ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD) 38th Annual J.P. Morgan Healthcare Conference January 14, 2020 1:00 PM ET
Steve Davis - Chief Executive Officer
Cory Kasimov - JP Morgan, Senior Large Cap Biotech Analyst at JP Morgan
Conference Call Participants
Alright, good morning everyone. My name is Cory Kasimov. I'm the Senior Large Cap Biotech Analyst at JP Morgan. It's my pleasure to introduce our next company, ACADIA Pharmaceuticals. Here to present for ACADIA is CEO, Steve Davis and please note the following Steve's presentation there's a break out down the hall to the left in the Olympic Room. Steve, I turn it to you.
Great! Thanks so much Cory and good morning to everyone. Before we start, I just need to remind everyone that the pharmaceutical business has certain risks and uncertainties. Please see a copy of our SEC filings for a description of these risks as they relate to our business.
I'd like to start this morning just reminding all of us, why we do what we do. What you see in this picture are faces of actual patients that we serve and that we seek to serve, together with some of our dedicated employees. And I'm always reminded when we meet with patience, that these are real people. They have lives. By the time they develop Parkinson's disease psychosis – same will be true in dementia-related psychosis. They many times are carrying a very high disease burden.
The disease strikes later in life and in the case of Parkinson's disease psychosis, they are already carrying a very high disease burden, and then you layer a psychosis on top of that, it becomes a very heavy burden for both the patient, care giver and their families. These are people that we can help and our mission is to provide the greatest benefit we can to them.
When you think about where we stand as a company today in 2020, the starting point is pimavanserin or NUPLAZID; it's known by its trade name, is the first and only drug approved to treat Parkinson's disease psychosis. We launched this drug a little over three years ago, and at the time we launched it we said, what we expect is this very kind of linear shaped curve as we educate the market with the first and only approved drug and grow the market in the number of patients that we are treating. And today or in 2019 what we observed is a 50% increase in net sales growth year-over-year over 2018. So we are well on our way to fulfilling that promise.
The second element that is important to point out in terms of where we stand in 2020 is we have a very innovative pipeline with four late stage pipeline programs. Three of these programs are leveraging pimavanserin, the same molecule that were approved for PDP in other indications, and in all three of those indications we've now concluded pivotal studies with very robust results.
These three indications in addition to PDP represent a potential 35 fold increase in the number of treated patients. So we have a very strong foundation today in PDP, we've got a late stage, very innovative pipeline that has the potential to be dramatically larger than the footprint we have today.
There are three pillars to our business: First, it’s to drive NUPLAZID growth in PDP; second is to deliver dementia related psychosis, opportunity to patients; and third is to develop innovative treatments for unmet needs and additional indications in areas.
Before I get into the pipeline and talking about specific programs and just where we stand on each of these three pillars, I'd like to pause for a second and talk a little bit about Pimavanserin and how this molecule differs from all other anti-psychotics on the market. I'll start by saying, even the term antipsychotics is a little bit of a misnomer, because the traditional antipsychotics are approved to treat psychosis and schizophrenia, they're also approved to treat – some of them are approved to treat bipolar disorder, some of them are approved to treat depression, so they have a kind of a rich pharmacology with benefits in multiple indications. None of them however are approved to treat Parkinson's disease psychosis or dementia related psychosis.
All of those drugs are more or less brothers, sisters and cousins of each other. They all work in a similar fashion and they were primarily by blocking dopamine. Our drug works in an entirely different fashion. We work by very selectively blocking a subtype of the serotonin system. That's led to us again having the first and only FDA approved treatment for PDP. We achieved breakthrough therapy designation from the FDA in the process of getting that approval; we have composition and matter of patent protection for NUPLAZID. It is also relates to Pimavanserin and the other indication we are pursuing into 2030.
As we go forward, we've now established robust efficacy in pivotal studies across three CNS indications; that was not a given. When we started down that path a few years ago, I said to you, I said this may not work in everything we tried and it doesn't have to. If it works in just one, it will be well worth the investment.
And I said this is the kind of investment we love to make, because we already know so much about this molecule. We know the efficacy in Parkinson's patients, we know the safety and tolerability profile, we know how to make it, we know the drug-to-drug interactions. The thing we don't really know yet is the full extent of the utility. That picture has become much clear, particularly based upon the results we've had over the last 12 to 18 months.
What we’ve seen is in dementia-related psychosis where we also have breakthrough therapy designation, a very robust efficacy response there and a safety and tolerability profile that looks very consistent with what we know about the drug. In MDD, same thing, we saw very robust response in – as adjunct therapy in MDD any in negative symptoms of schizophrenia we recently reported in November, positive results from a pivotal study there as well.
In this space what you see and what you don't see are both important. What we don’t see with this profile is a lot of the side effect baggage that you see with the older generation, dopaminergic compounds. These are just some examples what we don't see. In dementia related psychosis, we don't see a negative impact on cognition or impairment of motor function. In MDD we don't see sexual dysfunction. In fact we’ve see an improvement in sexual function in the pivotal study that we ran.
We also didn't see increases in day time sedation. In fact we saw benefits to day time sedation in that study and we don't see – consistently in all of our studies we don't see a weight gain. In schizophrenia, in addition to some of the other baggage that I previously described, because it’s a younger population, weight gain is a very significant issue there. These patients on these older generation dopaminergic drugs can experience dramatic weight gain, which can lead to metabolic issues, cartographical risk, etcetera. We don't see that with the serotonergic profile that we have.
So, what kind of benefits do we see in the clinical studies we've done, and this slide represents, tell us really two stories that I think are very important. One is, what we see is this internally consistent benefit. This is four different disease states and in each of these disease states we see a very robust efficacy response. The other take home message here is on the left hand side of the slide, what we see is a very strong antipsychotic response. We see that in our Parkinson's disease study, where we established a p-value of 0.0014, we see it in our pivotal dementia related psychosis study with the p-value of 0.0023, so it’s a very strong antipsychotic response.
On the right hand side of this slide, what we see with this unique profile is a very strong benefit on moved. We see it in our major depressive disorder study where we saw a p-value of 0.0003 and in our recently announced results from negative symptoms in schizophrenia, where at the 34 milligram dose, the dost that we are taking forward into the next pivotal study which has a p-value of 0.0065.
I mentioned earlier that the – some of these three additional indications is a 35 fold increase over the size of the treated patients in Parkinson's disease psychosis, so just a level set a little bit. In Parkinson's disease psychosis, we’ve guided to revenues in our third full calendar year or third full fiscal year of launch, 2019 being between $330 million and $340 million. We are continuing to grow at a very attractive revenue growth clip. With a lot of room to grow, I think this would be a very substantial drug just in PDP alone.
In dementia related psychosis, we see a similar opportunity in terms of the unmet need that we see in Parkinson's disease psychosis, but it's dramatically larger, it’s 10 times the size of Parkinson's disease psychosis. So I mentioned we will be submitting an SNDA submission in the summer of this year for that indication, so that’s very near term getting to the finish line there.
In major depressive disorder, if we just focus on the patients that receive adjunct therapy, that is 20-times the size of Parkinson's disease psychosis. There we have one pivotal study in the bank. We're running two additional pivotal studies now; we only need one of them to be successful.
One is we are running in the U.S., one is an international study. The U.S. study – in both studies we are running ahead of schedule. The U.S. study we’ll have results by the end of this year.
Negative symptoms of schizophrenia, I mention that we reported positive results there last year. We will be starting a second pivotal study in the summer of this year. It is a five-fold increase over the size of the Parkinson's disease or psychosis population.
Our business rests on three strategic pillars. First it’s to drive NUPLAZID in PDP. Second is to deliver the DRP opportunity and third is to develop additional indications. I'm going to dig a little bit into driving growth in PDP.
I mentioned already that sales guidance for 2019 will report – our actual results are in the figure [ph], but our guidance is $330 million to $340 million. That represents a 50% increase in revenues and a 38% volume growth year-over-year. We are currently in the high teens in terms of market penetration. As I mentioned, we’ve got a lot of room to continue to grow this drug in PDP.
The levers that we are – we are pulling now to continue this growth include, the movement disorder society published guidelines last year. They recognize NUPLAZID as the only therapy with clinically useful – that was clinically useful with an acceptable safety profile and didn’t require specialized monitoring.
We have new caregiver burden in long clinical safety data that we’ll be publishing later in the year, and we're continuing to leverage digital and patient care giver campaigns to close an information gap at all. I’ll spend just a second talking about it.
With PDP when patients are first diagnosed, there's a 50/50 chance that they will ultimately develop psychosis and it usually doesn't happen until the later stages of the disease. So for that reason, physicians many times don't talk about it at the diagnosis, and when it occurs, patients don't make – they don't connect the dots. They don't realize that the psychosis, the hallucinations or delusions that they are experiencing are actually associated with Parkinson's disease. And so we do a lot of work to try to help educate patients, care givers, start dialogue with physicians to close that information gap and we’ll continue to do that this year.
Second filler, delivering the DRP opportunity to the market. As I mentioned earlier, there is no FDA approved treatment for Dementia Related Psychosis, but what we have today is use of these older generation dopaminergic compounds with a very high side effect burden. They are used off label to treat dementia related psychosis today. Of the 1.2 million patients that are currently being treated, about 800,000 of them are taking these dopaminergic anti psychotics.
I mentioned earlier that it's very problematic. They can accelerate cognitive decline in these patients. So it's a situation where, because there's nothing approved and these drugs have these high side effect burdens, when you treat them with a dopaminergic antipsychotic, it's been well established in a very large study that you actually accelerate cognitive decline. So you are exacerbating the primary symptom that these patients are suffering from.
I'll come back to that thought in a second when I’m talking about our clinical results. In addition, they can impair motor function, cause extrapyramidal symptoms, increase sedation, cause orthostatic hypotension. These are all side effects that would be problematic in a normal healthy young patient. They are particularly problematic in elderly frail patients.
We run a pivotal study that will serve as the basis for our SNDA submission. It’s a very straightforward study. It’s a relapse prevention study for those of you who are familiar with that study design, and in this study we started by putting all patients in this study on pimavanserin. So they are highly symptomatic, they start of pimavanserin. If they show a significant and sustained response at weeks eight and again at week 12, they stay in the study. If they don't show that response, we drop them from the study. For those that stay in, they are then randomized into one or two groups; they either stay on pimavanserin or they move to placebo and the primary end point of this study is simply the time to relapse once they are randomized.
So for those patients who are highly symptomatic, they started on pimavanserin, they showed this sustained response, they continue to show sustained response versus those patients who move to placebo and we remove the therapy that demonstrated a benefit. We are simply comparing to the average time to relapse for those two groups. We saw extremely robust efficacy in this paradigm. We significantly reduce the risk of relapse of psychosis by 2.8 fold, represented in a hazard ratio 0.353 and one side of p-value of 0.0023.
In the open label portion of the study, before patients are randomized, we observed that almost 62% of eligible patients met their pre-specified criteria, and that was a reasonably high bar. They had to show this response not only at week eight, but again at week 12. 62% of them showed that that was actually above our expectations and on average, we observed a 75% improvement from baseline on the SAPS-H+D score at week 12.
Running a study of this sort also allowed us to observe safety and tolerability over a very long time frame and what we saw there was very consistent with what we know about the drug. Pimavanserin was very well tolerated. We saw importantly no worsening of cognition, no worsening of motor function.
This slide is a Kaplan-Meier representation of efficacy where again we saw this very robust response. One footnote on this slide is many times when we treat neuropsychiatric disorders and we study them in clinical studies, we are limited in the way we can observe the response. Not like measuring blood pressure of course, so you’re measuring many times mood or hallucinations, delusions and so many times we capture that by moving on a scale.
To a treating physician that's important, but they do have to interpret it. They do have to interpret, well how many points moving on a scale that I don't use every day. What does that mean in terms of the patient that I'm looking at in my examining room?
This study gets right to the way physicians thing about treating their patients. The take home message from this study is if you put patients on pimavanserin, you'll see a consistent response that’s sustained over time and almost threefold reduction in the risk if they'll have a relapse over this time frame.
So that speaks very clearly to physicians in a way and then we get this feedback a lot from the KOL’s that we talked about this study, that it really helps drive home the point to them in terms of the benefits that patients should derive from the drug.
I mentioned I was going to come back to cognitive impact, no negative cognitive impact that we observed with pimavanserin. This is the second study where we've observed this with dose patients for an extended period of time. What we see here is no negative impact on cognition as measured by the MMSE over six months compared to placebo. So of course some of these patients were on drug even longer, because well, this is the randomized period. So if we combine both the open label period and the randomized period for those patients that were on pimavanserin that enter time, we see another, again a consistent sort of no negative impact on cognition over now up to nine months of treatment.
Next steps for us, we have recently submitted our request to the FDA for a pre-SNDA meeting. We plan to submit our SNDA in the summer of 2020. That package will include the efficacy results that I've just described from our HARMONY study. They’ll also include supportive data from two previous studies we ran, looking at that we observed, positive benefits on an acute basis with pimavanserin and of course a very large safety database. Now anytime you are filing the SNDA you include safety from all the studies you run together with ongoing studies.
Third pillar is to develop innovative treatments for unmet needs. This is a twin-lane slide showing the robust pipeline we have. We’ve already talked about the first two. So we’ll now focus on the bottom there programs here starting with major depressive disorder.
Depression is a huge medical problem in the United States and as well as globally. There are 17 million patients in the U.S. A majority of these patients do not adequately respond to first line therapy. They don't adequately respond to SSRIs or SNRI treatment. That results in about 2.5 million of them being treated with adjunct therapy. Today the drugs approved for adjunctive therapy and depression are the same class of dopaminergic antipsychotics that I described earlier.
These can lead to very significant issues in this patient population, including the issues here: sexual dysfunction, weight gain, sedation, etcetera. We ran a pivotal study in these patients using Pimavanserin as adjunctive treatment and what we saw here was positive primary endpoint with the on the HAMD-17 results. Importantly, in the Stage 1 of this study, which was a parallel design portion of the study, now there was this same study design we’re using in two additional studies, we saw a very robust affect, p- value of 0.0003 and effect size of 0.63. We also saw very strong results on key secondary endpoint disability, which is you don't often see with antidepressants.
Take home message here is when you look at the right hand side and you think about the last slide in terms of what physicians need, we rang every one of those bells. We saw – the physicians said I need faster on set, we saw early onset; I need to sustained and strong antidepressant effect, we had very robust efficacy there. Physicians would like to not see sexual function, sexual dysfunction exacerbated with drugs, which many antidepressants do, we actually saw an improvement in sexual function.
They don't want to see daytime sedation exacerbated through therapy; we actually saw an improvement in daytime sedation. We've never observed being for weight gain, no cognitive side effects, we’ve already talked about, and the extrapyramidal symptoms of part of dyskinesias that can occur with use of the dopaminergic drugs are not an issue with our [inaudible]; we’ve never observed those.
So I mentioned already there were two ongoing Phase 3 studies with one additional positive study needed. The reason we are running two studies courses is with depression, you many times see how placebo responds, so to mitigate that risk we are running two studies. We only need one of them to be positive; we already have one positive pivotal study. The first of those studies we’ll read out by the end of this year.
Negative symptoms of schizophrenia, about 40% to 50% of schizophrenia patients experience predominate negative symptoms. So what are negative symptoms? It’s really the kind of social withdrawal aspects of the drug. It’s some of the most problematic symptoms that schizophrenia patients deal with. It includes apathy, a lack of emotion, social withdrawal, etcetera. This can lead to low social function and long term disability and very significant care giver burden.
It's rare to have a positive study in negative symptoms of schizophrenia. We concluded a pivotal study that we reported out in November, where we saw positive results on the primary endpoint. This was a study where we are doing some dose ranging, importantly at the 34 milligrams does, the does that we’re taking forward in the next pivotal study. We saw a very strong, very robust efficacy with a p-value of 0.0065. That second study as I’ve already mentioned will commence in the summer of this year. I would be remiss if I didn’t say here too we continue to see this very consistent safety and tolerability profile.
Rett syndrome is a debilitating disorder. There are about 6,000 to 9,000 patients in U.S. I've going to underscore a very debilitating disorder. These are really tough cases. These patients start life with normal development and then somewhere usually about six months to a year they begin to experience neurocognitive decline. They ultimately almost always lose their independence. They can lose purpose for hand movement and most of the time loss of spoken communication.
We – our drug Trofinetide has completed Phase 2 and we recently commenced Phase 3 study. This is a drug that we enlicensed North American rights to from an Australian company. The positive results in the Phase 2 stage they ran were recently published in neurology. Our objective is to repeat those positive results in a Phase 3 study using the same end points that they observed. If we are successful in doing that, I think we’ll have a very valuable, potential new drug here for Rett Syndrome where there again today is no drug approved. So we'll have results from this study next year in 2021.
We sum up the regulatory and clinical milestones in dementia-related psychosis. I mentioned we’ve recently requested a meeting with the FDA. That will result in a SNDA submission in the summer of this year. In major depressive disorder we are running two pivotal studies, again, we need one of them to work. The first of those we’ll read out this year, by the end of year.
I should mentioned, that's actually ahead of schedule. Investigators have been very enthusiastic; enrolments running ahead of planned and we’ll have those results this year. We are again well ahead of schedule. Negative symptoms of schizophrenia, one pivotal study in the bank, we need a second, we'll commence that study in the summer of this year and Rett syndrome as such as described, we'll have results from next year.
So I’m going to close where I started, and that is by recognizing the patients, caregivers and families that we seek to serve and to whom we owe our very best. Thank you.
Question-and Answer Session
[There is no Q&A Session for this event]