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

Welcome to the second session of the biotech conference. I'm Yigal Nochomovitz, one of the biotech analysts here at Citigroup. The next session is with ACADIA Pharmaceuticals with Mark Schneyer, the CFO. Welcome. Thank you so much.

Yes. Thanks for having us.

We just started covering you, as you know. So we're very excited to be officially following the story. I know we had the management team here last year, but we weren't officially covering. So that's good. So maybe...

We're glad you are. So thank you very much. We appreciate it.

Thanks. So maybe we could just start, just give us a bit of an overview. Obviously, you have 2 approved products that are growing. You have a significant pipeline with several important catalysts coming, one big one, in fact, in the middle of next year. But if you could just start with kind of an overview of the business, how did the last quarter...

I think you added a few words to that. That would be the elevator pitch for ACADIA. I can jump off on top of that. Yes. So at ACADIA, we're a neurological and rare disease company, both commercial and development stage. The 2 commercial products are NUPLAZID that treats an indication called Parkinson's disease psychosis and DAYBUE that treats an indication called Rett syndrome. Together, those products will have over $1 billion in sales this year. On the robust pipeline behind that, kind of the most advanced is ACP-204, which is our next-generation 5HT2A program. We're studying in 2 indications, Alzheimer's disease psychosis. And last quarter, we've initiated a second Phase II in Lewy body dementia psychosis. As you just mentioned, the kind of the big catalyst or milestone upcoming mid-next year is the Phase II readout for the Alzheimer's disease psychosis Phase II trial for 204. Behind that, we have a robust early-stage pipeline, which we're happy to talk about. And then from a financial perspective, since I'm the CFO, I can plug back to we're cash flow positive, got a strong balance sheet with over $800 million of cash, no debt. So strong ability to invest in the existing business as well as add to the portfolio through business development.

Okay. So you had a very strong quarter last quarter. Maybe if you could just summarize the commercial performance for NUPLAZID and DAYBUE and how you see the trajectory? I know you've given some forward-looking thoughts as far as where those 2 products are going.

Yes. So I think for us, we gave at our R&D Day this past year, we gave a view on kind of peak sales potential for both brands. We've started to talk to investors about splitting that out next year and giving a peak sales estimate for both brands, which we will do. As far as the quarter is concerned, both brands are growing strongly. There's kind of a -- as any pharmaceutical brand, there's kind of unique things going on with each. So starting with NUPLAZID, if you roll back a year or even more than a year, right? This is the only approved branded product in the indication. If you kind of roll back a couple of years during COVID, without wasting too much time on that, we pulled back investment just because we had mortality and less opportunity in this elderly and frail patient population. But kind of fast forwarding to last year, we made renewed investments. And the biggest one that we did was we restarted kind of a branded and unbranded direct-to-consumer campaign through targeted media on the unbranded side, brought in a celebrity spokesman partner, Ryan Reynolds. Because as we looked at our data, we recognize that the awareness came down through COVID and our retrenchment -- appropriately retrenchment in spend, but the willingness of physicians to prescribe NUPLAZID was still very high. And so that was a clue to us that there was a ripe opportunity now to start to reinvest. And what we saw this quarter kind of coming back to your initial question, kind of was like the strongest quarter in new patient starts in a long time where we had over 20% increase in both referrals as well as new patient starts in the quarter. And it's amazing for a brand that's been on the market for 9 years to have that level of performance, and that's where we've now really arced the growth trajectory for NUPLAZID because any brand that's been on the market for a while in any given quarter or any given year, the kind of volume performance is mostly driven by refills. So it takes numbers of quarters, if not years, of kind of increased referrals and new patient starts year-over-year, quarter-over-quarter to arc that trajectory, and we've done that with NUPLAZID. And so we're -- and then on top of that to kind of continue the trend in growth in NUPLAZID, we've announced that starting next year, we're going to increase the size of our customer-facing field force to continue to advance the growth and profitability of the franchise. And then on DAYBUE, we've kind of for different reasons, but kind of a little bit of a similar theme and more advanced in the investment profile, we increased our commercial footprint earlier this year, around the second quarter time frame, to be able to reach out and have higher reach and frequency and calling customers in the community setting where we're underpenetrated relative to center of excellences, and we just needed more people to be able to do that. And then what we saw in the third quarter was a significant -- a meaningful increase in new referrals, the largest we've had since the third quarter of 2024. So it's just the early signs that, that investment in our U.S. infrastructure is proven to be successful in the short term, though kind of the financial performance of that will play out over the next quarters and into next year. And then as we look forward to next year to expanding outside the U.S. with an expected European approval next year.

Okay. So you did the branded and as you pointed out, the sort of not relaunch, but sort of enhanced messaging on the branded and the unbranded as you pointed out right now. But then you also decided in addition to that, to boost the sales force. Can you maybe kind of talk a little more about the stepwise thinking there? You felt that, that would be necessary or helpful as well to also boost the sales force in addition to the...

Yes. Well, I think it's a combination of things, right? I think it's kind of a continuation and evolution. I mean, when you make a new investment, you have expectations and then you have learnings. I think our expectations have been met that we are seeing significant increase in referrals. The learnings and maybe not unexpected are where is that coming from, right? So if you have a targeted field force, you're only calling on certain level of physicians. When you do a direct-to-consumer kind of targeted media campaign, we're reaching patients and caregivers that are cared for by physicians that we're not covering. And so we've seen a meaningful number of our prescriptions coming in from this campaign from accounts and customers from a physician standpoint that we're not covering. So then the question is, well, is it productive to cover them? And how would you cover them? And so we've had -- with Catherine and Tom being new to the leadership and Catherine is our new CEO over the last year, they've kind of revisited everything. And their background is commercial expertise, and we haven't done a meaningful kind of reset of kind of the targeting and positioning of the NUPLAZID field force in a very long time. And so we kind of part of the exercise that we did over the course of this year is, we're going to take a blank piece of paper, what would be the optimal targeting for NUPLAZID based upon 8, 9 years on the market as well as the experience over the last 12 to 24 months with the renewed investments coming out of COVID, and that's where we've landed on. And I think where we're calling on or will be calling on is expanding. So we're essentially recutting every territory. So you'll have a little bit deeper reach into that territory and ability to call on physicians that are -- some PCPs as well as nurse practitioners. If you're having -- it does take some time for patients to hit neurologists, right, because they're not the easiest physicians to get appointments with. So if you're earlier in your disease progression for PDP, your first point of call is probably to your primary care, some existing physician in your kind of care network. And that's a lot of the prescriptions we're seeing with our existing campaign. And so to be able to cover the call on those, we need an expanded footprint. And we've done all the commercial math and metrics to see that this is in our expectation, a good investment to make, which is why we're kind of taking that next step next year.

But I guess the point on what I was driving at and what you're driving at is that by doing this branded and unbranded, you sort of revealed where you should be making those incremental investments in the...

Yes. Partially.

So it's synergistic from that perspective.

Yes. Exactly.

Okay. And then you've given some guidance for NUPLAZID for this year?

Yes.

Do you want to remind everyone what that is?

So we're just under $700 million in guidance. So we've narrowed our range to $685 million to $695 million.

Okay. And that was -- you moved it up a little bit.

We narrowed it and moved it up, like if you're looking at midpoint of the previous range, it shifted up.

It. Shifted up. Yes. Okay. And then any general thoughts for how -- I mean, you obviously -- we're talking about making some significant investments in the scale of the operations. So next year, you would expect continued significant momentum.

Yes. I mean we expect continued meaningful growth in both franchises, right? And certainly, as we're talking about NUPLAZID now, yes, NUPLAZID. And so we'll guide next year for NUPLAZID. And as I believe I mentioned earlier, we'll give a perspective on peak sales for NUPLAZID itself.

We sometimes -- now that we're covering you and we're covering some of the other neuro names as well, as you may know. So this is the question of the IRA negotiations coming into play. Does it factor in for you in a significant way with NUPLAZID? I mean, you've gotten -- you had the very important legislation win -- with the IP win with the taking [indiscernible].

So there's kind of a yes and no to that. I think for commercial investments, you're looking over kind of a 2- to 3-year horizon, right? So from an IRA standpoint, kind of the next -- while there's intricacies in kind of the next couple of years, which we can get into if you want to get really wonky. But I think the big question is, well, when and if NUPLAZID will get negotiated, right? And so from that standpoint, 2029 is the year that we would expect, unless there's changes in the legislation such as kind of fixing the pill penalty, that's the year to kind of think about from a modeling standpoint of what negotiation can happen. But that's still far enough off that it is not really influencing what we're doing in kind of 2025 or 2026 when we've shifted our R&D investments in this area to 204. So kind of that long-term investment decision that -- maybe those things would start to play. We've kind of already made previous decisions to shift the effort there for the really long-term investments. But of course, we're mindful of it, right? So I think as we think about what could happen, yes, there'll be some price decrease that comes through that. At least in the first couple of years, there's limitations on what it will be for a small company. But the business will still be profitable at that point as you go through the negotiation and profitable enough that supporting our existing infrastructure, including the incremental investments that we're making to drive -- still drive volume growth. It's not like a patent cliff scenario where you would say, "Oh, this is going to happen and you're going to lose 90%, 95% of your sales and you just retrench everything." That's not what we anticipate this is going to be. But yes, there'll be a step down in price. So there'll be a step down in profitability, but profitability will remain and driving growth to grow profitability overall will still be part of the strategy as we get into the 2030s.

So you don't have a notable competitor in this space.

3 We do not.

Right. So that's another benefit as compared to some other companies. Okay. And now let's -- so DAYBUE, obviously, you talked about starting to see the benefits of the investment there. Tell us more about what you're hearing about in the field about the benefits of the medicine. Obviously, there's nothing else for Rett syndrome. It's a really, really, really tough disease. How is it looking in terms of the growth going forward?

Yes. I think from what we -- we've been on the market over 2 years now. And I think -- and what we have -- maybe as a way to answer your question is we have a very stable patient base. So greater than 70% of our patients have been on therapy for 12 months or longer. And so that just speaks to the benefit that DAYBUE is bringing for these patients and these families. They are seeing a meaningful increase in the quality of life that they get from taking the medicine versus prior to. And I think what we're looking for as growth, at least in the U.S. is, as in any rare disease drug, you really focus on your key opinion leaders and your centers of excellence where the kind of highest concentration of patients are and we have significant market share and penetration in those segments. But 2/3 of Rett patients are still treated by their community physician, neurologists or otherwise. And so to be able to expand out to reach those physicians, those caregivers, those patients; that's kind of the next wave of kind of focus and investment for the company. And that's why we did the increase in field force earlier this year, and we're starting to see the fruits of that investment.

And what -- so you mentioned, I think, the duration of therapy of a year, 12 months, is that right?

Well, there are a couple of metrics that we point at. Sorry, go ahead.

So how are you helping people stay on drug even longer? Or is there a point where there's -- just a point where there -- it's done what it needs to do and they come off...

No. I mean, you've seen and we have open-label extension -- or not only just our open-label extension, but our real-world evidence study, LOTUS, that shows that patients are continuing to improve the longer they stay on therapy. So it's not that you just take it for 12 months and then it's done what it can do and you come off it. No, you're continuing to get benefit. And the opposite is true, too. If you come off therapy, the benefits that you're receiving go away. So it's not that you get something, stabilize and stay. You can continue to -- you can stabilize, continue to improve. But if you take the medicine away, the benefits that you're receiving from the medicine will go away. So that supports why patients are -- who've received benefit are staying on. I think what we're just -- that metric is not -- I mean, there are lots of metrics that people look at for commercial performance. It's really for us, if you're going to ask me how do I grow the revenue base from here, that was what I was trying to address is that we have a stable patient base there that should be staying into the future. Of course, like any medicine, there's a reason why you [indiscernible] or even if you've been on it for 18 months may come off tomorrow for whatever reason, that happens in any medicine, it happens with DAYBUE. But for the most part, we have a stable base that we're now adding patients on top of it through our renewed commercial efforts. It's really -- maybe getting back to your other question, it's really more early in the treatment regimen that people -- that patients, caregivers and their physicians are trying to find kind of the most effective dose and managing the potential tolerability issues that come along with DAYBUE where many patients experience diarrhea or vomiting. So they're trying to titrate or find the most effective dose to be able to manage the side effects if they're experiencing them. But kind of once you've hit -- you're out 6, 9, 12-plus months, you found that for yourself for an individual patients. Our efforts on getting people to see efficacy are really focused on that earlier part of treatment.

Okay. And what are you doing in terms of identifying or diagnosing earlier in life? Is that -- I mean, it's generally recognized that someone may have Rett syndrome fairly early on.

Yes. This is not a disease that it's hard to diagnose. I think what -- unfortunately, what you'll have is a healthy normal advancing, from a milestone standpoint, child and that child starts to regress around 18 months, and they lose function and cognitive ability that they had gained up to that point. It can take some time, but fairly quickly, if families are seeing the right physicians or ultimately get to the right physician, it's readily diagnosed. There's a genetic test. It's not one of the rare disease that it's just very, very hard to find patients. So I think what will -- but what you do see more -- less on the younger side of the patients, it's more on the older side of the patient. So if someone from our generation or older than us, who's still living with Rett syndrome, that patient might not have been diagnosed with Rett syndrome way back [indiscernible], maybe they were diagnosed with some form of autism or some other disease associated with that. So that's where you're seeing an increase in diagnosis and DAYBUE works for those patients. It's not a type of disease that if you don't treat soon enough, you lose the ability to treat it. You can treat -- the way that DAYBUE works, you can treat any Rett patient at any point in their disease progression. I think what we've seen as is typical of rare disease is that when we launched, we said, while the prevalence would suggest there's 6,000 to 9,000 patients in the United States, we knew by claims databases, there weren't any medicines, but there are codes that identify patients as Rett patients that there were 4,500 patients that were diagnosed and treated in the United States when we launched. When we look at that data now, it's more 5,500, 5,800 patients. So similar to other rare disease, when there's something to treat, you want you see that more patients are identified. And today, about 40% of those kind of 5,500 to 5,800 patients have tried DAYBUE. And so there's many more out there for us to talk to and if it's the right treatment for them to get them on therapy.

And then for the ones that may experience some initial challenges, as you pointed out, with some of the early side effects, do you have ways to help educate physicians and prepare them and set expectations so that they know what's coming and so they can be better positioned to stay on the therapy?

Yes. So we do. That -- our success in getting people to restart has improved over time. I think if you'd asked me this question a year ago, we'd say, yes, you see a very small number of patients that would come back and retry. We're seeing more of that now. I wouldn't say -- it's not the lion's share of our new patient starts. It's still, in the realm of numbers, smallish, but it's increased a lot from a percentage-wise from where we were maybe a year ago. And then yes, what we -- but usually, what you've had is you have a family that's come back and they have a reason that they want to try, maybe they've learned something. We know more now than we did a year ago. Their physicians know more now than they did a year ago. And so what we're seeing is the families that come back, they tend to have a better experience than the -- when you look at them as a whole from a standpoint of persistency, are they staying on therapy, those families have had more success than them.

Can you talk a bit about the broader strategy outside of the U.S. in terms of how you're going to market the drug in Europe, for example?

Yes. So we're going to market on our own in Europe. And so we've started building a team, and we've done some of that this year since have a leadership team, some key commercial payer market access people, MSLs. We didn't -- trofinetide or DAYBUE wasn't studied in Europe. So it's important to start to have those scientific conversations even over the course of this past year. It's one of also the reasons why we've started an inpatient supply program is to enable physicians that are comfortable and want to have DAYBUE prescribed to their patients. There are programs that can get access today and also give these physicians, some key physicians experience with the medicine in patients. And so that's kind of setting the stage of where we are today. And then we expect the time line for approval is kind of towards the -- by the time we go to opinion and then the timing for approval is probably in the late first quarter, second quarter time frame. We'll start to build -- of next year. We'll start to -- we've said that we'll go through a typical launch sequence with Germany being the first market. So we'll start to make the right kind of hires incrementally from there as we kind of start in Germany and expand throughout the major markets in Europe.

Okay. And is it sort of the way you would pitch the drug, the way you would sell it there, is it different in terms of the types of key opinion leaders you have to with to get uptake? Or would it be a similar sort of strategy as in United States?

It's similar and different, right? I think it's country by country. Some have centers of excellences, some don't. Some have big hospital centers. I think it's -- the kind of customer call point, there are differences across markets, but there's experience that we have from the people that have done this before as well as the knowledge that we have with what's been successful in the United States and how do we adapt it to the different markets in Europe, kind of we're well prepared to launch the drug.

Okay. Well, let's make sure we talk about the very important pipeline.

Sure.

So let's start with 204. We started to talk about it a little bit. So what can you say about how you're thinking about that readout and the significance of that readout in terms of expanding the market and getting approval in both ADP and [indiscernible]. I know this is only a Phase II trial, but still it looks like...

Yes. I mean, listen, we're very excited about both of them, right? So the Phase II readout next year is in ADP, right? So the Lewy body dementia psychosis, we just started. With the wealth of kind of data that we have over the various studies that pimavanserin, which is our -- for those new to our story is the other 5-HT2A program. So the wealth of information that we have from pimavanserin and the ability to leverage those learnings to what we think is -- optimize is probably too strong of a word in drug development, but just to best position 204 for success, that's what we're doing. And we're very excited about what the readout next year for a Phase II asset, just -- it's still drug development. There's still risk, but we view this as kind of your higher probability of success versus just some de novo Phase II asset first time ever in patients. So we will see what the data tells us. From an ADP standpoint, we do have this seamless enrollment. So since we do have a lot of knowledge here, what that just means is that as our sites finish and complete enrollment for the Phase II, they'll just continue rolling in Phase III, and it's just an effort to be able to save time in the overall program from the Phase II to Phase III program to trial readouts.

And just to remind people, again, that are less familiar, this new molecule, this 204, it is related to pimavanserin in some respects. So can you maybe walk through [indiscernible] what's the...

Yes. So it is a new molecule, right? It's not a reformulation of pimavanserin. What we've done is we've designed it to try to optimize the potential performance of 204 relative to what we've known with pimavanserin. What pimavanserin, well, it doesn't really impact the commercial setting for NUPLAZID in PDP, kind of the limitation on pimavanserin is it's a modest QT signal. And so what it did was prevent us from dosing beyond what's in the commercial dose for PDP in other indications. And I think what we've seen in other indications is that increasing the dose has potential for greater efficacy. So what we've seen -- what we've designed for 204 and what we've seen in all the Phase I -- extensive Phase I work that we've done to date is no QT signal. And so what that's enabled us to do in our ADP trial is to study 2 doses. So one, the lower dose is essentially equivalent to the current marketed pimavanserin dose and the high dose is double. So that potential can give for greater efficacy and also potential for a shorter time to onset. So all of that together are the enhancements that we've kind of created and designed into the molecule and the program for 204. And obviously, we'll see what the -- we're very excited about the data readout coming mid next year.

Okay. And just in terms of the market sizing, how do they compare in terms of PDP versus ADP. What can you say about just the potential for marketing.

Yes. I mean ADP is a much larger market. It's multiples and multiples of what size the PDP market is.

Okay. And as far as the specifics of the readout, what are you looking for in terms of what would be kind of like a win scenario, just hitting on the primary endpoint?

Hitting on the primary endpoint would be -- I mean, there's -- to date, there's nothing approved for this indication. So I think that would certainly be a win. Less than that could be a win too, but that's not what we're expecting or hoping for. And -- so I think that -- and even though we have this kind of seamless enrollment, the Phase II is a Phase II program, and it's a distinct trial from the Phase III. So we'll get that data, and we'll share it with Wall Street.

And that's coming, you said. So what's the timing on that?

It's mid next year.

Mid next year.

Yes. So as we get closer to that, we'll kind of refine and put a more specific [indiscernible].

It's done enrolling.

it's not done enrolling.

It's not done. Okay.

Yes. It's a 6-week trial.

You don't need a lot of time on it.

You don't need a lot of time. So kind of as we get into next year, at some point, we'll be fully enrolled and that will kind of put a more of a pinpoint on what the time line will be for data readout.

And the other one we were about to talk about, the Lewy body one, that one is staggered to some extent? Or how far along is that one?

That just started last quarter, right? So we don't have -- so we need to -- we don't have time lines for that yet.

And obviously, that's a smaller market. It's more specialized.

It's a smaller market. It's more specialized. We are very excited. While -- in our HARMONY trial, while we -- it's a limited data set, we showed some of the strongest efficacy in this sub-patient population of Lewy body dementia psychosis. So we think there's a very strong opportunity there as well.

Okay. And just to sort of state the obvious, there's nothing -- we don't have drugs that can treat these conditions [indiscernible].

In either case, yes.

Okay. And then just quickly, the sort of the -- the patent on 204, I assume would be very good, quite long.

It's quite long, yes.

Given it's a new NC.

Yes.

All right. So then you have a few others, the MDD trial and then the [indiscernible] study. So let's start with MDD. And there, I believe the goal is to sort of differentiate versus SPRAVATO. so tell us a little bit more about that program and the molecule.

I think if you -- so if you look at that program, I think the kind of optimal outcome would be able to show SPRAVATO type efficacy, but have a side effect profile that avoids dissociation and sedation and that would then limit or minimize the amount of kind of time you need to spend in an office while you're taking the treatment and monitoring. So if we can get the same efficacy with a side effect profile that provides just kind of enhanced benefit and ability to take the medicine without having a dramatically negative impact on the time and effort that it takes to take the medicine, that could be really meaningful.

And the time lines on that one, have you been specific about when we would see the...

We haven't -- we've just started -- we started Phase II. We're going to start it this quarter, right? So again, another thing that's exciting yet just started the kind of its next step. So we'll need to kind of get through that to give you a little bit more time frame on -- or color on what time frame will be for data readout.

Okay. And with these sorts of MDD trials, you always run into -- I know this gets a little bit into the leads. But I guess just at a high level with your clinical development group, I guess they've got everything under control in terms of [indiscernible] checking the placebo effect, making sure there's good consistency at the sites so that you don't run a foul of some of these serious results where you have a drug that works, but it doesn't get -- you can't show it in the study.

Yes. I mean, listen, we've got very experienced teams. It's neuroscience, right? So there is an element of risk of like in any trial that you could say the drug worked, but the trial didn't. But we have a lot of experience and a lot of safeguards and set up to minimize the likelihood that, that happens, but you can't take that away completely in the line of work that we do.

And then at the R&D Day you had, which was now quite a few months ago, I remember one of your VPs of clinical development was talking about the essential tremor program quite eloquently. So that's interesting. Tell us a little bit more about the -- just the basics of the time lines, the study design.

Yes. So I mean, for the ET -- another disease where there's no approvals today and a number of these are -- it doesn't mean that other companies aren't investigating them. But I think for us, -- what we are excited about with 711 is the selectivity within the mechanism. And that where we think is within the GABA system, supports efficacy but doesn't touch on some of the other nonselective points that can bring about the side effects that come with this system. That's the thesis. That's what we're excited about, and we're looking to prove that out. We'll start the Phase II next year. So we've still -- since we licensed the asset, we've done additional Phase I work, including doing some elderly cohorts to help us pick dose and design the Phase II, and that's expected to start next year. So still early in development, but very exciting, very large market opportunity if it's successful, and that's why we're making the investment.

And of course, you are the CFO. So shifting back to the financials. Just kind of give us a high-level snapshot of the P&L dynamics. I know you're investing more in the sales, but just talk about how you see the OpEx trending and the cash.

Yes. I think from a CFO financial profile, I think it's an exciting P&L, if you could actually say that. We can all laugh. But I think for -- we have a growing revenue base, growing profitability. The company is and has been cash flow positive for a while. I've been CFO for over 4 years. What's been in and out a tough kind of biotech financing market. We've not financed since I've joined the company. So that's been a strong position to be. We have over $800 million of cash, no debt that I mentioned in my elevator speech. So that enables us to just invest across the business and to expand the business. I think what we see going forward is we're making some additional investments, some that we talked about. We'll give guidance for what OpEx will look like next year, but you'll see an increase from the variety of things that we're doing across the company. But we're also increasing sales, and it's something where if you look at multiple years, there's significant operating leverage in the business. But our goal is kind of to drive kind of total area under the curve profitability, and that's what we look to do from a business and financial standpoint.

On the R&D side, you sort of -- are you kind of comfortable with this level of investment in this number of programs? Or do you see that you have candidates in the discovery that are coming up the ranks that could be in the clinic in the next few years?

We have some other early-stage programs that we've yet to disclose. Most of those also have come in through business development. We don't have a big -- while pimavanserin and 204 are internally discovered molecules, we have -- so we have a limited discovery effort in certain areas. It's not a big focus of the operations of the company. So most of the assets in the portfolio, whether disclosed or undisclosed beyond those 2 have come in from business development. So yes, there's capacity. We don't manage the company from like a ratio of R&D to sales. We have operational and financial capacity to add to the portfolio. And then as Liz Thompson, our Head of R&D, always likes to say, we try to look at molecules, are they going to earn their way into our pipeline? And do they have data that supports staying in the pipeline. And that's how we evaluate it. And then whether or not the R&D line goes up or down, it's going to follow the science and the opportunity and then the commercial expectation from that science. So we can lean in and do more or we can pull back if things don't warrant advancing into the next stage. And that's how it will [indiscernible].

Awesome. All right. Well, thank you so much.

Thank you. Great discussion.

Thank you very much.

All right. Thank you. Enjoy the conference.