Praxis Precision Medicines, Inc. (PRAX) Earnings Call Transcript & Summary

So, good morning, everyone, and thank you for attending Citi's 16th Annual Biopharma Conference. I'm Neena Bitritto-Garg. I'm one of the biotech analysts here, if you don't know me. And for our next session, I'm really pleased to be joined this morning by leadership from three companies developing drugs in the psychiatric disease and broader CNS space as well: Cerevel, Karuna and Praxis Precision Medicines. So, from Cerevel, we have CMO, Ray Sanchez; from Karuna, we have Steve Paul, CEO; and from Praxis, we have Marcio Souza, CEO as well. And we'll cover some high-level topics this morning in psychiatry; some specific indications, including schizophrenia, DRP and depression; and some specific programs that each of you are developing as well. Before we get into the discussion, I just wanted to remind the listeners that if you do have a question, feel free to e-mail me directly or you can actually submit questions here at online portal and I'll receive them as well and I'll try to incorporate them if time permits. So, now I just want to turn it over to each of you to give just some opening remarks. I guess, we'll start with -- maybe let's start with Steve, then Ray, and then Marcio.

Well, first of all, Neena, thanks for the invitation to participate in this panel discussion and -- with Marcio and Ray. Let me begin by putting kind of what we're doing, not just us at Karuna, but what we're doing at other companies, into some perspective -- historical perspective. Psychiatric drugs, as you know, if you go back 20, 25 years, were among the most commonly prescribed, and frankly, commercially successful drugs on the planet. We had all of the SSRIs and SNRI drugs to treat depression, anxiolytics, benzodiazepines, non-benzodiazepine GABA receptor modulators, and then, of course, we had the second-generation antipsychotics. Many drugs in this space were widely prescribed and all considered many -- virtually all considered commercially blockbuster drugs with sales -- multibillion-dollar sales in many cases. Zyprexa drug I helped launch when I was at Lilly, it was $6 billion a year drug prior to patent expiry, and Abilify (aripiprazole) had $9 billion in sales just back in 2014. And then all of them, for the most part, not completely, but for the most part, became generic drugs, and you saw a big drop-off in innovation. Many of the big companies that were in this space sort of got out of the space and focused on oncology or inflammation. And I think, in general, that was because of a lack of innovation. Despite the fact that the current genre of drugs, both in mood disorders and in psychosis, are not that great. They do help patients. They keep them out of the hospital. They prevent many people from committing suicide, for example. But if you look at response and remission rates among people who have depression or schizophrenia, they're very low. And many, many patients are still troubled by symptoms even when "adequately treated with the current generation of drugs". And I think what you're going to hear this morning is that there is now, I think, a new era of new drugs with new mechanisms and greater hope for an area with still huge unmet medical need, and I think from a business perspective, incredible commercial opportunity. I think when I go around, I'm sure Ray and Marcio experience this too, well, it's a satisfied market. We have all these generic drugs. Why do we need anything better? Well, the reality is the current drugs aren't very good. I can say that now, and I was involved in the launch of Prozac and Cymbalta and Zyprexa; godsends for many patients, but not terrific drugs overall. And now you're seeing, I think, the emergence of a new generation of drugs, both for schizophrenia and dementia-related psychosis and mood disorders broadly defined. And I think it's an exciting opportunity, obviously, for patients, but obviously, for the industry, for the biotech industry in general. Just quickly on schizophrenia, I don't want to hog the mic here, so to speak. You have, again, 20% to 30% of patients now who don't respond adequately at all to current generation -- the current generation, second-generation antipsychotics. And then you're left with about 70% of patients who still have residual symptoms. We call them inadequate responders. And that's sort of in the primary set of symptoms of the syndrome, [ because ] it's a pretty positive symptoms, virtually nothing works for negative symptoms and cognitive symptoms, which are arguably the most disabling. And we hope, at Karuna, to bring forward a medicine that will help holistically across the board to treat the core symptoms of schizophrenia, not just psychosis. Psychosis is important. Our drug seems to be quite efficacious there, but we'd also like to be negative in cognitive symptoms. So with that, I'll shut up and turn it over to my partners on this panel.

So, thank you, Steve. And, Neena, thank you for hosting us and including me. It's a great privilege to be here with Steve and Marcio, and really very relevant and timely topics. And as you know, I serve as Cerevel's Chief Medical Officer since its inception, joining in January of 2019. It's a great privilege to be here, and we're almost three years old. But our mission really is one that is to continue our efforts in building the premier neuroscience company by unravelling the mysteries of the brain. We're extremely fortunate to have a talented and skilled team of researchers and clinical developers that combine their deep insights and experience in neurocircuitry with receptor pharmacology to develop medicines that are designed with receptor subtype selectivity to improve the clinical challenge experienced by millions of individuals worldwide who suffer from neuroscience diseases, such as schizophrenia, and Steve thank you for that perspective, Epilepsy, Parkinson's and several others, including dementia-related apathy, where there are in all approved therapies. And so we're rapidly advancing a broad portfolio of 11 neuroscience assets with multiple near-, medium- and long-term catalysts, including at least seven data readouts and multiple INDs over the next three years. So, it's really an exciting time for us. And I just wanted to give everyone the perspective of Cerevel and its inception as well as its vision. As far as my background, I'm a psychiatrist by training and practice, and achieved both at the Yale medical school. I was also extremely fortunate to be part of the leadership team that developed, Steve and Marcio, Abilify, Abilify Maintena, the long-acting injectable, Abilify MyCite, which in 2018 was approved as the first small molecule digital combination product to monitor ingestion, as well as Rexulti, which was approved initially with two simultaneous indications for the treatment of schizophrenia and major depressive disorder. But excited to be here on this panel to really, as Steve as you eloquently mentioned, that the need for advanced therapies and novel targets and really us providing patients and practitioners with better options, and so thank you for including me in that discussion.

Wonderful. And thanks, Ray, thanks, Steve, thanks, Neena, first and foremost, for the invitation. I really appreciate it. It's a privilege to be here speaking to all of you. I have to echo a lot of what Steve and Ray mentioned, right, it's the excitement to help patients more than [ they being ] helped. And I always start conversations by saying like it's incredible what exists already. It's not because there are great drugs right now that we wouldn't do anything better to begin with, but the drugs that we have are, as Steve mentioned, they are just not great, right? They are helping 1% of the population, and they are not helping them completely. The difficulty or not, and I'm sure we're going to be discussing about developing drugs here, I think it's widely exaggerated to some extent, it was really a lack of innovation in the fields in the last several decades, one could argue years in some cases, that almost stopped despite the fact psychiatry specifically has been only growing in awareness, which is wonderful, since the stigma is always a big [ zero ] in psychiatry historically, but in numbers as well. So, from an attractiveness, from a market perspective, incredibly positive for all of us. You can see like a group of people here, they are incredibly excited to develop drugs in psychiatry. So that excitement is not subsiding whatsoever. And a lot of new data that came up from either genetic studies or better understanding of the networks in the brain, better understanding of targets that are going to allow us to unlock. How are we using this at Praxis, right? We are broader than just psychiatry. We have three programs in the clinic right now. Soon to have four. By the end of the year, we're going to have six Phase II trials running in several indications. And numbers not always matter, but they're all very meaningful. They're all really towards helping patients significantly, and we're incredibly proud of the group of people here. I will call them [ Praxisens ] that are driving that forward to help patients. That's what unite us. So, excited to share the panel and to discuss many aspects today. Thank you.

Awesome. Well, thank you for those very insightful opening remarks. The first topic that I actually wanted to talk about was just kind of this trend towards -- recently, I think we have seen a wave of kind of new innovation in the psychiatry space. And I guess, maybe if we can talk a little bit about what you guys think has kind of driven that. I think my view has been that it's -- maybe it took the larger companies getting out of the space to really allow small companies to focus on new targets and really targeted therapies, new formulations and things like that, but I'd be curious kind of to hear your thoughts on what's kind of driven that? And where you see kind of the psychiatry and the broader mental health kind of drug development space going in the near future?

Yes. Maybe I can start, and others can weigh in. We do believe that neuroscience is the next frontier drug development. As Marcio and Steve eloquently said, there's such a great need, and part of it is because we really haven't understood the biology and the neurocircuitry of the brain well. And I think over time, we have a better understanding of what the underlying basis of many of these psychiatric and neuroregenerative diseases are. And so -- which has allowed us to really explore novel targets and to look at more innovative ways on how we can address the challenges that face the patients, face the practitioners. But it's also, I think, in terms of -- it's not in terms of the what, but it's also the how, how we've been more mindful in terms of working with the regulators to come up with more innovative approaches to drug development and really allowing us to -- as we understand the science and the neurocircuitry better, we're able to understand the patient profile much better and be much more precise, because I do think that the patient profile does drive the outcome in terms of signal detection of your therapy. So, I think collectively, there's -- and this is so exciting to be here with Marcio and Steve, because we -- before we started the session, I was talking to Marcio about the fact that we're all really involved in an area where there's such great need to be much more innovative and to provide patients and practitioners with greater options. And the fact that we're all collectively invested in such a mission is really exciting. And -- but I do think that we -- the needle has moved and the time is now for us to continue to come up with novel therapies.

Yes. I'll take the segue there, Ray. The needle has moved a lot, right? And maybe we underestimate that sometimes, like with -- when you look into understanding of the patients, the cause of the disease, the genetics behind or not, because sometimes there is no genetics behind some of this, but eliminating that factor, the operation itself in psychiatry, and I think like Steve has done a lot of developments before when we're learning about the operation, how important it is to control certain parameters, it's a lot more, I would say, of science right now than it was before, what was a little bit more of an [ art ] and making sure these patients getting there. To your kind of points, Neena, with companies moving out, did that open a space? It did, I would argue. It opened space for more innovation, more discussion, to be honest, I think it's part of that as well. We are cheering for each other. Like we're talking before the session like I follow like Cerevel and Karuna and like cheering for every progress in the field. We're all learning from each other and that kind of enthusiasm in biotech helps as well. I would be remiss not to mention something Ray just said, there is a lot more appetite from the regulators as well, to have discussions and conversations. We have an aging population in the United States. We have mental health, in general, is a way more, I would say, prominence in terms of awareness and discussions, and that will help when you're developing drugs, because you can identify these patients easier. We can [ gastro size ] that are more engaged and really drive the trial. So, yes, I think we're better in all aspects from the chemistry of the molecules to the targets, to the biology of the brand, to the execution of the trials.

Yes. Neena, as somebody who's been doing this for about 45 years or so, I hate to tell my age, let me just put a slightly different twist to it. For site indications, I'll separate those from the genetically defined or genetically inherited neurological indications where we know a lot about the etiology and even the pathogenesis of disease, we don't know a lot about the etiology or pathogenesis of schizophrenia or major depressive disorder. We have no major genes. I personally worked on this both in my Lilly world and my academic life. But what we do know a lot about, we should be very proud about is, the intricacies of signal transduction in the brain and this emerging knowledge about neurocircuitry. So, for example, when it comes to G protein coupled receptors, they've all been identified at a molecular level. We know second messengers. We know a lot about selectivity. I would argue that we know about as much about many of those receptors, and I'd put the Ionotropic GABA and Glutamate receptors in the same bucket as we know about T cell signaling, which has become pretty hot in immuno-oncology. So, this allows us to craft drugs with much more precision than ever before. And I think you'll see that embodied in the work at our three companies. And so we can feel real proud about that. Hopefully, we'll be able to subgroup patients based on something biological that allows us to stratify patients who might be responders or non-responders. We aren't quite there yet, but having more agents, novel agents, I think, is going to bode well for being able to do that eventually. With respect to this issue, I had 17 wonderful years at Lilly, but I still don't believe big pharmaceutical companies drive innovation. If you look at the major advances, immuno-oncology, many of the advances we see in science, gene therapy, gene editing, you don't see those coming out initially from big pharma companies. They're from biotech companies where they take more risk, investors are a little different appetite, et cetera, et cetera. And I think that's what you're seeing here too. I think it's going to be on the basis of smaller innovative companies that the field swings back. And the big pharma companies will definitely come back into this space. We see that interest emerging almost every day in the work we're doing at Karuna. But it will take real clinical data from our compounds to persuade people that we're on to something. And I think we're on that verge. We -- I think we're there.

Yes. And Steve, I would -- I fully agree with you, and I would argue, Neena, that to Steve and Marcio's comments that the big pharma versus the companies that we all have the privilege of being part of is really the risk taking, right? It's really -- there's greater appetite to take certain risks to really continue to make progress. And I think that's part of the exercise as well, which is terrific.

Yes.

Absolutely. No, that makes a lot of sense. Fantastic. So, we've talked a little bit about this so far, too. But just, obviously, one of the challenges in running studies in psychiatry is there's a potential for a large; placebo effect, endpoints are subjective, all of these things that, obviously, you all are familiar with. But I guess, can we talk a little bit about some of those aspects? And how you think about incorporating controls into studies to kind of control placebo effects and control kind of the noise to the best extent possible?

Well, I can tell you what we've done at Karuna, and I think this has got elements that are pretty much directionally spot on. First of all, clinical trials in any area of medicine are not trivial, they're difficult. And you see large placebo responses in many areas of medicine. But those have been a challenge, I think, it's fair to say in treatment trials and depression and to some extent, schizophrenia. I think it all starts with enrolling good, if not excellent patients to begin with. We spent a lot of time -- our Chief Medical Officer, Steve Brannan, and our Head of Clinical Ops, Sharon Sawchak, they spend a ton of time adjudicating patients getting into the trial, picking the right clinical trial sites, which often give you the best patients to work on, making sure that ratings are not inflated. At baseline, we have criterion built in from screening to baseline that there can't be a 20% drop in ratings, in this case, the PANSS, which is the primary endpoint in our studies, to get patients enrolled kind of doing everything we can to reduce expectation by large placebo groups, if you will, not multi-arm trials with 40, 50, 60 sites. These are things that we've done before. And I've been a part of, and you get a lot of variability in these trials and they often fail. And so we've decided to keep things modestly small in terms of what we're doing from Phase II to Phase III. By the way, that's been a troubling transition. As you know, for many companies. Phase II data looks great, Phase III data not so good. And so our attempt is really to take what we've learned from Phase II and apply it to our Phase III studies. There are different nuances between doing outpatient depression trials versus doing inpatient psychosis-schizophrenia trials that we can elaborate on, if you like, some of them are obvious, do patients take their drug? Do they not take their drug? So, there are a lot of design elements that we've introduced into our trials. Many of us have battle scars from this for a number of years. And I do believe that this is manageable. I'm not saying our placebo responses won't go up a bit, but I think the delta between active drug and placebo. By the way, it also helps to have a drug that works. It works better than just marginally because, obviously, that's a big factor in how these trials turn out in the end. The other thing is we talked a little bit about the regulators. I think the regulators have an appreciation for the challenges in this space. It's not uncommon to see approvals of drugs where there's more than one failed trial either in Phase II or Phase III, completely failed trials, where the competitor actually differentiates from placebo and active drug -- new drug doesn't. But you get your two positives, and you're going to get your drug approved if there's a good benefit risk ratio, safety looks good, et cetera. Now we don't plan on that happening at Karuna. We plan on having three positive trials in our Phase III program. But -- so those are some of the elements we're actually going to -- I think we've even published a paper recently on some of the things that we've introduced to minimize placebo response and to improve the chances that the studies are going to be positive.

Yes. Let me jump a little bit on Steve's point there, not that there's a lot more to add, to be honest, because we covered a lot of the grounds. I'll start with hope is never a strategy, but it's definitely not a strategy when you're controlling placebo in psychiatry trials. And it sounds like just an empty statement. But when you go back to the ones that had inflated, it basically violated this rules that Steve just said, right, like are the patients the right one? And it's not only the right one professional versus non-professional, which is quite important, do they have the right diagnosis, right? The unipolar depression versus bipolar depression, or a mood disorder that is not depression or an adjustment disorder. It sounds trivial, but it is not, as I think we all would agree. Well, better, it is trivial if you have the right control in place. But if you just hope to have the control in place, it's not going to happen. Are we getting the right sites, something else that Steve just mentioned, the rate of accrual, the size of those trials, there are so many trials in psychiatry ran before, there's so much data to analyze the issues, that not doing things about it is more irresponsible than one's, and making sure they're controlled. So, when you look into the trials that put all the controls in place, there is not a lot of inflation actually on placebo. That is a predictable placebo effect. It is -- one could call large, but it's not going rightly while it's not going completely crazy, but having the right patients, the right sites, in our case and in all case of others here, we're using a second psychiatrist to assess whether or not the diagnosis is correct, the severity is correct. We use the group at Mass General, safer. That's been shown. We call the trust, but verify approach, right, trust aside, but we verify if it's correct. And then during the conduct, very close to the patients, in our case, for depression outpatient, as Steve just mentioned, making sure the patients are taking the drug. Making sure the interventions are kept to a minimum, because we know that the more you influence there. And there are a few other things that came up in recent, I would say, years like reminder scripts for placebo effect that do control that. When you look into the collective of drivers that deployed all these aspects, placebo is actually fairly manageable. And we do expect to see a large separation from placebo exactly because we put all of those things in place as well.

Yes. So, Neena -- thank you, Marcio and Steve. I don't have a lot more to add. I just wanted to underscore a couple of points. I think one is, I think, kind of a mantra with our teams, it's really about the patient profile and making sure that we get the right patients. And Marcio and Steve, you talked about this, the surveillance, the surveillance of the trial, the surveillance to ensure that the patient profile is never compromised. But also looking at blinded data to eliminate a [ parent ] ratings and really making those interventions in a timely manner as the trials proceed and really try to ensure that the conduct of the study is always where it should be. So that's something that is so critical. And I couldn't agree more with what both Marcio and Steve have outlined. It's something that we're very cognizant of, after, of course, having the battle scare, Steve that you alluded to, over many years, over time. But I think we're learning. We're learning. And it was great to see Steve, your schizophrenia data with a low placebo response, our recently schizophrenia data with a low placebo response. And so, we're continuing to work together and learn from each other to ensure that we can bring these medicines to patients sooner than later.

Exactly.

Great. So, just one more general question before we jump into kind of some specific indications. But, Steve, you brought up kind of the regulatory flexibility. And I think we've seen actually a few surprising kind of decisions from the Division of Psychiatry this year. One was the CRL for Acadia's pimavanserin and dementia-related psychosis. There was also recently another deficiency letter issued from the Division of Psychiatry. So I guess just what are your thoughts on kind of what's going on with the FDA right now? I think a lot of people have questions specifically around also the Division of Psychiatry. And I guess just how have your interactions going in to the stuff that you can comment? I know that's a tricky subject, but...

Yes. Well, Neena, let me start, and then the others can chime in. First off, you never really know exactly the reasons for those -- the CRL or deficiencies with respect to [indiscernible]. So you just don't know the -- what the issues are because it's kind of a one-way dialogue, so you don't know what the FDA has said or what their thinking is. Having said that, our interactions have been pretty good. And I think they've been very helpful to us. We had an end of Phase II meeting, obviously, before we embarked on our Phase III program. But we've had multiple interactions with that division. And I think their -- they've all gone pretty well. I mean we haven't agreed on everything, but the bottom line is they've been very helpful. They want to see new medicines in this space. And they know the unmet medical need, can we come up with a rapidly acting antidepressants. As you probably know I am the co-founder of Sage Therapeutics too, full transparency, can we come up with a drug that can robustly treat schizophrenia without any of the extrapyramidal side effects, risk of tardive dyskinesia, weight gain, any of the metabolic liabilities. They see that. They know that. They understand it. They appreciate it. And in our case, we've been very pleased with them facilitating those discussions. I also think that the leadership there in the division that [ sight ] drugs, but also [indiscernible]. Patrizia Cavazzoni is a very experienced drug developer. She worked at Lilly. She worked on our Zyprexa team for a number of years. She's very experienced. She worked at Pfizer for a number of years. And having people that have really -- that really understand the challenges and opportunities in drug development at the agency. So, all I can say is our experience so far has been quite positive.

And I agree, Steven. It's interesting, this pre pandemic when the Office of Neuroscience was developed under which psychiatry, neurology and the pain division all sit under the vision there, which I couldn't agree more, really is for consistency so that all these divisions really were being consistent in terms of the collaboration and the expectations that they would have with all the sponsors in terms of developing novel therapies. So, I applaud them for that effort. It's never -- I think it's never a good exercise to speculate on FDA's decisions with sponsors, because as Steve alluded to, it's -- drug development is a very complex science. And there's many moving parts in terms of getting these therapies approved to show the -- both the efficacy and the safety tolerability that is needed to ensure that we keep the patient-centric approach and patient at the core of it. And so it's not fruitful to speculate on that. But what I do know is that in -- even in the programs that we're pursuing like dementia-related apathy, where there are no new -- there are no approved drugs that they've been extremely open and collaborative with us in our approach to find a regulatory path forward. So we're encouraged by that, and we're encouraged by the vision, and we continue to have very positive exchanges and look forward to continuing that trend.

And I have just sensed there to what was said, right? So one, maybe our own experience to raise points. There are different divisions within the office, right? And we interacted with three of them recently, psychiatry, like we have like potential paying assets and obviously, like essential tremor and so on. So one, neurology one, neurology two in psychiatry. And all of them are incredibly positive in terms of how it interacts and they really want [indiscernible]. I think that's the common between the industry and the FDA. It's undeniable that that's what they want. The aspect we haven't been discussing as much, and I wanted kind of to bring the attention to -- those are humans. And there was a lot of change in the last couple of years for all of us, right? We figure out -- some of us figure out and has to adapt, like looking into the rate of depression, look into the rates of anxiety in the world. When you disrupt a workflow that's been established many decades ago, and it's most like getting together and having discussions and then you throw political instability on top and decisions and like having to develop vaccines and things like that, it's all positive. I think we're ignoring a little bit the human aspect of the agents and how much pressure they are under and how much that influence. So being a little bit more compassionate, I would say, about this process, sometimes the simplest answer is one of the solutions, and it might be that just the level of work and the level of decisions that have to be made are too many right now for the agents and tends to stabilize. But our relationship and the discussions have been positive, and I believe the outlook is incredibly positive for working with the agents under [indiscernible] as Steve mentioned, and the entire crew there in the neuroscience office.

Fantastic. So now I want to talk about in the last 15 minutes or so here. I want to talk about some specific indications and specific programs as well. So starting off with schizophrenia. So Steve and Ray both have programs kind of in the space, muscarinic receptor modulators. I guess, can we talk a little bit about kind of your specific approaches and then there's obviously this debate, I think, in the space around M1 versus M4, how to target each, which one is more important in cognition, which is more important in psychosis. So yes, if you could just give me some thoughts on those topics, that would be great. And Marcio, you're welcome to comment if you wish.

I'll sit out of this part, stay away.

Maybe Neena, I can start and Steve, please, you can weigh in after me. But CVL-231, which is our M4 positive allosteric modulator, really does have the potential to be the first highly selective M4 positive allosteric modular PAM targeting the muscarinic pathway, very different from directly activating the M4 receptor. It does so by increasing the affinity of the M4 receptor for its natural item, which is, of course acetylcholine. And we do believe that M4 is driving the antipsychotic benefit by modulating dopamine levels without actually directly blocking the D2 receptors, as you all know, avoiding some of the debilitating side effects that we see with the current therapies that cause the extracranial side effects and so many other debilitating side effects. So we do believe that this is the next-generation of opportunity. And the great news -- there's great news here is that we are providing patients with greater armamentarium and options and practitioners as well. And so I do believe that more therapies available to patients is always a good thing. We were quite excited when we had the data readout recently with PANSS scores of close to 20 point in total reduction for our 30 milligram dose. We're also excited that we're planning to conduct trials in the future that are dosing only once-a-day and where a titration is not needed, which is our two key components to ensuring that patients do comply with their treatments. One of the biggest reasons for high recidivism rates in schizophrenia and other vulnerable population. So taken together, we're really Neena very excited about the program that we're embarking on, providing patients with this medication sooner than later. But really, with all the attributes that I just outlined, which I think will potentially be transformative to the landscape as well. So great to be in this group that are working on therapies that I think will give patients more options.

Neena, at the end of the day, in this disorder schizophrenia and really for DRP as well, it's going to be all about efficacy. Safety is going to be important. I'm not trivializing safety. But we have to get drugs that work better. And frankly, across the board, positive symptoms are very important, hallucination solutions, negative symptoms and cognitive symptoms are arguably the most disabling. What we like about KarXT is it's a M1 M4 preferring. So it directly stimulates at the orthosteric site, the same-site that acetylcholine, the natural ligand stimulates these two receptors quite potently. And we think that is going to give us clinical benefits. There's one drug out there today that probably improves cognition based on the data in hand, and that's clozapine. And the evidence suggests that it's not clozapine itself that's responsible for the improvement in cognition, it is desmethylclozapine its major metabolite and that compounds a potent M1 receptor agonist. And there are just reams of preclinical and even clinical data suggesting that stimulating that M1 receptor may be good for negative and certainly for cognitive symptoms. So we like that attribute to the drug. With that, you may get some stimulation of M1 receptors in the GI system, some of the AEs that we see, which are greatly attenuated by the addition of the trospium. And by the way, the effects on, let's say, nausea and vomiting emesis in our studies are not all that different than SSRIs, which are arguably some of the more safe drugs that people prescribe. So we like this dual agonist effect. We also like the fact that it's a direct-acting effect. It's not dependent on the release of acetylcholine, which the allosteric compounds generally are -- require that. Now at the end of the day, I hope this doesn't end up be a Coke and Pepsi kind of scenario, but it will depend on the clinical data. We need more clinical data from KarXT, we need more clinical data from the Cerevel compound before we're ever going to be able to evaluate. You can't take a Phase Ib study or even a Phase II study and say, okay, how do these drugs look? They're both active. And some data, you can look at it one way or the other, we see a very rapid response, right, two weeks, very robust statistical data if you look at our paper that we published in the New England Journal of Medicine earlier this year. So I think it's going to take a good amount of Phase II and frankly, even Phase III data and maybe even post-launch data before we're ever going to really be able to compare. But here's the key thing. And I think I definitely agree with Ray on this point, maybe not as other points, but on this point, I agree, we need more drugs. This is a very forgiving indication. There will be patients, I can assure you that will respond, hopefully, very well to our drug and maybe patients that don't respond. Therefore, we need new drugs, new mechanisms. And remember, at one point, we had drugs, 5, 6, 7 marketed products that fundamentally all worked the same way, and they were all blockbuster drugs because there are interindividual differences in response that we can't predict that we learn empirically by trying one drug in a patient that doesn't work as well, we try another one. I'm also very excited about our ARISE trial, which will start later this year, in which we're adding to patients with schizophrenia who have residual symptoms an inadequate responders. That could be as many as 70%, 80% of patients we're adding KarXT to their standard of care, and I am very optimistic that we're going to see improvements. And we're going to start thinking about schizophrenia like we think about cancer, we're probably really helping these patients is going to require more than one agent moving forward.

Neena, just -- and thank you, Steve, for that perspective. And I do agree with you that empiricism at the end of the day will really guide our approach. And -- but it's terrific to see that we're all working on novel therapies, which are desperately needed. And we'll obviously know more as we continue to get more data to elucidate the potential of these therapies to provide the unmet need that exists in these patient populations.

Absolutely. So I just want to ask quickly about dementia-related psychosis as well. Because I know that's an indication that both of you are looking at also. So I guess we could talk a little bit about just kind of the mechanistic rationale on why you see kind of promise for these drugs in the DRP population. And then I guess just also how you're thinking about drug or clinical trials in that population, just given what we did see earlier this year with Acadia.

What I'd like to remind people that we discovered the antipsychotic properties of Xanomeline in DRP. So we did a study at Lilly, looking at the cognitive enhancing, memory enhancing effects of an M1 agonist. At that time, we weren't even 100% certain how potent our drug was at the M4 receptor. We now know it's very potent at the M4 receptor. In fact, more potent there than the M1 receptor. And that's where we saw to our surprise, it was a serendipitous observation that if patients had psychotic symptoms, behavioral symptoms at baseline, they went away pretty quickly with treatment. And then when we looked at the emergence of those symptoms, so call it a kind of a relapse prevention sort of strategy over the six months, we saw nice dose-dependent reductions in the emergence of these psychotic symptoms versus placebo over that six months. That's where the antipsychotic effects of muscarinic agonists in general were discovered, and that led to work at many companies and academic institutions on this whole MOA, if you will. So we're optimistic this will work, assuming tolerability is good, and we think it will be in patients with DRP. So again, this is something that Karuna is pursuing. We believe based on that large Phase II study, 343 subjects, six-month study that this strategy should work. Remember, no sedation, no weight gain, no EPS, none of the problems that these elderly people get when they're treated with antipsychotics, which unfortunately, they're treated with those today because we don't have any drugs indicated for that indication. So the design of the trial has to be done well. It has to be well powered. We'd like to focus in on the most common form of DRP, which occurs in people that have Alzheimer's disease. And so we'll make sure -- but we're also interested in DRP and Parkinson's and things like frontotemporal dementia, multi infarct dementia et cetera. But we have to really explore its potential in Alzheimer's disease-related DRP.

Yes. And thank you, Steve. Just -- I know we're running short on time, but just to add to that, we're very excited about pursuing that population as well. Obviously, the efficacy is critical as Steve has mentioned, but the side effect profile and the tolerability will be even more important as well. The regulatory path forward seems to be something that we need clarity on. So we'll be getting that clarity from the agency as we move forward. But I think a great day for patients who suffer from dementia-related psychosis in the future when we have these therapies available to them.

I think the unmet medical need here cannot be overstated, as Ray indicated. This is -- we've got 6 million people with Alzheimer's disease in the US alone, 40% to 50% of them will develop DRP, having lived through this in my own personal experience with one of my older relatives, I can tell you it's a horrific scenario. And the treatments that we have today are not good at all.

Absolutely. That was super helpful. So I want to bring Marcio back in for the last minute here. So you, of course, have your lead program is a GABA-A receptor PAM that's in development for multiple forms of depression, some neurological disorders as well and some other psychiatric indications. So I guess, can you just talk a little at a high level about how PRAX 114 is differentiated from other GABA-A receptor PAMs and then just the overall kind of development strategy in terms of the different indications that you're pursuing?

Absolutely. So a couple of things there, right? I mean, I think it starts with the molecule itself and its properties. We know a lot about GABA-A PAMs, as Steve mentioned at the beginning, there was like many ideas and many developments, some of them fairly successful on disease space, others not so much. Our hypothesis when backed up by a lot of preclinical and clinical data now is by targeting preferentially, the access synaptic receptor, we would be able to one dose these patients, I would say, more in a standard manner to what they need in terms of exposure, and that's something that's key and is being problematic in this space and not having like what is sedation or exaggerated sedation and exaggerated somnolence of this patient, especially next day, since they have to operate, hopefully, their normal life or as close to normal as possible. The other intrinsic property of this molecule that allow us to those patients is very little, I would say, food effect. If anything, a little bit increase in the exposure without food. For a drug that taken before bed time, I couldn't express how important that is, right? So we're taking the drug before going to bed, patients with depression, they normally have appetites disturbance, and it's something we forgot oftentimes. So too little or too much food sometimes is a problem there and just saying, I'll go ahead and take like a cheeseburger to bed is not exactly a great value proposition to begin with. So being able to get the exposure that is needed, drive the effects and continuously treat standing the episodes. And that's another, I would say, approach here. In terms of the regulatory, we are just talking about GRPs like how that is not a lot there on the -- how to develop, I think here is a little bit different. There is a very clear pathway to develop drugs in depression, one that the FDA confirmed with us in terms of the episode of depression, lasting on their view between three and six months, I think we're more on the six months average duration here. And until that episode is well controlled, the need for pharmacological treatment, I would say, unfortunately, for these patients to be present. There is no evidence preclinical or otherwise that GABA-A PAMs, like 114, can just be given for a little period of time and then disappear and that symptoms will not come back. So our approach for development is for the treatment of the episodes. And that's what we are doing now with study 213, our area where we are dosing patients for four weeks continuously or intends to dose for longer as a follow-up later. It gives a great balance here in terms of the primary endpoints being at day 15. You'll go back to our very first conversation about placebo response tends to maximize towards the end of treatment, but the end of the treatment being at day 28. So we're incredibly bullish about AMTT. The readout is early next year. As we mentioned publicly before, it's a trial that takes all the controls we discuss in this panel into effects, I would say, full-blown effects. We have an adjunctive therapy trial as well ongoing right now, and they're going to be complementary for a potential package then being positive, and we're running a second Phase II to trial after that. The second psychiatry indication is PTSD that we are about to start the trial. Incredibly excited there as well. Very similar. I think the thematic here is unmet need is so high in psychiatry in general, you're looking to PTSD is no difference. By using the same level of control, we just talked about by selecting the right patients for these trials and having a drug that really impact significantly, in this case, CAPS-5 and the symptoms in general of PTSD, we believe we can bring a lot of value to these patients and to the company and all its shareholders alike. So very excited with all we are doing. And again, looking forward to continue the conversation.

Fantastic. I know we've run a couple of minutes over. I do have one quick question just to kind of wrap everything up. But obviously, these are all large indications that you guys are pursuing. So how are you thinking about kind of the go it alone approach from a commercial perspective versus partnering and looking for kind of help from a large pharma?

I was just going to say, we publicly disclosed that we're going to commercialize our product in the US ourselves. We believe that's possible. And in fact, frankly, we think we want to be intimately involved in that for obvious reasons, but we will see partners outside the US, and those discussions are underway. But I think it's doable, and we're excited about the prospect.

Thank you, Steve. Neena I was just going to say that we're a fairly young company. We're evaluating that as well and keeping all our options open. So stay tuned for that and in the future.

In our approaches, I would say [indiscernible] is more hybrids between the two [indiscernible]. Outside of the US, we believe that the market is probably more of a distraction for us right now to say bluntly. So looking for people that are good at what they do that can express the value there. It's going to be more and more of a strategy. In the US, it's whatever gets the most of the drug to the patients, and it might be someone else or might be a hybrid between us and someone else or ourselves alone. We continue to explore that, but the real guiding principle here is market share matters, excellence to patient service matters, and the market is changing quite a bit, which used to be a very PCP heavy market is actually moving towards an interesting concentration, and we're looking to that and we're collecting data as we speak towards making the best important decisions that generates the most value.

Awesome. Well, thank you so much, guys. I apologize for running a few minutes over. I appreciate the extra time, and it's been a fantastic discussion. So thank you so much again. Really appreciate you participating, and enjoy the rest of the day. Thanks again.