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

Okay. Great. All right. Welcome, everyone. I'm Yigal Nochomovitz, one of the biotech analysts here at Citigroup. Welcome to Miami, our first iteration of the conference down here in Florida. So it's my great pleasure to have with me senior leadership of Acadia Pharmaceuticals. We have the CEO, Catherine Owen Adams. Welcome.

Thank you.

Head of R&D, Liz Thompson; and Mark Schneyer, the CFO.

Hello, Yigal.

Thank you so much for being here.

So maybe we can just kick it off with just a high-level overview of the company, the products that you're selling where you are in the trajectory with the 2 products in the market, and we'll get into the pipeline later.

For sure. So thanks for having us. So Acadia Pharmaceuticals is in the market in the neuro-psych space in the main and also rare disease. We have 2 commercial products. One is NUPLAZID that is indicated for the hallucinations and delusions of Parkinson's disease and currently has a top line of around $600 million. About 1.5 years ago, we launched DAYBUE, trofinetide, which is for the treatment of Rett Syndrome, the first and only product approved globally and we're 18 months into that launch, as I've just said. And then beyond that, Acadia is in a very strong financial position. We're cash flow positive and have a very healthy balance sheet and are excited by recent deals adding to that in terms of selling our PRV. So we're excited to use that balance sheet wisely in the next year or so. And then in terms of the company itself, our pipeline, we have 2 late-stage products in Phase II/III. One is ACP-204, which is being in clinical trials for the treatment of Alzheimer's disease psychosis, which is a relatively large market, around 900,000 patients in the U.S. And then also ACP-101, which is in clinical trial for the treatment of Prader-Willi syndrome, again, a space where there's relatively high unmet medical need. So 2 late-stage products in Phase II/III. And then, as you know, we just signed a deal with Saniona for a product in essential tremor, and Liz can give us more details of other products in the pipeline.

Okay. So you're new to the role in CEO. So tell us a little bit about what made it an interesting value proposition for you to come to Acadia and take leadership.

Yes. So after 30 years in large pharma at Johnson & Johnson and Bristol-Myers Squibb in the main working in U.K., Europe and in the U.S. for the last 20 years. I love the pharmaceutical space, obviously, but was looking for something a little bit different from my next chapter. And so smaller biotech was highly attractive for me, but I wanted something that made sense for my skill set, but also allow me to sort of grow and develop. So the Acadia proposition sort of hit, if you like, the Goldilocks is what I was looking for, has a great commercial stage a couple of products, which I believe have a lot of room for growth and development in the next years and an exciting unmet medical need in terms of the spaces where they are. The pipeline was important to me. And as I've just said, we have 2 very strong and interesting products in late stage, but also a very exciting early pipeline. And I was looking for a company with a strong financial position. And I think all of those 3 things were achieved with Acadia, and I'm sort of 2 months in. And if you ask me how differently do you feel about your choice 2 months in, I would say I'm much more excited I've met all of the team, obviously. I've been out and about meeting customers understanding the therapy areas that we're in. And I think we're poised for some really exciting couple of years ahead, and I'm super excited to be leading this team into that.

Okay. So we'll get into the details of the launches in the set, but just in terms of how you're thinking about your vision or your imprint on the company, how do you see it unfolding next year and then beyond for the rest of the decade?

So I think in terms of my background, obviously, heavily commercial, but also R&D and manufacturing experience from way back when. I would like to unlock what I believe is some hidden potential in terms of the commercialization of both DAYBUE and NUPLAZID. I believe both of these products have the opportunity to grow beyond maybe expectations currently. And certainly, in terms of globalizing those products, I'm excited to take them or DAYBUE outside the U.S. in terms of our EMA submission in Q1 next year and beyond that, hopefully, into Japan. So looking forward to that opportunity. And then in terms of the pipeline, 2 areas of high unmet medical need, no approved products in either space right now and very large markets. And I believe with our capabilities in terms of commercialization and development, which is very strong, we're poised to make an impact in both those areas. So excited to lead the company through that. And then in terms of BD, as I've said, we have a strong balance sheet. And I think the team and I are looking at different areas to guide the company and maybe expand the aperture a little bit. We have a strong capability now in rare disease development and commercialization. And so Liz, Mark and I are looking at different opportunities in rare in terms of where we might play in the future. We're not going to take a left turn and move into oncology or CAR-T or anything, but I think just looking at rare as a whole and maybe looking at some different types of rare disease would be on the cards. So...

Would you stay in neuro or are you potentially broaden...

Potentially broadening, yes. We're looking at all opportunities right now. But I think the capabilities that we have in terms of commercialization in the U.S. and very strong development puts us in a great position to look at some different deals in those spaces.

Okay. Well, let's dig in a bit to DAYBUE in terms of how you see that launch you're at a sort of what I'd characterize as a steady state in terms of patient adds quarter-on-quarter. Do you envision that pattern continuing? Do you see it plateauing? You mentioned that you sort of peered into the data and seen more that you could extract out of the product? So tell us more about that?

Well, I think just to sort of level set, I think DAYBUE came out the gate incredibly strong, high unmet need, a lot of interest in the product. The clinical trials had a huge impact on the community. So there was strong demand out of the gate for DAYBUE. And as we've indicated, those first sort of 6 months were very exciting for the company, but also learning how to manage the side effects that come along with DAYBUE, which are which are real and have allowed us to learn in the last few months, how we should manage that more appropriately in the population outside of a clinical trial setting. The study state of patients that we've seen in the last sort of 3 quarters has indeed sort of flattened and plateaued. But again, if you look at other analogs of rare disease launches, that's fairly typical. You get that bolus at the beginning and then you get the steady state. I believe we've got the opportunity to inflect that growth next year in terms of increasing that steady state into the top of the funnel. And why do I believe that? Because we've penetrated about 30% of the market right now in terms of patients that have tried DAYBUE, and there are 70% of patients who have not, obviously, and I believe we have a strong value proposition for them now in terms of understanding the impact that DAYBUE has on Rett children and the bringing the data to life. So the other thing we've learned is that clinical trial scores are very numeric and sort of very cold and hard data. But what's matters to families is understanding what that means for their child. And so we're now able to talk about with Liza's team driving the LOTUS clinical trial, which is an observational study. looking at patients on long-term DAYBUE. We're really bringing to life the impact that it's having. So increased cognition, increased socialization, eye contact, sleep a number of areas that really have meaning to families with a Rett child. And so bringing that to life and allowing families to understand the impact it can have, but also balancing that with how to introduce DAYBUE into the family and how to titrate that appropriately. I believe we have the opportunity to unlock that percentage of patients that haven't tried DAYBUE yet. So excited to do that. In addition, I think we have the opportunity to increase the impact of the commercialization, the go-to-market model, the field model and really amplify that in the field looking to put some increased data and analytics in our field teams to ensure that we understand where the patients are, which physicians are treating them to educate the doctors appropriate at the right time. And then continuing to bring that data to life. But also now, we have a very strong patient base of patients who are stable on DAYBUE. And as we've been saying, at like 12 months, we have over 50% of patients still on DAYBUE and still beyond that now. And so that's tracking about 10% above our clinical trial rate, which is impressive. Normally, you see study state below clinical trials because of that controlled setting. So to have an incremental amount of patients stable on DAYBUE at 12, 15 months, 2 years is, for us, a very important part of the brand and articulating the why behind the what is again important. So why the patients staying on because they're seeing incremental impact of DAYBUE on their child. And so getting those stories out there and that data published and relevant to families is going to be a strong focus of us continuing.

And the ones that are stopping, is that driven by the tolerability? What are you doing to mitigate that? And what have you learned in the commercial experience that you may have not picked up as much in the clinical experience?

I think what we're learning is that these children are incredibly complicated to manage and that families spend an awful lot of their emotional physical time with their child, seeing up to 7 doctors for each child in any 1 year. Getting them stable to a point where they feel like they can manage their child in a family situation. And so to introduce DAYBUE, they need to understand how to do that in a way that doesn't compromise the family, compromise the child. And so what we're learning is that they need a lot of support in those first 3 to 4 months in terms of understanding how to titrate. And so what we're doing now is educating our physicians and our nurses and other sort of allied professionals on how to help the families through that time. but also we've put now a number of what we call FAMs or family access managers in the field, and we're going to now increasing the number of those FAMs to ensure that those families can call somebody at any time when they need guidance and that person can then be directed to the right place in terms of the guidance they need. So what we're learning is that families need a lot perhaps more support than we thought. But once you get them through those first 3 to 4 months, they feel a lot more confident and they're able then to manage the child themselves. And so we're really focusing on that first 3 to 4 months in terms of the support we're providing and the information that's available to those families.

Okay. And I assume those lessons would carry over to the ex-U.S. markets that you referenced. So what's up with that?

Absolutely. So we're excited -- yes, we're excited about the potential to launch into the EMA European Union. So Liz and the team are working towards a filing in Q1 of next year. All of those meetings are tracking according to plan. And so we would hope to be launching in the EU in early '26 and in order to achieve those goals, we're setting up our business now in Europe and getting that staffed and having people on the ground working with our advocacy organizations, working with the reimbursement teams in each of the countries, working with the key opinion leaders and the centers of excellence for Rett. And what we're hearing is that they're very excited about the opportunity to bring DAYBUE into Europe. There's a large amount of patients in Europe with Rett syndrome between 6,000 and 9,000, so more than there is in the U.S. or certainly at least the same. And so another big opportunity for us with strong interest right now, and we're excited to get that there as soon as we can.

And Japan as well, yes?

And Japan as well. Liz, do you want to talk about what we're doing in Japan?

Absolutely. So typical of the Japanese market, we do need to do some additional clinical work there to be able to bring the medicine forward. So we're engaging with PMDA, have had some good productive discussions about what that clinical program needs to look like and are looking to reach agreement on a protocol once we get that started, we can track on towards bringing that to -- bringing DAYBUE to patients in Japan. This one is obviously a little bit of a longer-term opportunity than Europe.

And this market size there is roughly what?

1 to 2,000.

Okay. And are you -- is that -- because within rare disease, you always have this question of the prevalence versus the identified, right? So just to do the -- what are we talking about? Is it -- these are identified or prevalent or it's somewhere in the middle?

Prevalent and identified in Rett sort of match up pretty well right now. I think in the last 10 years, we've seen a lot more acceleration in the ability to test early for Rett and the genetic identification is pretty good globally. Do you want to add anything differently?

I think that's all fair. But I do think it's also fair to say that we're seeing a little bit of expansion in the diagnosed population over time. And that's not also an atypical dynamic in rare spaces where once there is an effective therapy, there can be a little bit more of a push to actually get that definitive diagnosis, whereas sometimes physicians haven't pushed all that far. So I think it's a what, 10% since launch. We've seen an increase in the diagnosis rate. And so maybe we would see a similar dynamic in other geographies. Hard to say that at this point.

Tends to be in the older patients who might have been misdiagnosed in the past with either a nonspecific syndrome or even autism or something like that. So the younger patients tend to be diagnosed right now, but it's the older patients that are 20 and above that are getting this sort of this new diagnosis of Rett syndrome, which is much more specific to MECP2.

But the key thing is to get them through that sort of tricky period from 3 to 4 months. And then once they're there...

It is. Once they're there, we actually see a very sticky base of patients that stay on.

And that's the 50% you referenced?

That's right.

And they're on -- they're just staying on?

So far, we think they've been staying on, yes.

What about the competitive landscape in Rett? Who's nipping at your heels? Is anyone -- I mean I know there are other approaches that are different, obviously, gene therapy, but tell us about that?

Yes. I mean I think how I look at this is, first off, look, we're the first and only, but we're hoping we won't be the only therapy for Rett in the long term. You can interact with these families, wanting them to have continued improvements and benefits for their children. That said, I think the main other agents that you hear about in development at this point are gene therapies. And look, across our industry, gene therapies have been a bit tricky from a development perspective. And I think unfortunately, from some of the data you're hearing out of the gene therapy companies in Rett, in particular recently. It's really just emphasizing that these are early days for these therapies. And that the path to market and to helping patients may be a long and challenging ones. So certainly, we are optimistic for continued improvement in the space, but I would say that I do see the gene therapy space is a little challenging to date.

And there's nobody nipping at our heels right now sort of in terms of a DAYBUE competitor. But again, we're hoping that there are more -- there are new options for these families because they are incredibly special, and we want to see this space opened up for more opportunities in the future.

So they would stay on therapy through their pediatric years and adolescents. I mean will they ever come a point when they graduate to be adults that they would no longer need it? Or are they just -- they're going to stay on it?

I think, obviously, we don't have the randomized full data to be able to answer that definitively. But I think that based on our expectation of how DAYBUE seems to be working with these patients. It's not clear that there's a point at which they've gotten all the benefit that they're going to get and if they come off therapy, they're going to maintain that in the future. So I think we are seeing this as likely a persistent treated patient population and certainly one where there is additional ability to see benefit in these patients over time, seems to be...

I mean there's 2 ways to define -- many ways to define benefit, but 1 way is you reach a certain degree of benefit, and then you keep it because you stay on the drug or you just steadily improve functioning in various demands, right, over time? Are you seeing both or what?

I don't think we know a definitive answer to your question yet. What we are doing is really focusing on the open-label observational study in order to sort of get answers to that. But if you talk to the parents, so I guess the longest child has been or young adult has been on our brand for about 4 years now, 4 or 5 years. And they will talk about continued improvement in their abilities cognitively, socially mobility-wise, gate wise, sleep wise. So we haven't heard yet. I believe that we've got a stable sort of situation. What we do here is that if they come -- if they lower the dose, they see a decrease in that increase that they've seen. It's definitely dose dependent. So I think watch the space. We want to broaden the understanding of how Rett evolves and be part of that natural history.

There is an ongoing longitudinal observational study?

Yes, we do have an ongoing observational study that we're looking at.

But you haven't published anything there yet?

We have -- we don't have any pure viewed manuscripts yet, but we do have one that's in the offing. We have presented interim data at medical meetings throughout the year that seem to support the idea that there is continued benefit across some specific domains and that you can see some evolution of that over time. And I will say that, that also is true of what we saw in our open-label extensions. Obviously, open-label extension data, always have some caveats to them, but I think they do give you an opportunity to look at what you can see in patients who persist in therapy for a long time. And what we do see in that open-label experience is some indication of continuing benefit accruing over time.

Okay. Let's switch over then because we're halfway through. So NUPLAZID, let's talk about the growth trajectory there. From looking at the data, it seems like things have reaccelerated a little bit. So can we talk about the drivers for that and what the strategy is to continue to grow that brand?

So yes, the NUPLAZID indication for the delusions and hallucinations of Parkinson's disease and been on the market now since 2016. And so yes, you're right, a recent acceleration. So why is that? I think what Mark would say from the history is that through COVID, we saw that market decline through a number of reasons, but mainly due to accelerated morbidity and mortality in that population of patients. Coming out of COVID, we've seen a stability in the patient population and a new focus on treatment. At the same time, as I understand it from the history of the brand, we've had to clarify a couple of things on the label, which have now helped, which is treatment is appropriate for patients with and without dementia. And again, that has allowed physicians to make those treatment choices more specifically for NUPLAZID. The other thing that the team has been working on is the publication of data against the off-label antipsychotics that are commonly treated -- commonly used to treat these patients. And we have now large databases and publications of Medicare patients showing a mortality benefit for NUPLAZID when used in these patients. And what Liz and the team are looking at now is expanding the understanding of that population in terms of whether we treat them earlier or later, whether we see changes in sleep dynamics, whether we see changes in hospitalizations, ER visits, et cetera. So the real-world evidence on NUPLAZID is just getting bigger and bigger. We've also, in addition to that, launched an awareness campaign because what we learned is that caregivers generally don't understand that hallucinations and delusions are part of a Parkinson's disease progression. And so sometimes they go unnoticed -- not unnoticed but undiagnosed. And so we're raising the awareness of that now with the Ryan Reynolds campaign. His father had Parkinson's disease and hallucinations and delusions, and that's been very impactful to raise the awareness. We've coupled that with a direct-to-consumer campaign to raise the awareness of NUPLAZID being the only product indicated for these patients. And what we're seeing now is the impact of that coming together, which is an increase in patients coming into their doctor's offices and asking to discuss NUPLAZID and then getting those prescriptions. So as we head into next year, we will continue to invest in the awareness programs and the DTC campaigns because we believe it's the right thing to do patients with all of this evidence showing that there's a mortality benefit versus the off-label antipsychotics, and we believe we have the opportunity to grow our market share. We're currently in the low-20s and there's a ways to go. And with the clinical evidence to support its use, I feel very strongly that NUPLAZID has another chapter to write.

Where is the growth? Is it coming from the switches of the off-label antipsychotics or are you finding new patients that have never been on therapy before that are now see Ryan Reynolds and...

It's the naive patient, yes.

Okay. What about the switching market? Does that play...

It's relatively smaller it's the naive patient and the awareness that we now have an approved product and appropriate product to use in these patients, yes.

Okay. And just -- sorry, to add, just keep in mind, this -- when a patient gets diagnosed ultimately with Parkinson's disease psychosis. They're usually very late in life and they have a life expectancy of about 5 years at that point in time. So the patient popular, so while you can live with Parkinson's disease for decades, you're not likely to live with Parkinson's disease psychosis for that longer period of time. So it's really -- the patient population is ever churning -- and then most of our prescriptions come from patients when they're diagnosed and if they're going to get a pharmaceutical treatment, they get NUPLAZID versus off-label antipsychotics, and then that patient will live its life, and then 5 years later, it will be a new patient that's recently diagnosed and talking to their physician about what the therapy would be most appropriate for that patient.

But the retention rate -- the adherence rate is high in that period of time. Is that fair?

I think -- so like any drug that has subjective endpoints. It works for some doesn't work for others. So there is a period of time where the patient is determining what their caregiver does NUPLAZID work. So there's an element of -- in the initial few months, you'll have some reduction in patient population because they determine that NUPLAZID doesn't work. But then once you get through that initial period, the adherence is very high through the remainder of life. So we have a very like long -- there are some patients that are on therapy today that we're on in launch year of 2016, most of those patients, unfortunately, are no longer alive today. So those that are still alive are still taking it. And that's just the dynamic of how kind of the math works behind the revenue build for NUPLAZID.

Okay. And can we quickly touch on the IP aspect of NUPLAZID. Anything you want to say there in terms of the generic filers, how you do...?

So there's no like update from what we've been talking to the Street, but I could just repeat, what we've said there's 2 sets of litigation going on. One is on our composition of matter patents that last through October 2030, including the receipt of the 6-month extension for pediatric investigation. That we're at the appeal stage. We won decisively at the trial court level. We presented 2 arguments. We won both the generic challenger to us needs to overturn both upon appeal. What's also happened since our trial court, there's a similar case that Allergan is ahead of us that they won on a deal. And that, we believe, reads through to our place. So we're we feel we're in a very strong position to have our appeal upheld and be victorious there. There's no -- the kind of the appellate hearing hasn't been set yet, so it should happen sometime between now and the first quarter of next year just based upon what we've been asked for calendar availability. And depending upon when that happens, you're looking kind of first or second quarter next year on a ruling. The other set of patents rely upon our formulation patents, actually, the trial is going on as we speak now. So I'll be -- I'll choose to be quiet on exactly what's happening there, but that I guess what I'd be comfortable saying is we certainly believe in our IP and well rigidly defend it, and that can bring possible exclusivity through February 2030.

Okay. I'm not going to leave the detailed legal arguments aside. That's probably not what every body wants to hear. Let's switch over to biotech and R&D pipeline. So I'm not an attorney. So anyway, so let's talk about the 2 drugs that you mentioned at the beginning, Prader-Willi syndrome, hyperphagia, so they're going into the cabinet and eating things at night and doing -- we know all about that. So tell us how does the drug work to tamper to tamp that down? What is the data so far? And what's your path forward?

Yes. So I'll very lightly touch on Prader-Willi because you do have a good -- you articulated it very nicely. Prader-Willi, it's a complex and rare neurodevelopmental disorder. It's roughly 8,000 to 10,000 patients in the U.S. And one of the really defining features here is this is hyperphagia, which is this unrelenting hunger that these patients feel. And it can be routing in the cabinets that it can be routing in many other things as well. And the unrelenting hunger can result in cardiovascular impact, unfortunately, the life expectancy for these patients is something like 30 years old, largely driven by obesity in the cardiovascular consequences. So this is a huge unmet medical need with currently no approved products. ACP-101 is inhaled carbetosen. And carbetosen is essentially an analog of oxytocin. There's a variety of different kinds of data that support the relevance of oxytocin in Prader-Willi and in feelings of fullness. Carbetocin was essentially designed to improve upon some drug-like qualities of oxytocin, give you a better PK profile, give you better selectivity. So make it something that would be more amenable to being used as a drug. It's inhaled intranasally, which gives us maximum exposure to the target organ. There are existing data for ACP-101 in Prader-Willi. Levo, who we acquired it from had run it through a number of trials. The most recent of which was a Phase III trial. In that Phase III, there were suggestions of the efficacy at the lower dose, but interestingly enough, not at the higher dose. There was some numerical separation there, but certainly not statistical significance. There are some plausible reasons as to why that could be. The most likely of those is off-target impacts at other receptors. But we think that the sort of consistency of signal within that 3.2 milligram dose, which is what we're using in our Phase III program gives us some reason to believe taken together with some of the sort of mechanistic rationale that I described. So we currently are running a Phase III trial there focusing on the 3.2 milligram dose and other learnings from the prior Phase III trials. At the end of the day, we're going to need a positive study there. But we think that if we do hit statistical significance, we will have a robust and compelling body of evidence to discuss with regulators.

And just so everyone understands, the endpoint is food consumption? Or what exactly is being measured?

The endpoint is a measure of hyperphagia. So it's not actual literal food consumption. It's questionnaire that does -- that is the regulatory appropriate primary endpoint. You see that across these trials that measures hyperphagia and related behaviors.

And who -- is that filled out by the caregiver, by the physician? Well how does that work?

It is generally filled out by the caregiver.

Okay. And secondary endpoints would relate to obesity metrics? Or do you have that? Or is that not part of the study?

We are looking at a number of different endpoints in this and certainly are tracking weight over time. That obviously is kind of a complex thing that there are a number of aspects that are going to go into it that's not just the degree of hunger that people are experiencing, but other aspects as well. So it's not always clear how quickly obesity is going to change over time.

What kind of a magnitude of an effect would really change the behavior of the kids so that they really ramp down on hunting in cabinets at 3 in the morning. I mean, what do we -- what do you need to -- what kind of effect size do you need to see biochemically to really change the behavior?

Yes. So in terms of what there is in the literature on what constitutes a clinically meaningful change in HQCT, which is the primary endpoint here. There are data suggesting that sort of a minimal important change is on the order of about 2.5 points. Higher levels of response have been defined and a higher level response would be a change of something like 8 points in an individual subject. But what we're looking at here, what we're looking at in our trial, and I think what is fairly consistently looked at is just the change from baseline. And so again, we target that a little bit more on what a minimally important change is rather than sort of the maximally responder level. But we will, as part of 1 of our secondary endpoints be looking at some of these responder level analyses as well.

Okay. Now you mentioned appetite suppression. I mean this is not a setting where the big appetite suppression drugs we all know about is relevant, right? It wouldn't work in Prader-Willi? That's not...

Yes. I mean it's interesting, actually, because I think a lot of people kind of at face value, assume that GLP-1s would be something that you would apply here. But the data there are pretty mixed so far. So it's not clear that that's going to be as helpful as I think we might have expected to know about.

And vice versa, ACP-101 is not potentially a broader weight loss category here?

I don't think that's our ambition here, no.

Okay. Just checking. All right. And then let's talk about the other asset, the Alzheimer's does. First of all, I just ask a basic question. Why can't NUPLAZID would not work in Alzheimer's disease psychosis or could it? Or is that an open question?

I think that how I'm going to characterize this is saying that NUPLAZID has had quite a history where it's been looked at in a number of different diseases. And there were some trials that were either looking specifically at or included patients with Alzheimer's disease psychosis. And I think that out of that, we saw some indications of potential efficacy. But we certainly don't have a definitive establishment of that and didn't get approval from FDA for Alzheimer's disease psychosis. That said, that experience did give us the opportunity to learn about how we could do things differently and hopefully better with ACP-204. I'll start by describing a couple of things about ACP-204 that we think are helpful and then talk a little bit about our development approach. So NUPLAZID, we consider to be a very helpful agent for patients and 1 with a really strong product profile. That said, there are a couple of things about it that we were looking to improve when we were designing ACP-204 in particular, NUPLAZID does have a QT prolongation signal. It is not a massive QT prolongation signal, but there is something there, and that is relevant in an elderly patient population in and of itself. But more importantly, it limited our ability to go to higher doses and higher exposure levels with NUPLAZID. And from some of our work with NUPLAZID in Alzheimer's disease psychosis, we did see some suggestions that higher exposures were correlated with higher efficacy. And so the potential to be able to dose range up higher could give us likelihood of greater efficacy than we would be able to accomplish with NUPLAZID. So with ACP-204, the study that we're running right now, the lower dose is equivalent roughly to the exposure that you get with NUPLAZID. The higher dose is roughly twice that exposure. So there's the opportunity if that exposure response analysis holds true, there's the opportunity for greater responses with ACP-204 than we might have expected to be able to see with NUPLAZID. There's also some improvement in terms of its PK profile to onset to steady state. So maybe you can get onset faster. But I think the ability for additional dose ranging is one of the things that I'm really interested in here. Other things we've learned from the NUPLAZID experience though, are about clinical trial design and execution in Alzheimer's disease psychosis. And I think one of the primary ones that we learned was the importance of having a dedicated study that looks specifically at that patient population. And so what we've got in our current Phase II, Phase III program is specifically in Alzheimer's disease psychosis population. And we're going the extra step there and making sure this is a biomarker confirmed patient population so that we can feel really confident that the patients under study do have Alzheimer's disease psychosis. And we think that's a pretty important learning from the NUPLAZID history, taken together with some of those potential benefits of ACP-204 over NUPLAZID that we think give us a greater likelihood of success here.

Which biomarker are you referencing there?

So we are allowing certainly some imaging biomarkers, but we also are allowing some blood test biomarkers as well. I don't think we've been more specific on those.

[indiscernible] configuring into this or not necessarily or you haven't...

It is a component of what we're looking at best.

Okay. Okay. And ACP-204 is a variant of NUPLAZID chemically I mean, are they cousins molecularly or are they...

So they are targeting the same -- they have the same target. And I don't think we've talked too much more about their individual molecule.

Okay. Understood. Understood. And then as far as we touched on it a little bit, where would you go -- what are you looking at beyond those areas in neuro? Can you comment at all?

Well, I think I can certainly comment on the fact that we just licensed in a new program in essential tremor, touching super briefly on essential tremor. It is one of the most common movement disorders out there. There are roughly 7 million patients in the U.S., of which about 1 million are actually receiving treatment right now. But that said, the treatment, to be the first and only approved therapy there, was approved more than 50 years ago. So this is a space where we've not seen a lot of innovation over time. So we brought in SAN-711, which is GABAA-alpha3 specific, and we think is going to give us the opportunity, hopefully, to thread the needle between targeting the GABAA system with enough specificity, while avoiding some of the potential adverse events that you get from other GABAA receptors, the GABAA receptor subunits beyond the alpha3. So that's certainly an area that's interesting to us. We continue to look for opportunities, both with our existing molecules and with business development to really utilize our expertise from a neuropsychiatric point of view. But as Catherine mentioned earlier, we're also keen to make use of some of our rare disease chops. So that's going to be another space we're going to be continuing to look at very carefully.

Okay. And then as far as the cash and you mentioned the PRV, which you sold for nice very high watermark for the valuation of PRV, $150 million, right? But then you have to pay some of that back?

Yes, just with our -- so the PRV, we earned this with the FDA approval of trofinetide DAYBUE and with our original business development deal with Neuren, our partner, we owe them 1/3 of the value of the proceeds that we raised.

Okay. But as far as the cash runway and the operations of the business?

Well, I think for us we're in a very positive position of -- we generate cash. So it's not a runway until we run out of cash. The business is cash flow positive. So every day, just it increases and our ability to invest in our business or to invest in business development to expand our business, just our firepower gets bigger as the quarters go by.

Okay. And then do you want to just wrap up with sort of what you've said about the guidance for the commercial business and any clinical catalysts coming up over the next 12 months?

Yes. I mean I think just to sort of summarize, we're excited to guide for next year at the appropriate point in Q1. But we see growth for both of our commercial brands, both NUPLAZID and DAYBUE. Liz will be sharing a little bit more about the clinical sort of, I guess, events that are going to happen in 2025, but a lot of regulatory excitement as well around the EMEA application for DAYBUE. And then beyond that, we were excited to sign the deal with Saniona, and we are actively looking at other business development deals. And as Mark said, we have a strong cash flow situation. So we are looking to invest that money and enhance and expand Acadia as we move forward.

Very good. Thank you. That was great.

Thank you so much.

You're welcome.

Thanks, Yigal.