ACADIA Pharmaceuticals Inc. (ACAD) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the ACADIA Pharmaceuticals Corporate Update Conference Call. My name is Gigi, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to Mark Johnson, Vice President of Investor Relations at ACADIA. Please proceed.

Thank you, Gigi. Good afternoon, and thank you for joining us on today's corporate update call to discuss the acceptance for filing of our sNDA for dementia-related psychosis and the top line results from the Phase III CLARITY study evaluating pimavanserin as an adjunctive treatment for major depressive disorder. On today's call, Steve Davis, our Chief Executive Officer, will provide opening remarks. Following Steve, Dr. Serge Stankovic, our President, will discuss the Phase III results in greater detail. Following Steve's closing remarks, we will conduct a Q&A session. Michael Yang, our Chief Commercial Officer; and Elena Ridloff, our Chief Financial Officer, will join Steve and Serge for the Q&A. I would also like to point out that we are using supplement slides, which are available on the Events and Presentations section of our website. Please turn to Slide 3. Before we proceed, I would first like to remind you that during our call today, we'll be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events or future results are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve Davis, our Chief Executive Officer.

Thank you, Mark. Good afternoon, everyone, and thank you for joining us on the call today. We have 2 updates today. Let's start with DRP. We are pleased that the FDA has accepted for filing our recently submitted sNDA for NUPLAZID for the treatment of hallucinations and delusions associated with dementia-related psychosis or DRP. NUPLAZID has been assigned a standard review with the PDUFA action date of April 3, 2021. As you know, we'd expected to have a priority review with the PDUFA date around year-end. We remain highly confident in both the efficacy and safety data supporting our submission and look forward to continuing to work with the FDA to facilitate their review. Importantly, the FDA has communicated to us that at this point in their evaluation, they have not identified any potential review issues. And at this time, they do not plan to hold an advisory committee meeting. This acceptance is an important next step, given the significant unmet need in DRP patients, their caregivers and physicians who deal with this devastating disease with currently no FDA approved therapies. Now let's turn to Slide 6 to discuss our second update, the top line results from the Phase III CLARITY study. The Phase III CLARITY study evaluated pimavanserin as an adjunctive treatment in adult patients with major depressive disorder who had an inadequate response to their first-line SSRI or SNRI therapies. As we previously shared with you, following positive feedback from the FDA, we combined our identical CLARITY-2 and CLARITY-3 Phase III studies into 1 study with a prespecified statistical analysis plan. In the study, we assess patient improvement on the Hamilton rating scale for depression, or HAM-D, versus placebo as the primary endpoint. Unfortunately, this study did not achieve statistical significance. Following the robust efficacy results from our CLARITY-1 study, we're disappointed that the study did not achieve our desired result as the unmet need is high with millions of patients continuing to suffer from depression. We recognize that depression trials are inherently challenging. In this study, pimavanserin showed the consistent numerical improvement of depressive symptoms from baseline at all time points. We also observed clinically meaningful separation on disease severity, the key secondary endpoint as measured by the Clinical Global Impression Severity or CGI-S score. In addition, pimavanserin was well tolerated and no new safety findings were observed. Please turn to Slide 7. It's important to consider today's results in the broader context when evaluating pimavanserin as a potential antidepressant. Our pivotal Phase I -- or excuse me, our pivotal CLARITY study demonstrated clinically and statistically significant efficacy compared to placebo. We were further encouraged by the findings of an open-label study in Parkinson's disease patients with co-morbid depression. Unfortunately, the Phase III CLARITY study failed to confirm these findings. We will continue to analyze and review the data from the Phase III study in conjunction with findings from our previous positive studies in depression as we assess next steps. However, at this time, we do not plan to pursue an indication for the broader adjunctive MDD population. As we've discussed in the past, we've pursued pimavanserin as a highly differentiated, best-in-class adjunctive MDD treatment based on the promising results from CLARITY-1. Unfortunately, today's Phase III results do not support the additional investment necessary to confirm a product profile that would sufficiently differentiate from the currently approved adjunctive therapies and drive sufficient physician adoption and commercial success. Pimavanserin has shown a significant and differentiated treatment benefit for Parkinson's disease psychosis and dementia-related psychosis, and we will continue to focus on bringing this much needed innovation to patients suffering from these disorders. In addition, we're looking forward to initiating our next Phase III study in negative symptoms of schizophrenia later this year, and completing our Rett syndrome Phase III program with trofinetide next year. I'll now turn the call over to Serge for some additional details.

Thank you, Steve. Allow me to start with a commentary related to the DRP sNDA. We are very pleased that the FDA indicated their acceptance of our submission for filing and are encouraged by the fact that they have decided that at this time, they are not planning to hold an advisory committee meeting. We look forward to working with FDA on the review of our file. Regarding MDD study results. First, I would like to thank the patients, their families and the investigators for their participation in the study and to the entire study team for their hard work. Now let me start by reminding you about the study design as presented on Slide 9. CLARITY-2 and CLARITY-3 were identical Phase III placebo-controlled study designed to evaluate the efficacy and safety of pimavanserin as adjunctive treatment in patients with MDD, who have an inadequate response to standard antidepressant therapy. Study participants were treated with an SSRI or SNRI as monotherapy for at least 8 weeks, with a history of inadequate response confirmed during the screening period. Following screening, eligible patients continued to receive their antidepressant at a stable dose for the duration of the study. Patients were randomly assigned to adjunctive treatment with pimavanserin or placebo in a 1:1 ratio. The primary endpoint was the change from baseline to week 5 in the HAMD-17 item total score. In May, with the alignment of the FDA, and given that the both studies were slightly over 50% enrolled, we decided to stop and combine the studies into one prespecified statistical analysis. We refer to this combined analysis as the Phase III CLARITY study, which enrolled a total of 298 patients. On Slide 10, we have provided a summary of the baseline characteristics from the study. Approximately 70% of patients enrolled in the study were female, average age in the study was approximately 46 years. The baseline MADRS total score was 32.4, signifying a moderately severe depressed patient population. Patients were diagnosed with MDD at an average age of 33.5 with the duration of their current episode of depression lasting an average of almost 18 months. Let's turn to the graph of the primary efficacy measure, HAMD-17, on Slide 11. As you can see, pimavanserin performed consistently better than placebo at all time points, but unfortunately, did not reach statistical significance. The graph on Slide 12 highlights the clinically meaningful separation and improvements we observed on the key secondary endpoint, disease severity as measured by the Clinical Global Impression Severity score. Pimavanserin performed consistently better than placebo, with numerical improvements at all time points and meaningful separation at week 5 with a nominal p-value less than 0.05. The graph on Slide 13 highlights the improvements we observed in daytime wakefulness, which is important for patients with neuropsychiatric disorder and is consistent finding in our studies with pimavanserin. The graph shows an early and sustained response compared to placebo with a nominal p-value of 0.005 at week 5. Turning to the safety summary on Slide 14. In the study, we had a very low number of serious adverse events and adverse events leading to discontinuations throughout the entire 6 weeks of treatment. These findings were balanced across pimavanserin and placebo groups. Over 90% of the patients in the pimavanserin group completed the study. Pimavanserin was generally well tolerated with the most common adverse events being dry mouth, nausea and headache. Please turn to Slide 15. In summary, we are pleased to announce today that the FDA has accepted for filing the sNDA for DRP and look forward to working with the FDA towards a potential approval. Regarding MDD, the Phase III CLARITY study did not achieve statistical significance on the primary endpoint, showed consistent improvement in symptoms of depression at all time points, demonstrated positive improvements in disease severity and daytime wakefulness and pimavanserin was safe and well tolerated. At this time, I'll turn the call back to Steve.

Thanks, Serge. Please turn to Slide 17. We're pleased to have moved 1 step closer to bringing pimavanserin to the market for dementia-related psychosis. Unfortunately, the MDD results did not reproduce the robust results we saw in CLARITY-1. I'd like to echo Serge's remarks and extend my thanks to the patients, their families and the investigators for their participation in the Phase III CLARITY study as well as our employees for their dedication and commitment to the trial. Overall, I'm proud of the progress our teams are making in executing our 3-pillar strategy this year. We look forward to updating everyone as we continue to drive growth of NUPLAZID in PDP, prepare for the DRP launch and advance our Phase III program to the negative symptoms of schizophrenia and Rett syndrome. I'll now open up the call for questions. Operator?

[Operator Instructions] Our first question comes from the line of Ritu Baral from Cowen.

I'm glad you guys have no indication of an AdCom, but I am a little confused why you wouldn't have gotten priority review for the DRP sNDA. I mean usually, that's a function of unmet need. Is that an FDA statement on unmet need? Or complexity of the NDA, especially given you guys have breakthrough status for this indication? And I've got a follow-up.

Yes. Thanks much for the question, Ritu. Serge, do you want to offer your thoughts first?

Yes, of course. Thanks, Ritu. We have anticipated a priority review. But based upon the FDA preliminary review, they designated a standard review. We have a different point of view on the classification, and I'm not really sure what their rationale is for the assigning of standard review classification. We have engaged with the FDA to try to get additional color around this. We remain highly confident in both the efficacy and safety data supporting our submission. And it is important to know that the FDA, in their filing communication to us, stated that they have not identified any potential review issues at this point in their evaluation. Similarly, they are not planning on holding the advisory committee meeting.

Within the communication, was there any statement about unmet need in DRP? Or how they view DRP? And also, in the last -- I guess, the last time we spoke about adjunct MDD, you guys mentioned that you were already planning an additional Phase III trial should CLARITY fail. What was it about the CLARITY data set that suggested to you that, that contingency plan is not worth pursuing?

Serge, do you want to take the first question and I'll take the second.

Yes. In their preliminary review, what we know from their preliminary review is that they have assigned a standard review and that they haven't identified any potential review issues at this point in their evaluation as well as the -- that they are not planning on holding the advisory committee. We are trying to get additional color from the FDA about the rationale for their classification of the review. But at this point, it's -- we would like to avoid to speculate on what really the rationale is for their decision.

I'll just echo Serge's thoughts there. We just really don't have any information as to why they came to the determination they did on standard review versus priority. But again, looking to get additional color. I think on the -- on your second question, Ritu, as I mentioned, based on the CLARITY-1 results, we pursued this very highly differentiated profile. And I would say this is primarily a commercial consideration. And in our business, it always comes down to a matter of making prudent investments based upon assessment of risk and reward. And in this case, we feel like the data from this combined study just don't warrant the investment. We're not saying that the drug doesn't have an antidepressant effect, we believe it does. It's really a function of do we -- what do we think the prospects are for getting that highly differentiated profile, which we do think is important. We think it's critical in the adjunctive MDD space where there are approved generic drugs, and particularly given the position we have in PDP and DRP, where there are -- there were no drug approved in PDP before us, and there is no drug approved in DRP. So it's a little bit different situation. And we just feel like this is a function of making prudent, appropriate investments and being disciplined about them. Yes, I'm sorry, I do just want to add 1 additional thing. In this business, we always release these results based upon top line data. We've not finished analyzing the data set. We've got to generate additional data, vet it, analyze it. And so I don't want to be -- I don't want to imply a degree of definition that doesn't exist yet. We're saying based upon the top line results that we've seen, we do not plan at this point to continue to pursue adjunctive MDD, broadly speaking.

Your next question comes from the line of Cory Kasimov from JPMorgan.

Steve, on that last point, with regard to the MDD study, have you had an opportunity yet to look into trends or differences between U.S. and OUS results?

Yes. We have done some of that. Serge, do you want to take that question?

Yes. Both studies, and here, I mean, U.S. and ex U.S. study had numerically better pimavanserin improvements compared to placebo. However, neither subgroup was statistically significant. So to that effect, we don't see the difference between. Although I will say that U.S. study had performed slightly -- showed a slightly greater data separation versus placebo, and thus, one could say it performed slightly better compared to the ex U.S. study.

Okay. Understood. And then just one quick follow-up to go back to DRP. And I fully agree, it's good to see there's no AdCom that's necessary at this point. Do you know if there's precedent for a product with breakthrough therapy designation to be assigned standard review?

Serge, do you want to take that?

Yes. Here recently, there have been some of the breakthrough therapy designation products that did not receive a priority review, but rather received a standard review. So there -- these are -- we are aware of some examples of that.

And Cory, I'll just maybe add just an additional thought there. Of course, when we look at breakthrough therapy designated drugs, the vast majority of them are in the oncology space. And there, it's relatively common to get an approval and then get another indication in a different tumor type, et cetera. And so you do see additional breakthrough designations and additional priority reviews frequently. When you get outside of the oncology space, there are not as many breakthrough therapy designations to start with, of course, and not as many of them that then have a priority review. So I want to be really clear, you do absolutely see it. But we, as Serge mentioned, are aware of some recent examples where that has not happened. How much that has to play with the agency's physician here or not? We don't know. But what we do know that it's much more of a common thing in the oncology space.

Your next question comes from the line of Neena Bitritto-Garg from Citi.

So just wondering about MDD. I mean it sounds like you're not going to, at this point, pursue the broader MDD adjunctive indication. But could you consider maybe some other kind of depression indications like PD depression or something like that based off of kind of the data that you've seen? And then were there any major differences? I mean it looks like from baseline characteristics, there weren't any major differences between the CLARITY Phase III versus CLARITY-1 other than maybe the age of the patient population, but any major differences in terms of -- based on characteristics or anything like that, that we should be aware of?

Serge, do you want to take that?

Yes. Let me first start to address first part. We are continuing to analyze and review the data from the study and of course, looking at the learnings from our other 2 positive studies in depression. And all of that is going to feed our further decision in the assessment of the next step. There is a significant unmet need for elderly patients with depression and large overlap with both dementia and Parkinson's disease, as you mentioned. So based on totality of data of pimavanserin in depression, and significant co-morbidity with depression and psychosis, this is something that we will certainly consider as we are evaluating next step. In addition, I would just remind you to -- and you mentioned that to the positive CLARITY-1 result. We do have additional evidence from the open-label depression study where pimavanserin demonstrated a clinically meaningful improvement in depression symptoms in PD patients. So that certainly feeds to this line of thinking as we move forward. In regard to the second part of your questions and that is whether there are substantive differences between CLARITY-1 and CLARITY-2. I wouldn't characterize them as substantive, but there are some differences in terms of -- slight differences in terms of the overall severity of depression. In other words, the mean severity score, or MADRS, was slightly bigger than what we saw in CLARITY-1 as well as duration of the current episode is slightly longer than what we saw in CLARITY-1. But overall, they are fairly similar in the baseline characteristics of the patients as we reported previously.

Your next question comes from the line of Charles Duncan from Cantor Fitzgerald.

I had a question on the DRP program and then a brief one on MDD. Quickly on DRP. I guess I'm wondering if you were surprised about there being no AdCom since this would be the first drug in this particular indication. Or do you think that its lack of AdCom, at least at this point, is consistent with robust efficacy and within the context of no new safety observations that have been made?

Yes. I would say we -- I wouldn't say we were surprised with no AdCom. I think we've been very open in saying that it's more common than not for the FDA not to have an AdCom on an sNDA. We felt in our case that it might be more likely than normal given the importance of this for patients and physicians. And as we said, at this point in their evaluation, the FDA has not identified any potential review issues and the support for pimavanserin in DRP that we received from KOLs and physicians gives us great confidence that we can present a compelling case to FDA and to an AdCom if one were to be scheduled. And at this point, they've indicated they don't seek one. So either way, we feel like we're in a very strong position. If they have one, we'll be prepared. Of course, we always have appropriate contingency plans, but we're pleased that they don't see a need for one at this juncture.

Okay. And then, Steve, can -- just kind of wondering on the priority review versus standard review. I'm wondering, and here, I'm asking you to speculate. And I'm wondering if that possibly reflects not so much the unmet need or perspective on that but FDA constraints given the COVID environment and being busy with other things and getting folks together. Or is there any additional information, clinical or otherwise, that you plan to provide the agency and perhaps that, that is setting the timing?

Yes. Well I'll just -- I'll start with the second and say no. There's nothing that they've identified, any additional information. So there's nothing there that would impact the timing that they've communicated to us. Look, I -- as tempting as it is, I really don't want to begin speculating about what's gone into their calculus. We just -- we don't know if the agency's factored in the fact that pimavanserin's already approved in 1 indication, PDP, so it is available. With the sNDA, when it's not a new chemical entity, it has a very shortened time line, and we don't know if that was a consideration or not. We don't know if COVID-19 had any play. They've certainly not communicated that to us. So I just think we're eager to try to get additional color. We've -- at this point in time, we've confirmed that it is a standard review. And many times with the FDA, there are a lot of things that factor into their thinking that are not always self-evident. And to us, we were surprised that we didn't get priority review.

Okay. And a quick question on MDD program, either for you or perhaps Michael, regarding commercial strategy. I guess I've always kind of wondered about MDD versus say, the clinical value in DRP. And I'm wondering if this result with CLARITY, really, in some ways, simplified strategy going forward, at least as you consider MDD in the adjunctive setting aside, of course, depression and, say, some higher burden settings.