I'm Tazeen Ahmad. I'm one of the senior SMID biotech analysts here at the bank. It's my pleasure to introduce our next company, Acadia Pharmaceuticals. Presenting for Acadia is Steve Davis, who is, of course, Chief Executive Officer. Steve, good morning. Thanks for joining us here in Las Vegas.
Oh, thanks much, Tazeen. Really pleased to be here. I also, I should mention, I have with me this morning Brendan Winslow. Brendan, works in our finance group and has joined me today.
Okay, great. Hi, Brendan.
Hi.
So maybe, Steve, just give us an overview of the company for those who aren't familiar, as familiar with Acadia, just the platform and some of the important events that have occurred, and then we can go into more specifics.
P erfect. So, so we have two commercial products. So the core of our business rests on those two products. We recently reported Q1 sales of $205.8 million. That's a 74% increase from the Q1 of last year. Of course, the Q1 of this year, we had, for the first time, sales from DAYBUE, our recently launched drug for the treatment of Rett syndrome. NUPLAZID, our other product, is for the treatment of Parkinson's disease psychosis. We are now in our eighth year since launching that product, and the primary objective with that franchise is to optimize cash flow, and it's generating well over $300 million a year in fully burdened free cash flow.
It's a great foundation upon which the rest of the business rests. DAYBUE, of course, is in high growth mode, as we've launched a year ago. That launch has gone extremely well. We are continuing to build out that franchise. Today, one in four diagnosed Rett patients have initiated therapy with DAYBUE, so we have three-quarters of the diagnosed populations yet to go. There are about 5,000 diagnosed Rett patients in the United States. We believe the prevalence, the total prevalence, is about 6,000-9,000. What we often see in rare diseases when a new drug is launched, that gap between prevalent and diagnosed populations tends to shrink, and we're already seeing some of that.
When we launched, our estimate was that there were 4,500 diagnosed patients, and now we're up to 5,000. In addition, we have rights, global rights to DAYBUE and are in the process of seeking approvals in Europe, Japan, and other areas of the world we'll make the drug available as well. So a lot of growth opportunity with DAYBUE. I'm sure we're gonna be spending a fair amount of time this morning talking about that. NUPLAZID continues to be a highly cash flow positive business. We're seeing some good growth there, by the way. Revenue is about up about 10% in the Q1 of this year over the Q1 of last year. Then beyond those two commercial products, we have two late-stage assets in development.
ACP-101 for Prader-Willi syndrome is in a phase 3 study, and we're very excited about that opportunity. We'll touch on that, I'm sure, more in this discussion. And then ACP-204 is our next generation of 5-HT2A blocking compound. So it's a improved version of NUPLAZID, and we feel like there's an opportunity to significantly expand and extend the franchise that we've established with NUPLAZID there. And that's in a seamless phase 2, phase 3 program that we also initiated in the Q4 of last year. We have an early-stage portfolio, about half of which is disclosed, about half of which is not, that presents additional opportunities to advance more compounds into late-stage development.
We don't talk a lot about that, but I'll just simply say that there's an opportunity, we think, to one, two, or three of those programs into the clinic in the next 12-18 months. And then business development continues to be an important part of our business as well, as we are a fully self-sustained, cash flow positive company, with a very strong balance sheet. We ended the Q1 with $470 million in cash and continue to add every quarter. We added about $30 million in cash in the Q1. And with these two well-established franchises in neuropsychiatry and rare disease, again, we'll continue to look for opportunities to add to that.
Our history in business development reflects the fact that we're pretty judicious, pretty careful about the investments we make, and so far, and two examples of those investments are DAYBUE, as an example of some of the success we've had in business development, and then our Prader-Willi program as well.
Okay, so there's a lot going on at the company. Maybe let's start off with DAYBUE, because that's been the primary focus of investors for the past year or so. Specifically, maybe let's talk about the quarter that just reported. You had guided to the Q1 sales range. DAYBUE did come in on the lower end of that. You've reiterated guidance for the full year, and so I think some investors would appreciate color on your confidence level of guidance for the year and what's giving you that confidence.
Let me start at the end, the last part of the question you asked, then I'll backfill. So when we give guidance, of course, we run multiple scenarios, and we guided for the year. We went to annual guidance on our February fourth-quarter call. And at that point in time, we recognized that we'd had some patient losses through the, at that point of the Q1. I'll get into more of that in a second. And so for a s we indicated on our Q1 call, for the last six weeks running, we had added net patient adds every week, and so we're back on that growth part of the curve now.
Anytime you have a loss of patients or patients that you don't gain, that you project to gain in the early part of the year, it can have an outsized effect on where you come out for the full year. Having said that, we took a careful look at our guidance and feel like it is still the right guidance range for the year. Let me get back to the Q1 and just try to give a little bit more color on that. So when we launched, we had a large surge that came through.
There were just a lot of families, and physicians, particularly at COEs, that were poised and ready to go on therapy. And you don't always see that in rare disease. Many times the demand is high, but it just takes a while to get patients on therapy. It takes time to get through access, because payers are not familiar with the disorder many times. It takes time for a patient to get in to see their physicians, etc. But in our case, we had this big bolus of patients that came through. And what we've seen now, a year into the launch, is very consistent rates of persistency when we look at persistency over time.
What I mean by that is we look at persistency at 3 months, all patients go on therapy, 3 months, 4, 5, 6, now we're out to 9. And what we've seen is a very steady and consistent rate of persistency from the time of launch now out through 9 months. We compare that to our clinical trial experience, the best data we have from our clinical trial experience to compare it to real world, and we've very consistently tracked about 10 percentage points above our clinical trial experience. That tells us that there is a very sizable enduring population that we expect to be on DAYBUE, and that's one of the most important elements of projecting the value of this, of this franchise longer term.
When you break it down to a just a period of time, not longitudinally, but just a period of time, a month or a quarter, that rate of discontinuation, not the rate, but the number of discontinuations you have in that particular time frame, that varies from time to time. It's driven mostly by the number of patients that started in the preceding quarter or two. And so in our case, because we had this large surge, we had an increase in numerical discontinuations that came through in the Q1 as a result of that surge. And we believe that is largely, if not entirely, now digested.
That's a big contributor to us now going back to adding patients and adding growth, which we believe will continue throughout the remainder of the year and is embedded in our guidance.
Okay, so maybe a follow-up question about the time that you notice a patient discontinues. I think you've said if they're going to discontinue, it's pretty early on in treatment, within the first few months or so. We've been trying to do doctor checks as well to try to get a sense of how physicians are viewing this market. Some feedback that we've gotten from a few physicians is that usually historically, for drug launches, you want to look at the one-year point because patients and their families tend to really try hard for the first year, and then it's after the first year that you really see the level of persistence that's going to be steady state.
Have you heard anything similar from feedback, either from your sales force or from physicians about this general idea, not necessarily related to DAYBUE, but just, you know, being compliant with drugs over time?
T here are a couple of things I want to unpack there. Again, back to the longitudinal persistency that we're seeing. We have the benefit of having data from all the patients that started on DAYBUE in our phase III program. And of every patient that started in one of those studies, 40% remain on therapy today. That means those patients have been on therapy for generally over three years now, well over two. And we know that 40% of those patients are on at that point in time. Again, if we continue to track ten percentage points above our clinical trial experience, that would suggest half of patients will be enduring patients over time. Between the time that patients initiate therapy and then become enduring patients, some patients do discontinue.
With drugs that have subjective endpoints, as we did in our clinical studies, you do tend to see more discontinuations early on. We see that regularly in neuropsychiatry. And so we see, we do see that here too. We do see a majority of discontinuations that happen within the first one or two fills of the drug, so within the first couple, two to three months. I do think we have an opportunity to improve on that. It is an area of focus for us now because a number of patients when they start therapy, titrate. So dose adjustment is reflected in the label, and many physicians are choosing to titrate up. If they're titrating up, it just, it does take sometimes more time to see benefits.
Now, we do have examples of patients seeing benefits very early and even at very low doses. But as a population, it takes more time. And so one of the areas of focus right now is to really make certain that we're effectively communicating that, particularly if you titrate, it can take more time. But today, the data we have tells us that the majority of the discontinued patients we have are in that early time frame. And I think the take-home message here is, I think we have an opportunity to improve on that.
Okay, that's good to know. On dosing and on titration, how consistent is the titration pattern that physicians are employing with patients to get them to their ideal dose?
I'm gonna. You asked the question in terms of titration. I'm going to expand that- question just a little bit and talk about, because titration is a tool for assisting with GI management regimen. And so I'm going to expand it to talk just a little bit more broadly about that. And so what we're seeing is. Let me back up for a second, just to take a little bit of a running start at it. Many times you hear the phrase in neurology with neurologists. When a new drug is introduced, this has nothing to do with Rett, but we see this across the treating population: start low and go slow. We saw that with NUPLAZID. There's only one approved dose of the drug with NUPLAZID.
When we launched, there was really no reason to start at a lower dose and work their way up, but physicians did it. We saw it was very common practice. Over time, that's that worked its way out of the system. With DAYBUE, dose adjustment is reflected in the label, and so we do have many physicians that are starting low and building slowly over time, titrating. It's a pretty wide range of regimens that they're employing to do that. Some of them start at a quarter of the dose or half a dose and build up over a month or two. But generally, most of the titration regimens that we're aware of fall somewhere in that general vicinity.
As it relates to broader GI management regimen, we're seeing a pretty wide range of variability there. Some even within COEs and then particularly outside of COEs as well. There are some COEs, Centers of Excellence, that feel like they've got this really dialed in, and they're having great success in getting to benefits of the drug, patients staying on therapy, etc., and others are not there yet. So with any drug launch, it's, there's a series of pivots that you make, and this is an important one in the medical community. There will be established over time, a best practice or best practices in terms of how to initiate therapy with DAYBUE and to get to the best results. Of course, our objective is to try to get that established as quickly as possible.
So another area of focus for us is to, again, reduce that variability in the application of GI management regimen, all of which is embedded in the label, and we promote to the—we can promote to those elements. But the application has a higher degree of variability than would be ideal. Again, it's an opportunity for us to improve even further on the persistence rates that we're seeing, that even with this degree of variability is tracking about 10 percentage points above our clinical trial experience.
Okay. A few minutes ago, you said that about 25% of patients, of Rett patients, have tried DAYBUE. Is that right?
Correct.
Is there a profile of patient that was an early adopter?
No, there's really not. I mean, we've seen, you know, Rett syndrome is mostly a female disorder, but there are some males, and we're seeing good representation of males as well. It's not all females that are on therapy. Age range, we're seeing a good distribution there. The drug was studied in patients up to 20 years old, but we've seen a, you know, a significant number of patients that are older than 20, coming on therapy. By the way, this is a neurodevelopmental disorder, not a neurodegenerative disorder. So, what that means is the neurons are still intact.
They've lost some of the ability to communicate across the synapse, but because the neurons are still intact, we see response in 18-year-old patients that's similar response to what we see in an 8-year-old patient or a 3-year-old patient. So we don't have to catch them early in order for them to benefit from the drug. So in terms of ages, and that then many times translates into weights, in terms of gender, severity of the disease, it's a very severe disease in all patients, but there are some levels of severity beyond that. Again, seeing a very similar response in our clinical trial data and very evenly distributed when we look at the patients initiating therapy.
So, for the, you know, three-quarters of patients that presumably you're still targeting to get onto therapy, what's the strategy on a go-forward basis that— Do you think there's anything that you need to change in order to get to that remaining group? And then related to that, I'll ask you a question about the doctor prescribing patterns as well.
So and I may touch on that as well in responding to your question. So in terms of where we stand, today, 1 out of 4 diagnosed Rett patients have initiated therapy. COEs represent a little over a quarter of the treating population. Now, there's a little bit of blurred lines here because some patients are treated at a COE, and they also see a local physician. But about a little over a quarter of the Rett population is treated at a COE. There's a small component that's treated in individual practicing neurologists or pediatric neurologists. The majority of the population is what we would refer to as non-COE, high-volume institutions. These are either practices in large hospital chains or at academic centers that are not designated as a COE.
There's a little bit of a range of what those facilities look like. Some of them have all the trappings of a COE. They have the infrastructure established, some do not. But they have a high density of patients. And so today, our penetration rate in COEs is about 50%. So we've you know, one in four patients overall, but in COEs, it's about half of the patients treated at COEs have initiated therapy. So there's a lot of room to continue to grow the drug in COEs, and today, about one in three of our scripts that are coming in are coming in from COEs. About one in three today are coming in from these high-volume institutions, where our penetration, our overall penetration is lower than it is in COEs.
This is where the majority of patients are, and so this is really a significant growth opportunity for us as we continue to advance. All this is tracking to the plan that we initially established. We'll start by focusing on COEs. They have the very highest density, and then we'll expand from there into the high-volume institutions, which we're doing now, and also community practices.
Why do you think you don't have, you know, close to 100% penetration from COEs just because you know that location, your salesperson knows the location, presumably they know the physicians for prescribing patterns? Do doctors tend to prescribe to all of their Rett patients once they know DAYBUE, or is it always just a subset?
Well, I think with any drug, you know, you'd love to get to 100% penetration, right? You know, we don't see that typically. So, but in COEs, there's a lot of room to continue to grow the drug. I think that there will be some physicians, so it's multifaceted, I mean, in response to your question. There'll be some physicians, and again, we see this in other areas, too, and we certainly hear this from neurologists that they want to, they'd like for the drug to be on the market for a year before they prescribe it. You do hear that. That, again, that's not highly prevalent, but there are some that have that view.
Rett patients tend to see their prescribing physician once every 6 months or 12 months, and so some patients, it just takes time for them to get in. These patients have highly, very highly complicated medical conditions, and some patients, it just may not be a good time to initiate therapy. And so again, it's multifaceted, but I'm highly confident we will get to much higher. We're continuing to pull a lot of patients from COEs, and I'm highly confident that'll continue to be the case.
Okay. And then, do you have the stats on what percent of the physicians you've targeted have written a script for DAYBUE?
S o that's another area where, you know, given, if we look at analogs on rare disease and given where we stand today, we have over 650 physicians that have written. That's a very broad population. That's well exceeded our expectations at this point of the launch. And again, I think it's just reflective of, you know, the high interest in the community, the fact that, you know, there's, has been no drug approved, so these patients have had very little to no hope. And so, so we're very, we have a very wide prescribing population today.
So it's 650 physicians have written a script for DAYBUE?
That's correct.
What is your targeted group of physicians?
Well, it's larger than that because we have some physicians that we target that we wouldn't have been given the number of physicians that we target. But as you would expect w e have a target group of physicians. Some that we're targeting have not written yet, and, you know, we're—the objective is to get them to initiate therapy, and that also can be multifaceted. Sometimes it's just not the right time for them. They want to see the drug, you know, on the market a little bit longer, etc. But we do have a targeted list, and as you would expect, our rate of frequency among targets varies also, and it depends on the density and the level of penetration with individual practices.
Okay. And then on the discontinuation part, what % of the discontinuations are due to the side effect profile versus the perception that the drug isn't working for that patient?
So here, too, let me tease this apart a little bit. So the most common reason for discontinuation, discontinue is diarrhea. I just want to remind you, context is important here. 80% of Rett patients have constipation. And in our clinical trials, the numbers coincidentally happen to be the same, 80% of patients in our phase 3 study had diarrhea. So it's a little bit of a trade-off there. The constipation can be a safety issue. It can lead to impaction, hospitalization. There have been a few reported deaths associated with it. The diarrhea that we observed in the clinical studies, 97% of the cases were mild to moderate. These patients, because of their medical condition, typically wear diapers or diaper-like garments their entire life.
So we were successful in getting key elements of GI management regimens into the label, which first and foremost include when you start DAYBUE, stop your anti-constipation medication, which vast majority of patients are on. Introduce fiber into the diet, you know, consider dose adjusting, and consider off-the-shelf anti-diarrhea medication. So those are the key elements of diarrhea management regimen. As I mentioned, we're seeing more variability in the application than would be ideal. That's not surprising, given where we are on the launch. It does take some time, sometimes to establish these best practices. It's a key area of focus for us today. But in terms of the discontinuations you're asking about, as we would have expected, diarrhea is the most common reason.
With any drug you have subjective endpoints, you're gonna have some patients that don't respond. Again, we see this in neuropsychiatry. I would say that when we look at that as a reason for discontinuing, it's a very low number. It's a number that we're actually very pleased with, and as we have more and more time on the market, the benefits that we're seeing with the drug can be super impactful to families. Just to give you an example, and, you know, we hate to rely too much on anecdotes, but these are examples of the kinds of benefits that some patients are seeing.
We had one patient who, and we discussed this on our last call, who said to her mom, "Mom, I love you, Mom." And it's the first time that mother, you know, ever heard that. Another patient had a vocabulary of four words, and now she's up to 40. Another patient, they live in an apartment on the second floor, had not been able to walk up the stairs. Some patients can walk some, and now she can. And so those are examples of some of the examples of the types of benefits that we're seeing. And as we are on the market longer, and we get more and more of that into the medical community, we're my expectation is that will also help. It presents an opportunity to have even higher rates of persistency over time.
Okay, great. So what do you think is the biggest upside surprise you've seen now that you're one year into the debut launch?
I mean, the biggest surprise was this bolus. We knew the demand would be high. One of the reasons that we were able to pull that bolus through or that surge through is we had done a lot of work with payers in advance. So, you know, when you launch a drug in rare disease, many times the first question you get from payers is, "I don't, you know, I don't even know if I have any of these patients. What is this disorder? I don't even know if I have any." So we've done a lot of work. So we were able to get access; access stood up really quickly. And then, and so you often have the high demand, but it gets bled out over time. We were able to pull it through very quickly, so that's probably the biggest surprise.
There's some real benefits to having done that, because it's, as I've said before, it almost is as if we leapfrogged into the second year of launch. You wanna get to a point where you have what I just described. You have a lot of data, a lot of examples of benefits of the drug, a better understanding and establishment of this best practices faster. So all that is happening faster now than it otherwise would have, due to this large bolus of patients coming through.
Okay. In the few minutes we have left, I did wanna quickly touch upon ACP-204, 'cause that's a molecule that I think, we're gonna start to get more questions about and increased interest in. Can you talk about that and how it's important relative to, to NUPLAZID, where it stands now, and, and when NUPLAZID were to lose, exclusivity, how this could become an important replacement?
So ACP-204 is, again, in our antipsychotic franchise. We're developing it for Alzheimer's disease psychosis. We do have other indications that we're considering as well. We just initiated our seamless phase 2, phase 3 program. The reason this is a seamless phase 2, phase 3 is because we have a lot of data on this molecule. We ran a very, very extensive phase 1 program, and the reason we did that is because, you know, many times in neuropsychiatry, when you go from phase 1 to phase 2, a real question is, well, what dose? You wanna do some dose ranging typically, and you're really exploring the molecule.
In our case, we had all the data that you would normally have to make those determinations, our in vitro data, in vivo data, PET studies in humans to measure receptor occupancy. But we were able to put that side by side with all the data we have with NUPLAZID. And ACP-204 is, as I've said before, chemically and biochemically very similar to NUPLAZID, but it has important points of positive differentiation. But being able to compare all of that data to NUPLAZID put us in a position where we have a much reduced risk profile. Nothing we do in our business is risk-free, but a much reduced risk profile going into phase 2. It enabled us to select the doses, run this seamless phase 2, phase 3 study.
The key points of differentiation on ACP-204, NUPLAZID is a very well-behaved molecule, but it's not perfect. One of the, probably the principal limitation with NUPLAZID is we have a mild to moderate QT elongation. It happens, it's very common with antipsychotics. And so one of the targets for ACP-204 was to reduce or potentially eliminate that. And all the data we have so far indicates that we've achieved that objective. And that's important because it allows us to go to higher doses, higher relative doses than we're able to go to with NUPLAZID.
In addition, because these are elderly, frail patients, you know, QT elongation is not, not as much of an issue in a 30-year-old schizophrenia patient, much more an issue in an Alzheimer's disease or Parkinson's disease, you know, elderly patient. And so that's a very important differentiating feature. In addition, we get to a steady state in a little less than half the time it takes with NUPLAZID, so it should act faster. And in all other respects, it seems to have all the benefits we see with NUPLAZID.
Based on where you are with just starting enrollment of this phase 2/3 adaptive study, when do you think you could complete enrollment?
We commenced enrollment in the Q4 of last year. As we always say, we need to get a little bit further into the study before we start narrowing the aperture, but we said, you know, these things usually take a couple of years.
Okay. The pace of enrollment is within what you would have expected so far?
Running right on target.
Perfect. With that, we are about out of time, so I wanted to say thank you so much-
Thank you.
-to you for presenting today at the conference. Thanks, everybody in the room for listening. I hope everybody has a great rest of the conference, and thanks for attending.
Thanks to each of you.