Please stand by. Your program is about to begin. Hello, and thank you for joining the Neurocrine Biosciences Reports First Quarter 2019 Results. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask Please note this call may be recorded.
It is now my pleasure to turn the call over to Kevin Gorman, CEO. Please go ahead.
Thank you very much and thank you everyone for joining us this afternoon. Here, I'm joined by Matt Abernethy, our CFO, iri Roberts, our CMO, Eric Benevich, our Chief Commercial Officer and also Kyle Gano, our Chief Business Development Officer. Before I get started, Jane, will you please read our safe harbor statement?
Yes. Good afternoon. Certain statements made in the course of this conference call that are not historical statements may be forward looking statements, which are subject to risks and uncertainties information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward looking statements is contained in the company's SEC filings, including, but not limited to, the company's first quarter 2019 Form 10 Q filed today, and in today's press release. Copies may be obtained by visiting the Investor Relations page on the company's website. Any forward looking statements are made only as of today's date, and we disclaim any obligation to update these forward looking statements.
Kevin?
Thank you very much, Jane. I'm sure everyone saw our press release this morning. Or this afternoon. This was the first time INGREZZA moved through a turn of the calendar year where we have a substantial amount of patients on the medication. So while it's not, while it's not our first Q4 to Q1, it is it is quite a different, Q1.
As has been the case since launch, we again saw the number of patients on INGREZZA grow. And as we've discussed a number of times, Q1 poses seasonality challenges, as it relates to the timing and the process associated with payers. It takes time for our patients and we see a delay in getting new scripts filled. This leads to fewer scripts for patients during the quarter, But the vast majority of this impact occurs in the 1st 6 weeks of the quarter. Now this is all largely behind us.
We've exited the quarter very nicely with the greatest number of new patient starts in Q1 than we've ever seen beforehand. We look forward to continuing point in more detail around these trends. In addition, in Q1, there are a number of other very promising results that we shared. The encouraging interim results from our Phase 2 study in adults with CAH, and our collaboration with Voyager became effective last month, and the teams have begun working together. This will add meaningfully to our pipeline, with the new significant therapeutic modality for neurological diseases and disorders.
And Eiry will be speaking to you about this in just a bit. So we try to keep our prepared remarks short so that there's plenty of time for Q And A afterwards. So I'll hand it over to Matt to give us a financial update on the quarter.
Thank you, Kevin. Good afternoon, and thank you for joining our first quarter 2019 earnings conference call. During the first quarter of 2019, INGREZZA saw a script volume of approximately 24,200 scripts resulting in $136,400,000 in net product sales. As Kevin mentioned earlier, across our industry, The first quarter inherently poses unique seasonal challenges due to insurance plan changes, co pay and deductible resets, and payer dynamics that can impact both demand and gross to net discounts. During January February, these seasonal challenges had a direct impact on patient's ability to get access to INGREZZA.
INGREZZA is a specialty tiered drug, which typically requires a reauthorization of the of the calendar year or when a patient changes insurance plan. These dynamics put pressure on our patients, pharmacies and prescribers to navigate the process of getting INGREZZA leading to a delay in script fulfillment. Our field sales team did a tremendous job managing through these dynamics during the 1st 2 months of the year, leading to a strong GRX growth trajectory exiting the quarter. Importantly, all of these efforts by our field sales team and also our other educational initiative resulted in a record number of new patients getting access a result of the Medicare Part D donut hole and commercial co pay assistance that came in slightly better than our expectations of a $6,000,000 to $8,000,000 impact. These headwinds were partially offset by the full quarter benefit for the price increase taken on INGREZZA during early December 2018.
Moving now to our financial results for the first quarter of 2019. During the quarter, we recognized a loss of 100 2,100,000 by $113,100,000 of IP R and D in connection with our strategic collaboration with Voyager, which closed in March Excluding the IPR and D expense for Voyager, we realized the profit of approximately $11,000,000. Our R and D and SG and A the first quarter of 2019. Specific to the Voyager transaction related accounting, we recognized $113,100,000 in IP R and D, reflecting $115,000,000 upfront payment and $2,800,000 in transaction costs. Which was slightly offset by $4,700,000 in equity premium.
In addition, we recorded our $50,000,000 equity investment as a $54,700,000 asset on our balance sheet based upon the fair value of the timing of the collaboration closing. Regarding cash and investments, we exited the 1st quarter with $700,800,000 compared to $866,900,000 at the end of 2018. The reduction in cash pertains to $115,000,000 upfront licensing payment and $50,000,000 equity investment for the Voyager Therapeutics collaboration. For the 2nd quarter, our commercial focus on INGREZZA remains the same. To continue to expand the awareness of TD through our tardive Dyskinesia educational effort, with healthcare providers and with patients.
We continue to invest in speaker programs, educational materials, and our Talk About TD campaign. As Kevin and I highlighted earlier, we are encouraged by how our team navigated the seasonal pressure early in the quarter and the momentum seen exiting the quarter. We look forward to seeing many of you With that, I will now
I'd like to start by saying that I'm very proud of the execution of our customer facing teams in Q1. As Matt said, we delivered over 24,000 total prescriptions, and over $136,000,000 net product sales. At the beginning of the quarter, we indicated that we expected certain payer challenges and this proved accurate. Challenges as a result of payer related seasonal dynamics are a common occurrence with branded prescription medicine. Particularly with specialty products.
Seasonal payer dynamics include patient health plan switching, out of pocket contribution resets, and plan requirements for annual recertification for specialty medications. Bills for new and continuing patients, primarily in the first half of the quarter. However, our teams worked diligently with our health care provider customers to address these payer barriers to get patients started or restarted, and we were able to work our way through these seasonal issues as Kevin mentioned. Formulary changes, which can and do occur throughout the year, did not have a meaningful impact on our Q1 results. And we remain very pleased with our plan coverage.
Once to date, approximately 70% to 80% of written prescriptions get dispensed. INGREZZA remains affordable for patients with 3 quarters of patients paying $10 or less per month out of pocket. And INGREZZA is covered for to INGREZZA and have worked and continue to work diligently with payers to ensure appropriate coverage policies. INGREZ is the most prescribed drug for patients with tardive dyskinesia, and we continue to see strong demand. In Q1, we saw record new patient starts.
We feel optimistic about the continued growth prospects of INGREZZA and believe that we have only just begun to help the many thousands of TD patients that can benefit from treatment with INGREZZA. So with that, I'll turn it over to our Chief Medical Officer, Eiry Roberts.
Thank you, Eric, and good afternoon to everyone on the call. I'm pleased coming American Academy of Neurology And American Psychiatric Association meetings, including quality of life data from the recently completed Reconnect study, demonstrating how patients perceive the impact of possible PD as well as the impact The catapolone methyltransferase inhibitor intended for the treatment of motor fluctuation in patients with Parkinson's disease and remain on track for a submission to the FDA this quarter. For CAH, the adaptive Phase II proof of concept study examining the pharmacokinetics, pharmacodynamics, and tolerability of NBI-seventy four thousand seven hundred and eighty eight in adult patients with classic 21 hydroxylase deficiency remains ongoing. We recently announced positive interim results from this study evaluating the impact of NBI-seven forty seven eighty eight on key biomarkers associated with the disease of CAH and its management. We were very encouraged by these data, which demonstrated a meaningful reduction in levels of ACTH, 17 hydroxyprogesterone and androstenedione in subjects receiving 14 days of dosing with NBI-seventy fourseven-eighty eight.
With these data in hand we plan to meet with the FDA to discuss the registration program for the evaluation of this molecule as a novel treatment for patients with congenital adrenal hyperplasia. We also plan to initiate clinical development of NBI 74788 in pediatric patients with CAH later this year. In January 2019, we entered into partnership with Voyager Therapeutics to develop 4 gene therapy programs, including the lead program providing a gene therapy from levodopa in the brain AADC. We are currently working very closely with our colleagues at Voyager progress this program in the clinic and to bring forward subsequent programs, including an effort targeting Rudriq's ataxia. Turning now to our novel internally discovered vesicular monoamine transport to VMAT2 inhibitor with potential for use in the treatment broad range of neuroscience disorders.
We remain on track with this molecule and recently completed dosing as planned in the phase 1 study. This study was designed to assess the tolerability and pharmacokinetics of single and multiple ascending doses in healthy subjects. We will provide further updates as we continue progress this program in the clinic. I'm very pleased by the progress made this quarter across our clinical development efforts. And we'll now hand the call back to Kevin Gorman, our CEO, for closing.
Thank you very much, Irene. So at this time, we'd like to open up the lines to your questions, please.
You.
And we will take our first question from Geoff Meacham with Barclays. Please go ahead.
Hey, guys. Congrats on the quarter. Can you hear me though?
Yes, we can, Jeff.
Okay, perfect. So a commercial question and a, clinical question. So Eric or Matt, I know it's tough to separate seasonality. From the DTC investments that you've made in the sales force build out. But maybe if you had any metrics that you can give us that will show that the or can show that these investments are on track or anything that, that, you know, shows that maybe the initial benefit from them and then have follow-up on the clinical side.
Yes. Hey, Joe. So with regard to, the sales force, We're very pleased with the progress that we've made in terms of integrating, the new members of the sales team. And certainly, we've seen a lift in terms of the kind of activity that you want to see, calling on, healthcare provider targets, increased peer to peer program activity and so on. You may recall that they were deployed shortly before, the holiday season last year.
And then we're really hitting our stride, I think, coming into Q1. I think that we started to see the benefit of the expanded sales team, especially with regard to, new patient starts. As we said, Q1 was a record for us in terms of new patient starts. With regards to the DTC program, for tardive dyskinesia, it's still early days yet. Only been on the air, since, I want to say mid January.
And, it takes time for awareness to build with this kind program. But I will say that we've been very pleased with the response that we've seen thus far in terms of unique visitors to the website. People downloading information and registering to receive more. So that's the kind of thing that you want to see with this type of campaign. And certainly, we think that it bodes well for the future.
Okay, that's helpful. Thanks, Eric. And Ira, you mentioned the next gen VMAT2 inhibitor and you guys are obviously doing some of the initial dose and healthy volunteers. But maybe just if you had a roadmap of what we could expect in the back half of the year, when we'll go into, you know, patients, I I I believe you guys have said you're gonna go after more orphan ish indications that have a movement component to it, but maybe any additional color you can give us on that would be really helpful.
Thanks, Geoff. We finished the phase 1 dosing in our in this study on track, as I mentioned. And we are continuing to progress the molecule. We believe that obviously this TMAC 2 target is a very important target with potentially broad application across multiple potential neuropsychiatric disorders. And we're considering all of those in the context of our path and plan forward.
We obviously have some idea about our initial focus. And as we get closer to that and as we decide off on our initial phase 2 plan, that will be on clinicaltrials dotgov and we'll obviously be talking more about that at that point in time.
Our next question will come from Brian Skorney with Baird. Please go ahead.
Hi, thank you. This is Jack Allen dialing in for Brian. Thank you again for taking our questions. Our question was more on the VY AADC data. We noticed that was published in late March of this year.
We were wondering if there are any key takeaways from that publication that you wanted to point us to with respect to that.
Thanks for that. I'll take that question. It's Eiry here. We have obviously been delving deeply into the clinical data in its entirety around the AADC program. We're very pleased with the consistency of the data that has been seen in the initial dosing in the phase 1 studies.
I think we're very encouraged by the fact that we see a consistency in terms of the car the in the gene therapy approach and how that then translates into clinical outcome data in terms of improvement in quality on time reduction in off time and other quality of life benefits. We are incorporating all of the learnings from that into the DORE-one trial, which is the ongoing placebo controlled randomized trial. And we'll be doing so further into the as we plan for the restore to next phase twothree clinical study and any further reactions we may have with the agency around that.
Awesome. Thank you so much. Our next question will come from Paul Matteis with Stifel. Please go ahead.
Great. Thanks so much for taking the questions. Drilling into the whole seasonality question a little bit further and kind of the back half of the quarter, was wondering if you could quantify or at least speak qualitatively to how March looked in terms of total script growth as compared to what you were seeing in the back half of twenty eighteen? And then I have one follow-up.
Hi, Paul. This is Matt. Yeah. So, you know, the whole factor of seasonality is not unique, to Neurocrine. As we look at different case studies across many, other drugs.
You see, quite a bit of pressure in January February and then see an natural lift. So we're very pleased with what we saw and the effort that the team undertook to get scripts filled in January February and then how we were positioned coming out of the quarter. We're not in a place where we want to specifically quantify that for you, but as, you know, Kevin and I and Eric have have all said, very encouraged with what we saw, encouraged also with the quality of that, given that we had a record number of new patient starts within the quarter, but don't plan on giving any specific, quantitative measure as to what we saw in March.
Okay, fair enough. And maybe just one question on formulary access and contracting. The Express Scripts formulary decision came to a was a surprise to a bunch of analysts and investors. I guess I was wondering if you guys were surprised by this decision. And then just looking forward, Do you have visibility into how this process is evolving with other payers and whether or not other payers might go that the more strict exclusivity decision route, which hasn't really been the case outside of Express Scripts to date.
Yes, Paul. It's Eric. So, I wouldn't say surprised. You know, certainly we've been engaged with Express Scripts and with other payers. And we've been carefully looking at opportunities as they've come along as whether it makes sense or not to contract, for formulary data And we've said all along that patient access is, is, very important to us, and we want to make sure that patients getting a prescription for INGREZZA are able to get access to INGREZZA.
And so with regards to, expressed scripts, they have a little bit of a different kind of formulary product in that they have a product called the NASH preferred formularies that actually excludes products versus other, types of health plan formularies that, that would stack up products either with, equal access or with preferred access for one versus the other. So I think that that's a little bit of a different dynamic last week, when that announcement came out from Express Scripts, we communicated via 8 K that it impacts less than 1% of our INGREZZA business. So, it shouldn't be too surprising that we chose not to pursue that, formulary in that regard. But going forward, we're going to continue to make sure that we're evaluating each, opportunity on a case by case basis and where we think it makes sense we'll go ahead and engage with the plans. And so, you know, I think that, like I said in my prepared comments, we're very pleased with the overall coverage with 90 percent of lives.
And what we found is that in the vast majority of these formularies, There's equal access to the therapies. We want to make sure that the providers and the patients have choice and that's certainly what we've been pursuing with the plans.
All right. Thanks a lot.
Our next question will come from Tazeen Ahmad with Bank of America.
Good afternoon. Can you hear me guys?
Yes, we can.
Okay. Thanks. So I just wanted to ask question about the continuation for INGREZZA to the extent that you can quantify any trends that you've seen there in terms of how long are patients staying on drug and if they're dropping out what the main reasons are? And then I have a follow-up.
So we haven't seen any, any shift or change over time in terms of persistency. And, as we mentioned earlier, Q1 presented some unique challenges due to these payer dynamics, with existing patients needing to be recertified by plan or switching to another plan or having a reset for that, a pocket contribution. And so, as Kevin and that said, it impacted us primarily in the first half of the quarter. Functionally, what that led to was delays, in getting prescriptions filled. And so, even though we didn't see a change in persistency, what we did see is that some patients that should have gotten a bill in January ended up getting a bill, for example, in February.
So there was fewer on average prescriptions built for patient in Q1 as a result of these seasonal dynamics, but no change in persistency.
Okay. And then, Eric, just to follow-up with that, in terms of how payers initially respond to requests for patients to be put on INGREZZA. Are you aware of situations where payers might initially suggest AUSTEDO. And, if they do suggest AUSTEDO, what percent rate are the is able to, appeal that and get the patient on INGREZZA? Thanks.
Nationally is less than 10% of lives, have a formulary where one product or the other is preferred. So as I mentioned earlier, the vast majority of plan lives are equal access. And in those situations where a plan for 1st, the deuterated tetrabenazine product. We found that we've been very successful in encouraging our healthcare provider customers to, appeal that decision, because when they choose to prescribe INGREZZA for their patient, typically, there's a reason behind that. And so if they're sharing, the medical justification with the health plan for why they're requesting INGREZZA in the 1st place, we've actually seen a pretty high rate of, successful appeal.
And so, overall, not being on formulary for being not referred on a formulary hasn't been much of a barrier for us, thus far through the launch.
To be clear, this is the first instance where you've had an exclusion, correct?
Yes. But, that exclusion doesn't, go into effect until July. And so I interpreted your question to be in scenarios where formulary, where we're not on formulary or where the other product is in a preferred status, which I mentioned earlier is last less than 10% of the lives.
Thank you. Our next question will come from Biren Amin with Jefferies. Please go ahead.
Yeah, hi guys. Thanks for taking my questions. I think to ask a question on seasonality as it pertains to this year versus last year. So for the first quarter of 2018, there were 3400 more prescriptions over the prior quarter whereas this year, there's, I think, 1300 prescriptions over Q4. So I guess my question is what changed this year given you have more sales people this year versus last year.
You've got, I think, DTC campaign starting to roll out. So just trying to understand the dynamics for 2019 over 2018?
Yes. Hi, Aaron. It's Eric again. So, as Kevin mentioned, this year, we have a much bigger vacation base than what we had going from Q4 to Q1 2017 to 2018. And so I think, simply put, we saw, a larger impact on refill prescription, than what we had going into 2018.
And the ratio of NRX's to refill Rx's back then was higher. So as you have a higher base and you have a much larger patient pool that all of a sudden, they all need to get recertified. As Matt mentioned, that puts a tremendous strain on the pharmacies. And on the providers to go through that process. So someone could be, you know, several months into their ingressant treatment.
They could be doing fine otherwise. Then all of a sudden, the plan notifies the provider, you need to start the process over again with patient because it's a new plan year. So I think that the impact was about at the level that we expected based on last year's experience, but it's just a larger patient base and certainly a lot more patients that needed to be, recertified all at the same time.
Got it. And then for my second question, can you provide the status of the Tourette's Phase III trial and when that trial would finish potentially?
Thank you, Bernas, Irene here. We are still analyzing the data from the T Force GOLD study that completed and that we read out the data on the end of last year. And we're learning a great deal from that study and from the data analysis. We have the T Force platinum study ongoing continue to learn from that study and we will be making a recommendation regarding the continuation of that study during the next quarter, the second quarter.
Great. Thank you.
Our next question will come from Ravi Marotta with Evercore ISI. Please go ahead.
Thank you for taking my question. It's regarding the Voyager deal So outside the PD and FA programs, you've got 2 additional programs there. Can you just give us some color and granularity on whether targets for those programs come from and the potential timelines for these flow?
Hi, yes, this is Kyle, I could speak to that, good question. On the discovery program, it's a process that we're currently working with Voyager now, a lot of things that we're discussing are disease states that Neurocrine's had a long standing history and we're, sharing and discussing those off with our Voyager colleagues to ensure the programs that we ultimately want to invest in makes sense from a technological standpoint. From a gene therapy standpoint and then from a delivery standpoint. So we're planning to get to a good spot later in this year and then startup programs on that at that time point. I think we'll we don't have a firm strategy on our disclosure.
Of those programs but probably be consistent with what we've done with small molecules where we don't say a whole lot until those programs are in the clinic.
Got it. Thank you.
Our next question will come from Phil Nadeau with Cowen and Co. Please go ahead.
Good afternoon. Thanks for taking my question. First, another one on seasonality. You had guided going into the quarter that there'd be $6,000,000 to $8,000,000 headwind from seasonality. And, the comments you made in the prepared remarks on $68,000,000 weren't entirely clear to me.
So are you saying that, seasonality was less than to $6,000,000 to $8,000,000 impact in total or was the impact of the gross to net adjustments less than $6,000,000 to $8,000,000?
Yes. Hi, Phil. I understand your question. So as we think about seasonality, there are really 2 dynamics. 1, that pertains to the demand side of the equation that we've talked about as it relates to, requirements of reauthorizations and plan changes that slow down the ultimate fulfillment rate.
The second piece is gross to net that you just inquired about. On the gross to net discount, we had previously guided, that we had expected a headwind of $6,000,000 to $8,000,000 as it relates to going from Q4 to Q1. And what we saw in Q1 was slightly less than the 6th.
Got it. Okay. And do you have a quantification for the impact of seasonality on demand as it relates to reauthorizations, plan changes, disruptions to prescriptions?
Not that we're planning on providing.
Do you have an overall estimate for how much seasonality impacted revenue in the quarter?
Phil, you'd probably what I would say is, let's get through the this quarter and next quarter, and that's going to be able to allow us to then quantify that.
Okay. Fair enough. And then just, on pricing and, formularies, you did mention, again, in your prepared remarks, that there was a net price increase, which the revenue in the quarter. As you begin to negotiate formularies and negotiating against Teva, Should we expect any impact of the discounting on net price or do you expect a relatively stable net price through the rest of 2019 and into 2020?
Yes. So from a net price perspective, you know, when you move from Q1 to Q2, there'll be a bit of benefit on our net revenue per script because you'll have less of a headwind from the, donut hole. So, that will the majority of that will come back as positive in Q1. As it relates to, I guess discounts or rebates that would impact our gross to net. Nothing material that we would flag, but if that were to change at some point, we would, you know, clearly communicate that.
But at this time, really, the growth to net drivers will be surrounding, the discounts associated with, our current patient mix payer mix.
Our next question will come from Anupam Rama with JP Morgan. Please go ahead.
Maybe just a quick one
for me on the physician side. I'm wondering if you're seeing any, trends different trends than you've seen previously on the repeat scriber side and with the Salesforce expansion, any qualitative comments on how you're bringing new prescribers into the fold? Thanks so much.
Yes. So with regards to our prescriber base, obviously one of the reasons that we did the expansion was be able to reach more high potential prescribers. And I think that's one of the benefits that we're seeing now. I mentioned earlier that, we've seen a lift in terms of new patient starts actually a record, for Q1, versus any other quarter in the launch. So that's something that we're very, positive about.
In terms of what it looks like at the prescriber level, obviously, we're still seeing new pace, our new prescribers initiating a treatment or initiating trial with INGREZZA for the first time each week and each month. So the pace of new prescriber adds does slow down over time. We're coming up in a few weeks. We'll be actually next week. We'll be 2 years into our launch.
And so that, that rate of adding new prescribers, slows down and what you focus on more is, increasing your penetration of existing accounts. And really that's been the primary focus for our sales team. They work with, not just the prescribers, but also the, the entire care team, especially in these psychiatric clinics, to help them to recognized TD to differentiate it from other drug induced movement disorders, and to more thoroughly screen patients and their practices that could be suffering from TD movements. And so what we've seen is that with these efforts, we're able to go deeper into these existing, prescribing accounts. Help them to identify the many patients that are, have been previously undiagnosed.
And that's been the focus for us. So more focused on, I would say continuing to grow the base from the existing prescribers and, less focus on trying to continue to expand because we've, we've reached a large number of prescribers already.
Great. Thanks for taking our question.
Our next question will come from Charles Duncan with Cantor Fitzgerald. Please go ahead.
Hi guys. Thanks for taking the question and congrats on. Dealing with the challenges of the first quarter. Well, most of my questions have been asked I'm going to take another shot at trying to understand the Express Scripts decision and trying to understand really how that decision gets made. Is that based on a perspective of clinical value or pricing?
And if you could just add in there, what do you see as the relative pricing between an INGREZZA and AUSTEDO?
So maybe I'll take your question in reverse order. It's difficult to, get a handle on what the actual acquisition cost is of the deuterated tetravenazine product, simply because, the data are murky. We've mentioned before, that you can't look at the prescription data and, get a read on what are the actual prescribed, dosing levels in TD versus HD, etcetera. But with regards to, the specific around the Express Scripts decision. We mentioned in our 8 K that Express Scripts, represents less than 1% of our existing business.
And we don't expect this, preferred formulary plan exclusion to have a meaningful impact going forward. So I think that that provides a little bit of context in terms of our decision making. However, we're always going to continue to reassess the landscape. We will make, decisions, when and where we think it makes sense to contract with the plan. We'll do so in the interest of patient access.
And that's really our top priority.
And the only other thing that I would add there, is that we have dialogue and we continue our relationships with all of the payers. It's not the fact that Express Scripts has put us on this exclusion list. And now we're not talking with Express Scripts about not by any stretch of the imagination. All of our relationships, with payers are important to us. So we continue a dialogue and, and as Eric said, where we see that there may be movement then at the appropriate time, if we think that's the betterment of our patients removed.
Okay. That's helpful. I added context, Kevin. The other question that I had was on the pipeline, just take another shot at asking, Irene, if she would anticipate the BMAT inhibitor program to be in designated phase 2 by theendofthisyear.
Well, Charles, all I can really say is we're still working successfully through our phase 1 plan and we're working to prepare for phase 2. And as soon as we have an indication closer to that, we'll obviously be communicating.
Okay. Thanks for taking the questions.
Our next question will come from Jay Olson with Oppenheimer. Please go ahead.
Hey, thanks for taking the questions. Just to follow-up on your next gen VMAT2 inhibitor. Can you just comment on what features you intend to improve a upon versus valbenazine, are they more efficacy related or safety and tolerability? And since you do have a lot of experience in Tourette's room clinical development and lessons learned there, is that, a potential indication that you might pursue in phase 2? And then I had a follow-up.
Thanks very much. The with respect to the VMAT 2 follow on, Valbenazine and INGREZZA. I think we're very confident in the profile of INGREZZA and we're confident in the label that we have there in the of TD and that is a well behaved medicine and serves many patients very well. We do believe, however, that the VMAC 2, target is a really important one, both in neurological disorders and in neuropsychiatric orders and that as a result, there are there's room for more than one potential medicine against that target. And that was the key driver for us in bringing forward an generation.
And we will be moving that forward in our phase 1 program as planned. And we'll be considering a broad swath of potential neuropsychiatric disorders, including potentially Tourette's, although obviously that's We have a broad range of things that we're considering right now, but we definitely want to leverage the learnings from our Tourette's program, in terms of what it's teaching us about the VMAT2 target.
Okay, great. Thank you for that. And then just looking ahead to next week, Is there any particular data we should be looking out for at AAN, either from Neurocrine or your competitors?
Actually, we will have a press release upcoming very soon to highlight some of the data that will be released in both the AAN and APA. Our press release will be coming out tomorrow. So if you look for that, that will give an indication of what we have ongoing across all of both our molecules and the Voyager molecules.
Okay, great. Thank you.
Our next question will come from Paul Choi with Goldman Sachs. Please go ahead.
Good afternoon and thanks for taking our questions. I was wondering if you can maybe help us maybe understand prescription trends a little better and specifically with regard to, what is the mix of patients getting 30 day, let's say, versus 90 day trends? And was it really the 30 day prescription type patients who were impacted mostly in Q1? And these would be refilled or re opt as you've indicated going here in the second quarter?
Yes, hi, Paul. So let me clarify. Because INGREZZA is a specialty medication, most plans impose, quantity limits in terms of the number of pills dispensed per month. And so there's very few plans that authorize 90 day pills, primarily
because of
the cost of the medication. And so the dynamic that we're really talking about is, a lot of plans have a requirement in place that at the beginning of the calendar year, regardless of where that patient is in terms of their treatment journey, that they would require reauthorization. They could be 3 months into it 6 months, 9 months into their treatment. So you have a dynamic where There's a whole bunch of, patients requiring reauthorization, to get their refill. And that could impact the timing of that bill in January.
And so a sort of very typical example would be, where, the reauthorization requirements in place, the provider is unaware of it And it's not until the pharmacy contacts the health care provider. It says, that this patient is unable to get their bill until the provider submits the prior authorization paperwork all over again. And so they get the gears going and, you know, and that's where you would see a delay, someone that might have gotten a bill in January, for example, wouldn't get their bill until February. So that's really the dynamic we're talking about. And then you kind of layer on some of these other payer related issues.
Matt mentioned that beginning of the year is a reset for, opay contributions. That affects both Medicare patients as well as commercial patients. And so if they've achieved their cap, last year and didn't have any more out of pocket. And now all of a sudden, they're starting over on that again. That can also affect the timing of bills, both for new bills and for resill.
So it's not so much a 30 day bill versus 90 day bill. It's more of, of this, because of the way that our health care system is set up, you have all of this activity really happening at the beginning of the calendar year and then it diminishes as you go forward. Gotcha.
Just have you ever or worth regard to your, your clinical support in terms of like tracking patients and so forth? Do you do, are you thinking about investing more like in in patient follow ups just to make making sure like nurses calling and so forth with regard to, making sure the scripts are filled apart from sort of the paperwork obstacles that you just talked about?
Yes. Actually, we had a program when we first launched that involve follow-up calls from, nurses at our patient services hub, embrace. And what we found is that, the pharmacies in our, in our specialty pharmacy network, our limited pharmacy network, were actually really successful in terms of their follow-up activity and were better suited for that kind of activity than we were. And so, even with the efforts of pharmacies knowing that patients were going to be having recertification requirements come January They were, for the most part, very proactive in contacting people at the end of last year. Despite all that, you still have this, I'll call it, surge of, recertification that hit in January.
And, they need to call people. Sometimes they have to call the whole times to reach them, etcetera. So, it does put a stress and a strain on both the pharmacy network as well as on, the health care providers because, you know, they have to start over again in terms of the paperwork. They get that patient restarted on Medicaid
Got you. And then maybe just one quick one for Aerie. With regard to the updated data that you're talking about at AAN at the upcoming AAN and APA meetings. I guess, in terms of primary clinical message that you're looking for from the data, can you maybe highlight what you think clinician should take away and how you think that might potentially translate to either, pick up an uptake or just general clinician awareness?
I think 2 things I'll direct you to. First, we continue to release ongoing longer term follow-up data from our phase 3 trials, which show the sustained effectiveness and improvement in tardive dyskinesia symptoms in patients would take INGREZZA together with concomitant medications for this psychiatric disorders. And secondly, I think the data from our RE Connect trial, which are focused on understanding the of life because we know that part of dyskinesia as a condition has a significant effect on the functioning of patients on a day to day basis. And also on the lives of their caregivers. And so we continue to be very interested by the data coming out of our real world study we connect.
Great. Thanks for taking our questions.
Our next question will come from David Ansellem with Piper Jaffray. Please go ahead. David, your line is open. We will take our from Mark Goodman with SVB Leerink. Please go ahead.
Yes, good afternoon. So two things. 1, I'm curious on INGREZZA. Can you talk about just the prescriptions per patient and how that's changed? Just I know you were talking about another factor there before, but I'm just curious if the patients are actually still getting the same amount of prescriptions that the who run it last year.
You have 2 years of data now. So I was curious there. And second, Eiry, you were talking about the Tourette's. What area are you focused on for your analysis. I mean, it almost sounds like you kind of found something that's interesting.
Just curious, we kind of all just assumed that, the program was going to be shut down. And it seems like it's taking longer to make that decision. So maybe we should view that as a positive.
So I'll take the first part of your question. This is Eric. With regards to prescriptions per patient, you know, we've looked at that very carefully. Over time, patients that started early in the course of the launch, patients that started last year or even more recently, We've seen that it's been pretty consistent because there hasn't been any change in terms of that persistency over time, both in the number of months that you can expect a patient to be on treatment and the number of fills. What we did notice though, and I think I highlighted this in my comments is that in Q1, the average number of fills per patient was a little bit lower than what we saw in Q4.
And this was primarily due to these payer dynamics that caused a delay in getting deals, especially in the first half of the quarter. And so even a modest change in the number of bills per patient can have a meaningful impact on the business, Thanksfully, this was counter, counteractive by a record number of new patient starts. And this gives us confidence in the underlying demand. Ira, you want to handle the second question?
Actually, I'll take the, the second question, Mark, just because, I don't want there to be any interpretation out there that there's, that there's some rebirth taking place here. With the Tourette's based on the fact that we're being very careful in going through the existing database that we have from the Phase III study and then, and then the, the ongoing, T Force platinum study. I think as Ira said, it it was a very large clinical trial. There's a wealth of data there. We have a keen interest and a key concern.
For children who suffer from Tourette's. And so we want to make sure that, as we go through, all of that data that, with these kids who some of them have very complicated other treatments that are taking place. They have a number of, different, disorders in addition to Tourette that is taking place. We want to, even in studies that don't give the outcome that you want. You still want to be able to, generate, as much data as you can for the future publications to help move the field along.
And so that's what we're doing, throughout it. We're not, we don't feel like we're in any hurry that we have to make these decisions, So we're making them carefully, and Ira and her team, along with all of our external experts, have been involved in this process. And we'll be able to update you on this later in
Our next question will come from Alan Carr with Needham And Co. Please go ahead.
Hi, thanks for taking my questions. I may have missed this, but do you all comment on guidance in terms of OpEx and in sales, which are, I know you haven't given sales guidance in the past, but I'm wondering if there's any updated thoughts on philosophy around that? And then also sort of fitting into this is your DTC campaign. Is that something what sort of duration do you have in mind and might that front load SG and A spend this year? Thanks.
Yes. Hi, Alan, this is Matt. As it relates to operating expense guidance, at the beginning of the year, we provided a guidance that was, for SG And A And R&D expenses between $550,000,000 to $600,000,000. And that would be inclusive of ongoing voyager related expenses that would range between $40,000,000 $50,000,000. So at this point, in the year.
We're not providing any operating expense guidance update. The decision around Seaport Platinum will be an finding for us as well as, you know, as the teams continue to work with Voyager on the development program. So no updates to operating expense guidance at this time, but something, you know, if we are going to update guidance, would likely be a net quarter or the quarter after. As it relates to revenue guidance as a company, as you know, we took the position not to provide a normal revenue guide. And if we ever did migrate to providing a revenue guidance, it likely would not be a form of a quarterly guidance.
So We're going to continue to stay close to the INGREZZA launch and continue to learn, the insights as to the business driver, long term compliance, how exactly seasonality plays out as well as sales force expansion, etcetera. And we'll continue to have that on a radar to consider whether. And when we would provide guidance.
And then around the direct to consumer spending there? Any commentary around that, whether how long that campaign might last?
Yes. So Alan, this is Eric. Typically, it takes time for DTC campaigns, to, have an impact. For 2 reasons. 1, you have to run the ad with enough frequency and have the right targeting, to reach your viewer multiple times.
To get them to take interaction you're looking for. In this case, we're, encouraging them to recognize the TD symptoms that they may be experiencing to go to our website, register to opt into our database and to talk to their physician. In the specifics around our program, We just launched it in January. And so we're less than a quarter into it. The expectation is that it's going to take some time for this to build for us to achieve the kinds of, GRPs that we're looking for in terms of, exposure to the audience.
And then we're going to reevaluate the program over the course of the year to determine if there's any adjustments that we need to make However, I mentioned earlier, that we're really pleased with the way that the campaign is performing thus far in terms of the number of unique visitors coming to talk about td.com, the time they're spending on the website, the materials that they're downloading and also the number of, individuals that are opting into our database to receive more information about TD.
And we will take a follow-up question from David Ansellem with Piper Jaffray. Please go ahead.
Okay, thanks. Sorry, my phone had cut out. So I just wanted to make sure, got my question in. Thanks for accommodating me. So So first, again, on the contracting landscape beyond this year, I'm wondering if you could talk to that and guess the question here is, does the ESI news recently is kind of a harbinger of more payer battle to come, particularly as the footprint of INGREZZA grows?
And then secondly, just remind us how you're thinking about the CAH program, the adult program in Phase III specifically the clinical outcome measures that you think the FDA may want to either part of the primary outcome measure or secondary analysis? Thanks again.
So Hi. So this is Eric again. With regard to, the payer landscape, the one thing that we can shape, say for sure, is that it's going to evolve Certainly, this is a market that is growing. We're the market leader. We've been pleased with the reimbursement that we've been able to achieve thus far.
Over 90% of lives are covered for INGREZZA, and that's regardless of, formulary status. And we've also found a very high rate of reimbursement. 70 to 80 percent of written prescriptions have been filled. So these are things that we're very proud of certainly, I think it's a testament to our sales team, to our, market access team and to the other customer facing roles. We're going to continue to evaluate opportunities going forward with plans.
And where we think that it makes sense the contract with the plan will do so, with, patient access being the primary driver for that. And with regards to the specifics of ESI, certainly, we recognize that, that's an important TBM and certainly has, a magnified impact on other brands, however, for us, it represents less than 1%. Of our, our business today. And, certainly, over time, we're going to monitor opportunities with Express Scripts And as Kevin said, we'll continue to engage in dialogue with DSI and other, other payers because These are long term relationships and we're in it for the long haul.
Thanks, David. With respect to the CAH question, by the interim data that we released recently from our Phase 2 ongoing study in adults treated for 14 days without medication. We saw as just as a reminder, at least a 50% reduction in baseline for the 17 hydroxyprogesterone and ACPH levels in greater than 50 send of the subjects treated in that trial. We also saw meaningful changes in androstenedione and the biomark That's important because those biomarkers are fundamental to the ongoing treatment and long term treatment and management of treatment for patients with and as such, they will form the foundation of our registration program and the design of that program and the interactions that we plan to have with the FDA coming up later this year. Obviously, other endpoints will be for us to listen to the FDA around.
We know that these patients take a long term high dose steroid treatment, but the only treatment available to them in reality now And so, any potential to impact the steroid dosage needed in patients, maybe interesting both to us on to the regulators. But as I said, we will be interacting with the FDA around the potential endpoints for registration program in adults. In addition, we intend to start a proof of concept study in pediatric subjects later in third quarter.
Thank you.
Our next question will come from Sumant Kulkarni with Canaccord.
Good afternoon. Thanks for taking my questions. I'll ask both upfront So now that the transaction with Voyager has closed and we also have early data from your key competitor on gene therapy in Parkinson's, how do you characterize the differentiation of VIAADC work is the Axoant lenti PD program? And second, what's the latest status on the and any definition around what CNS indications those might target?
Yes, I'll start. This is Kyle. Can start with your last question there and then we can move on to the Voyager 1 regarding the cellulite carrier, a protein collaboration that we have with Janetta still a very early stage collaboration that we have going on a number of targets that were, of interest in Neurocrine, long standing. We haven't disclosed what those targets are. But as we select advanced leads and those move into development candidate selection and then into the clinic, that's when we would able to share, more about those programs.
And it's not because necessarily we're trying to keep those, close, but we have had a long history in working in targets in the CNS and many things fail, especially in early stage. And so until those become real, our clinical development, we, we don't say much about those, but about the collaboration, we're quite happy with the way things have gone thus far. And we'll continue working with our genetic colleagues to identify new leads on the targets that we've selected to work on with them. Now when it comes to Voyager, I'll perhaps have Iris speak to that question.
Yes. So, Samantha, thank you. We're very confident in the target that we're working on within the Voyager collaboration in PD. We think it makes a great deal of sense targeting the ADC enzyme, given its key, role in the pharmacology and the dollars of levodopa and to dopamine in the brain. We also think the program is very well designed in the context of being able to understand the coverage that you're getting of the payment from the gene therapy approach, how that translates into increased activity of the enzyme as measured by pet and being able to correlate that very clearly with the clinical benefit for patients.
It's not as clear that that and its impact on understanding of dose response. It is easy to do for other approaches in this field. And so, we remain very confident with the approach that we're collaborating on with Voyager
And just to add to that, I think your question was with respect to Axovant there using a Lenti virus delivery, for 3 different genes. I think no one here knows what ratio of those 3 genes should be used for an effective treatment Parkinson's let alone what their long term consequences would be, putting these 3 genes in an area of the brain where they're not naturally found and also within the human genome, at different places that you're unable to control. I think the elegant piece about the approach that Voyager has brought forth is that for the single gene that we're adding into, the containment what we're looking at doing here is, not having it integrate within the human genome, which is a positive for some of the deleterious consequences. If you put the gene and the wrong part of the human genome. But more importantly, are equally important on the dosing piece, if you happen to provide too much of the gene.
The safety belt here is l dopa. You can reduce your l dopa dose over time in patients and get the desired effect. Put the Lenti virus approach, if you overdose or, you put the gene in the incorrect spot. There's not much you can do for the patient at that point.
Got it. Thanks.
And there are no further questions at this time. So I'll turn it back to Kevin Gorman for closing remarks.
Thank you very much. We enjoyed your questions and what I'd like to close with this rear is something that, Eric has said. I'm very proud of our commercial team, both field teams and the in house teams here in the way that they manage through the, the first half of Q1, they really have teed up, INGREZZA for a very nice year ahead of us. There is, we have all the confidence in the world on how well INGREZZA is going to perform and the number of patients that we're going to be treating with INGREZZA, not just through the remainder of this year, but from years to come. And it goes back to something that, I've said on these calls each and every time and from the podium in different banking conferences and in one on one meetings is that you can get misled by looking at INGREZZA on a quarter to quarter basis.
What you really need to do is you need to step back and look at INGREZZA and look at the the trends that we establish on a year over year basis. And that's what I would encourage, you to do going forward. And then finally, May is mental health month. And we're very happy that as part of mental health month, the week of May 6 has been designated Tardive Dyskinesia awareness week. We're going to be sharing more news on this next week.
And we're also going to have a large presence at both AAN and APA in the very near future. I'm very happy with what we shared with you today about our growing pipeline, advancing pipeline. And that's going to be a common theme in our quarterly calls to come, throughout this year. So I thank you very much once again for your attention and look forward to meeting you at future meeting. Thanks,