Ian Somaiya – Nomura Securities

Okay, thank you.

Operator

Thank you. And we’ll go next to Robyn Karnauskas, Deutsche Bank. Your line is open. Please go ahead.

Robyn Karnauskas – Deutsche Bank

Hi, guys. Thanks for taking my question and congrats on all the progress. I guess the lot of questions on my inbox are all about the timing of the elagolix data. And I know this is in AbbVie’s hands, but here are the questions as follows, the number one, can you confirm that AbbVie will allow you to release top-line data or at least whether or not the trial works are not ahead of the second Phase II? And the second question is, will that be released be at the three month end point which is primary end point or at the six month end point and the naïve others as well?

Kevin Gorman

Okay, so Robyn, you’ve probably and imagine the people who have -who have put those questions in have read reports were AbbVie as stated that they have concerns about the amount of data and the timing of data that they will release from that first Phase III clinical trial, because there will be the second Phase III that’s ongoing. And it is a subjective endpoint they don’t want to influence the placebo group there.

We’re in discussions with that, about the extent of the release that they will do and the timing of the release and when I have more color on that, then I’ll be able to let you know about that or AbbVie will in their releases as we lead up to that. They do understand that, the data is quite important to us and we would like to share that with our shareholders.

The second question is that, is the -is the top-line data coming at the three month primary endpoint or is it coming at them, after the six months of placebo controlled. And the data that AbbVie is talking about is after the six month placebo controlled portion of the trial has completed.

Robyn Karnauskas – Deutsche Bank

So the earlier see the data then it would be six months from like say ended the month plus sometimes. So that would be more that would be more fourth quarter or at least this quarter.

Kevin Gorman

That’s correct.

Robyn Karnauskas – Deutsche Bank

Okay. And then the next question is, what is the process so as you complete the trial, how much time typically does it take to analyze these data sets I mean a pretty big study, so could it -could we really be talking about only this year, early into next year how much time typically for these type of studies?

Kevin Gorman

And you know Robyn I could give you a good estimate about what Neurocrine would do and I know our process and Chris could then talk to you about it and give you some guidance on that. But, we’re talking about AbbVie as our partner, we do not have insights on their processes and so I can’t really speak to you about the timing of how quickly they can close that out for top-line results and get that out.

Robyn Karnauskas – Deutsche Bank

Okay, another question that you may not be able to answer, as I know there is a lot of readouts post the six month, and that would be relevant to safety. And so two questions there. So number one, what will we learn -what is critical to learning about the side effect profile that we’ll get at six months versus a year? Number two, when do we have any sense of what kind of readouts will occur after the six months should AbbVie allow that to be released? And then number three, when you think about safety, what does the FDA or when will we know how much safety or longer term data the FDA needs before approving the product?

Kevin Gorman

Well I’ll take a couple of those, first ones and maybe Chris to comment on the last I don’t know. But, basically what do you want to get out of the study from a safety standpoint and you’re going to win all the typical safety measures and we’ve treated patients continuously out of six months and we’ve shown that we have relatively minor effects on bone and then otherwise the drug is very well tolerated.

Now AbbVie is going to be taking that out to 12 months of continuous dosing, so clearly one is going to want to see what is the impact on bone now out to 12 months of continuous dosing. And then because, they are in such large numbers now you’re also going to have the opportunity that as with any drug if there is any rare or unusual safety issue then that’s what it’s in these longer bigger trials that they can come up. But that’s true with any drug. When AbbVie would release all of that data, I have no idea on when they would release that. In your question about longer term trials as far as the FDA…

Chris O’Brien

I think Robyn asked two questions one was about the longer term data, so at the end of 12 months of continuous treatment, because of the legacy safety concerns for drugs like Lupron, the FDA had said do some post to treatment follow-up for potentially up to 12 months after stopping treatment. And so that’s simply to make sure there is no lingerie, no residual adverse events or bone changes or anything that, they needed to be aware of, whether that truly needs to be 12 months or 6 months that remains to be seen that’s obviously something that AbbVie will discuss with the agency.

As far as the size of the safety data set, we haven’t been involved to direct discussion with the FDA since the end of our collaboration in partnership. So, I honestly don’t know whether AbbVie has had any additional discussions that would be a good question to ask me.

Robyn Karnauskas – Deutsche Bank

Great. Thanks a lot.

Operator

And we’ll go next to Thomas Wei with Jefferies. Your line is open.

Thomas Wei – Jefferies

Thanks, just on the VMAT Phase III program, if you housekeeping things just in your proposal, how many patients did you propose, what you think the estimated timeline there is and what are your latest thoughts on seeking an SPA? And then I had a follow-up on the primary end point.

Chris O’Brien

So let me, this was in reverse order Thomas, thanks. I don’t plan on asking for an FDA, we don’t have -lot of contentious issues here on the study design and in this division, it doesn’t have a long track record of using FDA. So hopefully that’s not an path that we need to go down, we should seek consensus at the End-of-Phase II meeting and get good agreement on to this trial design endpoints and statistical methods.

As far as the sample size, there is always a balance, there three or four competing forces, you want enough patients to contribute to your safety data set, you don’t want so many patients that you’re grossly over powered and you want a reasonable timeline for recruitment and completion of the study. And finally you want enough data to have interruptible efficacy and safety information to guide clinicians in a product label.

And so, I believe that for a Phase III trial that balance is somewhere around 200 subjects for a single trial, the question is how many total subjects well we need for overall NDAs filing and that’s something we’ll seek agreement on from the FDA at the meeting in June. The timeline for that as I mentioned meeting in June IRB and study site contracting and activities over the summer starting the pivotal program in the fall and the rough estimate that we’ve mentioned for a trial of this size is probably in from start to finish that is all the data done and all the study subjects closed out, probably about 18 months. So we’ve said, 2016 NDA.

Thomas Wei – Jefferies

And what about ICH guidelines for safety exposure on chronic treatment, is not a good guideline?

Chris O’Brien

Well there of course there are good guidelines, I would never argue with the ICH guideline. But there is some flexibility particularly for on indication, which will not orphan disease is still relatively uncommon, unmet medical need and as you may be aware the FDA has guidance documents, which outlined the kinds of situations where for example a single pivotal trial can serve as adequate evidence of efficacy, is there is supportive efficacy data from other sources like a good Phase IIb study.

We expect that our NDA will probably have, just under a 1000 subjects in our safety data set and will – certainly will exceed the ICH guidelines for more than a 100 subjects with one year of continuous treatment. So we’ll exceed the guidelines for, three and six months and 12 months of exposure, just the overall package maybe not the 1500 that you often hear people referring to. But that again that’s also negotiation with the regulatory authorities.

Thomas Wei – Jefferies

When I look at the proposal, I guess couple of other things that, I’m a little bit uncertain about that might be may or may not be potential risks. And I guess, I’d love to get signs, the assessment of depression suicidality, how detailed are you going to be in looking at that and trying to get the black box removed? And then on the primary endpoint of the triple blinded scrambled consensus assessment at the AIMS videos, is there any risk there that the FDA does not accept that, that either because, of the lack of concordance with the investigator assess the AIMS or the reduced dynamic range of video scoring, is that something that we shouldn’t all be concerned about?

Chris O’Brien

So let me answer that first, this division in particular FDA in general are actually very good supporters of blinded central rating. And we’ve had good interactions with our ex-FDA consultants and our regulatory experts and our clinicians. I’m quite comfortable going in with this proposal and I don’t see this as being any riskier than any other aspect of going into Phase III, I think it’s, we’re in very good shape with respect to that.

Now we do a lot of work to show that, the kinds of changes that we document with the AIMS are collaborated by other scales and other methods. This is not a standalone. So, we have fairly robust collaboration by looking at for example the psychiatrist that are onsite, they do the CGI the clinical global impression of change and that is a more three dimensional tool that is done by the onsite clinicians, psychiatrist and that encompasses a broader scope of what’s happening with these patients and simply dyskinesia rating.

You see that, as not only collaborative evidence, but the magnitude of change that we’re talking about we consider a responder for example of the CGI someone who has been scored as either a very much improved or much improved and that turns out is fairly tightly linked to someone who has had at least a 15% reduction in their video AIMS score. So, these are robust changes with a marked separation from placebo. So, I think we’re in good shape with respect to those things.

Your other question was about…

Kevin Gorman

Thomas you had another part to your question.

Chris O’Brien

The first part of that.

Thomas Wei – Jefferies

It’s okay, I’ll -I can follow-up later on that, to labor my questions. Thanks very much.

Kevin Gorman

Okay.

Operator

Thank you. And we’ll go next to Phil Nadeau with Cowen & Company. Your line is open.

Phil Nadeau – Cowen & Company

Good afternoon and thanks for taking my questions as well. First, the VMAT2 towards trial in the prepared remarks I think you mentioned that you were going to go after a specific target population in Tourette. Can you give us your preliminary thoughts of what -who makes up that target population and how it’s defined?

Chris O’Brien

Sure, thanks Phil. Tourette, as you know is generally a pediatric disorder with onset range being 3 to 21, by definition 21 is the cut-off. Obviously adults have Tourette’s, but most people with tic disorder and Tourette syndrome are in the kind of eight to 16 year range. And so our interest is in fact going after pediatric that’s why we’ve done all this pre-clinical safety work to support our ability to do chronic dosing in the young children. And while we obviously haven’t started those studies, my estimate is that we will be in the six to 18 year old age range, since that’s the kind of the -the most common earliest onset is age 6, the average onset age of diagnosis is 8 and by the time your 18 your moving into adult.

Phil Nadeau – Cowen & Company

Okay. That’s very helpful. And then second is on elagolix uterine fibroids press release mentions that the Phase IIb is ongoing there. Do you have any clarity from AbbVie when that trial might complete and what their data disclosures were actually is going to be?

Chris O’Brien

So I can tell you what on clinicaltrials.gov uterine fibroid Phase II program is related as that the completion of the clinical portion associated with the primary assessment is July of this year and that’s 520 or so subjects, Kevin is shaking his head.

Kevin Gorman

Yes. That’s the part of clinicaltrials.gov that AbbVie is yet to update with that trial, because they doubled the size of the trial, but they level at July date in there. That date can’t be correct any longer, we don’t think and that AbbVie at some point I’m sure is going to update that. We do a back of the envelope and we see it as being early next year is when that trial can read out with its top-line. But AbbVie has not yet updated clinicaltrials.gov. But, I’m sure they will be.

Phil Nadeau – Cowen & Company

Okay. And have they communicated to you in anyway whether they are going to release these data, I know we haven’t seen the Phase IIa data somewhat if we’ll get to see the Phase IIb?

Kevin Gorman

As it is with the Phase III program that is part of our discussions with them in order to find out exactly what amount of data and when they plan on releasing in the U.S. program also.

Phil Nadeau – Cowen & Company

Okay great, thanks for taking my questions. That was very helpful.

Operator

[Operator Instructions] And we’ll go next to Marko Kozul with Leerink. Your line is open.

Unidentified Analyst

Hi, this is DD in for Marko Kozul. So I just have one quick question. And looking at the Kinect 2 trial, did you use a central reading process to screen patients, and if yes what was the screen failure rate in Kinect 2 versus Kinect? Thank you.

Kevin Gorman

In all -in both Kinect and Kinect 2, we used a central review process to screen patients to assure that they met the infusion criteria of moderate or severe tardive dyskinesia. The screen fail rate with Kinect and Kinect 2 was virtually identical and as screen failure could be because, they didn’t meet the PD requirement. But it also could be because, they had unstable medical condition, laboratory abnormalities, prohibited uncommon medications et cetera.

So the screen fail rate for the two trails was about 50% and of that 50% whose screen failed about half of them were because, they either didn’t have tardive dyskinesia and some other movement disorder or they didn’t have moderate or severe tardive dyskinesia and that was pretty much the same in both trials.

Unidentified Analyst

Okay, thank you.

Operator

And at this time, I would like to turn the call back over to Mr. Kevin Gorman.

Kevin Gorman

Thank you very much everyone. Thank you for joining us today. We’re going to as you’ve heard particularly in Chris’s group there is a lot of work going on right now to get the Phase III program and PD kicked off in the Phase and then get into the children in Tourette’s syndrome. We’ll keep you apprised at the upcoming meetings on our progress going forward and in our Q2 earnings call, we’ll have a discussion at that point since we should have the FDA minutes from our End-of-Phase II meeting at that point then we can really map out for you what the Phase III program is going to look like.

So, thank you once again and I look forward to getting together with you all.

Operator

And thank you everyone for joining us today. We do appreciate everyone’s participation. This does conclude today’s conference. You may disconnect at anytime.

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