Intra-Cellular Therapies, Inc. (ITCI) CEO Sharon Mates on Q1 2022 Results - Earnings Call Transcript

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Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Q1 2022 Earnings Conference Call May 10, 2022 8:30 AM ET

Company Participants

Juan Sanchez - Vice President, Corporate Communications and Investor Relations

Sharon Mates - Chairman and Chief Executive Officer

Mark Neumann - Executive Vice President and Chief Commercial Officer

Suresh Durgam - Executive Vice President Chief Medical Officer

Larry Hineline - Senior Vice President and Chief Financial Officer

Conference Call Participants

Andrew Tsai - Jefferies

Jessica Fye - JP Morgan

Charles Duncan - Cantor Fitzgerald

Brian Abrahams - RBC Capital Markets

Mike DiFiore - Evercore

Marc Goodman - SVB Securities

Sumant Kulkarni - Canaccord

Jason Gerberry - Bank of America

Karin Jenkins - Goldman Sachs

David Amsellem - Piper Sandler


Good morning, ladies and gentlemen. And welcome to Intra-Cellular Therapies First Quarter Earnings Call. At this time, all participants are in a listen-only mode [Operator Instructions]. As a reminder, today’s conference call is being recorded.

I’d now like to turn the conference over to Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Juan?

Juan Sanchez

Good morning, and thank you, all for joining us on the call today. Our earnings press release provides a corporate update and details for the company’s financial results for the first quarter ended in March 31, 2021. This press release is available on our Web site at Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Mark Neumann, Executive Vice President and Chief Commercial Officer; Dr. Suresh Durgam, Executive Vice President Chief Medical Officer; and Larry Hineline, Senior Vice President and Chief Financial Officer.

As a reminder, during today’s call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety and intended use of the company's product development candidates, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and results of ongoing and future clinical trials, plans regarding regulatory filings, future research and development, our plans and expectations regarding the commercialization of CAPLYTA, potential impact of the COVID-19 pandemic on our business and possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions and expectations. Those are 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 and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, and the company disclaims any obligations to update such statements.

I will now turn the call over to Sharon.

Sharon Mates

Thanks, Juan. Good morning, everyone and welcome to today's call. I'm pleased to present our first quarter 2022 results and to provide an overview of our strong launch of CAPLYTA in bipolar depression. Additionally, I will share our progress with our lumateperone clinical development programs and other pipeline programs. We launched CAPLYTA in bipolar depression immediately following its FDA approval in late December of last year and we're off to a great start. Following this important label expansion, CAPLYTA's prescription growth has accelerated significantly. In the first quarter, CAPLYTA new prescriptions increased by 63% and total prescriptions increased by 45% compared to the fourth quarter of 2021 -- compared to the first quarter of 2021. In Q1 2022 new prescriptions increased by 154% and total prescriptions increased by 134%. Consistent with the strong demand has been the highly positive feedback we are receiving from physicians regarding CAPLYTA's clinical profile in a broad range of patients with bipolar depression, as well as their early experience with patients.

CAPLYTA is an important treatment option to help individuals living with bipolar disorder. We are confident in CAPLYTA's continued growth for several reasons. First, CAPLYTA is a novel anti psychotic with a strong clinical profile, which is clearly reflected in its broad label. There are only a few approved treatments for bipolar depression, which affects more than 11 million US adults. CAPLYTA is the first and only treatment approved for both bipolar I and bipolar II depression in adults, both as monotherapy and as adjunctive therapy with lithium or valproate. Depressive episodes in patients with bipolar I or bipolar II disorder are significantly more common than mania or hypomania and are linked to worse prognosis, greater impairment, decreased quality of life, higher morbidity and increased suicide rates. The prevalence of bipolar I and bipolar II disorder are similar. Bipolar II is often characterized by a higher frequency of depressive episodes that last longer with lower overall functioning than bipolar I. Prior to CAPLYTA's approval, only one drug was approved for bipolar II depression.

Second, physicians and patients are looking for effective treatments with favorable side effect profiles and CAPLYTA has shown consistent efficacy across a broad patient population with a favorable safety and tolerability profile. Bipolar patients consistently identify weight and akathisia as side effects of great concern. Importantly, across our clinical trials, weight gain was similar to placebo and in fact in our longer term open label studies, patients with bipolar depression had no weight gain from baseline to six months, while patients with schizophrenia lost an average of 7 pounds in one year. Additionally, fasting glucose total cholesterol, triglycerides and EPS, including akathisia, were also similar to placebo. In recent market research, psychiatrists highly rate CAPLYTA’s performance on efficacy and safety measures. Third, CAPLYTA administration is simple and straightforward. It is a once a day medication that does not require dose titration. The starting dose is a therapeutic dose and can be taken with or without food.

To address special populations, we recently received FDA approval for the expansion of the CAPLYTA label. This label provides dose adjustments recommendations for patients concomitantly taking strong or moderate CYP3A4 inhibitors and for patients with moderate or severe hepatic impairment. This label expansion allows an even greater patient population to have access to CAPLYTA. Finally, our confidence about CAPLYTA's continued growth is further fueled by our strong commercial team, their launch execution and the improving market conditions as COVID continues to subside. Mark will provide more details on our launch in a few minutes. We're pleased to report that total revenues were $35 million for the first quarter of 2022, representing 120% increase over the same period of 2021 and a 36% increase quarter-over-quarter. Larry will provide additional details in our financial performance in his remarks.

In addition to our commercialization of CAPLYTA, we have ongoing programs to expand our label to include the treatment of a broad range of mood disorders, including major depressive disorder or MDD and mixed features in MDD with bipolar depression. These disorders, which affect millions of patients, have important unmet medical needs. Patient enrollment is ongoing in our registrational MDD studies evaluating lumateperone as an adjunctive treatment to antidepressants. We expect to file a supplemental new drug application with the FDA for approval of lumateperone as an adjunctive therapy to antidepressant for the treatment of MDD in 2024. In addition, Study 403, our study evaluating the antidepressant effects of lumateperone in patients who exhibit mixed features with bipolar depression, or MDD, is ongoing. We expect to complete clinical conduct of this study in the second half of this year.

We are also advancing our lumateperone long acting injectable program for the treatment of schizophrenia, which is currently in phase 1 clinical development, addressing different formulations and additional sites of injection. In addition to lumateperone, we continue to expand our robust pipeline with ITI-1284-ODT-SL, our phosphodiesterase one or PDE1 inhibitors and ITI-333. In 2022, we are advancing ITI-1284 for the treatment of agitation in patients with probable Alzheimer's disease, followed by studies in dementia related psychosis and certain depressive disorders in the elderly. We also plan to begin patient enrollment in a Phase II clinical study of our lead PDE1 compound, Lenrispodun, for the treatment of Parkinson's disease shortly. In addition, we have successfully completed a Phase I single ascending dose study for ITI-333 and plan to continue its development with neuroimaging studies to support dose selection for future studies, including a Phase I multiple ascending dose study.

We ended the first quarter with $773.2 million in cash, cash equivalents and investment securities. In January, we received $433.7 million in net proceeds from our public offering of common stock. We have no debt. Across all our efforts, our goal remains the same. We are developing effective, innovative treatments to improve the lives of patients with neuropsychiatric and neurologic disorders. We are very proud of our team and the progress we have made towards our goals. We are encouraged by our performance to start off the year and look forward to bringing CAPLYTA to increasing numbers of patients in the months ahead.

I'll now turn the call over to Mark, who will provide additional details about our successful launch. Mark?

Mark Neumann

Thanks, Sharon and good morning, everyone. It's great to be here with all of you today. Following the exciting approval of CAPLYTA for both bipolar I and bipolar II depression in late December, Q1 marked the first full quarter of the launch of our expanded label. And as Sharon mentioned, it has been a very successful initial launch. CAPLYTA has seen a robust uptake and strong upward inflection in prescription trends, growing new prescriptions by 63% and total prescriptions by 45% versus the prior quarter. This strong performance is driven by a well-differentiated product profile, broad market access and successful sales and marketing execution. Initial feedback from physicians is highly positive regarding the favorable efficacy and safety and tolerability profile of CAPLYTA in bipolar depression. We have seen utilization of CAPLYTA across a broad range of patients, including both bipolar I and bipolar II depression, and is both monotherapy and adjunctive use. Newly diagnosed patients are being started on CAPLYTA, as well as those switching from other antipsychotics. These switches to CAPLYTA are coming from both branded and generic products.

New patients starts, as reflected by new-to-brand prescriptions or NBRX, have increased approximately 300% following CAPLYTA's bipolar depression approval. New to brand prescriptions reflect early adoption by prescribers and this metric is considered a key leading indicator of future prescription growth. We expect the upward trajectory in new to brand prescriptions to continue throughout the launch phase of our bipolar depression indications and are confidence in continued overall growth of the brand. We continue to maintain broad formulary coverage for CAPLYTA, including greater than 98% of patients with Medicare Part D and Medicaid and over 80% in the commercial channel. We expect additional coverage gains in the commercial channel in the coming months. Since the Bipolar depression launch, we have seen a rapid increase in the number of commercial patients being prescribed CAPLYTA and expect to see additional growth in this channel through the remainder of the year. Supporting this rapid uptake, our LYTAlink program is effectively supporting patients through the prescription process, as well as minimizing out of pocket costs for those with commercial insurance. Our sales and marketing team is executing a comprehensive launch plan and our commercial efforts are sized to optimize the large market opportunity in both bipolar depression and schizophrenia.

During the first quarter, we saw improving market conditions relating to patient visits and physician access for our sales force. Our sales force continues to seamlessly execute a hybrid commercialization model, combining primarily in person presentations with supplemental virtual engagements. These efforts are supported by extensive medical education programming and comprehensive digital initiatives to extend the reach to our target physician audience. We're also proud to announce our new “let in the light” direct to consumer campaign, which we launched in early April. Consisting of a national television ad, social media and other digital initiatives, the “let in the light” campaign reaches out to people suffering from bipolar I and bipolar II depression, as well as extending awareness to prescribers. We believe patients with bipolar disorder are particularly receptive to this type of campaign, because they are typically well informed and vocal about their depressive symptoms and side effects with their existing anti psychotic medications, and they are proactive in discussing these concerns with our physicians. In summary, I'm very pleased with our current growth trends and the feedback we are hearing from health care providers and patients, and I'm excited about our future growth. We have a strong commercial plan in place and our team will continue to execute to drive results.

I'll now turn the call over to Larry. Larry?

Larry Hineline

Thank you, Mark. I will now provide a summary or summary of our financial results for the first quarter ending March 31, 2022. Total revenues in the first quarter grew to $35 million compared to $15.9 million in the first quarter of 2021. In the first quarter, we recorded net product revenue of CAPLYTA of $34.8 million compared to $15.6 million for the same period in 2021 and $25.5 million in the fourth quarter of 2021. The first quarter of 2022 gross to net percentage was in the low-30s consistent with our prior guidance. As Mark mentioned, we had an increase in the number of patients in the commercial channel since the bipolar depression approval. This, together with standard Q1 seasonal payer dynamics, contributed to the gross to net increase over prior quarters. We expect CAPLYTA's gross to net percentage to remain consistently in the low-30s throughout 2022.

Cost of product sales were $3.2 million in the first quarter of 2022 compared to $1.5 million for the same period in 2021. Research and development expenses for the first quarter of 2022 were $29 million compared to $15.1 million for the first quarter of 2021. This increase is due to higher lumateperone clinical trial and non-clinical related costs and an increase in non-lumateperone project costs. Selling, general and administrative expenses were $75.5 million for the first quarter of 2022 compared to $52.6 million for the same period in 2021. This increase is primarily due to an increase in commercialization, marketing and labor related cost. Net loss for the first quarter of 2022 was $72.1 million compared to a net loss of $52.7 million for the first quarter of 2021. Cash, cash equivalents, restricted cash and investment securities totaled $773.2 million at March 31, 2022 compared to $413.7 million at December 31, 2021. On January 7, 2022, we completed a public offering of our common stock, in which we sold approximately 10.95 million shares of common stock for aggregate gross proceeds of $416 million and net proceeds of approximately $433.7 billion.

This concludes our prepared remarks. Operator, could you please open the line for questions?

Question-and-Answer Session


[Operator Instructions] Our first question or comment comes from the line of Andrew Tsai from Jefferies.

Andrew Tsai

So last quarter, as well as this quarter, you mentioned there are set of leading indicators that were looking favorable, which helped drive your confidence. So can you kind of remind us one more time what these leading indicators are? If any of them have slowed down this quarter or all of them still trending in the right direction or even accelerating? So just trying to gauge your confidence that momentum should indeed continue to accelerate throughout 2022?

Sharon Mates

I'll ask Mark to address that, please.

Mark Neumann

There's really three leading indicators that we look at. First and foremost, we look at our new to brand prescriptions, which really represent the adoption of a new medicine or new indication for that medicine by prescribers, and is really considered to be the key leading indicator of future prescription growth. And with new to brand prescriptions since we launched the bipolar depression, we've seen about a 300% increase in that metric. And that continues to trend in a very positive direction. So we're very pleased with what we're seeing in the new to brand prescriptions.

Another thing we look at is sample demand, samples of the product. And since the launch of the bipolar indication, we have been getting -- seeing a very high level of demand for samples and that demand is continuing as physicians are identifying new patients to put on CAPLYTA and looking to start them on a sample to assess the effectiveness and the safety and tolerability, and that sample demand is continuing. And then finally, just the feedback that we get from physicians about their current use and their expected future use of CAPLYTA and those trends are continuing to look very positive as well. So to your point, Andrew, across the board when we look at the leading indicators, they're all pointing in the right direction and suggesting continued future growth of the brand, especially in the new bipolar indication.

Andrew Tsai

And a very quick one is, is it fair to assume there was indeed no warehousing effect in Q1 that sales did grow organically through sales reps and marketing or even word of mouth?

Mark Neumann

That's our assessment and that's our belief that there wasn't a significant bolus of patients out there just waiting to be put on another anti psychotic. We believe this is true organic growth. There's a lot of excitement about the new indication for CAPLYTA. There's a great deal of interest and support of the clinical profile, and the feedback that we are getting from physicians of their early experience with their patients has also been very positive. So all signs are pointing to a very strong launch and that continuing.


Our next question to comment comes from the line of Jessica Fye from JP Morgan.

Jessica Fye

Mark, you mentioned you expect new to brand scripts to continue to grow throughout the launch phase in bipolar depression. I'm curious how long is a launch phase in your mind? Second question, should we think of net price over the year improving? Is it just for some other companies when 1Q often has the highest gross to net discounts, or maybe because your gross to net is being driven by a payer mix shift as bipolar depression use grows? Could we expect gross to net discounts to widen over the rest of the year? Just looking for a little color there. And lastly, I think you mentioned commercial coverage would continue to grow from around 80% now. Where do you see it leveling out and when could you get there?

Mark Neumann

I'll take the first part of the question and the last part of the question, and then perhaps I'll turn it over to Larry to make some comments on net price and gross to net. So in the launch phase, Jessica, it varies depending on, the category, the product, the new indication, new launch, et cetera. But generally, you can look at the first six to 12 months of a product indication as the launch phase. And given the strength that we have seen in the new to brand prescriptions, we would expect to see that continue during that timeframe, and all signs are pointing to that happening.

In terms of the commercial coverage, yes, as we have said before, we have taken the coverage in the commercial channel from about 55% last year, up over 80% at the time of the launch. And we do expect that to continue to climb in the coming weeks and months and we would expect to see that move up towards the 85%, 90% range, perhaps even higher. And we think that gives us very broad coverage across all three of the channels. And combined with our LYTAlink program really provides strong access to the product for patients so that that's not a barrier in the marketplace or for the uptake of the product. So with that maybe, Larry, I'll ask you to comment on net price and gross to nets.

Larry Hineline

As you know, we have had a rapid uptake of CAPLYTA in the commercial channel in Q1. And as you know, this is essential for a successful launch. But also this uptake in the channel did result in higher utilization of our copay assistance program, which impacts gross to net negatively. And secondly, the seasonal payer dynamics, as you see with many other drugs, the impact of copay assistance programs is greater in the first quarter of the year due to these seasonal payer dynamics. Now what we see for the rest of the year, we are in the low 30s in the first quarter, we see it staying in the low thirties for the rest of the year. And one of the reasons is there is less impact of seasonality and also the impact of the mix of the Medicaid channel as that decreases. So there are pluses and minuses but we expect to stay in that low 30s range for the remainder of 2022.


Our next question or comment comes from the line of Charles Duncan from Cantor Fitzgerald.

Charles Duncan

I did have a kind of a follow-up to an earlier question for Mark regarding the market feedback, or if he could just really kind of provide us some color on the kind of feedback he's getting from prescribers. What is it about CAPLYTA and its profile in terms of driving adoption for BPD, is it really on the efficacy side or safety? And then can you provide us any color on expectations regarding persistency in this particular population versus say the schizophrenic patient population?

Mark Neumann

To answer the first part of the question, it really is all the things you mentioned. So what we're hearing back from physicians is that they are very impressed by the proven efficacy, first and foremost in both bipolar I and bipolar II, and the FDA approved indication in both of those disorders. So it all starts with safety, it all starts with efficacy. But what they also really highlight as differentiation for CAPLYTA is the safety and tolerability profile. Sharon had mentioned in her initial comments that both weight gain and akathisia are two side effects of great concern to patients with bipolar disorder based on some of the limitations of the existing anti psychotics that they had been using. And in our clinical trial program, changes in weight were similar to placebo with CAPLYTA and akathisia and other EPS measures were also similar to placebo. And physicians are experiencing the same safety and tolerability profile in the bipolar depression patient population as they saw in the schizophrenia population. So that gives them a great deal of confidence that they can prescribe CAPLYTA, they'll see the efficacy, and they're sure that there is good and favorable safety and tolerability.

And then in addition to that the dosing a single 42 milligram dose once a day without regard to food, the physician can start the patient on the effective dose without having to titrate over multiple weeks to get to that point and then maintain the patient on that same dose. And that's being viewed very much as a benefit as well. The second part of your question regarding persistency. What we have seen historically is that patients with bipolar disorder tend to persist with their medication, their anti psychotic a bit longer than patients with schizophrenia do. And while it's still too early for us to gauge that with CAPLYTA, we do believe that we will see a similar dynamic in patients with bipolar versus those with schizophrenia. And as we get that data in the coming months, we'll share that with you.


Our next question or comment comes from the line of Brian Abrahams from RBC Capital Markets.

Brian Abrahams

I’m just curious if you could expand a little bit more on access for CAPLYTA, now that you’ve expanded into commercial channels. And with regards to just any potential barriers to CAPLYTA, what's sort of the average time to get started on CAPLYTA? And then I’m also curious if you could speak about what type of poultry you might expect from the April DTC campaign and when we might see that start to manifest?

Mark Neumann

So we are very pleased with the broad access that we have across all three channels, Medicaid, Medicare Part D and the commercial channel. Depending on the payer, each one has different utilization criteria. Certain plans make CAPLYTA available unrestricted, which means that the physician can write a prescription for CAPLYTA regardless of the indication if they feel that that CAPLYTA is right for that patient. There's others that employ an electronic step edit, which means that they first want to see the patient started on one, sometimes two generic products. The dynamic in bipolar is very similar to schizophrenia that the vast majority of patients have already cycled through one, two, three different anti psychotics, and this happens behind the scenes at the pharmacy, so it's not something that the physician or their office staff needs to do. And it is not a barrier at all to the patient being prescribed CAPLYTA.

And then there are some that have a prior authorization in place. And typically, the prior authorization is the payer just wants to make sure that the patient is being prescribed CAPLYTA for an on label indication, either schizophrenia or bipolar depression. And we have the LYTAlink program to help physicians and their office staff to navigate that process and again, is not a significant barrier to access to the medicine for patients or for the physicians that are prescribing it. In terms of DTC, we're very pleased with the early metrics that we're seeing in terms of interest that is being generated by looking at the increase in searches on CAPLYTA, increased traffic to our Web site. And we would expect to see the impact of that in -- typically, you see it in a four to eight week period of time after you begin airing your TV commercial and we're about a month into the airing as we started it in early April. So we look forward to that as well.


Our next question or comment comes from the line of Umer Raffat from Evercore.

Mike DiFiore

This is Mike DiFiore in for Umer. I have a two parter on the mix feature study, if I may. The design of Study 403 is very similar to that of the adjunctive MDD trials in terms of the primary endpoint, you have MADRS at day 43, as well as in the number of patients enrolled. So I guess my question is since patients with mixed features have greater symptom severity and are harder to treat, is the powering of 403 adequate and if you can, what are the pairing assumptions of that study? Secondly, again, since this population is historically harder to treat, is there any -- what gives you confidence that lumateperone would be in handling the mania aspects of these trials? And is mania something that we should be more worried about in this disease state?

Sharon Mates

I think I was going to start and then have Suresh add comments. But maybe Suresh, do you want to start and first talk about what mixed features is so that everyone on the call understands that and then talk about mania and how we certainly monitor for mania, as well as depression and then just talk a little bit about our study design.

Suresh Durgam

In terms of the mixed features, patients with both unipolar depression that is major depressive disorder and bipolar disorder that exhibits manic symptoms or hypermanic symptoms that are below the clinical threshold of these symptoms during the depressive episode. So that is the patient population we are studying. Mixed features is a specifier within the DSM-5 and this applies to patients both in the mini-polar depression and also in bipolar depression. And they need to have some symptoms of whether mania or hypomania that is below the clinical threshold. And the importance of this is because these symptoms are difficult to diagnose. These patients have greater severity of illness, they have high suicidal rates, they have high recurrence rates and also the high comorbidities and are difficult to be treated with antidepressants. They fully respond to antidepressants.

So based on our studies in our bipolar depression, in our programs that were completed, we looked at the subset of patients with mixed features and where we have seen an effect in mixed features patients, and that's what led us to design the study for our current study. The patients who diagnostically meet the criteria for mixed features in the current ongoing 403 study and the primary endpoint for this is MADRS at week six and second CGI severity as secondary. And these patients will include both patients coming in from major depressive disorder, as well as from bipolar I or II who have mixed features. And these studies are adequately powered and we are on target right now for completing the enrollment by end of this year.

Sharon Mates

And then to address your question, Mike. So first of all, we have not talked about the powering of the study but obviously, it is powered to be able to look at efficacy appropriately. To your question about the mania and there we do and we have in all of our bipolar studies used the YMRS scale to monitor for mania. And we don't see patients flipping into mania overall and we don't -- we have not seen that in any of the bipolar subsets either. So I think we are very good in knowing that we are not shifting patients into mania.


Our next question or comment comes from the line of Marc Goodman from SVB Securities.

Marc Goodman

Mark, are these patients, these mixed patients, using anti psychotics anyway? I mean, I guess what I'm getting at is, if they're using it anyway, how important is the new indication? How much of inflection points should we see when you get that indication hopefully when you do? Just trying to understand how much-off label there is already usage there. And then secondly, can you just give us an update on the depression studies, how enrollment is going. Some companies have had some trouble with enrollment. Obviously, it's not just COVID, it's also because of the Russia Ukraine engagement. So can you talk about that a little bit and how the enrollment is going?

Sharon Mates

So Mark, do you want to take the first part of the question, and then I'll comment on the clinical trials?

Mark Neumann

Maybe just to clarify, Mark, when you're asking that question, is that a follow on question to the mixed features patient population, or are you talking about the bipolar indication? I think we -- Mark may have hung up on that. So Sharon, maybe I can speak to the bipolar portion of that and then maybe you or Suresh could speak to mixed features, if that's the focus of Mark's question. For me, as a commercial person, there's really two big advantages to a product being on label for a particular indication. One, when a physician sees that a product has passed the rigor of efficacy and safety and tolerability and an indication for a specific disorder like this, it gives them a lot of confidence that they can use.

And for CAPLYTA bipolar depression, when they see both bipolar I and bipolar II depression being on label, this gives them a great degree of confidence that the patient in front of them, whether they have bipolar I or bipolar II, CAPLYTA to is an excellent choice for them. The second thing for us is that what this allows commercial organization to do is to engage in promotional activities around on label promotion, which other companies with products that aren't labeled for that cannot do. So for me, there's those two big advantages of having something on label as we do with bipolar I and bipolar II depression. So with that, maybe I'll turn it over to Sharon and Suresh to comment on the second part of the question.

Sharon Mates

I'll start and I don't know if Mark was able to rejoin or not, but I know it is an important question about what's happening in Russia and the Ukraine, and our enrollment in the MDD studies. And I think as we've told you before, for all of our studies, our global studies and what we have done is put in place mitigation strategies, whereby we have been able to mitigate the effects of Russia and the Ukraine enrollment. And so we can tell you that our studies are ongoing. And what we have done is mitigate again, for Russia and the Ukraine and we are still on track for our filing in 2024 in MDD, as adjunctive treatment in depression.


Our next question or comment comes from the line of Sumant Kulkarni from Canaccord.

Sumant Kulkarni

I have a couple of quick ones. First, how important is the recent approval of the 10.5 mg and 21 mg strength and your ability to round out the currently approved indications and potentially target MDD later? And second on 1284, is it fair to assume that you're attending those studies have already led the selection of optimized doses for clinical studies in the elderly that are set to start later this year?

Sharon Mates

I have to tell you I missed that. Can you repeat the question, please?

Sumant Kulkarni

So the first one is, how important is the recent approval of the 10.5 mg and 21 mg strengths? And the second was on 1284, do you already have optimized doses selected for the clinical studies in the elderly that are set to start later this year?

Sharon Mates

So I'll start, and I'll ask Mark or Suresh, if they have any comments to add. So the recent approvals of 10.5 and 21 milligrams are for the special population, those with hepatic impairment and those CYP3A4 inhibition. So that means they're taking other drugs that inhibit CYP3A4. So while these are -- especially for schizophrenia, because it's a smaller population overall, it impacts a smaller number of people. The larger we get in your indication, obviously, the more patients can be impacted. So we think that it is an important option for that small percentage of people who need dose adjustments. That's the first answer. And for 1284, we are still looking at certain things like we want to look at brain occupancy of different receptor functions for 1284 to ensure that we have selected the appropriate doses for our next studies. I don't know Suresh, did you want to add anything on the importance of 10.5 and 21 milligrams?

Suresh Durgam

I would say that it is important, especially for the special populations. And for those, there is a small percentage of patients who will be on CYP3A4 inhibitor or for any severe or hepatic impairments, these doses will provide coverage for those population. So in that sense, it is important. One thing I want to remind is, these doses are just for the special populations, they're not doses for any titration.


Our next question or comment comes from the line of Jason Gerberry from Bank of America.

Jason Gerberry

So I guess first one, just curious if you guys have seen any impact at all from the competitive launch of Alkermes' Lybalvi -- fierce schizophrenia business? And then my second question is just looking at [raylar] gross to net sort of the gross sales versus net sales dynamic, it looks like around 25% to 30% gross to net. So just curious, like directionally, given that their sales mix is probably similar to how both the street forecasts CAPLYTA sales mix? Is that a good kind of medium term indicator, again, on the directional basis, not looking for guidance?

Sharon Mates

Mark, you want to take that?

Mark Neumann

Maybe I can take the first part and then I'll have Larry comment on the on the gross to net. So Jason, we're focused on CAPLYTA. We're focused on serving patients and driving CAPLYTA business. What I would say about our schizophrenia business is we have seen in addition to very, very strong growth in bipolar depression, we have also seen our schizophrenia business continue to increase and continue to grow. And I think our expectation is that overtime as physicians get more and more awareness of CAPLYTA and more and more experience with CAPLYTA in other indications like bipolar depression, there will be a positive halo on their prescribing in schizophrenia as well, and we are seeing those increases in schizophrenia also. So the second part of the question with the gross to nets, perhaps Larry, you could comment on that.

Larry Hineline

I mean, I really can't comment on another company's gross. I did mentioned that our gross to net in the first quarter was in the low 30s and that was impacted by a seasonal payer dynamics. And that with some adjustments up and down, we should still see our gross to net going forward in 2022 in the low 30s. I don't know if I can give you any more color than that.


Our next question or comment comes from the line of Karin Jenkins from Goldman Sachs.

Karin Jenkins

I'm curious, if you have any visibility on the patients that are coming on the drug in the bipolar indication? If those are primarily bipolar I or bipolar II, and how this compares to what you might it expect in the more limited competitive options in bipolar II in particular?

Sharon Mates

Let me start with an overall statement and turn it over to Mark. We're very excited about the bipolar II indication, and we think there is a large number of patients out there who are either misdiagnosed or under-diagnosed, who are candidates or maybe candidates for CAPLYTA for bipolar II. And so we think we see the market continuing to grow with the bipolar II indication. With that, I'm going to turn it over to Mark to give further comments on that.

Mark Neumann

And I can comment on characterizing sort of the source of business of CAPLYTA in bipolar depression. And I guess the overarching statement is that we are seeing use across a broad range of patients consistent with the products labeling. So we're seeing use in both bipolar I and bipolar II depression. We're seeing use as both monotherapy and as adjunctive use. In terms of the types of patients, we are seeing an increase in the newly diagnosed patients being put on CAPLYTA, as well as continued strength in those switching from other anti psychotics. And when we dig a little bit deeper into the switching, we find that switches are coming to CAPLYTA from both generic anti psychotics, as well as other branded anti psychotics. And so we view this as a very healthy sign of the launch and utilization across a broad range of patients suffering from bipolar depression.


Our next question or comment comes from the line of David Amsellem from Piper Sandler.

David Amsellem

So just have a couple questions on, the payer landscape, just thinking longer-term. Do you envision the loss of exclusivity of Latuda next year is having any sort of impact on access for CAPLYTA or at least in terms of hassle free access, I should say? That's number one. And then number two, just with overall utilization of atypicals growing considerably in recent years and continuing to grow. Do you think there's going to be overtime a trend towards tighter control of the category? We haven't seen a ton of it over the last decade or so. But do you think that could happen in the next several years just given the sheer volumes here?

Sharon Mates

I will start with the loss of exclusivity of Latuda and will that have a big impact on us, and then ask Mark to comment on the utilization strategies going forward. And we don't believe that the loss of exclusivity of Latuda will have a big effect on CAPLYTA, because, first of all, Latuda has been around for a very long time, and many patients have already cycled through Latuda. So we don't imagine that to be a burden for us, for patients, who if they have a step through, they will already have stepped through Latuda as one of the -- as a generic. So I think that we're not concerned about that. Mark, do you want to add anything to that or do you want to go directly to the second question?

Mark Neumann

The only thing I would add is in particular in this category over the years, as various brands went generic, and that specific brand certainly was impacted by the loss of exclusivity, but the other anti -- the other branded anti psychotics were not seeing that significantly impacted. So I think there's a historical precedent for it for that as well. And then in terms of the trends moving forward with payer management of this category, we also don't expect there to be a significant shift in how payers manage this category, they're very comfortable managing the category, the way that they have. They like to ensure access to a broad range of anti psychotics for these conditions. They recognize there's an unmet need, they recognize that there is a significant amount of churn whereby patients discontinue their existing anti psychotics, and they need other effective, safe and tolerable anti psychotics to go to for their next line of therapy. And so we don't expect there to be a significant shift in how payers manage this category.


Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Sharon Mates

Great. So we're very excited about the progress that we have made on our launch for bipolar -- for the treatment of bipolar depression. We look forward to continued progress and we look forward to updating you on this progress and on our pipeline, as well as we go forward. With that, operator, you can disconnect.


Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.

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