Title

Presentation

ACADIA Pharmaceuticals Inc. beats earnings expectations. Reported EPS is $0.2, expectations were $0.14.

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Third Quarter 2024 ACADIA Pharmaceuticals Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Al Kildani, Senior Vice President, Investor Relations, and Corporate Communications. Please go ahead.

Al Kildani : Thank you. Good afternoon and thank you for joining us on today’s call to discuss Acadia’s third quarter 2024 earnings results. Joining me on the call today from Acadia are Catherine Owen-Adams, our Chief Executive Officer, who will provide some opening remarks, followed by Brendan Teehan, our Chief Operating Officer and Head of Commercial, who will discuss our strong commercial franchise’s DAYBUE and NUPLAZID. Also joining us today is Liz Thompson, Ph.D., Executive Vice President, Head of Research and Development, who will provide an update on our pipeline program, and Mark Schneyer, our Chief Financial Officer, will review the financial results. Catherine will then provide some closing thoughts before we open up the call for your questions.

We are using supplemental slides which are available on our website’s events and presentation section. Before proceeding, I would like to remind you that during our call today, we will make several forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, future results, and financial guidance, are based on current information, assumptions, and expectations that are inherently subject to change and involve several risks and uncertainties that may cause results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC.

You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today’s date, and we assume no obligation to update or revise these forward-looking statements as circumstances change, except as required by law. I’ll now turn the call over to Catherine for opening remarks, beginning on Slide 4.

Catherine Owen-Adams : Thank you, Al. Good afternoon, everyone, and thank you for joining us. By way of introduction, I’m Catherine Owen-Adams, and it’s an honor to be speaking with you as the new CEO of Acadia. I want to take a few moments to share a little about my background and how it aligns with Acadia’s goals and explain why I felt so drawn to join Acadia. So, begin, I have over 30 years of experience in the pharmaceutical industry. Most recently, serving as senior vice president and general manager of the U.S. business at Bristol Myers Squibb, and prior to that, leading their international major markets business. Before that, I spent 25 years at Johnson & Johnson, working in both their pharma and med tech businesses in the EU and U.S. Throughout my career, I’ve led teams that have successfully launched and managed drugs across many therapeutic areas, including rare disease and neurology.

In the last five years, I’ve had the privilege of being involved in nine drug launches in the U.S. and internationally, including a number of successful rare disease launches. I joined Acadia because I was excited by the foundational business and the future potential of the pipeline. I’m both inspired and humbled to have the opportunity to lead Acadia in advancing therapies that can make a real difference in people’s lives. As I look toward that future, I see incredible opportunities ahead to grow our current portfolio and advance the innovations in our pipeline, including two late stage assets serving new communities of patients with high unmet medical needs. I see significant potential to enhance shareholder values as we continue to execute and evolve our commercial priorities and advance our pipeline assets.

Please turn to Slide 5, where I will elaborate a little on each of these areas and underline why I chose to join Acadia against our three core pillars. First, on the commercial front, we have two growing franchises, which together, based on our Q3 results, are now tracking to over $1 billion in annualized sales, an extraordinary milestone for a biotech company of our size. Second, our robust pipeline includes two late stage assets in Prader-Willi Syndrome and Alzheimer’s disease psychosis, complemented by many promising early stage programs. And third, our financial strength is fueled by our positive cash flows and a growing cash balance, which now stands at $565 million. I’ll now briefly highlight our commercial and R&D pillars before handing off to our leaders, who will dive deeper into the details.

Turning now to Slide 6, beginning with DAYBUE, where we’ve had another solid quarter generating sales of $91.2 million, up 36% year-over-year and 8% sequentially. I’d like to take this opportunity to share some high-level observations on DAYBUE, based on my experience with multiple DAYBUE launches, and to give some context for our launch results to date. Six quarters in, with $429 million generated in sales, I think we can say this has been a successful launch. Every rare disease launch is unique, but I have observed some key commonalities with DAYBUE. They are complex, highly situational, and involve coordination of lots of moving parts within the healthcare system. Especially important is the focus on the patient’s journey, both to start and stay on therapy.

And concentrating on how this journey is fully supported. We’ve reached a steady state of new patient starts with DAYBUE, and have strengthened our focus on growing this in the next several quarters. This will take time, and growth will be driven by continuing to lean in to the breadth of our clinical data, illustrating and describing for HCPs the impact DAYBUE has on patients, bringing to life the scoring systems used in clinical trials, and generating real-world experience and insights from our ongoing local studies. We will also continue to focus on the early part of the patient’s journey, as families and doctors work together to find the dose for their child. I’m extremely confident about the potential for DAYBUE growth, and further penetration beyond our series, into the diagnosed patients who can benefit from its impact, both in the U.S. and beyond.

I’ll now turn to NUPLAZID, which has had an outstanding quarter, with net sales of $159.2 million, up 10% year over year. These results were achieved on the basis of underlying trends we described last quarter, including the impactful real-world evidence studies and last year’s label clarification, combined with what we now see as a stable Parkinson’s disease psychosis market. In August, in collaboration with Brian Reynolds, we announced our unbranded [indiscernible] Parkinson’s campaign to raise awareness of Parkinson’s-related hallucinations and delusions. We are excited about the early impact of this campaign that we’re seeing with patients, caregivers and HCPs. Separately, we launched a new closed direct-to-consumer campaign which we believe will help us accelerate growth for NUPLAZID in 2025.

Brendan will discuss these campaigns in more detail. Turning now to Slide 7 for a discussion of our pipeline. In addition to our successful commercial brands, Acadia’s pipeline is an important reason why I was so excited to join the company, as I believe the pipeline is truly underappreciated. We have a Phase 3 asset in ASCP 101 that’s being evaluated as a treatment for Prader-Willi syndrome, a rare and debilitating genetic disease with no FDA-approved treatment — where patients often have an unrelenting drive to eat called hyperphagia. Behind that in our pipeline is ACP-204, our second-generation 5-HT2A blocker while we are currently conducting the Phase 2 portion of the program. This exciting asset has the potential to extend and expand our neuropsychiatry franchise.

Both of these drugs will allow us to offer new options for patients in underserved communities with patient numbers larger than our current portfolio. We also have a number of exciting earlier-stage assets. We look forward to discussing more in the future as they advance in their development. We’re also actively pursuing opportunities to expand this pipeline further through business development, which remains a strategic imperative of company and an important focus for me as we look to set our growth trajectory for the future. I’ll now turn it over to Brandon to discuss our commercial performance with these brands beginning on Slide 8.

Brendan Teehan : Thank you, Catherine. Let’s take a look at both our DAYBUE and NUPLAZID franchises. Starting first with DAYBUE on Slide 9. In Q3, we continued to drive growth in our DAYBUE business with $91.2 million in net sales. That growth was primarily driven by continued penetration of the prevalent population and increased demand as measured by dispense rates among our continuing patients. During the quarter, 923 patients received paid shipments, which compares to 917 receiving shipments in Q2 and 871 in Q1. Importantly, the average number of bottles each patient received increased as our patient cohorts mature and begin reaching a dose that they will likely remain on longer term. Weekly patient discontinuations in the quarter were similar to Q2 and continue to be down significantly from Q1.

Importantly, we now have over 60% of all active DAYBUE patients on treatment for 10 months or more since treatment initiation. This is significant as the persistency curve for patients out past 10 months on treatment is flattening, suggesting a strong enduring patient base benefiting from treatment over time. In fact, looking out 12 months and beyond, we see persistency rates at 50% or higher. This compares favorably to other chronic therapies at similar stages. Turning to prescriber dynamics. We have continued to expand the breadth of prescribers with now approximately 800 unique prescribers having written a prescription for DAYBUE. We have further increased our penetration of the 21 RETT centers of excellence, or COEs, and we see an increasingly large proportion of new starts coming from non-COE high-volume institutions as well as community-based practices.

This is important as approximately 70% of all RETT patients are treated outside of COEs. We are focusing on driving depth of prescribing among those HCPs who have prescribed DAYBUE to one or two patients where we know they have additional patients under their care who can also benefit from DAYBUE. Let’s discuss our ongoing efforts to drive future adoption. Please turn to Slide 10. As Catherine mentioned, to expand treatment to more of the prevalent RETT patient population, we are focusing on further educating prescribers about DAYBUE ‘s efficacy and the real-world day-to-day benefits patients and their families are experiencing. This is especially important outside of COEs where HCPs do not have as deep an understanding of RETT syndrome or DAYBUE ‘s efficacy profile.

These caregiver and HCP reported real-world benefits include improved quality of life, improved mood, more purposeful use of hands, increased alertness and better engagement in conversations and improvement in both verbal and nonverbal communication skills which, among other benefits, are the driving force behind continued penetration of the RETT population. As an example of these tangible daily benefits, I was excited to speak to one of our caregivers at a recent program about what her daughter is now capable of doing on her own now that she’s been treated with DAYBUE. She shared that since her 8-year-old daughter started treatment. She can now grab and hold on her own everyday items like utensils and other objects, including much to her delight ice cream cones.

Her daughter has become more expressive and increase her vocalization improving her overall ability to communicate as well. Other caregivers tell us about their loved ones improved ability to communicate non-verbally with their Tobi iGas device. Each of these benefits are helping create better connections with RETT patients and their caregivers. These are just a few very tangible and exciting examples of the real-world benefits we want all HCPs and caregivers to hear, understand and pursue. We are sharing these stories within the RETT community where these types of improvements will surely resonate. One of our best sources of real-world efficacy is our ongoing LOTUS observational study that continues to yield valuable insights for both HCPs and families about the number and breadth of clinical benefits caregivers are reporting in their loved ones as well as their GI management experiences.

We are sharing this data with HCPs to allow them to make more informed prescribing decisions for their RETT patients. In summary, our primary focus for growth is on demonstrating Daybue’s efficacy and real-world benefits in our sales materials, peer-to-peer engagements and our caregiver programming, sharing these benefits with all HCPs and families. We continue to increase penetration of the RETT population and are building a strong and enduring patient base. We’re confident in our growth outlook based on the current rate of new patients entering at the top of the funnel combined with a growing base of enduring patients. And we plan to continue to drive growth while helping HCPs and families better manage tolerability challenges and improve the early treatment journey.

With now over 30% of the 5,000 and growing diagnosed RETT patients in the U.S. having started DAYBUE, we have a substantial opportunity ahead of us to continue growing the brand. Now let’s turn to NUPLAZID on Slide 11. Q3 was another outstanding quarter for the NUPLAZID franchise with $159.2 million in net sales representing the highest ever quarterly sales for the brand with 10% growth year-over-year. We achieved this growth by increasing active patients on NUPLAZID across all market segments. This strong performance in the quarter follows what we’ve seen throughout the year as we’ve grown demand quarter-over-quarter throughout 2024. Q3 volume growth was driven by two key initiatives that have been the focus of our discussions with HCPs. First, leveraging the published real-world evidence demonstrating the important differential outcomes, Parkinson’s disease psychosis patients have experience with NUPLAZID, including a lower overall risk of all-cause mortality versus all other off-label antipsychotics, most notably low-dose cotyopine [ph] and educating the market about last year’s label clarification which helps HCPs understand that they can treat Parkinson’s disease patients experiencing hallucinations and delusions with or without comorbid dementia.

These two levers helped us increase HCP conviction in NUPLAZID as their first-line therapy of choice for PDP, leading to a higher demand and market share. Looking at the broader market, we are seeing a return of Parkinson’s patients as measured by in-office visits as well as long-term care resident census numbers. This market dynamic supports continued future growth for NUPLAZID. We are excited about NUPLAZID’s Q3 results, which were achieved in advance of the benefits we expect to see from our recently launched direct-to-consumer campaigns, which I’ll discuss now. Please turn to Slide 12. As we announced in August, we launched an unbranded disease state education campaign featuring Ryan Reynolds and his mother, Tammy, focused on the non-motor symptoms of hallucinations and delusions that can often accompany Parkinson’s disease.

The early results of this disease state awareness campaign suggests it is among the most successful campaigns ever in this category. Here are just a couple of the impressive early measures demonstrating this. Over 3.9 billion media impressions in just the first eight weeks or so of airing and nearly 200 media placements, including approximately 75% with headline mentions of the campaign. These are very encouraging early indicators. Concurrently, we also launched a branded campaign featuring NUPLAZID as the first and only treatment for PDP. In just the first two weeks post campaign, we saw a nearly threefold increase in Parkinson’s disease patients who visited Nuplazid.com and subsequently visited a PD specialist. As a reminder, we expect the vast majority of the benefit of these campaigns to be seen in 2025 as new patient schedule appointments with their specialists and seek treatment for hallucinations and delusions with NUPLAZID in the months ahead.

In summary, we’re excited about the growth we’re seeing in NUPLAZID and we’ll look to capitalize on that momentum with our consumer campaigns in the weeks and months ahead. I’ll now turn it over to Liz on Slide 13.

Liz Thompson: Thanks, Bren. Please turn to Slide 14. I’d like to start today highlighting some good news on the global expansion front. We recently received approval from Health Canada for DAYBUE as the first and only approved therapy for patients in Canada living with RETT syndrome. Our next focus is in the EU, where we are targeting a submission of the marketing authorization application in the first quarter of next year. We’re now building up our team and expertise in Europe in order to plan for that launch. In addition to European expansion, we’ve had productive conversations with PMDA, the regulatory agency in Japan regarding the potential to bring DAYBUE to patients there. We very much look forward to continuing to collaborate with PMDA and Japanese experts to progress our program.

Continuing on regarding support of our marketed medications, I’d also like to touch upon some of the analyses that we continue to generate and share about NUPLAZID on Slide 15. At the recent movement disorder society meeting, we presented data on sedation and sleep, both sleep quality and the avoidance of the unwanted sedation are key areas of interest for physicians treating Parkinson’s disease psychosis. In some of the studies with Pimavanserin across healthy volunteers, patients with PDP and patients with neuropsychiatric symptoms related to a neurodegenerative disease, we’ve included various exploratory measures of sleep. Taken together, the data across these trials suggested that Pimavanserin may be associated with low levels of liquidation and other fleet-related adverse events.

Just last week, we also presented data at the site Congress meeting, examining patients in our PDP studies who had complete resolution of their hallucinations and delusions. The literature suggests that symptoms of Parkinson’s disease psychosis will tend to worsen over time, if left untreated, but there’s little information about the impact of treating earlier versus later. In an integrated analysis, including 135 patients with PDP, of whom 21 reported no symptoms after receiving Pimovanserin, treatment initiated following after onset flotation and dilution was associated with a higher probability of achieving a complete response then was later treatment. Turning to Slide 16, I’ll discuss our late-stage clinical programs starting with the ACP-101 program in Prader-Willi syndrome.

As a reminder, Prader-Willi is a rare genetic neurobehavioral disorder, roughly 8,000 to 10,000 patients in the U.S. are living with Prader-Willi. As we’ve described before, the defining characteristic is hyperphagia, which is an unrelenting hunger. This manifests very early in life and can lead to obesity and myriad complications like Type 2 diabetes or heart disease, as well as behavioral changes like anxiety and aggression. And unfortunately, life expectancy is currently only around 30 years old, largely due to cardiovascular disease. Our Phase 3 study called COMPASS PWS is currently enrolling. This study is global, multicenter, randomized, double-blind and placebo-controlled. We built on prior Phase 2 experience in terms of both dose and endpoint selection.

We’ve been truly pleased with the enthusiasm we are seeing in the Prader-Willi community, and we look forward to continuing to work with them and clinical experts as we advance through the study. I anticipate providing more specific guidance on timing early next year. Now turning to our second late-stage clinical program, ACP-204 on Slide 17. Here, we have utilized our extensive neuropsychiatry expertise and pathway understanding to develop a next-generation 5-HT2A compound designed to build upon the strong product profile of NUPLAZID. In particular, to date, we’ve seen no sign of QT prolongation at the dose of year study, a wide dose range, supporting the potential for a dose equivalent to approximately twice the approved NUPLAZID 34-milligram dose and steady PK achieved in less than half the time of NUPLAZID, projecting the potential for an earlier onset of activity.

Currently, ACP-204 is in development as a potential treatment for Alzheimer’s disease psychosis in a master protocol that includes a Phase 2 and two Phase III. The program is global and contained randomized, double-blind, placebo-controlled studies. The Phase 2 is over 300 patients. We continue to plan that the two Phase 3 studies will be of roughly equivalent five. Once the Phase 2 study data are collected, we’ll analyze and report results by which time the two Phase 3 studies will already be underway. I look forward to also providing more specific timing guidance on this program early next year. And now I’ll turn it over to Mark for a financial update beginning on Slide 18.

Mark Schneyer : Thank you, Liz. Let’s review our quarterly financial performance on Slide 19. In the third quarter, we recorded $250.4 million in total net sales up 18% from the third quarter of last year. DAYBUE net product sales were $91.2 million in the third quarter, up from $66.9 million in the third quarter of last year. Sequentially, DAYBUE sales were up 8% from the second quarter, comprised of 4% volume growth and 4% net price growth. NUPLAZID net product sales were $159.2 million in the third quarter up 10% versus the prior year’s third quarter comprised of 7% volume growth and 3% net price growth. Gross to net for NUPLAZID was 24.9% in Q3. R&D expenses decreased to $66.6 million in the third quarter of 2024 from $157 million in the third quarter of 2023.

The decrease in research and development expense was related to a reduction in business development expenses as we made the $100 million upfront payment to Neuren for ex North American rights of trofinetide in Q3 of last year. SG&A expenses increased to $133.3 million in the third quarter of 2024 from $97.9 million in Q3 2023. The increase was mainly due to the ongoing NUPLAZID consumer activation campaign as well as onetime costs related to our CEO transition. We ended the quarter with a cash balance of $565.3 million, which increased $64.4 million versus the prior quarter. I also have an update to share on our rare pediatric disease priority review voucher. Yesterday, we entered into an agreement to sell the PRV for $150 million. We expect this transaction to close in the fourth quarter.

And as a reminder, as part of our licensing agreement with Neuren for trofinetide, we will own Neuren one third of the net proceeds received from this transaction. Please turn to Slide 20 for a discussion of our latest 2024 financial guidance. For DAYBUE, based upon our third quarter results and the dynamics Brent described, we are narrowing our guidance range for debut and now expect net sales of $340 million to $350 million. For NUPLAZID, we are narrowing our guidance range to the high end of our previous range and now expect net sales of $600 million to $610 million. As Brent said earlier, this guidance does not rely on a meaningful impact from our recently launched DTC campaigns, the benefit of which will largely be achieved in 2025. We are also narrowing our full year NUPLAZID gross to net guidance and our new guidance range is 26% to 27%.

On the expense side, based upon year-to-date results, we are reducing our R&D guidance to $280 million to $290 million and increasing SG&A guidance to $480 million to $495 million. Lastly, we are raising our cash guidance range to $600 million to $640 million reflecting our expectations for our operational performance. This range does not reflect the anticipated net proceeds from our sale of our PRV. And now I’ll turn the call over to Catherine for closing remarks.

Catherine Owen-Adams : Let’s now please turn to Slide 21. As we head towards the end of the year, our business today is built on a strong foundation, and I am excited for us to drive further growth in 2025 and beyond. We will continue to execute on the significant opportunity that remains in front of us for both DAYBUE and NUPLAZID to drive that growth. We will also work diligently to enroll our two late-stage trials as well as our pipeline programs and potential for business development deals. We’re pleased to be generating sustainable and expanding cash flow from operations to fund future growth. As I stated upfront, I truly believe that the deeper dive into the company, the more enthusiastic I am about Acadia’s incredible potential for future growth. With that, I’ll turn it over to the operator for our Q&A. Operator?

Operator: [Operator Instructions] And our first question comes from Gregory Renza with RBC Capital Markets. Your line is now open.

Gregory Renza : Great. Good afternoon, Catherine and Acadia team. Congrats on the progress. Catherine, welcome aboard. Thank you. Maybe to start, maybe I’ll refrain from asking a question about Ryan Reynolds, but you gave us some interesting just color on the rationale and what you saw the attractiveness of joining Acadia. You mentioned business development and certainly the early-stage pipeline, I’m sure is of interest to us. Just wondering if you could just add a little more color about how break down the strategic framework, what the capabilities are for Acadia to sort of welcome in some of those business development assets as well as really nominating and fleshing out the early-stage pipeline that was of interest to you.

Catherine Owen-Adams : Great. Thanks for the question, Greg. So yes, I’ll ask Brent to talk about Ryans at a more appropriate point. But I will focus on business development. So yes, in terms of the focus of growth for the company, I believe business development is going to play an important role in our future. As you know, it’s played an important role up until now in our growth with the acquisition of trofinetide. And so as we think about the framework that you asked around. Obviously, we have a very strong footprint in neuropsychiatry and continue to develop drugs in that area, and I believe that will be part of our future and possible additional business development areas. Rare disease, we now have year and half years under our belt, strong, successful launch with DAYBUE and continues to be a strong focus for the company.

Beyond that, I’m working with the team to discuss further areas of interest, and we’ll be sharing that probably at a slightly later date. But just to confirm that we are strong financial cash position, as Mark has outlined, and we feel very strongly that we are in a great position to look at business development deals as they come forward in the next few months.

Gregory Renza : That’s helpful. Thank you. And maybe a question for Brendan. Just on the latter part of 2024 with respect to DAYBUE and as you think about coming into the holiday season, and we reflect on some of the December to January to February, patient visits and DAYBUE utilization from patients and families, how should we be thinking about some of the patterns when it comes to us entering Thanksgiving and the December holiday season and how it relates to transitioning to 2025? Thank you again. And congrats.

Brendan Teehan : Sure, Greg. Thanks so much for the question. And just as a reminder, this will be just our second first quarter transition as we head into 2025. And a lot has changed in the DAYBUE franchise since then. First of all, we have a much better understanding of the reverification process and requirements for our patients. And we’ve built out those capabilities both within our hub but also our family access manager team that’s working very closely with each of our families during that transition. I think a very important difference is our patient mix heading into 2025, which is quite different than the mix we had in the first quarter of 2024. As I mentioned in our prepared remarks, we have over 60% of our current Daybue debut patients currently on treatment for 10 months or longer which obviously wasn’t even possible in the first quarter of 2024.

There were far less than 10% of patients at that time that had been on therapy that long. So I think that provides a much more dependable base of business for first quarter demand. In terms of patient dynamics, I would think that just as we’ve seen in Parkinson’s disease, I don’t think that patients tend to schedule as many appointments in January. So that wouldn’t be a surprise to me. But otherwise, we fully expect to grow patients and sales in 2025 over the longer period.

Gregory Renza : Fantastic. Thanks so much.

Operator: And the next question comes from Jason Butler with Citizens. Your line is now open.

Jason Butler : HI thanks for taking the questions. Congrats on the quarter. I guess just a couple on NUPLAZID. Can you give us a sense of the profile of patients that are initiating therapy now in the context of the branded and unbranded campaigns? I guess — and also in terms of the label change. Are you seeing more older patients initiated on therapy versus — to what extent are you seeing patients come on board earlier in the diagnosis or early in the psychosis symptoms?

Catherine Owen-Adams : Thanks for the question, Jason. I’m going to let Brian answer that for us.

Brendan Teehan : Thanks, Jason, for the question. I would say, first, we’re in very early days post launch of both of those campaigns. But I can tell you from what we’re seeing for patient dynamics thus far, the mix of prescribers still seems to reflect what we see for — from what we saw in the second and third quarter. So we’re seeing the same kind of prescribers that are our targets and a similar number of new physicians that are new to the brand. In terms of the age of our patients, it’s been largely what we would expect. I think the caregiver campaign has helped to help connect families to identify perhaps more readily subtle changes that they’re seeing in their loved ones. But I don’t think we’ve seen a substantial change in the age of our patients so far.

Jason Butler : Okay, great. Thanks for taking my question.

Operator: And our next question comes from Ami Fadia with Needham & Company. Your line is open.

Unidentified Analyst : Hi, this is Poorna [ph] on for Ami. You’ve suggested that you’ll be having $1 billion in sales in 2025. Just wondering are you anticipating any decline in DAYBUE sales relative to 2024? What is like the mix of the two products? Thank you.

Catherine Owen-Adams : Thanks, and I’ll let Mark up that for?

Mark Schneyer : Yeah. So let me just clarify that. Thanks for the question. I think what we’re saying is right now, we have $250 million in sales in the quarter and that equates to a run rate of $1 billion. So we’re not, at this point, suggest guiding yet for the full year 2025. But we’re pleased to kind of have a run rate milestone that’s over $1 billion, and then we’ll guide into next year. But certainly, at this time, can share that we expect growth in both franchises and growth over that.

Unidentified Analyst: Thank you.

Operator: And our next question comes from Marc Goodman with Leerink Partners. Your line is open.

Unidentified Analyst: Hi. This is Padma [ph] on for Marc. We have a question regarding DAYBUE. Regarding the 50% or 60% of the patients remaining on therapy — do we know the proportion of patients who respond to the treatment and actually demonstrate clinical benefits? Should we assume that all of them at this point are responders and basically benefit from the therapy? And on the flip side, I wonder if you could provide us with more color on the discontinuation data. And share with us what is the key factor that really drives the discontinuation of therapy? Is it the profile? Or is it the lack of treatment effect? Thank you.

Catherine Owen-Adams : Thank you, Padma. I think I’m going to ask Brendan to take us through those two questions.

Brendan Teehan : Sure. No problem. And thank you for the question. First, just to confirm, yes, we have over 60% of patients at 10 months or longer. And what we see there is the flattening of the persistency curve out to 15 months for the latest cohort that we’re looking at, which is very encouraging. What that would suggest to us is that patients have worked through the treatment journey and have found the dose that they’re settling in on and are benefiting. Our family access manager team and our clinical nurses at the home would confirm that these patients are benefiting and continuing. So I think that answers that question. The second question around discontinuations, we still see that the majority of discontinuations happen in the first one or two fills on — of treatment. And that is consistent in terms of the reasons for discontinuation tends to be diarrhea or vomiting and not so much a lack of treatment effect. It’s really the tolerability in the early sales.

Unidentified Analyst: Thank you.

Operator: And our next question comes from Tess Romero with JPMorgan. Your line is open.

Unidentified Analyst: Hi, team. This is Caroline Potter [ph] on for Tessa Romero with JPMorgan. Thanks for taking our questions. So first, in your prepared remarks, you had mentioned that the DAYBUE launch is now at steady state of new patient flow. We were just curious if you could just clarify the statement. Does this mean steady net ads? And then you mentioned it will be a focus to grow this over the next few quarters. Is there anything that has fundamentally changed in your strategy to accelerate new patient starts and are you considering changing or pivoting any facets of the launch strategy going forward? Thank you.

Catherine Owen-Adams : Thanks, Caroline. I’ll take some of that in terms of the perspectives that I’ve developed with the team over the last six weeks. So just to go back to the original part of the question. In terms of the steady state, yes, we’re seeing a steady state of patient ads after a very strong start to the DAYBUE launch. And that’s not unusual in rare disease launches. As you know, you see a big burst of patients out the door with the high unmet medical need and then tend to sort of go to a more plateau phase. But we are looking to see how we can recharge that growth and start to see more patients coming in the top of the funnel. And we believe that there is a strong possibility of driving that growth. And let me just tell you what the areas that we’re focusing on in order to achieve that.

The first is efficacy. What we’ve learned over the last six quarters is that the scales that we use in our clinical trials, the RBI — they need to be brought to life for physicians, and they need to understand for their patients the impact that DAYBUE can promise them for their changes in cognition, they change in communication, they change in handwringing. So bringing the efficacy to life is our first real focus as well as starting to enhance the data that we’re generating around the LOTUS study and ensure we’re amplifying this message to physicians and helping them understand the longer-term impact of DAYBUE on their patients. The second Brendan just sort of mentioned, which is managing the patient journey, with all rare diseases, we need to really start thinking about the patient journey that surrounds the patient when they start on therapy and as they continue to persist.

And as Brend has indicated, we’re really going to start focusing on those first few cells to ensure that patients are guided through that first process. But also, we now have a strong mature cohort of patients towards the end of the treatment right out beyond 15 months now and ensuring that our families are supported throughout that whole journey. And then finally, we’ve talked about the penetration of DAYBUE into the currently diagnosed patient population of 30%. A couple of things. First of all, we’ve seen the diagnosis rate increase since the launch of DAYBUE. We’ve seen that increase by around 10%, which obviously allows us to go after more patients and make them aware of the opportunities with DAYBUE. And secondly, 70% of our patients are treated outside our COEs. So we see a strong opportunity for growth outside of our centers of excellence.

So if I compound those three factors, enhancing the efficacy really focusing on the patient journey at the beginning and then driving the growth beyond our COEs, I feel very strongly that we will see strong DAYBUE growth as we move into 2025.

Unidentified Analyst: Great. Thank you so much.

Operator: And the next question comes from Joe Beatty with Baird. Your line is open.

Joe Beatty : Hi, thanks for taking the question. What do you think of the ratio of the patients on therapy to the number of unique prescribers and I guess what I mean is that looks like there’s been about 1,500 patients who have started therapy at some point with about 800 unique prescribers. So that’s a little bit less than two patients per prescriber and perhaps I would have expected it to be a little bit more concentrated?

Catherine Owen-Adams : Thanks, Joe. That’s a great observation and one that I know we’ve been looking at. So Brend, do you want to share a little bit more about that?

Brendan Teehan : For sure, Joel. Thanks for the question. And I think it’s right. There is a concentration and a long tail. And I think for a first mover in a rare disease area, the centers of excellence still have the vast majority of prescribers that have multiple referrals that are written for DAYBUE. High-volume institutions also have a concentration of physicians that have three or more referrals that have been written and we’re continuing to penetrate those. In the community, as we’ve gone further and further into the community, it is not uncommon to see a position that may have one patient or one or two patients that they see less frequently. And there, you see kind of a long tail of not necessarily pediatric neurologists anymore.

You’re seeing primary care physicians and some pediatricians who likely will have one patient to offer. We are, however, focused on those physicians that have written one or two prescriptions for DAYBUE, and we know they have additional patients for follow-up.

Joe Beatty : Thank you.

Operator: And the next question comes from Keith Tapper with BMO Capital Markets. Your line is open.

Keith Tapper : Thanks, good afternoon team. And thanks for taking my question. Welcome and congratulations to Catherine [indiscernible] for Acadia. So for DAYBUE, can you remind us what to expect from the Canadian approval maybe in ’25 and ’26 in terms of launch expenses and certainly impact to revenues, if all goes well. And then have you guided for timeless revenues in Europe and Japan. And then separately, I know it’s early, but could you talk about 2591, which you have rights to in gradual — is it a similar strategy versus DAYBUE, the drug itself? I know your partner neurons interesting data, obviously, in different indications? Anything you can share would be helpful there. Thank you.

Catherine Owen-Adams : Thanks, Keith. I’m going to ask Brend to elaborate a little bit more about our strategy in Canada, Europe and Japan, and then we’ll ask Liz perhaps take the 2591 question for RETT.

Brendan Teehan : For sure. Thanks. We’re obviously excited to have an ex U.S. approval for Canada, very much looking forward to serving that patient population. Post approval, we then enter into negotiations with health technology assessment approvals. We’re going to be talking with stakeholders about public and private reimbursement. We anticipate having limited coverage in 2025 through private payers and the public payer process tends to take a bit longer. In the interim, we have a great opportunity to work with the centers that have RETT patients in Canada and begin to generate their interest in signing patients up for when we do have reimbursed approval. So we’ll be doing that in the interim. And otherwise, we are very much looking forward to making DAYBUE accessible to patients as soon as we can, while we’re actively engaging those necessary stakeholders to get to coverage.

Liz Thompson: And to comment a little bit on 2591. I think I’ll start out by commenting generally. We think we’ve got a first great treatment for patients living with DAYBUE but are obviously interested in continuing to find new ways to serve that community. So 21 and other things that you may see come from us in the future really show our commitment to this patient population. At this point, it’s probably premature to talk too specifically about what we’re thinking about from a clinical perspective. I’ll just generally say that we are learning from Neuron and their interesting data that they have compiled so far as well as putting together our own set of information that we think is necessary to have a RETT specific strategy with this asset. So more than I’ll be able to talk about in the future.

Catherine Owen-Adams : And just, Keith, in terms of Europe and Japan, we are preparing our MAA as Liz has already referred to in the prepared remarks. We started to build out achieve Europe to support that launch, and we’re looking forward to not only making our DAYBUE product available for patients in Canada but in Europe and beyond. And in terms of Japan, Liz alluded to, and it was on the slide, our discussions with the PDM. So all of those discussions are currently active and ongoing.

Operator: And our next question comes from Tazeen Ahmad with Bank of America Securities. Your line is open.

Tazeen Ahmad : Hi, good afternoon. Thanks for taking my questions. And Catherine welcome from me as well. I wanted to get your thoughts about how to think about the European launch in your previous role, you did handle ex U.S. launches. Are there rules of thumb to be aware of as it relates to rare disease launches in Europe that you can share with us today? And can you talk to us about your general plan forward in that region? Thanks.

Catherine Owen-Adams : Sure. Thanks, Tazeen. So as I’ve just said, we are preparing for our MAA application early next year in Europe. As you know, there’s a set time clock in Europe. It normally takes up to a year for that document to be assessed. Then we start the clock with each of the national HTAs on reimbursement, and we would normally expect to launch in Germany first as well as Switzerland and then other company — other countries come online after that, depending on how long our local negotiations take with both the national authorities and then some of the regional authorities in places like France, Italy and Spain. In terms of managing a rare disease launch in Europe from my experience, is relatively similar to managing a rare disease launch in the U.S. accept that.

In some ways, it’s a little bit easier because with a single health care system in all of our countries in Europe, we have less involvement in the patient journey. The access to medicines once it’s prescribed is a lot easier. We’re not dealing with payers on a sort of a case-by-case basis. And so while we need to wrap around support of the physician and patient, it just looks slightly different in terms of that individual patient journey. But with my experience and the team already being built up in Europe, I feel very confident that we will have DAYBUE available post-registrational approval, and we’re looking forward to making that launch successful as well.

Operator: Our next question comes from Jeff Hung with Morgan Stanley. Your line is open.

Jeff Hung : Thanks for taking my question. For AP, just wondering if there’s any update on whether regulators have agreed to your master protocol? And can you just remind us of the strategy there? Thanks.

Catherine Owen-Adams : Yeah, I’ll ask Liz to take that one for us.

Liz Thompson: Sure. So we haven’t reengaged with them about the master protocol, the Phase 3 portion in particular. We anticipate doing that on more a little further into the Phase 2 portion of the study. That said, again, all this really means is that Europe may be a little bit slower up and running on the Phase 3 portion of the — on the Phase 3 portion of the master protocol. But the advantage is that potentially we’d be in a position of starting up Phase III there with data in hand from the Phase 2 portion, which is always helpful in terms of getting investigator interest. So it’s a little bit of a bump in the road, but we don’t see this having an overall implication on strategy or time line.

Jeff Hung : Thank you.

Operator: And our next question comes from Ritu Baral with TD Cowen. Your line is open.

Unidentified Analyst: Hey, guys. This is Athena on for Ritu. Thanks for taking my question. I had another follow-up on high-value academic centers and community practices. How should we think about forward adoption rates here? And how comfortable are these physicians when it comes to titrating DAYBUE and what learnings are you applying from the earlier stages of DAYBUE’s launch to your conversations with these folks? Thank you.

Catherine Owen-Adams : Thanks, Athena. I’ll let Brend elaborate on that.

Brendan Teehan : Yeah, sure. Thank you for the question. As I think I alluded to in my prepared remarks, COEs were instrumental in the early part of the launch, and they still continue to contribute and we’re driving further penetration there. I’m pleased with what we’ve seen for high-volume institution penetration growth over the past year. I’m similarly pleased with our ability to get into the community to find those physicians that have RETT patients and see them continue to start to prescribe DAYBUE. The further you get from a COE, the more you’re doing education on the particulars of RETT syndrome because they have infrequent visits with these patients as well as the clinical profile for DAYBUE and we’re starting to leverage those clinical champions, those that have a lot more experience with DAYBUE in the early part of the launch to do programs like discovery DAYBUE, where we’ll pair a clinician and several caregivers that have had longer-term successful experiences on DAYBUE to tell them what to expect in real-world performance of the product and what they’re seeing in their loved ones, and that’s been a very successful combination for us.

Operator: And our next question comes from Paul Mattis with Stifel. Your line is open.

Unidentified Analyst: Hi. This is Julien on for Paul. Just a really quick one. What are your expectations for ROI on the DTC campaign in 2025 for NUPLAZID? Obviously, you’ve demonstrated strong execution in 2024. Just curious if you have any more commentary you can provide for next year? Thank you.

Catherine Owen-Adams : Thanks, so Brend, do you want to talk about the direct-to-communication campaign?

Brendan Teehan : For sure. And thanks for the question, Julien. So we initiated this, but we initiated this campaign in the middle of August, and it’s really just pick up its momentum as it relates to patient visits starting to see their neurologists or movement disorder specialists. So I think the vast majority of the benefit we’ll see will begin in 2025. And — but as a reminder, the lifetime value of our NUPLAZID patients both in the community and long-term care will extend beyond 2025. So we’ll start to see both an increase in new patient starts also their continuing value throughout 2025, ’26 and ’27, perhaps beyond. And so I don’t think we’ll fully realize all of its value in ’25. But we’re enthusiastic about what we’re seeing about early visits in some of the early returns.

Operator: The next question comes from Charles Duncan with Cantor. Your line is open.

Charles Duncan : Hey, good afternoon, Catherine, and team. Thanks for taking our question. And Catherine congrats on the new opportunity with Acadia. I had a quick question regarding ACP-204, in terms of the data release protocol, I guess I appreciate the master protocol in terms of facilitating enrollment, but I’m a little bit confused as to whether or not you’ll be releasing any information from Phase 2 in terms of efficacy, et cetera, as the enrollment of the Phase 3s are ongoing. So please provide a little color there. Thanks.

Catherine Owen-Adams : Thanks for the question, Charles. I’m going to let Liz answer that.

Liz Thompson: Yeah. Our current expectation is that we would be releasing some data at an appropriate time. And the expectation was always that we could use the Phase 2 data to make modifications to Phase 3 as needed.

Operator: And our next question comes from Jay Olson with Oppenheimer. Your line is open.

Jay Olson : Hey, thank you for providing the updates and thanks for taking our question. For Catherine, could you please talk about your due diligence and any key considerations that you were contemplating as you considered taking on the role of CEO at Acadia? And then also maybe elaborate on your longer-term vision for Arcadia. Where would you like to see this company go in the future? Thank you.

Catherine Owen-Adams : Thank you, Jay. So in terms of the approach I had, you’re looking at an opportunity, I was really looking for the combination of three things. First, was commercial base where I could come in and add value based on my experiences, 30 years so far in the commercial side of the pharma business? And that’s what I found with NUPLAZID and DAYBUE, very exciting core brands that we can look to grow and develop over the coming years. The second important area I was looking at was the pipeline, and that I was really excited by, especially with our two late-stage clinical trials in Prader-Willi and Alzheimer’s disease psychosis. And as I got into the due diligence, I was able to see a little bit more in the pipeline.

I’m still very excited by that. And then finally, it was really around a strong financial position, which obviously Acadia has and in terms of the cash position, but also a really strong board and strong investors. And so those three things together made Acadia for me a very attractive and exciting option. And I can tell you, six weeks in, I’m even more motivated and excited than I was when I first walked in the door here in San Diego. I’m very excited about the future and really believe that this company has only to go from strength to strength.

Operator: And our next question comes from Sumant Kulkarni with Canaccord. Your line is open.

Sumant Kulkarni : Good afternoon, thanks for taking our question. Another one on DAYBUE other than patients being at centers of excellence versus not, what’s your understanding of the key bottleneck that may be preventing new patients from starting DAYBUE? And what’s the main variable you need to focus on to see an inflection on DAYBUE sales from current levels?

Catherine Owen-Adams : Thanks, Sumant. Very fair question. So I’m going to let Brendan answer that.

Brendan Teehan : Hey, Sumant. So, thanks so much for the question. I think we’re focused entirely once you get beyond centers of excellence and some of the academic centers that are very much like COEs on education, on the efficacy in the real world setting. And so it really is a combination of focusing on physicians and explaining to them what the translation of CGII, RSBQ into daily improvements that families are seeing, which we’re doing through a combination of peer-to-peer programming as well as having caregivers that have had their loved ones on therapy for two or three years, talk about what they’ve been able to see in their loved ones over time. And then similarly, leveraging those experiences to speak to caregivers that may be on the sidelines need to know more about what they should expect in their loved one.

And we have a number of programs that look at patients between the ages of 2 and 5, 5 to 10, preteens, teenagers and patients over the age of 20 so that we can really speak the language of the caregivers from similar experiences that some of the caregivers that have already started DAYBUE are well ahead on. And those are really our two primary areas of focus to elucidate efficacy and what I can see for clinical benefit for both of those audiences.

Operator: And the next question comes from Danielle Brill with Raymond James. Your line is open.

Unidentified Analyst: Hey, guys. This is Alex on for Danielle. Thanks for taking the question. Continuation on that on DAYBUE patient numbers. Just curious what your level of effort is to potentially getting patients who have tried DAYBUE and discontinue to potentially back on treatment given the ongoing learnings from real-world mitigation strategies to the adverse events? Thanks.

Catherine Owen-Adams : Yeah. Great. Thank you. Alex, I’ll let Brendan do that one as well.

Brendan Teehan : For sure. Great question. It’s important to realize that we stay in contact with every family [technical difficulty]. And as you know and probably are pointing out here, there are some patients that will discontinue after just one or two fills mostly due to tolerability challenges. With those families, we’re obviously checking to see what their GI management experience was like, and looking to further educate them on strategies, both around GI tolerability and engaging their HCPs to make sure they have a strategy in place, but also understanding more about their dosing and treatment journey because there could be alternate approaches where they could work themselves to a dose that would be more effective. And so that will certainly be something we continue to focus on over time. Up to now, I would say that the — for restarts in terms of patients that have restarted, it’s still significantly less than 10% of our overall patient base.

Operator: And at this time, I would like to turn the call back over to Catherine Owen-Adams for closing remarks.

Catherine Owen-Adams : Great. Thank you, operator. So thanks again, everyone, for joining us today. Really appreciate the welcome that you’ve given me into the Acadia community. We look forward to updating you further on our progress in the next quarter.

Operator: This does conclude today’s call. Thank you so much for participating. You may now disconnect.