Good day, ladies and gentlemen, and welcome to the Arcadia Pharmaceuticals Second Quarter 2020 Financial Results Conference Call. My name is Jonathan, and I will be your coordinator for today. At this time, all participants are in a listen only mode. We will be facilitating I would now like to turn the presentation over to Mark Johnson, Vice President of Investor Relations at Arcadia. Please proceed.
Thank you. Good afternoon, and thank you for joining us on today's call to discuss Arcadia's Q2 2020 financial results. Joining me on the call today from Acadia are Steve Davis, our Chief Executive Officer, who will provide an overview of our Q2 2020 financial performance and provide a review of our business. Also joining us today is Michael Yang, our Chief Commercial Officer, who will provide updates on our commercial initiatives and Doctor. Serge Sankovich, our President, who will discuss our pipeline progress.
Our Chief Financial Officer, Elena Ridloff, will then discuss our financial in more detail before turning it back to Steve for final remarks and opening the call up for your questions. I would also like to point out that we are using supplement slides, which are available on the Events and Presentations section of our website. Before we proceed, I would first like to remind you that during our call today, we will be making a number of forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements, including goals, expectations, plans, prospects, growth potential, timing of events or future results are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC.
You are cautioned not to place undue reliance on these forward looking statements, which are made only as of today's date. I'll now turn the call over to Steve.
Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Please turn to Slide 5. We've made important and significant progress on our 3 strategic pillars. As a reminder, this year, we are focused on driving the growth of NUPLAZID for patients with Parkinson's disease psychosis, delivering on the dementia related psychosis opportunity, our second indication for Nucleizid and developing innovative new treatments for unmet needs in CNS with 3 candidates in our early and late stage development pipeline.
At ACADIA, our mission is to improve the lives of patients with CNS disorders by developing and commercializing new medicines. Our focus on these three strategic pillars enables us to execute on that promise. Let's turn to review. For the Q2 of 2020, NUPLAZID achieved $110,100,000 in net sales, a 32% year over year increase, driven by strong commercial execution. These strong results are reflective of the fact that we adapted quickly to the evolving environment resulting from the COVID-nineteen pandemic.
Our commercial team is executing at a high level and successfully engaging both virtually and in person with healthcare practitioners. As a result of our team's successful execution, we've raised the lower end of our net sales guidance. We now expect full year net sales to be between 430 dollars to $450,000,000 representing 30% growth year over year at the midpoint of the range. We are confident in driving the long term market opportunity for NUPLAZID and PDP and look forward to the addition of DRP. Let's move to the DRP opportunity on Slide 7.
Our supplemental NDA for dementia related psychosis was accepted for filing by the FDA with a PDUFA date of April 3, 2021. The filing of the application is an important next step as DRP is a devastating and highly disruptive disease and represents a significant unmet need not only for the patients, but also for their caregivers and family members. We're highly confident in both the efficacy and safety data supporting our submission and look forward to continuing to work with the FDA to facilitate their review. Please turn to Slide 8. We continue to make important progress in our late stage development pipeline.
We have now initiated our 2nd pivotal study ADVANCE-two into negative symptoms of schizophrenia. This Phase III trial will enroll approximately 386 patients and evaluate them in a double bond fashion for 26 weeks with a 34 milligram dose of pimavanserin. Our Rett Syndrome Lavenir Phase 3 study recommenced patient enrollment in June. We anticipate top line results in the second half of next year. In addition, we are focused on business development to grow our development pipeline and leverage our internal R and D and commercial capabilities.
For example, earlier this year, we licensed the EM-one PAM program from Vanderbilt, and we will continue to invest in our future through additional business development opportunities that complement our long term growth strategy. With that, I will now turn it over to Michael to discuss our commercial performance and highlights.
Thank you, Steve. Today, I would like to review our 2nd quarter performance, which highlights the fundamental strength of our business and gives us confidence in the long term expectations for the New Plaza franchise. This was another strong quarter of commercial execution, setting us up for another year of double digit volume growth. For dementia related psychosis, we're making good progress with our launch preparations. Please turn to Slide 10.
NUPLAZID continues to transform the standard of care for patients with PDP. We have driven positive momentum through our best in class virtual engagements and by our rapid innovation in response to the evolving environment. In the Q2, we delivered net sales of $110,100,000 driven by year over year volume growth of 17%. This growth was fueled by enhanced patient identification tactics, such as leveraging electronic health records and clinical pathways, enabling patients to be diagnosed and prescribed NUPLAZID remotely. We are utilizing our digital platforms to stimulate patient and caregiver conversations with their physicians about the troubling symptoms of PDP and potential treatment with NUPLAZID.
We also continue to invest improving in patient access services and easing the prescription fulfillment process for health care practitioners. Sequential volume growth in the specialty pharmacy channel contributed to strong overall performance. Monthly fulfillment rates for both new and continuing patients in the quarter remained consistently high. In the long term care setting, managing the COVID-nineteen situation has resulted in adjustments to facility operations in terms of nursing staff, infection control and decreases in new resident admissions, which impacted new patient growth this quarter. However, we have seen things stabilize recently and directionally showing signals of improved market metrics.
Despite these challenges, we believe NUPLAZID is performing well in LTC. And in fact, according to IQVIA, NUPLAZID outperformed most other major promoted brands in the long term care setting. We have recently established new partnerships with key stakeholders in the long term care space, demonstrating the importance of disease education and timely patient identification, and we believe these partnerships will further advance NUPLAZID as standard of care. Let's review our 2020 growth initiatives further on Slide 11. The sales team has been functioning at a high level in the virtual environment, and we recently have been able to return to the field in certain areas.
Moving forward, I'm pleased to report that the recent new patient start trends have returned to pre COVID levels in the SP channel. We have introduced several new initiatives to support the field and drive continued growth, including on demand virtual speaker programs with nationally recognized KOLs, virtual patient case learning programs and COVID specific educational materials to optimize care via telemedicine, including topics on social isolation and caregiver tips. In addition, we continue to enhance our integrated patient and caregiver disease awareness campaigns to stimulate conversations with their physicians about PD Psychosis and NUPLAZID. We are also continuing to expand our digital and social platforms to further activate NUPLAZID requests. Now let's turn to our second potential indication for pimavanserin, DRP, on Slide 12.
Our DRP launch preparations, including disease awareness initiatives and talent recruitment, are on track. We are planning for both in person and virtual scenarios and will be well positioned to execute our launch plans. We are continuing to prepare the market via marketing driven disease state education initiatives, including refreshing new and engaging content on more than cognition.com, our disease education website and partnering with 3rd party HCP sites such as Sermo, Doximity and Medscape to leverage disease education content from our site to theirs. We are also participating in virtual medical congresses, such as last month's Alzheimer's Association International Conference, or AAIC. As many of you are aware, AAIC is an extremely influential international meeting dedicated to advancing dementia science.
Acadia sponsored a virtual disease education booth, held an oral presentation on the open label HARMONY data and presented 9 additional posters, some of which highlight the significant burden of DRP and the need to treat. With that, I'd like to turn it over to Serge to discuss our R and D pipeline.
Thank you, Michael, and good afternoon. Please turn to our development pipeline on Slide 14. Allow me to start with a comment related to DRP sNDA. We are very pleased that the FDA has filed our sNDA for dementia related psychosis and communicated to us that they have not identified any potential review issues and are not planning to hold an advisory committee meeting. We look forward to working with on the review of our application.
In addition, we continue to advance our late stage programs for pimavanserin in the negative symptoms of schizophrenia and trofinetide for Rett syndrome. Earlier this year, we licensed a novel M1-ten program from Vanderbilt University and look forward to advancing this program as well. Consistent with our strategy, we remain focused on developing innovative new treatments, and that is reflected in our growing and advancing pipeline. Let's start on Slide 15 with the negative symptoms program. I'm happy to announce that we have initiated our Phase III study ADVANCE II for the negative symptoms of schizophrenia.
Please recall, this would be the 2nd pivotal study for this indication, the first of which, ADVANCE, reported positive results in November of last year. The negative symptoms of schizophrenia remains a very significant unmet need with no FDA approved treatment options available. Slide 16 provides a high level view of the ADVANCE-two study design. Similar to the design of the previous positive study, ADVANCE-two is a 26 week study evaluating pimavanserin as an adjunctive treatment for schizophrenia patients with predominant negative symptoms while controlling for their positive symptoms. The primary endpoint is the change from baseline on the negative symptom assessment 16 item scale.
Applying the learning from the positive ADVANCE study, where we observed the robust results on the primary endpoint in patients receiving 34 milligram dose, we are now evaluating this dose of pimavanserin in ADVANCE-two. Building on the learnings of our 2 previous studies in schizophrenia, ADVANCE-two will be conducted in non U. S. Clinical trial sites. Rett syndrome is a rare and debilitating disorder with the unmet need highlighted here on Slide 17.
Working with the study investigator, we were able to recommence enrollment in our LAVENDER study in June. We are working on a site by site basis to be able to once again enroll patients into the study. We anticipate being able to announce top line results in the second half of twenty twenty one. With that, I will now turn the call over to Elena to discuss our financial performance.
Thank you, Serge. Today, I'll discuss our Q2 results and our updated 2020 financial outlook. Please turn to Slide 19. In the quarter, we recorded $110,100,000 in net sales, an increase of approximately 32% compared to $83,200,000 of net sales in Q2 of 2019. This was driven by approximately 17% volume growth year over year.
The gross to net adjustment for Q2 2020 was 11.3%. Weeks of inventory in the channel at the end of the second consistent with previous quarters. Moving down the P and L, GAAP R and D expenses decreased to $64,300,000 in the quarter compared to $67,300,000 in Q2 2019. The decrease is largely due to lower development costs associated with pimavanserin and schizophrenia and DRP. GAAP SG and A expenses increased to $84,300,000 in the second quarter from $68,000,000 in the Q2 of last year.
This is largely due to increased advertising and promotional spend as well as an increase in personnel and related costs. Non cash stock based compensation expense during the quarter was 19 point compared to $20,400,000 for the same period in 2019. Cash used in operations during the quarter was $36,900,000 compared to $38,400,000 for Q2 2019. Our cash balance at the end of the quarter was $658,600,000 Please turn to Slide 20. For the full year, we expect continued strong growth for NUPLAZID and have raised the lower end of the guidance range.
We now forecast 2020 net sales to be between $430,000,000 $450,000,000 The revised revenue range reflects year over year growth of approximately 30% at the midpoint. Our net sales guidance continues to incorporate a range of assumptions related to the duration and impact of the COVID-nineteen pandemic. On the expense side for 2020, we are decreasing our GAAP R and D guidance to be between $265,000,000 to $280,000,000 from previous range of 270 dollars to $285,000,000 The reduction reflects a reduction in development expenses for AdjunctivMDD. We now expect GAAP SG and A to be between $400,000,000 to $420,000,000 from previous range of $425,000,000 to 445,000,000 dollars This reduction reflects lower costs associated with the timing of investments to prepare for our DRP launch. We continue to anticipate non cash stock based compensation expense to be between $90,000,000 $100,000,000 in 2020.
We will end 2020 with a strong balance sheet and expect our year end cash balance to be approximately $570,000,000 to $590,000,000 increased from our previous guidance of $470,000,000 to $500,000,000 And with that, I'll turn the call back over to Steve.
Thank you, Elena. Please turn to Slide 22. Since the beginning of the year, we've achieved $200,000,000 in net sales in the first half for NUPLAZID and PDP. Our sNDA for DRP has been followed by the FDA with a PDUFA date of April 3, 2021. We've advanced our Phase III programs in the negative symptoms of schizophrenia and Rett syndrome, and we licensed an in-one PAM program from Vanderbilt.
We look forward to keeping you updated on our progress, where continued momentum of NUPLAZID and the breadth and depth of our pipeline position Acadia for long term growth.
In closing, I would like
to thank our employees for their continued commitment and passion as we advance the business. I'll now open up the call for questions. Operator?
Our first question comes from the line of Tazeen Ahmad from Bank of America. Your question please.
Good afternoon. Thanks for taking my questions. Congrats on a strong quarter. Just wanted to get your thoughts on how you're seeing comments you can provide. It does seem that the pandemic is kind of moving its way through different geographies.
We have heard from some physicians uncertainty in terms of the ability of doctors to keep seeing new patients at a pace that you're comfortable with? And can you just give us a sense of the sensitivity for your guidance for the rest of the year on that particular item? Thank you.
Sure, Jazeen. I'm going to ask Michael to just comment on the dynamics that we're seeing broadly. But before he does, I'll just simply say that I think the quarter that we just reported is, as I mentioned, a reflection of how quickly we've been able to adapt to kind of the new world that we're all living in with this pandemic. And what we've seen is very strong execution irrespective of whether we're seeing doctors in person, in their offices or in person in long term care facilities or we're doing this remotely. And again, I think that's a testament to the strong relationships that we have and the quick pivot that we made, which we talked about pretty extensively in the past as soon as the pandemic hit.
And in terms of guidance, we're very confident in the guidance that we've updated today through the remainder of the year. Michael, do you have anything else you want to add just in terms of product dynamics?
Yes, Steve. I think if I look at it from a setting of care perspective, we saw very strong response to the tactics you outlined in the office setting. We haven't seen any increase in discontinuations and we see, as I mentioned, pre recent trends to pre COVID levels in terms of our new to brand. So that's very good. I think in long term care, things have stabilized of late recently.
There was a period where the long term care facilities were quite frankly dealing with a lot. They had nursing staff they had to deal with. It was turning over infection control. But we're seeing that again, as I said, stabilize. We're pleased with our performance relative to the peers in that setting.
So if you look at the patient journey, the need to treat the patient with these symptoms that are very disruptive and have a high degree of caregiver burden, that's still a major issue. And so the role for NUPLAZID in that situation has not been diminished by any by the pandemic. And frankly, from the doctor, patient care, we're well positioned to help the patient, whether it's in the nursing home, whether it's telemedicine or in the office, as a result of some of the tactics we've put in place. So I think you said it well in regards to our confidence in our establishing the guidance.
Okay. As it relates to new patient starts, can you give us any kind of color about comments that physicians have given you about their ease of being able to diagnose patients or see patients for the first time virtually and then get them on drug?
Yes, Mark, I'll go to it.
Yes, sure. I think that, obviously, telemedicine is being adopted and optimized across the channel. But I think the thing with PDP is that it's likely a patient that's already been diagnosed with Parkinson's. So in this case, there's already likely a relationship with a physician. And so the ability for the physician to diagnose, get samples, verify their reimbursement insurance and ship directly to the home, We think that's a really big advantage for New Plastics.
So we're not I think we're very well positioned for that. We're hearing good feedback on and response to our tactics on that one.
Okay. Thank you.
Thank you. Our next question comes from the line of Cory Kasimov from JPMorgan. Your question please.
Hey, good afternoon guys. Thanks for taking the questions. I have 2 of them for you. One is something we've started to get more from investors and it's whether we should assume New Plaza pricing stays stable once DRP comes online assuming of course it's approved. Given the increased addressable patient population, is that a safe assumption based on the strength of the data you have there?
And then the second question I have, I know it's only been a few weeks, but have you gotten any additional color from the FDA on why you did not get priority review? And do you believe there's any potential opportunity for the agency to accelerate that timeline? Is that something that's sometimes seen within this division? Thanks a lot.
Yes. Thanks, Corey. I'll answer the first question. I'm going to ask Serge to answer the second one. So in terms of pricing, as we said, it's a little premature to comment on pricing at this juncture.
But I wouldn't necessarily assume that we would need to change price for DRP. 1, we currently enjoy very good access with pears for nUPLAZID. And as we said before, the dynamics between PDP and DRP are very similar. 2, the payer mix is very similar in DRP. And in such cases, we believe it will be seen as an important line extension, where there are no currently approved treatments to what we already have.
And finally, it's important that we demonstrate optimum advancing can provide value for patients and caregivers above and beyond the off label standard of care that we see today. As such, we're already developing and we'll be very well prepared to deliver our value proposition, budget impact modeling, health economic survey, h payers, which we deliver in anticipation of launching DRP. So we feel very good about the dynamics, very good about the data set that we have. And as we progress and as I've said before, once we have final labeling language, we'll be in a position to kind of firm up the dynamics that we're seeing today with theirs. Serge, do you want to take the second question, Cory?
Yes.
As discussed previously, we engaged with the FDA. In their communication back to us, they reaffirmed that based on their preliminary review, they view the filing as appropriate for a standard review and did not provide any additional color to us. Considering where we are in the review cycle, at this time, we really don't anticipate receiving additional details regarding the classification. Instead, we are focusing on working with FDA and facilitating review toward the April 3 Action Day. And as you mentioned, yes, on few occasions, it did occur that they complete their review prior to that action day.
But it's very it's early and hard for us to speculate whether that may be the case in our case. So we are focused on facilitating review and on the Action Day of April 3.
Our next question comes from the line of Ritu Baral from Cowen. Your question please.
Hey guys, thanks for taking the question. I think Michael, you alluded to talent recruitment timelines. Can you talk a little bit about how you're preparing for the DRP launch? Given you've got some extra time, what sort of hires are you looking to make? And then the follow-up to that question is for Elena.
As you took down SG and A on lower DRP spend, should we just think of it as sort of a forward shift into 2021? Or do you see actual net savings to launch costs given the fact that there could be a larger virtual component than classic launches?
Mako, you want to go first?
Yes, sure. Thanks for the question, Mitu. So when I mentioned talent, obviously, what we've done first is hiring we've begun to hire and identify the leadership level. We already have a good leadership team in place for PDP. We're broadening that out and that's how we start to build a slate of talent to begin to be in preparation for expansion.
Obviously, now the expansion has been shifted because of the April 3 date, and we're adjusting to that now, but we'll be well prepared to expand our footprint and leadership team and sales team. We're doing also a lot of virtual disease education and market preparation at this moment. So we're getting the benefit of the similar extra time to prep the market. And I think just one other thing to think about here is we're really already on the market for new UPLAZID. And so this is a lot of things we already have in place.
We're loaded in the payers. We have a very successful patient support services team. So we're really getting this extra time to be extra prepared to launch and prep the market. So I think we're in good shape at virtual or face to face, whatever we see that comes at us in April.
Yes. And just on the SG and A question, Ritu, the savings this year is the result of a timing shift. And as Michael mentioned, moving the field team hiring to the early part of next year. We've been engaging in PDP very well virtually. And so regardless of whether we're in a virtual or in person environment, we think there's key investments we'd want to make on the field team expansion to support a successful launch.
Thank you. Our next question comes from the line of Jason Butler from JMP Securities. Your question please.
Hi, it's Roy in for Jason. Thanks for taking the question. We've had a couple on the marketing efforts interesting with the new patient start strength. I wonder if you could discuss a little more the COVID specific materials you mentioned earlier. And then what percentage of the sales force has been able to actually have the in person interaction with providers?
Thanks.
Sure. Thanks so much for the question. Michael?
Yes. Great question. So, what we've been able to do is, obviously put out some sheets and educational material, especially around social isolation, caregiver tips on how to engage in a telemedicine environment. Those have been well received. We've been doing a lot of, as I mentioned, virtual disease ed and medical promotion programs.
It's difficult to say what exact percentage the field is engaged, but what we do have is a fairly sophisticated algorithm that we automate and load into the sales force's computer system that is enabling them to diagnose or really release them to a face to face visit or not. So that varies depending on the COVID risk levels that the algorithm spits out for our team and we've been very successful, I think executing that on a case by case, county by county basis.
Okay, great. So it varies by reps actually as well.
It can vary by reps by even in the reps inside the reps territory that they have. One county could be red and one county could be green.
Got it. Okay. Thank you.
Thank you. Our next question comes from the line of Neena Bittratio Garg from Citi. Your question please.
Hey guys, thanks for taking the question and congrats on the quarter. So you talked about how the pace of new starts has come back to kind of pre COVID levels recently. So I'm just wondering how much of that do you think is due to physician offices reopening versus just patients and physicians getting more comfortable with telemedicine? And what I'm really trying
to get at is, if telemedicine does kind
of end up sticking around for a longer period of time or there is kind of this reclosing of some of the offices, should we expect to see new starts continuing to remain at kind of pre COVID levels or could we actually see a drop if things do kind of shut down again? Thanks.
Michael, you want to take that?
Sure. Great. That's a great question. I think that I would start really that answer to that question is really at the patient disease level. And PDP is a very, very disruptive And so that I think puts it into a kind of an urgent need to treat.
So I think that as I mentioned earlier, what we try to do is capture that patient physician diagnostic and treatment paradigm,
no matter what
the setting is. It could be in the nursing home, it could be in the telemedicine as you asked, or it could be in the face to face office setting. And I think what we're really seeing with the new starts is just a response to our ease of process to enable that to happen. And I think it speaks to the urgency to treat. And I don't think that is really going to abate if physicians aren't open.
I think that's still going to always be a situation. It's not a choice in many cases. There's a clear mandate for treatment.
Great. Thanks so much.
Thank you. Our next question comes from the line of Salveen Richter from Goldman Sachs. Your question please.
Great. Thanks for taking the question. This is Andrea on for Salveen. Elena, maybe as a follow-up to your prior comments there, given the increase in virtual efforts as you look towards the DRP launch, do you still expect to grow the team to about 400 to 500 personnel as you previously mentioned? And then I have a follow-up question.
Sure. So as Michael mentioned, we're preparing for
a range of scenarios of both virtual in person and in person. And we will we believe extending the sales force will be supportive of a strong DRP launch and we'll be able to provide more specifics as far as exact sizing as we get closer.
Got it. And then maybe just to go back to PDP. Given the efforts that you outlined to drive that PDP growth and to continue that, just wondering if you have updated that on the penetration into the market? I think previously you were saying around the mid teens. So just would love to hear if you have an updated thought on that.
I think what we've said is high teens most recently and that continues to be the case.
Sure. So mid to so still mid to high teens or high teens now?
That's correct. Got
it. Okay. Thank you.
Thank you. Our next question comes from the line of Charles Duncan from Cantor Fitzgerald. Your question please.
Thanks for taking the question. Congrats Steve and team on a good quarter of progress and top line. Wanted to ask you, I'm a little bit intrigued with the new patient add commentary. And I'm just trying to figure out if that's really commentary going into the second half of the year or if in the quarter there was really good new patient adds. And then kind of I don't know if you can deconvolute that, but new patient adds versus, say, persistence?
And then I had a follow-up for the pipeline.
Yes. Thanks, Charles.
Michael, you want
to start? I'll add any color. Yes.
Sure. Yes, thanks for the question, Charles. No, those were new patient adds in the quarter. So I think it speaks to the strength of the business, especially as I related to on the SP side of the business. And I forget what was your second part of your question?
Yes. And what was the contribution of persistence or current patients? Yes.
Right. Yes. We continue to see high and consistent fulfillment rates. So I think that I think was consistent from prior quarters. We've really seen that actually since the 34 milligram launch.
And so that I think was continued.
And do you feel Sorry.
I'm sorry, just to add a brief annotation. So as Michael mentioned, the and as we discussed on the last quarter, we saw the decrease in new patient starts at the beginning of the pandemic. And we indicated that we were seeing things stabilizing and beginning to return. And what we're seeing now just in the last few weeks is now we're kind of back at the same level of new patient starts that we were prior to the pandemic. So I think that's just again reflective of the fact that we've adapted, physicians have adapted, patients have adapted and we're in a position now where as Michael mentioned the symptoms of this disorder are very burdensome.
They're burdensome on patients, caregivers, etcetera. So it's really not something that you can ignore or just defer for a significant period of time. So as we look forward, we expect, given that we're still in a fairly fluid situation with this pandemic, but we expect that we and physicians and patients will be in a better position to operate in a more normal fashion than we did during the than we were operating at the beginning of the Q2.
That's helpful added color. As you know, new patient adds have not been universally a thing that can occur easily in this current environment across neuroscience. If I could just ask one question for Serge and that is relative to the DRP, I understand that the regulatory process is ongoing. But do you anticipate any kind of milestone analysis, additional information that you'll be providing to the agency such as safety in PDP or anything else during the time between now April?
What we anticipate is a standard update at 120 days, which essentially you're providing a safety update for all of the new safety information, which includes, of course, the new data and accumulated between the cutoff date for your original application to the cutoff date for the 120 day update as well as pharmacovigilance data and the information. So it's a comprehensive safety information for the agency. That's a standard process. And other than that, I do not anticipate any additional updates for us providing it. Of course, we will provide anything that FDA would require, but this is a fairly standard process in terms of the providing the additional safety information.
Okay. That's helpful. Thank you for taking my questions.
Thank you. Our next question comes from the line of Paul Matteis from Stifel. Your question please.
Great. Thanks so much for taking my questions. I appreciate it. I just had a couple on PDP and then just one quick regulatory follow-up. On PDP, can you just speak to guidance and your expectations for volume?
I think you guys took a price increase at the end of June. So how did that factor into the update? 2nd, on script data, I know scripts for this drug and a lot of specialty drugs can always be hard to interpret. But is there any channel that IMS is more or less biased to given that I think in the past 4 weeks, it's showing a year over year decline? Wondering if that is more long term care bias than anything else.
And then just on the regulatory side, I was curious given with the standard review timeline, is there a certain date or general timeframe in which the FDA under PDUFA V should be telling you its final decision on whether or not they'll be holding a panel? Thank you so much.
Yes. Thanks for the questions, Paul. Okay. Elena, you want to go, then Michael, then Serge?
Sure. So on the volume question with regards to guidance, the guidance range assumes mid to high teens volume growth year over year, which is pretty consistent with our previous guidance range. And Michael, you want to take the script question?
Sure. Thanks for the question, Paul. So 75% of our business is in the SP and what we call the SD non LTC channels. IQVIA does not capture prescriptions in those channels. So effectively, they're only really capturing and projecting the long term care channel, which is about 25% of our volume.
So you probably saw that IQVIA showed us down in the lower single digits and you're seeing us report sequential volume growth. So that tells you that the 75% of our business was growing and we saw a modest decline in long term care.
I'll tackle the regulatory question here, Paul. Typically, it is expectations that the FDA will notify sponsor of their decision to hold the advisory committee no later than 60 workdays from the timing of the advisory committee. That's what a general expectation is. So if you think about end of January, beginning of February, vis a vis our action day for the advisory committee and pool about 60 workdays, then that puts us somewhere in November, where the latest time where the agency would notify us if they change their mind about the advisory committee. So this is what expectation is.
What essentially in reality happens is a different thing.
Thank you. Our next question comes from the line of Alan Carr from Needham and Company. Your question please.
Hi, this is Joey on for Alan. Thanks for taking our questions. Congrats on the quarter. Just two quick ones. In terms of looking at other indications for pimavanserin in terms of additional label expansion, are you taking a look at some additional indications perhaps?
And in terms of the BD front, are you looking to be more active there in terms of acquiring new assets going forward? Thank you.
Yes. Thanks so much for the question. In terms of additional indications for pimavanserin, the indications we've discussed are the indications Tim. We haven't talked a lot about it, but we do have a program to leverage the learnings that we have from pimavanserin to bring other molecules forward. None of those molecules are in the clinic yet, but we do have a battery of compounds that we're advancing.
And it may well be that we pursue with those compounds indications that we will just never get to with pimavanserin. I do think given the very favorable tolerability profile with pimavanserin and given the efficacy that we've seen with it, there is there certainly are additional indications that you would want to pursue with this kind of pharmacological profile. So we may get to some of those with additional molecules. On the BD front, I would just say that as we've said before, business development is a very important part of our strategy. We've built a strong organization with very strong R and D and commercial capabilities and want to leverage that not only for the Pimavanser opportunity but also as we grow other company's transactions.
So we'll continue to do that. As I've said before, you will see additional deals. It's an important part of our business.
Thank you. Our next question comes from the line of Sumit Kulkarni from Canaccord. Your question please.
Thanks for taking my questions. NUPLAZID is well positioned to be the 1st drug to be approved for DRP, but recently we have seen some other companies talk about their pipeline programs in DRP as well. So given this newish competitive dynamic, what are your assumptions on the runway you might have to be alone in the market as the only specifically approved branded product for DRP?
Well, I'll start and Serge or Michael, feel free to jump in if you have additional color you'd like to add. But first, I'll say, we're way ahead of anyone else. 2, we all know the hazards of this industry. As you progress, compounds usually don't get cleaner, they get dirtier. As you progress, generally, you just have more and more hurdles to cross.
And I'd also say that the field of that we're operating in, in terms of Parkinson's disease psychosis, dementia related psychosis, continuing to advance in negative symptoms of schizophrenia. These are all very, very large markets with room for multiple large drugs. So from a competitive perspective, I think we continue to enjoy a very, very strong competitive position. Michael or Serge, do you guys have anything else to add?
Yes. I would say
that to
Go ahead, Serge.
Yes, thanks. To our knowledge, these efforts are in early clinical stages of development. So we still have years of clinical development before this product, if successful, would actually reach the market. So I think, as Steve said, we are way ahead. And plus, we accumulated significant amount of safety and tolerability data, and that's really a critical aspect of any work, clinical work in this vulnerable patient population.
And Steve, the only thing I would add to your comments on the market is that there's still a very significant, both in PDP and in DRP, and a large untreated population. So there are patients who have the disease and could benefit from treatment. So not only are these large existing markets, but there are large potential markets to grow into.
Great. Thanks so much.
Got it. Thank you.
Thank you. Our next question comes from the line of Jay Olson from Oppenheimer. Your question please.
Hey guys, congrats on the quarter and thanks for taking my question. I was curious if you're planning to have any ex U. S. Study sites for ADVANCE-two. And I was wondering if you could share your latest thoughts on seeking approval for pimavanserin outside the U.
S. For schizophrenia or any other indications?
Serge, do you want to take the first question? I'll take the second.
Yes. For the ADVANCE-two, our negative symptom second pivotal trial, all of the sites will be ex U. S. Actually, the trial is done completely outside of the United States.
As to your second question, as we said before, we frame shifted our strategy on ex U. S. Filings in order to be in a position where we could accumulate or better optimize the number of indications that we're pursuing during a single 10 year data exclusivity period. So that has not changed. We'll continue to assess that as we go forward.
Obviously, now with Snot moving forward in the broad adjunctive MDD population, that simplifies the calculus a little bit. We're still looking at negative symptoms of schizophrenia, of course, DRP and PDP.
Great. That's very helpful. Thank you for that. And then since you have additional unexpected time to prepare for your DRP launch, with the standard review, can you talk about how you plan to leverage that extra time and what learnings you may have captured from virtual education and promotional strategies in the past few months that could benefit a virtual DRP launch if needed?
Yes. Thanks so much for the question. Michael, you want to take that?
Yes. Sure. So I think one of the advantages we have is because of the pandemic, we can do a little bit more we have a little bit more time to do the disease state education. We're leveraging that, as you heard on virtual medical meetings like AAIC and future meetings. Also with our Mortar Van Cognition website, We're doing a lot of virtual education programs with speaker training on disease state education.
So we're, I think, doing a lot more with the physicians who could potentially be, educators on this market profiling offices and profiling the market. So we're taking it, I guess, more strategically in time to get more general on our more details on our commercial operations as we prepare for launch. And as I said earlier, we are doing very well in the virtual environment today. So again, if we're in a face to face, that would be great. But if not, we're going to be well positioned to launch this product in a virtual environment and leverage the learnings that we've had through PDP.
So I think it's a good news story for us in regards to New Plaza already being on the market. We have a lot of existing infrastructure to leverage and we're just putting that to best use.
Great. That's very helpful. Thanks again for taking the questions.
Thank you. We have time for one further question. Our final question today comes from the line of Gregory Rensna from RBC Capital Markets. Your question please.
Hey Steve and team, thank you for sticking in and congratulations on the quarter. Just wanted to follow-up on an earlier question and commentary on DRP potential pricing for PIM. And while I appreciate the prematurity, I'm just wondering in broad strokes, if you could perhaps comment a bit on now that MDD is out of the picture, how some of those dynamics in MDD could either simplify or introduce some direction to how you would approach establishing value for DRP, especially when it comes from being a multi indication program? Thank you.
Yes, sure. So I'll start, Michael. Feel free to jump in. I think as we've indicated before, the dynamics between PDP and DRP are very similar. Prior to bimavanserin, no drug approved.
The only drugs used are off label dopaminergic previous generation antipsychotics. They're very complicated to use in these populations. They can undermine the kind of primary symptom of the disease. In the case of Parkinson's, they can impair motor function. In the case of dementia, they impair cognition.
And so and we don't have those liabilities. So they're very similar dynamics between PDP and DRP. As it relates to adjunctive MDD, as we've said all along through the entire development program, we're looking for a profile that would be dramatically differentiated in order to break into that market where there are other drugs approved and they're generic. And so what we saw is an antidepressant signal, but it wasn't didn't we didn't replicate the kind of highly differentiated profile that we'd expected. So as a consequence of not moving forward in adjunctive MDD, it does again, to use the same phrase, it does make the calculus a little bit more straightforward there.
Because, of course, junket MBD is dramatically large, it's twice the size of DRP or 20x the size of PDP. So now operating in 2 indications with very similar dynamics, very similar unmet need, very significant value that we're delivering in those patient populations, it does make pricing more simplified as we think about moving forward in PDP and DRP.
Got it. Thank you. And I'll sneak just one last one in, helpful commentary on BDC, Steve, and it sounds like sort of a stay tuned approach. I was wondering if you could provide some quick color on the landscape, that is just the competition for assets that are in your wheelhouse, how some of the drivers of not just COVID, but valuations are potentially helping those dynamics evolve? Thank you again very
Yes. In some respects, in our industry, those of us looking for assets, we have to compete against the capital markets too. And so as I've indicated before, sometimes the capital markets are the biggest competitor you have. And so with this very, very tragic pandemic that we're all operating in today, a consequence is it's created more uncertainty in capital markets, particularly for private companies. And that has knocked down effects in terms of actionability of assets and the calculus that owners of those assets are doing.
So I think that's a good thing for business development generally speaking. And we're already seeing that in some of the interactions that we're having, and I'm sure others are as well. So I think with every challenge comes opportunity. And I think that we are very well positioned to continue to capitalize on the key capabilities that we've built, both in R and D as well as in commercial, but more recently in the business development arena. We've got strong balance sheet.
We've got access to capital. We've got strong commitment from our management team, our Board, our large shareholders. And so as I mentioned, it's an important part of our business. I think we're very well positioned to continue to be successful at it.
Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Steve Davis, CEO, for any further remarks.
Great. Thank you, operator, and thanks again, everyone, for joining us today. We greatly appreciate it and look forward to updating you on our progress next quarter.
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.