Good day, ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals fourth quarter 2016 financial results conference call. My name is Kirsten, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today's call. If at any time during the call you require assistance, please press star zero on your telephone keypad and a coordinator will be happy to assist you. I would now like to turn the presentation over to Lisa Barthelemy, Director of Investor Relations at ACADIA. Please proceed.
Thanks, Kirsten. Good afternoon and welcome to ACADIA's fourth quarter in 2016 financial results conference call. This call is being recorded and an archived copy will be available on our website at www.acadia-pharm.com through March 14th, 2017. Joining me on the call today from ACADIA are Steve Davis, our President and Chief Executive Officer, Dr. Srdjan Stankovic, our Executive Vice President and Head of Research and Development, Terry Moore, our Executive Vice President and Chief Commercial Officer, and Todd Young, our Executive Vice President and Chief Financial Officer.
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, including statements regarding our strategy, including the timing, results, or implications of clinical trials, other development efforts or regulatory approvals, the benefits or advantages to be derived from future approval of and the commercial potential for our products and product candidates in each case, including NUPLAZID or pimavanserin, future commercial and financial results, and the future development and commercialization of our product candidates. During our call today, we may use words such as anticipate, believe, could, expect, intend, may, plan, potential, predict, project, should, or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements.
These forward-looking statements 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 from those contained in the forward-looking statements. 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. ACADIA disclaims any obligation to update these forward-looking statements. I'll now turn the call over to Steve Davis, our President and Chief Executive Officer.
Thank you, Lisa, good afternoon. Let me first thank each of you for joining us on today's conference call. Today, I'll focus my comments on three areas. First, I'll briefly highlight our 2016 accomplishments. Second, I'll provide a brief overview of the status for our U.S. launch of NUPLAZID, third, I'll touch briefly on our broad clinical program with pimavanserin, including the recent positive phase II data we announced in Alzheimer's disease psychosis. Following my remarks, Todd will discuss our financial results for the quarter. Terry will provide additional color on our key commercial priorities for NUPLAZID, Srdjan will go into a little more detail about our clinical development programs. I'll then wrap up with 2017 priorities, we'll open it up for Q&A. 2016 was an exceptional year for ACADIA.
NUPLAZID was approved by the FDA in April as the first and only treatment for hallucinations and delusions associated with Parkinson's disease psychosis. A month later, we launched NUPLAZID and commenced the process of effecting the paradigm shift that NUPLAZID represents. In the fourth quarter, we announced positive results from Alzheimer's disease psychosis from our -019 Study with pimavanserin. These findings further increase our confidence in the potential of pimavanserin to benefit patients in multiple disease states, representing sizable medical and commercial opportunities. Pimavanserin has now shown antipsychotic results in clinical studies in three important CNS indications: Alzheimer's disease psychosis, schizophrenia, and of course, Parkinson's disease psychosis. In the fourth quarter, we added four new clinical programs for Alzheimer's disease agitation, schizophrenia inadequate response, schizophrenia negative symptoms, and major depressive disorder. When added to PDP and ADP, we are now pursuing a total of six indications with pimavanserin.
Each one of these indications independently represents the potential to dramatically impact our long-term growth. Taken together, they position ACADIA to be a strong leader in the CNS space. Let me now turn to our launch. In short, we continue to be extremely pleased with the strong progress of the launch. We continue to see solid growth and uptake of NUPLAZID and reported fourth-quarter net sales of $12 million and $17.3 million for the full year 2016. During the quarter, we continued to observe a steadily growing number of patients starting therapy, together with a growing number of prescribers, including repeat prescribers. We see good reimbursement and access for NUPLAZID. We're on Medicare formularies, our coverage by commercial plans continues to grow. These indicators are consistent with the very positive feedback we're hearing from the medical community, from patients, and from caregivers.
We hear this through our field force and market research pulsing of the medical community. Through these avenues, we've received favorable feedback from physicians on the clinical profile of NUPLAZID, including its efficacy and favorable safety profile, as well as on NUPLAZIDconnect. Importantly, we've also heard many moving stories from patients and caregivers on how NUPLAZID is having a positive impact on their lives. Our field force has also made significant inroads in broadening and deepening awareness of NUPLAZID. As we announced earlier this year, we're expanding our sales force from 133 to around 155 reps. Terry will add a little bit of additional color on that in his remarks. While it's still early in the launch, we continue to see strong foundational elements confirming our view that NUPLAZID sales will grow attractively over many years.
These elements comprise, for example, a groundbreaking product in a first selective serotonin inverse agonist, or SSIA, to be approved by the FDA, pimavanserin represents not only an important advancement in PD psychosis, but also a potential important advancement in other CNS disorders. At the end of last year, we announced positive phase II data with pimavanserin in Alzheimer's disease psychosis or AD psychosis, as I noted earlier. As you are aware or would recall, the FDA has not approved any drug for the treatment of this disorder. We estimate, based on scientific literature, that AD psychosis affects approximately 25%-50% of patients diagnosed with Alzheimer's disease. The unmet need is vast.
As a backdrop, atypical antipsychotics are frequently used off-label to treat psychosis in these patients, but they represent a suboptimal treatment option for a couple of reasons. First, it is meaningful safety and tolerability concerns, and secondly, the fact that currently available antipsychotics have been shown to statistically significantly impair cognition in this patient population, making the primary symptoms of Alzheimer's disease worse. Data from our study 019 show that pimavanserin may achieve an antipsychotic effect without impairing cognition. We also saw a favorable tolerability profile in this elderly and frail population that was, on average, about 10 years older than patients in our PD psychosis trials. We will be advancing this program into phase III in the second half of this year. In support of this, we are in the process of scheduling an end-of-phase II meeting with the FDA to discuss our phase III development program.
We expect that to happen around mid-year. We also plan to present data from Study 019 in the second half of 2017. In sum, we enter 2017 with strong momentum, and we are committed to delivering strong results as the year progresses. With that, I will now turn the call over to Todd, who will discuss our fourth quarter financial results.
Thank you, Steve, and good afternoon, everyone. Today, my comments will be focused on our financial results for the fourth quarter of 2016. For financial details related to our full year 2016 results, please take a look at the P&L and balance sheet included in today's press release. For the fourth quarter of 2016, we generated net product sales of $12.0 million, with a gross-to-net percentage in the low 20s. As a reminder, we are still using the sell-through method for revenue recognition. Under this approach, we recognize revenue when a specialty pharmacy dispenses NUPLAZID to a patient, or when a specialty distributor sells NUPLAZID to a long-term care pharmacy or government facility. Moving to the expense side of the P&L, total operating expenses, including cost of goods sold for the fourth quarter of 2016, were $90.2 million.
R&D expenses for the quarter increased to $30.2 million from $20.5 million in the fourth quarter of 2015. This increase was primarily driven by the clinical costs related to our new studies in the area of Alzheimer's disease, schizophrenia, and major depressive disorder. The personnel and related costs, including stock-based compensation expense associated with our expanded research and development team. SG&A expenses increased to $57.7 million for the fourth quarter from $22.6 million in the fourth quarter of 2015. This increase was primarily driven by the hiring of our specialty sales force in April 2016 and investments we made to support NUPLAZID's commercial launch. For the fourth quarter, cash used in operations was approximately $63 million, and we ended 2016 with $529 million in cash and investment securities on our balance sheet.
As we move into the first quarter of 2017, there are underlying dynamics that we believe may impact first quarter net sales more than other quarters of the year. First, we expect to have a higher gross to net percentage in the first quarter of the year, primarily due to ACADIA's contribution to the donut hole for Medicare Part D patients. We expect our gross to net percentage in Q1 to be in the high 20% range, which should be the highest percentage for the year. Second, we believe some patients filled prescriptions in December because they have likely reached their plan deductible or have already progressed through the entire Medicare Part D donut hole for the calendar year.
This phenomenon, which is not uncommon in our business, likely resulted in some sales being pulled into the fourth quarter that otherwise would have naturally occurred in the first quarter of this year. Third, similar to other companies in our space, at the beginning of the year, patients are managing the changes to their Medicare plans. We began preparing for this impact for our patients months ago and have staffed NUPLAZIDconnect to make this process as easy as possible for our patients. In terms of expenses for the first quarter of 2017, we expect our R&D expense to be in the high $30 million range and our SG&A expense to be in the high $60 million range. We continue to invest in the lifecycle management of pimavanserin and the NUPLAZID launch. These amounts include projected non-cash stock-based compensation expense.
We drive the commercial uptake of NUPLAZID and develop pimavanserin for other indications with high unmet medical needs, we expect our cash used in operations to increase in 2017 compared to 2016. I will now turn the call over to Terry, who will lead the discussion on the commercial launch of NUPLAZID.
Thanks, Todd, and good afternoon, everyone. My remarks today will be focused on commercial highlights from the fourth quarter. I want to take just a moment to reflect on a few key accomplishments in 2016 we believe have contributed to the successful launch of NUPLAZID. First, we saw Parkinson's disease psychosis awareness significantly increase in the months leading up to launch. We believe our pre-launch disease awareness campaign enabled us to hit the ground running in helping healthcare professionals understand the prevalence and devastating consequences of Parkinson's disease psychosis if not treated. Once approved, we believe the FDA provided us with a product label that allows us to fully convey the value of NUPLAZID in terms of its efficacy, safety, tolerability, and no impairment of motor control.
We are also very pleased with the reimbursement and access for NUPLAZID and the recognition of the innovation and benefits our product brings to the market. Just recently, we've been recognized by several professional bodies. Just to mention a couple, the American Society of Consultant Pharmacists named ACADIA as the winner of its annual Hall of Fame Award, given for significant contributions to senior care, long-term care, and consultant pharmacy practice. NUPLAZID was presented with the award for outstanding product by the California Life Sciences Association. Turning specifically to the fourth quarter commercial highlights. We have had a strong introduction of NUPLAZID into the marketplace and are pleased by the solid uptake we saw in our second full quarter of commercialization. The use of NUPLAZID increased across all targeted segments, with greater adoption occurring among movement disorder specialists.
This was expected given the high density of PD psychosis patients these physicians treat. In terms of prescriber mix to date, about two-thirds of our prescribers are neurologists, a little less than 15% are psychiatrists. The remainder are nurse practitioners and physicians' assistants supporting these physicians. Operationally, our sales force activity is robust. We continue to have good access to physicians. As we announced earlier this year, we are increasing the size of our long-term care sales force by about 20 specialists to increase our bandwidth in long-term care. We knew when we launched that we would need to get some experience in the field to size the long-term care sales force.
As we look to the future, it was clear that we should expand our bandwidth to keep up in the long-term care segment of our business. We expect to deploy these additional specialists in the field in the second quarter. Moving on to NUPLAZID brand performance in the market. We are pleased to see brand awareness continue to increase, with unaided awareness going from 62% in September to 74% in December, and aided awareness increasing from 76% to 88% over the same time period. Currently, NUPLAZID prescriptions are approximately 70% switches from current therapy and approximately 30% are treatment-naive patients. We continue to make good progress regarding access and reimbursement. NUPLAZID is on Medicare formularies. Coverage of NUPLAZID by commercial insurance plans increased from 35% to over 60% of covered lives and continues to grow.
Importantly, the majority of plans, whether Medicare or commercial, require a simple prior authorization verifying that the patient has PD psychosis. Our payer mix is still about 75% Medicare, 15%-20% commercial, and the remaining 5%-10% VA, TRICARE, and Medicaid. With regard to the VA, the Department of Veterans Affairs Pharmacy Benefits Management Services has completed their review of NUPLAZID and has recently published their criteria for use guidelines, often referred to as CFU. I am pleased to report NUPLAZID is now available within the VA system. Overall, we are very pleased with our progress regarding the patient's ability to access this important medication. Moving forward, our commercial initiatives in 2017 will be focused on accelerating and facilitating dialogue between physician and patients regarding their PD psychosis symptoms through disease awareness programs.
Specifically, we are initiating new direct-to-patient programs through a variety of multimedia channels. For example, we will be increasing our presence at the local community level with Parkinson's disease psychosis disease awareness education exhibits and physician-led education programs at patient advocacy events. Another crucial initiative will be educating key prescribers on the benefits of NUPLAZID and differentiating NUPLAZID based on proven efficacy without impact on motor symptoms and a favorable safety and tolerability profile in frail elderly patients. It will also be important to continue to remove barriers and facilitate greater physician and patient access to NUPLAZID through NUPLAZIDconnect. As mentioned previously, we'll increase our presence in the long-term care segment through our sales force expansion. With that, I'll now turn the call over to Serge.
Thank you, Terry, good afternoon, everyone. We've made tremendous progress in executing on our broad development plans for pimavanserin. During the fourth quarter, we reported positive top-line results with pimavanserin in Alzheimer's disease psychosis and initiated four new clinical programs. As Steve mentioned, we are advancing our AD psychosis program into phase III. We conducted further analysis of data of our phase II 019 Study, which reaffirmed the efficacy we observed on the primary measure. Importantly, data from this study provides significant learning that is helping shape the design of our phase III program. We look forward to presenting O19 data in the second half of this year and commencing phase III program later in the year. Let me now turn to our newer clinical programs.
During our third-quarter call last November, I highlighted two new programs we initiated in Alzheimer's disease agitation, or AD agitation, and in schizophrenia inadequate treatment response. Let me briefly touch on each. Our AD agitation study, named SERENE, is a 12-week randomized, double-blind, placebo-controlled, multicenter outpatient study designed to examine the efficacy and safety of pimavanserin in approximately 430 patients with AD agitation. The primary endpoint is the reduction in total score on the Cohen-Mansfield Agitation Inventory. Similar to AD psychosis, there is no FDA drug approved for AD agitation. Our schizophrenia inadequate response study, named ENHANCE, is a six weeks randomized, double-blind, placebo-controlled study designed to examine the efficacy and safety of adjunctive use of pimavanserin in about 380 patients who have an inadequate response to current antipsychotic treatment.
The primary endpoint is the change from baseline to week six on the Positive and Negative Syndrome Scale, or PANSS total score. Both these studies commenced in the fourth quarter and are ongoing. Since last quarter's call, we initiated two new clinical programs in the latter part of the fourth quarter, one in negative symptoms of schizophrenia and another in major depressive disorder. Let me go over each of these programs. First, let's start with our study with pimavanserin for negative symptoms of schizophrenia. There is currently no drug approved by the FDA for the treatment of negative symptoms of schizophrenia. Given pimavanserin's highly selective pharmacological profile, positive exploratory trials with older compounds of similar pharmacologic activity, and our clinical experience with pimavanserin in schizophrenia, we believe pimavanserin, when added on top of an atypical antipsychotic, may address this unmet need and improve clinical outcomes in patients.
Last November, we initiated ADVANCE, a clinical study to evaluate pimavanserin for adjunctive treatment in approximately 380 patients with negative symptoms of schizophrenia. It is a 26-week randomized, double-blind, placebo-controlled multicenter study with a flexible dosing regimen between 10 and 34 milligrams pimavanserin. The primary endpoint of the study is the change from baseline to week 26 on the Negative Symptom Assessment, or NSA 16 total score. Let me now turn to our clinical program with pimavanserin in major depressive disorder. Some atypical antipsychotics are approved as adjunctive treatment in MDD. While atypical antipsychotic can boost antidepressant efficacy, it comes at the price of significant side effects. Preclinical and clinical evidence suggests that the blockade of 5-HT2A receptors improves the clinical effects of selective serotonin reuptake inhibitors, or SSRI.
As a selective serotonin inverse agonist, or SSIA, preferentially targeting 5-HT2A receptors, we believe pimavanserin has the potential to provide added benefit as a new adjunctive treatment for MDD. Last December, we initiated CLARITY, a 10-week randomized, double-blind, placebo-controlled multicenter study designed to examine adjunctive use of pimavanserin 34 milligrams in 188 patients with MDD who have an inadequate response to standard antidepressant therapy with either SSRI or SNRI, serotonin norepinephrine reuptake inhibitor. The primary endpoint of the study is the change from baseline on the Hamilton Depression Rating Scale, or HAM-D total score. With five CNS indications in development, in addition to our approved PD psychosis indication, we remain deeply committed to the development of pimavanserin in a wide array of CNS disorders that are underserved by the currently available therapies and represent a significant unmet need.
With that, let me now turn the call back over to Steve.
Thanks much, Serge. We laid a strong foundation for ACADIA in 2016 and look forward to build on that momentum in 2017. In 2017, our highest priority will be to continue the strong execution of the NUPLAZID launch in PDP. We will also focus heavily on the continued execution of our ongoing programs in five additional CNS indications, including the commencement of our AD psychosis study in the second half of the year. These are exciting times at ACADIA. Just one additional note, I'd like to say that I know I speak on behalf of all of my colleagues at ACADIA when I say we're very pleased to advance our programs in areas where we have the opportunity to make an important difference in the lives of patients who suffer from CNS disorders.
I'll now turn the call back over to Lisa, who will initiate the Q&A portion of the call.
Thanks, Steve. At this point, we will begin the Q&A portion of our call. We ask that each person limits themselves to one question and then queue with any additional questions. Kirsten, please open the call for questions.
Certainly. Ladies and gentlemen, if you wish to ask a question, please press star followed by one on your touch tone telephone. If your question has been answered or you wish to withdraw your question, please press the pound key. Press star one to begin. Please stand by for your first question. Your first question does come from the line of Jason Butler from JMP Securities. Your line is open.
Hi, thanks for taking the question. Just wondering if you could give us any additional color on the long-term care piece here and what your market research tells you about the prevalence of patients with PDP in long-term care facilities are. Do you have a sense of, with the new reps, how many additional patients you could be targeting? Thanks.
Jason, Terry's going to answer that question.
Sure. We know that there's more business in long-term care than we originally estimated. We don't have a definitive number. It is clear that we believe in our sales reps interacting with long-term care facilities, that the number of PDP patients is greater than we originally intended. To get the number is a little more difficult because prescriptions are not written in that environment, and there's not a code that matches up for it. Generally speaking, we've had enough time now to see that there is greater opportunity in that marketplace than we originally thought.
Okay, thanks for taking the question.
Your next question comes from the line of Ritu Baral from Cowen. Your line is open.
Hi, guys. Thanks for taking the question. Nice print. Question on use patterns for the drug. Can you talk about what you've seen so far? I know it's preliminary, but so far on persistence on treatment, and you mentioned the large number of switch patients. What's driving the switch? Search for better efficacy or search for better safety?
Yes. Ritu, Terry will take this question as well.
The answer is both. There remains, and as we expected, dissatisfaction in the market with patients currently on Seroquel. We know sedation plays a big factor in terms of side effects, but we also know that physicians are not seeing the efficacy that they are looking for with Seroquel. It is both. We know early on that we got some difficult-to-treat patients, but now we're seeing that balance out where we're getting both naive and switch patients.
persistence?
I think it's just premature for us to do that. It's one of the more difficult things to really pin down with any drug, but particularly at the launch stage. I think we just don't have enough data yet to really be able to speak to that.
Understood. Thanks for taking the questions.
Your next question comes from the line, Tazeen Ahmad from Bank of America Merrill Lynch. Your line is open.
Hi, thanks for taking my question. Steve, just wanted to get a little bit of color on what you were talking about the donut hole sort of resetting at the beginning of the year. I know you're not giving out guidance, but sort of directionally, how should we be thinking about when Q results in terms of the potential for the ramp that we saw between your first quarter and your second quarter versus what we should expect to see in terms of uptick for this quarter, if you can?
Sure, Tazeen. Todd's going to respond to that question.
Yes, Tazeen. As I mentioned, we're expecting a high 20% gross to net in Q1. That is driven by the donut hole resetting for all of our patients on January 1. That Medicare impact is based on the calendar year. As a patient has the standard benefit under Medicare, their first prescription for a drug, and that's any drug, not just ours, the first $400 they have to pay as a deductible. They go into an obligation to pay 25% of the next approximately $3,300. They reach into a part where we start to have to pay on a portion of the drug cost, and that's that donut hole.
As we flow through the course of Q1, all of our patients that we had entering the year already on therapy will be getting refills, and they will enter the donut hole again, much like they did when they got their first bottles for us Earlier in 2016. As a result, we will have this higher Medicare obligation in Q1 that essentially as that patient exits the donut hole, which is after having a little over $8,000 in prescription drug costs across all drugs they're taking, our liability for the donut hole goes away. That's why, as I said on the prepared remarks, we're expecting Q1 to be our highest gross to net percentage as a result of that donut hole calendar year reset.
Do you expect any lingering results heading into 2Q for some patients?
Sure. As you think about new patients that adopt NUPLAZID over the course of the quarter, we will have this every quarter of the year. There will be certain patients that are entering the donut hole, and there'll be certain patients that exit the donut hole. This is not purely a Q1 phenomenon. We had this in Q4 of last year and in Q3. It's just that as many of our patients are taking other prescriptions, the timing of their entering and exiting the donut hole will defer based on their overall financial profile for their drugs. That being said, we expect more in Q1 just because we have this bolus entering the year who are already on therapy.
Okay, thanks.
Your next question comes the line of Paul Matteis from Leerink. Your line is open.
Hey, thanks so much for taking my question. I appreciate it. Ahead of the FDA meeting on Alzheimer's disease psychosis, I was wondering if you'd expound upon what your expectation is regarding the size of the safety database in that indication, and how much of the safety data you think is leverageable on PDP versus how much new safety data do you think you need in the broader dementia population, given, of course, the black box warning and the meta-analysis done on atypicals. Thanks so much.
Serge?
Yeah. As Steve mentioned, we are in the process of scheduling the FDA meeting and preparing our, obviously, proposals for the discussion with FDA. It's a bit premature for us to discuss the specifics of the proposal that we will make with the FDA. To respond to part of your question, I think we certainly believe that our totality of the safety database we accumulated so far in Parkinson's disease psychosis as well as so far in Alzheimer's disease psychosis will contribute substantively to the overall safety database that we will be proposing for the development in Alzheimer's disease psychosis. We also do not believe that the black box warning that exists for all antipsychotics is in any way impediment for us to pursue and achieve this indication.
Thanks, Serge. If I could just clarify quickly, are you just proposing a single pivotal study?
As I said, we are developing program, we are at this point not discussing publicly our proposal until we actually have a meeting with FDA and discuss specifics and agree on the program.
Okay. Totally understood. Thanks very much.
Thank you.
Your next question comes from the line of Cory Kasimov from JP Morgan. Your line is open.
Hi, guys. This is Sean Fu on for Cory Kasimov. Thanks for taking my question and congratulations for the performance this quarter. Just a brief question about some of your ongoing phase II trials, specifically the Alzheimer's agitation and the schizophrenia trial with the negative symptoms. I noticed that these are phase II trials, but the patient population is quite large and they have quite a straightforward trial design. I was wondering if you could comment on whether or not there's a chance that these two trials could potentially be pivotal.
Yes. Thank you for that question, Cory. First of all, let me just say that in principle, our position is when we are conducting the phase II trials or that we try to design a robust trial that will be capable of giving us definitive conclusions in terms of the potential of pimavanserin in terms of both safety and efficacy. This trial indeed are sized up as similar that phase III trials would be. These are well-controlled trials, placebo control of a size that certainly may be a part of the pivotal program for approval if current trials are positive. We do certainly expect if they're positive and the data justify our pursuit of indication that these trials will be part of that submission.
Okay. Thank you. That's helpful.
Your next question comes to the line of Salveen Richter from Goldman Sachs. Your line is open.
Hi. Congrats on all the progress and thanks for taking my questions. This is Karin on the line for Salveen. Just quickly, maybe just going to the AD psychosis study that read out. What are some potential design modifications and strategies to mitigate placebo risk, particularly at the later time points in the study? Thank you.
I will just repeat what we've been saying and what I mentioned earlier, that -019 Study results are really a treasure trove of information that we are using in shaping and designing our phase III program. To that effect, we learned quite a bit of specific design features for the next program, both in terms of what would we do in control of the placebo response, how would we think about the duration of efficacy and response, and many other elements. At this point, we're refraining for publicly discussing that for a number of reasons, notwithstanding competitive reasons, but also until we actually have a discussion with FDA and settle on the design of those programs, it's premature for us to speak and provide the details of what we are proposing.
Okay, thanks for answering my question.
Your next question comes from the line of Charles Duncan from Piper Jaffray. Your line is open.
Hi, guys. Hi, Steve and team ACADIA Pharmaceuticals. Congratulations on a great quarter. I also had one question, which is two parts. One is commercial. With regard to Terry's comments, he listed out four, I think, initiatives in 2017. I'm wondering if he could pick one. Could it be long-term care or disease awareness that he would like us to focus on in terms of driving growth for 2017? Then for Srdjan, with five potential label expanding trials going on, if you could provide some insights on where there's been most interest thus far, or which one has the highest probability of success in your view, given the rationale and the clinical data thus far?
Sure. Charles, we're going to go with Terry's question first.
Right. In terms of key growth drivers, the long-term care effort is really our intentions are to keep up with what we believe is there. We know where to get business there, but we don't feel that we'll meet the current potential. For key drivers moving forward, I think our disease awareness with patients and speaking with physicians is going to be a key driver. Really, we cannot let up on the repetition that's necessary to cause a paradigm shift from patients being on unapproved agents to NUPLAZID. That requires, as we've said before, time, and it's going to be very important that we continue to differentiate the product based on the product's merits and what it brings to the party.
Part of the equation now is clearly making sure the patients are aware that their symptoms are associated with Parkinson's disease and that they speak to their physicians about it.
Terry, just to clarify one point, I think you said in long-term care, you felt like we wouldn't be able to keep up with the potential. I think what you were saying is if we didn't expand the long-term care sales force.
That's it.
we might not be able to keep up with the potential.
That's what I meant.
We need to do that.
Yeah
maintain that bandwidth.
Thank you.
Thanks.
Yes.
Okay. Serge?
Charles, a great question. Thank you for asking that. I do want to actually think back more than a year. We went through a very disciplined and tedious process in terms of thinking through our life cycle management opportunities, and ultimately settled on the life cycle plan for pimavanserin that the principal requirement for all of this is that there is a real unmet need. Looking at five indications that we are pursuing, it's very difficult for me to say which one is favored. Obviously, we all have our own biases in terms of one or the other indications, but each of these indications, we look at them as a significant need and certainly a great potential for pimavanserin and try to remain unbiased and neutral in executing the program so that we can ultimately evaluate how much of that potential can be realized in the clinic.
I'm sorry if may be a little disappointing to not give you any favorites, but that's really the truth of the matter.
No worries regarding the crystal ball. Congrats on a good quarter. Thanks for the added color.
Thanks, Charles.
Okay. Again, if you would like to ask a question, it's star and then the number one on your touch-tone telephone. Your next question comes from the line of Alan Carr from Needham. Your line is open.
Hi, guys. This is Danielle on for Alan. Thanks for the question. I was just wondering if you could comment on the MAA status and whether there have been any developments on XUS strategy.
I'll take a stab at that. Serge, feel free to jump in if I miss anything. On the MAA, what we have reported previously is that we frame shifted that submission. We made that determination once we got the 019 results in with ADP and determined that given where we stand in Europe, in thinking through our patent life versus the 10-year data exclusivity that we have, we felt like we'd be in a better position to frame shift that submission to try to position ourselves so that we have the potential to capture more patients for more indications within that timeframe. We haven't given any further guidance in terms of when we will, but we said at the time that our expectation is the next data point that we'll evaluate will be when we start getting some data back from these studies that are ongoing now.
That's going to be a while. Once we do that, we'll assess again and determine whether we think that's the right time to submit or not.
Great. Thank you.
Just to add, in respect to status, we did receive the agreement and approval on the pediatric investigational plan, which was the last administrative check that we needed to have for approval. From that perspective, we are ready for submission at any point when the decision is made to do so.
Thank you.
Your next question comes from the line of Ritu Baral from Cowen. Your line is open.
Hi, guys. Thanks for taking the follow-up. Wanted to just ask about what you're seeing as far as trends on time to fill for the prescriptions in the launch. Since we last spoke, have there been any changes overall on, say, the most severe or most strict pre-authorization requirements? Like what the highest bar is out there as you continue to make progress with payers. Then, Serge, is there any way that you can comment on enrollment for SERENE and ENHANCE? I know it's early, but maybe number of sites that are open, enthusiasm for enrollment amongst PIs that you see.
Ritu, we're going to actually take your last question first. Srdjan, you want to address that?
Yeah. Ritu, it's very early in the program to comment on the enrollment. We're still really monitoring that. I can say that there is quite a bit of enthusiasm that we're seeing with the investigators to be part of the programs. From that perspective, in terms of identifying investigational sites, both in the U.S. and globally, as we are doing these trials globally, other than depression trial, which is only done in the United States, we have quite a bit of enthusiasm there. We do want to see a few more months of recruitment to assess how really the recruitment is going and to project and provide some guidance in terms of the duration of the trial and how long it will take.
Terrence, do you want to take the time to fill question?
Sure. Ritu, this is Terrence. In terms of the timing, it takes about five to 10 days on average from when the physician puts in the form to the hub for the patient to receive the 30-day free trial. The adjudication process is occurring within that 30-day timeframe, for the most part.
I think another part of her question was just progress on the payer front in terms of restrictions that we're seeing.
Right. To date, the majority of plans are requiring nothing more than a simple verification of the PDP diagnosis. That trend continues.
Yeah. As I think is noted earlier, we're up to about 60% of plans that have now put NUPLAZID formulary in the commercial space.
That's right.
of course, we're on all targeted plans and for Medicare.
What's the strictest pre-auth that you guys have seen so far?
The strictest has been requiring an MMSE examination or sometimes stepping through a Seroquel prescription first. Those are generally the most restrictive.
Got it. Thanks for taking all the follow-ups.
We have no further questions at this time. Mr. Davis, please proceed to closing remarks.
Just like to say thanks again to everyone for joining us on today's call and for your continued support. We look forward to updating you on our future progress.
Thank you for your participation on today's conference call. This concludes the presentation. You may now disconnect. Good day.