Welcome everyone, to the 42nd annual J.P. Morgan Healthcare Conference. My name is Tessa Romero. I'm one of the senior biotech analysts here at J.P. Morgan. Our next presenting company is Acadia Pharmaceuticals, and speaking on behalf of the company, we're pleased to have CEO Steve Davis. Steve?
Great. Thanks much, Tess, and thanks to each of you for coming out today. I need to start with the obligatory disclaimer regarding forward-looking statements. The business of drug discovery, development, and commercialization has a lot of inherent risks. Please see our most recent SEC filings for a description of those risks as they relate to our business. Our business rests on three pillars. We have two successful commercial franchises driving record revenues, three late-stage assets with a strong early-stage pipeline fueling future growth, and we're a cash flow positive company, which further enables us to pursue that growth aggressively. This morning, I'm gonna focus primarily on our two commercial franchises, DAYBUE and NUPLAZID. And I'll also cover our pipeline of opportunities, but focusing primarily on our late-stage pipeline. So I'll start today with DAYBUE.
DAYBUE is the first and only drug approved to treat Rett syndrome. Rett syndrome, as many of you are aware, is a highly debilitating disorder. It affects predominantly females. About 90% of Rett patients are female, 10% male, and they develop normally for about the first two years of life. And then, at about age two, one and a half or two, they begin to deteriorate developmentally. They reach a point where many, if not most of them, are wheelchair-bound their entire life. Some can walk in a limited manner. They lose the ability to communicate. Some can communicate verbally in a limited manner. Some can't even communicate non-verbally. So again, it's a highly, highly debilitating disorder. We're proud to be the first company to have a bring a drug forward that offers hope and benefit to this patient population.
So to get things started regarding Rett, I wanted to take just a minute to describe why we do what we do, and it's illustrated here on this slide. And I'm gonna ask you to indulge me for a second. I'm gonna actually read these, 'cause these, I think these are really important. They're a representation of the kinds of feedback that we get on a daily basis, that illustrates the benefits that these Rett patients are receiving and illustrates the kinds of things they've not been able to do before. So first, "It was her engagement level with the world outside of her, to me and to friends in school. It just blossomed, and it was like a light was turned on." "Her verbalization definitely improved, and she started saying more things.
Picking up things a lot more, mostly her cup, happens daily, and she's now trying to drink by herself." "Improved cognitive ability, and the parents are hearing new words or words they've not heard in a while. She knows that she can get her answers out quicker, and she's answering accurately, and she's getting more reciprocation from peers. People around her are able to communicate with her more effectively." "Better at following directions and listening to what someone tells her. Better with receptive language." So again, this is why we do what we do. Many times in our business, we're focused on numbers. We focus on revenues. We focus on clinical trial enrollment rates. We focus on primary endpoints, statistical analysis, et cetera.
But I think this slide really sums up the higher mission that each of us, everyone in this room, is called to, and that is to really benefit those with the greatest needs. We've had a very successful launch, DAYBUE. Many times with rare disease drugs, we see a very linear-shaped launch in the first year or two of the product's life. We've seen that with one important exception. We had a very large surge that I think was a result of significant work we'd done pre-launch to educate the medical community, prepare the caregiver community, and to prepare the payer community, and this resulted in a very large surge that we saw in the early days of the drug.
So if the linear launch looks like this, for those of you in the room that can see my hand, it's moving up in an upward motion from left to right, my left to right, we have that, a very similar response, except we just stepped up. It's almost as if we accelerated, fast-forwarded a year into the product life, and that produces a lot of benefits that we'll enjoy for the entirety of the product life, but particularly as we launch into 2024. It creates a lot more critical mass around medical community's experience with the drug, a lot more critical mass around the caregiver community's experience with the drug. So again, we're thrilled with the way we've commenced the launch with DAYBUE and very much looking forward to a highly successful 2024.
There are about 5,000 diagnosed Rett patients in the United States, as we reported on our third quarter earnings call. At that time, we had greater than 800 patients on DAYBUE. We'll provide an updated number for that when we release fourth-quarter earnings. Based upon this success, we expect $170-$177.5 million in fiscal year 2023 product sales, so that's about the first eight and a half months of launch. And on this foundation, this very strong launch, we're continuing to expand the breadth and depth in our breadth and depth in the Rett community, leveraging the real-world benefits, the kinds of things that I just described, which are what physicians and caregivers and families really focus on. That's what matters to them.
The physician experiences I described, we've quickly reached a critical mass of understanding of how to use the drug, caregiver familiarity, and as I mentioned, I'll touch on this in the next slide, we've established broad payer access and are well ahead of plan there. Just focusing on a few performance metrics. At six months, our real-world persistency versus clinical trial experience is illustrated here. 76% of patients that start on therapy are still on therapy after six months. That's based upon confirmed discontinuation, so because it's a rare disease drug, we have high level of contact with families, with physicians, so we have a very good idea of when patients have discontinued. If we add to that, patients that have not refilled in more than 60 days from their last scheduled refill, that number is 68%.
Both of those numbers are still tracking well ahead of our clinical trial experience, and the best comparator we have there is the patients that were on placebo during the phase III study that then rolled over onto DAYBUE for the open-label extension study. So they knew they were going on drug, they didn't have to worry about drug or placebo, and it was their first time to experience the drug. Compliance to dose, we estimate to be in the 75%-80%. That's tracking precisely where we expected when we launched the drug. In the phase III study, we allowed for some dose adjustment. Everyone started at the recommended dose, but were able to adjust downward.
In the real world, what we're seeing, what we expected to see, and we're seeing, and we're pleased to see, is that most physicians, a high majority of physicians, are titrating up. So they start at a lower dose, and they titrate up and find the right dose. The dose that they seem to be settling on, again, we estimate at this point to be in the 75%-80% range. I mentioned payers a second ago. We now have formal payer policies in place for greater than 80% of Rett covered lives. There will be some plans that will never adopt a plan. If they have one or two Rett patients, they'll handle that on an ad hoc basis. Again, operating well ahead of that, of our initial projections on payer coverage. In the middle of last year, we acquired worldwide rights to trofinetide.
When we licensed this deal a few years ago, or licensed this program, we acquired rights to North America. We now have global rights. This presents a very strong growth opportunity for us, over the course of the product life. In Canada, it's estimated there are 600-900 Rett patients. We expect to file our NDS in the first quarter of this year, with a potential approval around year-end this year. In Europe, it's estimated 9,000-14,000 patients between Europe and U.K. We're engaging with EMA in the first quarter, and we anticipate filing an MAA in the first half of next year. Japan has 1,000-2,000 Rett patients, and this year we're engaging Japanese regulatory agency. I'm gonna shift gears now to NUPLAZID.
NUPLAZID is the first and only drug approved for the treatment of Parkinson's disease psychosis. Again, we focus on areas of high unmet need. Parkinson's patients generally live 15, 20, sometimes longer, years. They typically develop psychosis, not always the case, but typically in the last four to five years of life, so it's toward the latter stages of the disease. And it's a highly debilitating symptom. You have patients that are already very medically compromised. They have a difficult time walking many times. They have a difficult time feeding themselves. And layering on top of that, hallucinations and delusions is very, very burdensome, not only for the patient, but also for the families. With NUPLAZID, we have introduced, again, the first and only drug approved to treat Parkinson's disease psychosis. There are a lot of antipsychotics approved.
None of them, other than NUPLAZID, are approved to treat PDP. In fact, the labels of all the other antipsychotics state that they're not approved for use in elderly, demented patients, including Parkinson's patients. We're now in the eighth year of this product life. It's been a very successful franchise for us. We are generating over $300 million on a standalone, fully burdened basis in annual cash flow. In 2023, we leveraged real-world evidence, three studies that had come out recently, two of them looking at mortality rates in Parkinson's disease patients and comparing the mortality rate of NUPLAZID to the mortality rate of patients taking other off-label antipsychotics, which are sometimes used in this population.
What was observed in both studies, almost identical results, is that patients on pimavanserin, or NUPLAZID, had a statistically significantly lower rate of mortality than those taking other antipsychotics. Third study, comparing again NUPLAZID to other antipsychotics used off-label in this population, illustrated NUPLAZID had a statistically significant benefit on healthcare resource utilization. So we've leveraged that data to establish a growth in new patient starts and in net sales last year. Simultaneously, being in the eighth year of the product life, over the last couple of years, we've significantly reduced the investment. This is a natural evolution of a product at this stage of life. We don't need to spend as much. The ROI is not as attractive on the things that you're investing in in year eight, as opposed to what you might have invested in year two or four or five.
As a consequence, we've reduced the spend in this franchise by over $100 million on an annualized basis when we compare 2021 to 2023. Again, franchise is generating greater than $300 million a year in annual cash flow. I'm gonna shift now to our portfolio, our pipeline. In addition to NUPLAZID and DAYBUE, we have three late-stage programs. I'll go into more depth on each of those. They are ACP-101 to treat hyperphagia and Prader-Willi syndrome, pimavanserin to treat negative symptoms of schizophrenia, where we'll have results by the end of this quarter, and then ACP-204, where we're targeting as an initial indication, Alzheimer's disease psychosis. So more on that in a moment.
Here, I'll just make note of the fact that we also have a very strong, very robust early-stage pipeline, which includes ACP-2591, where we have rights for Rett syndrome and Fragile X. This is a compound that is in the same category or class as trofinetide for DAYBUE, so we're pursuing that compound with rights to those two indications. We have an ASO collaboration with Stoke Therapeutics, where we're pursuing SYNGAP1, Rett syndrome, and an undisclosed third target. And then we have multiple undisclosed programs, both in the neuropsychiatric franchise as well as in rare disease. Let's go to negative symptoms of schizophrenia. So many times when we think about schizophrenia, the first thing that we think about is the hallucinations, delusions, paranoia that these patients experience, which are highly debilitating, obviously.
What we don't often think about, doesn't come first to mind many times, are the negative symptoms of schizophrenia, which are manifested in chronic persistence symptoms that include social withdrawal, restricted speech, lack of emotion or lack of affect, loss of motivation, and can lead to very low social functioning, long-term disability, and significant caregiver burden. I've been in this business about 30 years, and when I joined, I had a couple of careers before this, but when I got into this industry, the first thing I did was work on a collaboration with a large pharma company to treat the negative symptoms of schizophrenia. I can tell you, in the 30 years that I've been doing this, the industry has advanced the ball about an inch. We just have not made any progress.
It's been the most significant unmet need in schizophrenia for decades. So we have with pimavanserin. And by the way, I should mention that in addition to there being no FDA-approved treatment, this is a significantly larger population than Parkinson's disease psychosis. This is about 700,000 patients in the U.S. that have persistent negative symptoms. And I should clarify, when I'm speaking of negative symptoms, I'm talking about the persistent long-term negative symptoms and the impact that you see here on this slide. And I want to separate that out from negative symptoms that many times respond on a temporary basis to improving the positive symptoms.
So when you have a schizophrenia patient today with no drug that's approved to treat specifically the negative symptoms, what we see almost invariably is when the positive symptoms are improved or stabilized, then the negative symptoms have a temporary benefit as well, but it doesn't last. And so we're not seeking to treat patients here that where we'd be first-line therapy to and competing against a lot of cheap generic drugs. We're seeking to treat the patients that have already on a first-line therapy. The positive symptoms are well-controlled or as well-controlled as they can be. They're stable, and but they continue to have persistent negative symptoms. In this program, we've done something that you don't often see in negative symptoms of schizophrenia. We have a positive pivotal study, our ADVANCE-1 study.
We're currently in the final stages of our ADVANCE-2 study. This is our second pivotal study, our phase III study, for pimavanserin in this indication. And for this study, it's almost identical to the first study we ran. The principal difference is, in the first study, we did a little bit of dose ranging. We saw it was a statistically significantly positive study, but we noted that on the 34 milligram dose, the highest dose tested, where most of the patients took, and that's the same dose that were approved for treating Parkinson's disease psychosis, but a much stronger response there, which we would have expected. So in this study, the principal difference is all patients in this study are on that 34 milligram dose.
Again, this is a six-month study, which is what's needed to really assess the long-term, persistent negative symptoms. And we should have results of this study around the end of the first quarter, so we're very much looking forward to that. Okay, I'm going to shift to Prader-Willi syndrome. ACP-101 is our drug candidate here. Let me just touch for a second on Prader itself. Like Rett, a highly, highly debilitating disorder. This is a rare neurobehavioral genetic disorder that can lead to very high social isolation. It's defined primarily by hyperphagia, which is this unrelenting desire to eat. And the symptoms typically begin to present but present between the ages of three and eight. There are other behavioral aspects, developmental aspects to the disorder, but hyperphagia is the hallmark symptom.
There are approximately 8,000-10,000 patients in the U.S., so it's a in the same size range as Rett syndrome. Here too, there are no FDA-approved treatments for hyperphagia in Prader-Willi syndrome. I think when we begin getting engaged in this area, you know, this disorder is a CNS originating disorder that has significant metabolic consequences, obviously. And one of the eye-opening facts that when we first got involved in this space really popped out to me was that the average life expectancy of these patients is 30 years. So it illustrates just how significant this disorder is. Okay, so we just initiated our phase III study for ACP-101 in the treatment of hyperphagia for PWS. We're testing 3.2 milligram dose of carbetocin, which is nasally administered.
This is a placebo-controlled study. Primary endpoint is the change in the HQCT. This is a validated scale for hyperphagia. This study is building on a previous experience with the 3.2 milligram dose, which was observed to significantly reduce hyperphagia-related behaviors in an earlier study. Shifting to ACP-204 for the treatment of Alzheimer's disease psychosis, this program is an extension of our franchise in 5-HT2A blockers. NUPLAZID, which I've discussed earlier, is a 5-HT2A blocker. ACP-204 builds on the experience we have with pimavanserin, and in this program, we're able to lever. In neuropsychiatry, many times, the models from animals to humans don't always translate perfectly. And so including estimating plasma levels you need for an effect, doses you need to achieve those plasma levels, et cetera.
In this case, we have we've done all of the normal things you would do to assess this compound very thoroughly on a in vitro basis, an in vivo basis, and through phase I testing. But we have one significant advantage here that you don't typically have in developing drugs for neuropsychiatric disorders. We have all the data from pimavanserin on each measure that we assess ACP204 in, and that enables us to go forward with a much risk-reduced asset at this stage. As we set out on this journey with ACP204, we sought to first and foremost replicate the strong profile we have with pimavanserin: robust efficacy in this population and a very attractive safety and tolerability profile. In addition, we sought to improve on the characteristics of NUPLAZID.
NUPLAZID has a modest QT prolongation. We see that many times with antipsychotic drugs. In a schizophrenia population, younger population, it would not be a significant challenge in the medical community. In a highly medically compromised population, like Parkinson's disease psychosis, or for that matter, Alzheimer's disease psychosis, physicians pay a lot more attention to those things. So we said, "If we can reduce or potentially eliminate the QT prolongation with ACP-204, there'd be significant benefit to that." And so far, in over 100 patients we've tested in phase I, we've not seen any indication of QT prolongation. And by the way, the QT prolongation that we observed with NUPLAZID was predicted based upon preclinical animal models, and the preclinical animal models with ACP-204 did not predict it, and we've not observed it in the clinic.
Eliminating that QT signal also allows us to do something with 204 that we were not able to do with pimavanserin. With pimavanserin, we saw some antipsychotic activity at 17 milligrams, and we saw more at 34. Due to the QT signal, we were not able to test above 34. With ACP-204, based upon lining up all of the data I've described earlier, in vitro data, in vivo data, and phase I data, we believe we can go to a dose that is approximately double the 34 milligram equivalent dose of pimavanserin. So that, so that will allow us to explore whether we can get even more efficacy by going higher on the dose. And then finally, NUPLAZID has a 57-hour half-life. It takes about 12 days to get to steady state. That means patients have to wait a while in order to observe the benefits.
That's often seen in serotonergic drugs. With ACP204, we've been able to cut the pharmacokinetic time to get to a steady state in about less. It's now less than half, so we've gone from 12 days to five days. As I described on the last slide, our experience with pimavanserin supports a different risk profile than you typically have at this stage, and it's allowed us to pursue a seamless phase II, phase III program. So what we're doing in this program is we have a phase II study that will roll seamlessly into two phase III studies, so we'll not stop enrolling at the end of phase II. When a site enrolls their last phase II patient, the next patient will roll into one of the two phase III studies.
We're exploring two doses, again, 30 milligrams, which all of the data we have suggest that that would be equivalent to 34 milligrams of NUPLAZID, and then 60 milligrams, double that dose. Six week treatment period, placebo-controlled. And the way we've designed this study, and we've sized and designed the phase II portion to also be qualified as a pivotal study. So we have three opportunities to get two positive results. Two positive results is typically what the FDA expects. And in neuropsychiatry, there's ample examples where the drug works, but it may fail a study along the way. So this is further insurance in this neuropsychiatric program. Okay, I'll close now with just recapping 2023 and looking forward to 2024 and beyond. In 2023 was a transformational year for us.
We launched our second commercial drug, DAYBUE. We experienced or achieved 38% revenue growth from two commercial franchises, DAYBUE and NUPLAZID. We completed enrollment in our ADVANCE-2 study in negative symptoms of schizophrenia. As I described earlier, we acquired worldwide rights to trofinetide. We initiated our phase III program trial of ACP-101 in Prader-Willi syndrome. We initiated our seamless phase II, phase III study of ACP-204 in Alzheimer's disease psychosis, and we reached cash flow positivity. Looking to this year and beyond, we'll capitalize on the successful launch of DAYBUE. We'll continue to achieve strong revenue streams from DAYBUE and NUPLAZID, with strong revenue growth as an organization. We will have the top-line results from our ADVANCE-2 study around the end of the first quarter this year.
We're pursuing our global expansion now of trofinetide into Canada, Europe, and Japan. We are now well on our way to examining ACP-101 in Prader-Willi syndrome, and with a potential new therapy there. Likewise, with ACP-204 for Alzheimer's disease psychosis. As we move forward, we're now at a point where we have sustainable and growing cash flow from operations. With that, Tess, I'll turn it back over to you to start Q&A.
Great. Steve, would you like to introduce the rest of your team that you have here?
I would love to do that. Mark Schneyer is our CFO. I think we have enough chairs up here for you guys to come up. Brendan Teehan is Chief Commercial Officer, and Doug Williamson is Head of R&D.
Where would you like us? We should sit there and you have... You stay here?
Yeah. Great. Please wave your hand if you do have a question, but I thought I would just get us started here. So we just wanted to make sure that we are interpreting your comments correctly. In your full year sales expectation for DAYBUE, are you suggesting that fourth quarter of 2023 sales landed within the guide, or rather, that you would arrive at $170 million-$177.5 million in full year 2023 sales, if you consider the last guidance?
Well, I've been talking a bit, so Mark, do you wanna take that?
So we'll clarify. That's just reconfirming the guidance that we gave at the end of the third quarter. So if you just add up what we've earned to date, plus the expectations for fourth quarter guidance, that gets to a range of $170-$177.5.
Okay. So given nearly 20% of the prevalent Rett patient population was on DAYBUE as of September 30th, following its April availability, how should we think about the trajectory of growth in 2024 and key drivers?
Brendan, you wanna take that?
Yeah, sure. Thanks, Tess and Steve. So I think Steve stated it very well. We had a great opportunity with an audience that was paying a lot of attention at the time we launched DAYBUE, and we pulled forward a lot of the demand that might have been expected to occur over the first 12 months. That creates great experience in the market, so HCPs, our healthcare professionals, have great experience with the product. I think the community is starting to talk to each other about the successes they're seeing, and some of which Steve articulated in each of those great stories we're hearing from families. So with that base of business, now we see what we've seen with other rare disease products.
There is a steady and incremental, linear growth that will occur, and is occurring, in the fourth quarter and what we expect to see in 2024.
Could we talk a little bit about the prescribers in particular? How would you characterize where you think growth will come from there? Do you think about new prescribers or deeper penetration in your current prescribers, or a combination of both of those two things?
Brendan?
I'm gonna go with yes and yes. So, breadth and depth will continue to be critical. We've made great progress in centers of excellence and in high-volume institutions that treat Rett syndrome patients, but there's still ample opportunity for us to penetrate there, which is great because there's already, you know, building experience among that treatment community. But if you look at the dynamics from the time of launch to where we are today, the vast majority of patients that were put on DAYBUE in the first quarter came from centers of excellence and high-volume institutions. But we're also pleased to see a non-negligible amount of patients come from the community, which means that prescribers were already comfortable with the product profile for DAYBUE to be able to treat.
Now, we're starting to see the continuum of HCPs shift towards more of those higher-volume institutions that are getting more and more experience, and community treaters, who may not have the volume of patients that you see at centers of excellence, but have sufficient numbers of patients and are starting to get their initial experience with DAYBUE. So I think you'll see in 2024, more patients coming from the community and high-volume institutions, but a steady flow of patients still coming from COEs or centers of excellence.
I thought I might turn the discussion now to NUPLAZID and the negative symptoms of schizophrenia. On timing, is there? It's, it sounds like you affirmed your guidance of the first quarter here, which is right around the corner. Any additional color you can give us on when you expect the last patient out of Advance II, and how long it could take you to get to the top line?
So the reason we were describing a range is because, I mean, this typically happens with clinical studies in this space. We don't know if the final patients all roll into the open-label extension, then we'll be able to present data a month earlier than we will otherwise. If some of the final patients don't roll over, then we have to have a safety checkup on them 30 days after they finish their dose. And so if that happens, then it pushes the timeline out. But in either case, we should expect data within the first quarter.
How are you thinking about a success for that study?
I'll start, and Doug, feel free to jump in. You know, it's a disorder where there's no drug approved, and it's a very high unmet need, very debilitating aspect of the drug. So there's no industry-agreed measure of clinical effectiveness. And so in that case, then the FDA and we will have to make a positive state. We'll have to make an assessment on the product. And many times in neuropsychiatry, we look at a 0.25 or a 0.3 effect size as being clinically meaningful. And so in our case, in the first study, our effect size at the 34 milligram dose was 0.34, so you know, well above that standard.
And so, you know, we're just as eager as you are to get to the results, open the envelope and know what we've got. But I think the honest answer is, in a situation like this, where there's no drug approved, a very high unmet need, no industry standard for what would be deemed clinically effective, we and FDA and investigators will be looking at that data to make an independent assessment. Doug, anything you want to add to that?
No, I think you've characterized it correctly. The only thing I'd add is that, you know, in psychiatry studies in general, in schizophrenia and depression, effect sizes of around 0.3 are, you know, not unusual and generally regarded as clinically significant. So 0.34 would be a successful outcome as far as we're concerned.
I did want to touch a little bit on how we should be thinking about the February earnings call in a couple weeks here, and you generally do provide NUPLAZID net sales financial guidance there. Can you talk a little bit about how you think about growth in 2024 for that franchise? And then second part of my question is, are you leaning towards potentially providing annual DAYBUE guidance at that venue, or do you think you will continue with quarterly guidance?
So I'll answer the first part of that regarding NUPLAZID, and let Mark answer the second part on DAYBUE. So you're right. We typically guide on an annual basis for NUPLAZID, and we'll do that again on our February earnings call. As I described in the presentation, in year 8 of that product, the investment thesis is different than it appropriately different than it was in year two or year four or five. And so our primary objective there is to optimize cash flow in that franchise. And of course, we do that two ways: One is to grow the top line, and two is to carefully manage the expenses in that program. And we'll continue to do that through 2024.
Now, having said that, as I've described, we do have some growth that we're seeing in new patient starts as a consequence of the real-world evidence papers that I described. And I think there's. I think we'll continue to see some new growth in that range. But what we're not doing in that franchise is we're not making the kinds of investments that we made in previous years, where we had significant DTC advertising and which, you know, grew the top line, but it comes with an expense associated with it as well, obviously. So the trajectory of growth is just at a different point in that franchise, and I think appropriately.
You know, with every product, you reach a point where you shift your emphasis from the top line to the bottom line, and I think we've been very successful in managing that appropriately, and that's what we'll continue to do.
Then on the DAYBUE guide, we haven't decided yet. I think what our commitment has been that we're gonna continue to give kind of one forward quarter guidance on DAYBUE until such time that we give annual or remainder of year guidance. And so I think we've said kind of all along, we'll expect at some point during this year, we'll give annual remainder of the year guidance for 2024. We just haven't determined yet, is that gonna be on the fourth quarter earnings call or subsequent quarters, first or maybe second quarter earnings of this year. You're welcome.
That's helpful. Thank you. Just given the amount of news flow around NUPLAZID and your patent life there, I thought this might be a good venue just to recap the recent litigation and what you think this means from an LOE perspective for NUPLAZID.
Yeah. So, you know, we've gone through or going through the typical end of litigation that, you know, every company goes through. There are two rounds of litigation related to NUPLAZID. One involving the composition of matter, composition of matter patent, or the principal composition of matter patent. And then the second is regarding some formulation patents that we have on the 34 milligram capsule dose of pimavanserin, and a method of use patent on the 10 milligram tablet. Those are the only two marketed forms of the drug. On the composition of matter patent, you know, small molecules, that's always your first line of defense. It's always the strongest defense you have to generic competition. In our case, the ANDA filers, there were 5 of them, we've settled with 4.
One remaining company continued to pursue the litigation to try to invalidate our composition of matter patent based upon a very technical point regarding that's referred to as obvious-type double patenting. Anyway, the short version is, we both agreed to all facts other than that one specific issue, therefore, we didn't need to have a trial. We just needed to present simultaneous. We simultaneously filed motions for summary judgment, and the judge, the court really just had to decide that one issue. And we had two arguments in our favor, we only needed to win one. The ANDA filer would've needed to win on both of them, and we won both arguments. So, you know, many times these things are appealed.
I don't know if this will be appealed or not, but it may be, and if it is, we feel like we're in a very, very strong position. Formulation patents. I'm sorry, that composition of matter patent runs through April of 2030, and with the pediatric extension, which we're working on now, that would take us to October of 2030. The formulation patents regarding the 38, excuse me, 34 milligram capsule form of NUPLAZID run to 2038. Now we've settled on those and taken a little bit of time off of that, but very little, a matter of months. So, that litigation is approximately a year behind the composition of matter litigation. On that litigation, we had a Markman hearing scheduled for December of 2023.
A Markman hearing is to try to help reduce the issues that you're gonna take to trial and really focus on a principal issue, and it's a pretty important step, a very important step in the process. After the same court that ruled in our composition matter, they then came forward a few days later and ruled. They canceled the Markman hearing. They ruled based on just the briefs that we submitted and the ANDA filer, and ruled in our favor on all key points. So we feel very good about that. There's more, you know, more work to be done 'cause we haven't come to trial yet on that. That's scheduled for December of this year.
Thank you, and last question from me, and then we'll wrap it up here, is: How should we be thinking about your capital allocation priorities and interests as it relates to business development, you know, hey, maybe over the next year or so?
Well, I mean, we're you know, this is a great position to be in in our industry. We've got a war chest of cash. We're cash flow positive. We've got a very strong portfolio, and as I've said for many years, and I'll just repeat here, business development is and will continue to be a very important part of our business. We've got two franchises that we want to leverage further, and we have a very strong business development in-house capability on both the external innovation front in R&D, as well as on the transactional front in business development. So you know, capital allocation is you know, the most important thing we do probably outside of the benefit that we provide patients. And, you know, we'll continue to allocate capital accordingly.
We have some really, really interesting assets that we're already owning, that we're developing, but we have an appetite to do more, and we'll continue to do that.
Okay. Thank you, Steve, and the entire Acadia team. Thank you for everyone for joining.