UBS virtual event. I would now like to pass the call over to Ash Verma.
Great, thanks. Good day, everybody. My name is Ash Verma. I cover SMID Cap Biotech and Spec Pharma here at UBS, and welcome to UBS Virtual CNS Day. Next company with us, Acadia Pharmaceuticals, and I'm really delighted we have the management team here: Catherine Owen Adams, who's the CEO, and Mark Schneyer, who's the CFO, and Liz Thompson, who's the Executive Vice President for R&D. How's everybody doing?
Great, thanks. Thanks for having us.
Yeah, I mean, Liz was smart enough to wear green, except for all three of us, so kudos to her. I'll try to remember that next time. Yeah, thanks. Look, I mean, this is a 25-minute fireside chat, so just we go over the questions on the products that you have and kind of the pipeline, starting to get more and more questions about that from investors. Maybe I think it'll be beneficial, Catherine, if you can just kind of provide a brief update on the business. You recently reported the fourth quarter earnings, where you guided to more than $1 billion in revenue for 2025. Just talk about just the two products, new plans at DAYBUE. What are you seeing, and how confident are you in terms of achieving that goal?
Yeah, so thanks. We're excited to be guiding to deliver over $1 billion this year for Acadia. It's a milestone for us, and that is consisting of our two brands, as you described, NUPLAZID and DAYBUE . We've guided NUPLAZID between $650 million and $690 million, and that growth is built on an uptick of volume that we're seeing due to a number of things around consolidation around our label, doctors understanding where they can use it in terms of the patient population, and also a very successful direct-to-consumer campaign that has been raising the awareness of the symptoms of hallucinations and delusions for NUPLAZID. Both of those things combined give us a solid base for growth in 2025. For DAYBUE, we guided between $380 million and $405 million.
As you know, we've seen a stable patient base for the last few quarters, and we've made some changes to our marketing strategy and go-to-market strategy that I can talk about later. Based on those changes and based on the steady state that we're seeing right now, we're forecasting a strong patient base in 2025 with some growth through the latter half of the year, and we feel very confident about both brands.
That's great. Good start. Maybe just talking about DAYBUE. Yeah, as a new leader of the company, just kind of taking over the business, what is your approach as you bring in a fresh perspective on how to rekindle the growth of the brand here?
Yeah, so the way I thought about DAYBUE when I came in was, first of all, look at it through the context of a rare disease launch. And I'm experienced in that space, and looking at DAYBUE, it behaved classically, just like many, many rare launches, very strong out the gate, a lot of patients waiting to use it in the Centers of Excellence. And then, like many others, it hit a steady state plateau, and the patients sort of have been steady for the last three quarters. So in terms of then the potential for future growth, the way I think about it is really in two ways. First of all, where's the source of future growth, and where's the potential volume? And that became very clear that actually outside the Centers of Excellence, where over 65% of patients are treated, there's a lot more potential.
As we shared on our call, we are over 50% penetrated in the Centers of Excellence, where 35% of patients are treated. Outside, in the remaining 65%, we're only around 20-25% penetrated. That is where the volume of patients sit. When I look at how we get to those customers, we were undersized in terms of our sales force. We have really added to that, and we're adding to it now. We're increasing our sales force by about 30%, or our customer-facing field team. With that increase, we're now able to get to the rest of those customers with a reach and frequency that will help to drive the incremental volume that we're looking for. The final thing for me was looking at the story we're telling. How is it resonating?
How is it really ensuring that customers understand why to use DAYBUE? I think historically we skewed a little bit towards the side effect profile. Understandably, we needed to have doctors understand how to use it, but we're really pushing now on efficacy and the why behind the what. What you'll see this year is a lot more around efficacy, a lot more about what patients should expect. We're excited that all of those coming together will help us drive growth into DAYBUE.
Yeah, that's great. Thanks for sharing some of those metrics. Excuse me. I think you've also noted just the expansion of the total addressable market in terms of the clinically diagnosed Rett patients. If you can expand on that a little bit.
Yeah, so I think if we just look at prevalence in the U.S., 6,000-9,000 patients, about one in 10,000 to 15,000 live female births. So that's the prevalence. When we launched DAYBUE, we looked at the data and saw that there were about 4,500 patients diagnosed through ICD-10 codes. What we're seeing now is that through the launch that those diagnosis rates are increasing, and that's, again, pretty normal for a rare disease launch because payers require patients to be confirmed and certified as having a specific disease. We are seeing that increase, and we believe now there's around 5,500 patients after two years.
Again, we expect that to increase a little bit more through to the prevalence, but I think we've sort of reached that sort of next wave of peak, and so not a whole lot more, but probably up to about 6,000 over the next year or two.
I think you've mentioned some metrics around how many patients have already tried DAYBUE, right? Can you remind me what that number is?
Around 35% of all rare patients have tried DAYBUE already.
Yeah, okay. Yeah, in terms of the I know persistency has been a big focus, and more recently you've been starting to note that you've sort of stabilized this persistency at 12 months. I think even when you report to 4Q, you're seeing an improvement in the discontinuation rate. Just where are we in that process? Do you think there is more of a room to improve the persistency? What are some of the things that you're doing to address that?
Yeah, let me break that down a little bit. What we're seeing right now at 12 months is over 50% of patients that start DAYBUE are still on DAYBUE. The persistency at 12 months is over 50%, and that's higher than our clinical trials. I think for me, looking at this from an outside in, that's still a very strong persistency rate for any chronic disease at 12 months. Now at a point in time where we're sort of two years into launch, if we look at our patient population now, over 60% of them have been on DAYBUE for longer than a year. We're seeing a steadying of our patient base, we're seeing a steadying in our persistency, and more patients now have been on DAYBUE for longer.
With all of those dynamics together, we are seeing sort of a relatively steady state of discontinuations quarter over quarter, and we're hoping for that to improve over time. We're focusing on it with our field teams, with our Family Access Managers, and we really concentrate on the first three months where patients really are trying to understand how to use DAYBUE and ensure that they understand all the processes and procedures that help them get through those first few months of side effect management. We continue that patient support right the way through their journey. Even after a year or a year and a half, those Family Access Managers are still with them. We continue to invest in that. We're continuing to share more real-world evidence, which Liz can share about how to manage patients more specifically, share Centers of Excellence and what they're doing.
We really feel like we know a lot more now than we did at launch, and that steady state and persistency will continue out over time.
Yeah. Is there the discontinuation that was happening before, right? Is the bulk of that was happening in the first three months?
It still is after. I mean, it really hasn't shifted in terms of when it's happening. It's those first few months when patients really start to understand how to use DAYBUE. I mean, it's helping them through that, using antidiarrheal medicines, fiber, fluids, and making sure that they really are understanding how to get through those first few months. Some patients don't experience diarrhea at all. Some have mild, moderate, and then a few severe. It is very different for every patient and every family, which is why we have that one-on-one support.
Right. I mean, when you talk about some of the measures that you're doing, right, how frequently is the kind of the solution that you're ending up lowering the dose as opposed to trying antidiarrheal therapies or other factors to consider?
I'm actually going to ask Liz to jump in here. She manages, as well as our R&D, she manages our medical affairs team, and we have a big real-world evidence study going right now where we're collecting a lot of data on not only management, but titration. So Liz, do you want to just jump in maybe with both of those aspects?
Yeah, absolutely. I'll comment on a few things there. I'd say that first, it really isn't a one-size-fits-all approach in terms of what tool in the toolbox helps physicians help their patients and the families through the diarrhea management. Certainly, we do see some evidence in LOTUS, and that's our real-world evidence study, that lowered doses can have, if not an impact on the overall likelihood of having diarrhea in the longer term, lower doses initially can delay the onset of diarrhea. That makes that a useful tool for physicians to use. There is a proportion of our physicians who do use that to help manage patients through the initial phase and give them the opportunity to get used to DAYBUE. We do, however, also see a pretty significant range in the degree of utilization of what I'd call some of these really practical matters.
I think there's really an opportunity to continue to improve on things like use of antidiarrheals, use of fluids, use of fiber, cutting down on the anti-constipation medicines, the things that Catherine also just alluded to. We see, for example, as little as 5% of caregivers noting that they have used antidiarrheal medication. There's real potential to continue to improve from that perspective. I'd say it's not one-size-fits-all very much, as Catherine just articulated.
Yeah, yeah. Okay, that's great. In terms of the split of where the patients reside in these systems, right? I mean, Centers of Excellence is a big part of where your focus has been. I guess how do you make sure that you do not lose the focus there as you are also trying to double down on outside the Centers of Excellence, maybe if you can?
Yeah, so I think I would describe it actually as an AND strategy. Yes, we've definitely focused on the Centers of Excellence. There are 22 of those now in the U.S., where 35% of the patients are treated. The AND strategy is we need to also, in addition, focus on the other centers where the patients are treated. Those 65% who are in smaller institutions, high-volume institutions, sort of an inch deep and a mile wide in the U.S. We need to get to those physicians and help them understand DAYBUE. That's why this increase in the field force and in our customer-facing model will allow us to get there with the right reach and frequency.
Right.
As I said, the potential's there because our penetration is so much lower outside the Centers of Excellence.
Yeah. You said the COEs are 50% penetrated and the.
Roughly, yeah.
Outside COEs, what is the?
About 20%-25%.
Okay, got it. Does that vary between high-volume institutions or the standalone neurologist?
We haven't really split it out like that because it's so difficult to really differentiate between the different institutions where people go and see a physician. The other thing about rare patients is they tend to see more than one physician. They're seeing a neurologist, they're seeing a pediatrician, they're seeing a gastroenterologist. We're sort of looking at everybody outside there. There's about 7,000 doctors that treat all rare patients, but about 5,000 of them are really in our focus right now in terms of this extra sizing of the field force.
Got it. I mean, do you think that the outside the COE patient and physician distribution is kind of more fragmented as opposed to the COEs, that you would require bigger sales effort there for patients?
Yeah, yeah, no, it really is much more fragmented. Again, because there's been no treatment for rare patients, there's been no need for them to go to a Center of Excellence. Also, they're quite geographically specific. If you live somewhere that's away from it for about 50 or so mi or 100 mi, you're not going to drive to see the Center of Excellence. We need to ensure that we are able to visit doctors all over the U.S. that treat these patients.
Got it. Okay. All right, that's great. Do you have any kind of a goal post for yourself on where do you want to be in COEs or outside the COEs from a penetration standpoint? I don't know, maybe one year out, a few years out, anything of that?
I don't think I have a penetration goal for us, but all I want to say is that I want to have rare patients able to go and visit a doctor and have that doctor aware of DAYBUE and have a good conversation with that family about whether it's the right choice for them. I want to ensure we're seeing everybody where a rare patient might come and get treated.
Right, right. Yeah, yeah, I think that makes sense. Okay, just talking specifically about the financial year 2025, this guidance of $380-$405, just maybe if you can mention what are some of the assumptions that go in there? Do you think that there is room for beat and raise here? Just in terms of the cadence of revenue, I know last year was sort of a few up and down quarters, kind of noisy, but are you more likely to see more steady growth quarter over quarter this year?
Do you want to take that one?
Yeah, I'll take that. Thanks, Ash. I'd say on the range, we're confident in the range. As I shared on our last earnings call, really the main driver across the range is how many patients are going to get new scripts for DAYBUE at the top of the funnel. Two years into launch, while all the other metrics matter: time to conversion, compliance to dose, persistency, those error bars have narrowed such that the real variability is new patients at the top of the funnel. It's really a volume-driven play across the range, just due to a number of dynamics, which we can get into if interesting. Our pricing at the midpoint of our range is expected to be up modestly about a half a percentage point.
It's really the full range of guidance is volume, and depending upon kind of where we sit with patients over the course of the year, we'll drive that. I think what I would say on your revenue cadence or on the there's kind of an operational cadence and a financial cadence. I think as we've talked about on our last call, we're making investments, and Catherine mentioned earlier, in expanding kind of our commercial-facing footprint. That's expected to start to come in early in the second quarter. With that investment and that timing, you'd expect kind of the operational metrics to tick up more toward the second half of the year as opposed to evenly spread throughout the year.
From a financial standpoint, we do expect a sequential revenue down Q4 to Q1, primarily due to a pull forward of revenue as families got in front of the holiday period and in front of their insurance reauthorization process, and then just normal Q1 seasonality as we experience in NUPLAZID and you experience kind of with every drug. What we do not expect to see this year is a reduction in patients, which really is stable patient base, as Catherine mentioned earlier on the call. Kind of with the sequential decline in revenue, we think there is probably more of a steady state in revenue growth quarter over quarter, Q2 through Q4, underlying that kind of a normal Q2 and then the operational metrics that I mentioned earlier.
Yep. Okay, perfectly clear. Thanks for that. I think this is great. Maybe just switching gears to the European market and just Canada as well. What are your expectations for the launch there? Anything that you can comment on, what pricing might be in these markets?
Yeah, I mean, as we stated, we've submitted to the EU or the EMA, and we're expecting to get a normal clock kind of dynamic. We would expect to get European approval sometime in Q1 next year. As you know, each different country has a different approach to pricing, and we're putting together all of our dossiers right now to ensure that we have the right value exchange with each of the national healthcare systems. We expect European pricing to follow probably similar analogs to other areas in terms of U.S. versus EU, but each country will be taken individually. In Canada, we're in the middle of negotiating right now. All of those countries will come online sort of middle of next year onwards. As soon as we start to get out of U.S. revenue, we will give some more specifics on that.
Yep, yep. Okay. All right. That's great. Just on NUPLAZID, just moving on the conversation to other parts of your business. What you mentioned earlier around the uptick in volume and you're doing the DTC, how much of a growth room is there in this market? Do you think that there is some level of saturation in this marketplace that you're facing with NUPLAZID?
I think what we've realized with the direct-to-consumer, which we learned prior with other campaigns, is that this is a very sensitive market for promotion in terms of raising awareness of hallucinations and delusions. In terms of that growth, we expect that to continue in 2025. Just in terms of opportunity, we're about 25% market share with NUPLAZID in a very large generic market. We believe there's a lot of room to grow the NUPLAZID share with the real-world evidence, the clinical evidence that we have to support it, as well as raising the awareness of hallucinations and delusions. I feel very confident we can continue to grow NUPLAZID, and there's a lot of room to grow that brand beyond where we are now.
Yeah, yeah. All right. That's great. I know there is a fair bit of focus from investors on the IP situation, that you have some trial that was there with Aurobindo in December. I really wanted to understand just to the extent that you can comment on your position on the 721 patent. It seems that this generic company, they're arguing invalidity on obviousness. I'm very surprised to hear that they would bring that out at this point when that is something that would have come at the Markman hearing stage. Anything that you can just share on what is your level of confidence on the validity of the patent? Maybe let's start there.
Yeah, I can touch on that. I think for maybe just to level set, we say the bookends for loss of exclusivity for NUPLAZID is between October 2030 and February 2038. Your questions are more on kind of the formulation trial, which happened in February, which if we're ultimately victorious on that, will take us out to that February 2038 timeframe. For us, on formulation, it's different than composition of matter, but there are a number of arguments both to support the validity of our patents and our position that the generic challengers are infringing upon our patents. We think we have the winning argument in both sides of that case. Obviously, we'll wait to see the ruling from the judge, which is expected out sometime in the first half of this year. On the Markman hearing, I think it's a little bit the opposite.
We were the ruling went in our favor in the Markman hearing. If you look at the details of that, it's really the language of the patents themselves. There are actually two generic challengers in the case, Aurobindo and MSN. Obviously, we need to ask them about their strategy. I think one of the challengers, MSN, dropped their non-infringement position after the Markman hearing because I think from our standpoint, it was clear with the ruling in our favor, they probably were infringing on our patents. What's left to them if they want to continue pursuing against us is to try to invalidate the patents, not make a claim that they're not infringing on our patents. We'll see how it plays out. As I said, I think we have the winning argument in both cases or both sides of the argument.
We'll see what the results are.
Yeah, yeah. Thanks for that. I mean, at this point, is there a possibility of a settlement? It seems like it is becoming more commonplace in the CNS drug landscape. There have been a lot of different announcements like this in the past few months.
Yeah. Yeah, I mean, there's always a, I mean, every case and situation is specific to itself. It takes two parties to get to, or in this case, three parties because there are two remaining generic challengers to get to a settlement. That is always possible. At the moment, we're in the middle of litigation, and we don't really comment beyond that.
Right. Okay. All right. That's fair. I mean, I have started to get more questions from investors more recently around potential that, let's say, if you get to 2030, and in the scenario that you don't get the extension right, would the non-AB rated pimavanserin tablet, let's say, if that were to enter the market? Just bear with me here while I play out this scenario. I guess in this type of a market, right, is there precedent for non-AB rated generics to be successful versus a brand?
I would say there's more analogs to say that they struggle to be successful. If you're non-AB rated, there's no natural switch at the pharmacy. There's no automatic use of the product. You have to go out there and really market the product yourself. You have to get it listed on all the EHRs, etc. It is an uphill battle. You have to put all the patient support services in place. It is a difficult hill to climb. I'm used to playing in those spaces. We will continue to compete with whatever is thrown our way. I would think that's a pretty difficult situation to be in. They're able to do whatever they would like to do, and we will continue to compete and win.
Yeah, yeah. Okay. All right. Just maybe in the interest of time, moving on to some of the pipeline questions. Maybe Liz or anyone, really.
Liz, yeah.
Yeah, ACP-204. You have this Alzheimer's disease psychosis. Just conceptually, what are you aiming for this molecule versus what you tried previously with the pimavanserin?
Thank you. NUPLAZID is a great drug and has done helpful things for many patients. There were some areas that we saw as potential areas for improvement when we were looking to come up with a new 5-HT2A inverse agonist. Really what we were looking for was a few things. First of these was NUPLAZID does have a QT prolongation signal. It's not substantial, but in an elderly and frail patient population, it's important in and of itself. It's especially important because it limited our ability to dose range. We were really sort of capped at the currently marketed dose of NUPLAZID in terms of what we could look at clinically. We saw some suggestion in our prior data that indicated that higher exposures could be related with higher potential for efficacy.
It was desirable to get rid of the minimize or eliminate the QT prolongation and have the ability to further dose range. Finally, we were hoping for a quicker time to steady state, which at least has the potential of giving you improved time to onset of action. I'll say that so far, between our non-clinical and phase one and current ongoing trial experience to date, the data do support that ACP-204 is accomplishing all of these. We're starting to get that data into the scientific literature, and I'm looking forward to sharing a little bit more of it in the middle of the year on June 25th at our R&D Day.
Oh, that's great. Okay. There's something exciting coming. I look forward to that. Maybe just on the ACP-101 for Prader-Willi. Here, I mean, there are a few other companies that are trying for that. Just, yeah, how do you consider your approach to be different versus a potassium channel or a histamine receptor type of approach?
I guess I'll make a couple of comments there. First, this is a disease that is complex in its presentation. Certainly, hyperphagia is the driving symptom for these patients, but there are a number of other things that go on with them: daytime sleepiness, behavioral challenges, muscle tone considerations. This is a complex patient population with complex needs. I think going along with that, you really do see a diversity of molecular targets and even development approaches in terms of what people are looking to demonstrate in their trials. I think that we fully anticipate that there can be and will likely be a future where there will be room for more than one treatment option that's going to be used by physicians based on the needs of the individual patient in front of them.
If we see a positive result in our ongoing trial , we think that it is going to be a relevant and important option for patients.
Yeah, yeah. That's great. Yeah. I'm looking forward to what you share at the R&D Day. I think we are out of time. I can't believe 28 minutes just flew by. Thank you so much for taking out the time today and for participating in our conference.
Thanks, Ash.
Thanks a lot.
Have a good one, everybody. Take care.
Thank you.
Yep.
Take care.