Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals First Quarter 2021 Financial Results Conference Call. My name is Mary, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's call. If at any time during the call, you require assistance, please followed by Zero and a coordinator will be happy to assist you. I would now like to turn the presentation over to Mark Johnson, Vice President of Investor Relations at ACADIA. Please proceed.

Thank you, Mary. Good afternoon, and thank you for joining us on today's call to discuss ACADIA's first quarter 2021 financial results. Joining me on the call today from ACADIA are Steve Davis, our Chief Executive Officer; who will provide an overview of our Q1 2021 financial performance and a review of our business operations. Also joining us on today's call is Amanda Morgan, our Chief Revenue and Customer Officer; and Charmaine Lykins, Global Product Planning and Chief Marketing Officer, who will provide updates on our commercial performance. Dr. Serge Stankovic, our President, will discuss our pipeline progress and our Chief Financial Officer, Elena Ridloff, will then discuss our financial results in more detail before turning it back to Steve for final remarks and opening the call up for your questions. I would also like to point out that we are using supplemental slides, which are available on the Events and Presentations section of our website. Before we proceed, I would first like to remind you that during our call today, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events or future results, are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. I'll now turn the call over to Steve.

Thank you, Mark. Good afternoon, everyone, and thank you for joining us today. Please turn to Slide 4. We remain steadfast in our commitment to our mission of executing on our three strategic pillars to create long-term growth. First, driving continued growth in NUPLAZID for patients with Parkinson's disease psychosis, or PDP. Second, delivering on the dementia-related psychosis or DRP, opportunity. And third, developing the next wave of breakthrough therapies by advancing our development pipeline and acquiring new assets. Let's review our Q1 results in greater detail, starting on Slide 5. For the first quarter of 2021, NUPLAZID achieved $106.6 million in net sales. This represents an 18% year-over-year increase, driven by strong year-over-year performance in the office-based setting. During the first quarter, sales of NUPLAZID were negatively impacted by the post-holiday spike of COVID-19 and ongoing conditions relating to the pandemic. As we look ahead, we observed improvements related to the pandemic in the latter part of the first quarter and into the beginning of the second quarter. And based on these indicators, we are projecting continued growth throughout the year and reiterating our net sales guidance for fiscal year 2021 at $510 million to $550 million. Let's move to an update on our DRP program on Slide 6. We remain committed to bringing pimavanserin to the DRP patient community. In April, we announced that the FDA issued a complete response letter, or CRL, regarding our supplemental new drug application for dementia-related psychosis. We look forward to a constructive dialogue with the FDA in our Type A meeting, where we plan to discuss the CRL and the potential approval path for pimavanserin. We are prudently planning and preparing for multiple scenarios based on what we learned at this meeting. I want to remind you of the significant unmet need that remains in this disease. Current treatment of DRP involves the use of off-label antipsychotics, which carry significant risks for this often frail and elderly patient population, including worsening of cognition and impairment of motor symptoms. We've heard both publicly and privately from many physicians, caregivers, and concerned family members who have made their voices heard on this critically important matter. We're further encouraged by the public statements made by patient advocacy groups such as UsAgainstAlzheimer's, the Lewy Body Dementia Association, and the Alzheimer's Association. We all recognize that without an FDA-approved treatment, the burden of DRP remains significant. In addition to DRP, we are focused on developing and expanding our pipeline of innovative new programs across multiple therapeutic areas, as shown here on Slide 7. Our Phase III program for trofinetide remains on track to deliver top-line results by the end of the year, and our Phase III program for pimavanserin for the negative symptoms of schizophrenia continues to enroll well. We recently initiated a Phase II study evaluating ACP-044, for postoperative pain following bunionectomy surgery and expect top line results by year-end. In the second quarter, we plan to initiate an additional Phase II study evaluating ACP-044 in pain associated with osteoarthritis. Business development continues to be a key priority of our strategy to expand our pipeline for long-term growth and bring new therapies to patients with high unmet needs. I would now like to turn the call over to Amanda and Charmaine to discuss our first quarter commercial performance and growth initiatives.

Thank you, Steve. Today, we'd like to review our first quarter performance and our long-term expectations for NUPLAZID in Parkinson's disease psychosis. The strong base of PDP patients continuing on NUPLAZID, improvements in the conditions related to the pandemic, and our focus on growth initiatives will enable us to deliver double-digit revenue growth in 2021. Please turn to Slide 9. NUPLAZID continues to transform the standard of care for patients with PDP. In the first quarter, we delivered net sales of $106.6 million, representing an 18% year-over-year increase. Performance in the quarter was driven largely by new patient starts and growth of our subscriber base within the office-based channel. As Steve mentioned, NUPLAZID's performance in Q1 was negatively impacted as a result of the post-holiday spikes in COVID-19 cases, resulting in a decline in patient office visits. However, as we exited the quarter, we observed overall visits returning to traditional levels, including an increase in face-to-face interactions, all of which are related to improving conditions of the pandemic and an increase in vaccination rates. While continuing patients on NUPLAZID remained high, we faced a unique temporal dynamic in the first quarter as payers reverted to pre-pandemic guidance of 30-day refills versus the ability to obtain a 90-day fill. This policy reversal temporarily interrupted our average bottle per continuing patient and impacted our Q1 net sales. Within the long-term care channel, after showing several months of stability, in the first quarter, we observed an additional decline in census. However, we are now starting to see census and more importantly, admissions, improve in March and into April. For both the office-based setting and the long-term care channel, our leading indicator and overall market conditions are steadily improving. As we come out of the pandemic, the timing and pace of recovery in face-to-face interactions, PD patient office business, and LTC new admissions will be a key driver to our 2021 performance and where we land in our reiterated fiscal year 2021 net sales guidance of $510 million to $550 million. Please turn to Slide 10. We have recently started to see early indicators pointing towards a return to growth in the LTC channel, including an increase in new long-term care admissions and modest growth incentives. The following key points highlight this observation. First, more facilities are allowing family members to visit loved ones, which previously was a major impediment to new resident admissions. And second, in the first quarter, both large and small LTC provider groups shared the rapid vaccination of all residents was prioritized over other areas of care. There are now high vaccination rates among residents and staff, which has led to a greater than 90% drop in COVID-19 cases since December 2020. And finally, our data shows that new resident admissions are a highly correlated leading indicator of new patient starts within the long-term care channel. We are encouraged by the improving market conditions within the long-term care market that support a return to growth. I'll now turn it over to Charmaine to discuss our focus on sustainable growth for the overall PDP business.

Charmaine, I believe you are on mute.

Thank you. Thanks, Amanda. Please turn to Slide 11. We've tailored our marketing channel mix to maximize response to the underlying market conditions as we begin to emerge from the pandemic. We continue to amplify our healthcare professional and consumer campaigns, both digitally and in person. And we expect that these initiatives will drive growth throughout the remainder of the year. This means strong engagement with virtual CME and speaker programs and leveraging virtual promotional booths at several key medical congresses across the country. In April, our virtual NUPLAZID theaters at the American Academy of Neurology and the American College of Physicians were very well attended, and we will continue to leverage our virtual Congress presence throughout the rest of this year. In addition to that, we are executing an on-air DTC and online campaign to support that DTC campaign, in order to activate patients and caregivers to request NUPLAZID specifically. Our current DTC campaign is exceeding our reach targets and working synergistically with social media and other digital tactics that we have out there to grow the breadth and depth of the prescriber base. The market opportunity for NUPLAZID remains large. Most patients today are prescribed off-label antipsychotics, which carry significant safety risks, including the potential for worsening of motor symptoms. We're focused on growing our share of the PDP market, and our new patient share continues to exceed our overall share. This is a key indicator of future growth and penetration. In recent weeks, we started to see growth across our business, which is supported by the improving market conditions. And importantly, as we exited the quarter and into April, we have started to observe a recovery in face-to-face interactions, in-office patient visits, and long-term care new admissions. Our commercial team's expertise has positioned us well, with strong performance during the pandemic and the ability to grow future business as we emerge from it. We are well-positioned to drive long-term prescription growth of NUPLAZID in PDP. And now I'll turn it over to Serge to discuss our pipeline progress.

Thank you, Charmaine. Good afternoon, everyone. Please turn to Slide 13. In regards to DRP, our team has been diligently preparing a briefing package, which outlines our perspective on SNDA, the positive Phase III HARMONY study results and provides a template for discussion and future interactions with the FDA. This document is almost complete now and will be included in the request for a Type A meeting. Our objectives for the Type A meeting are to discuss the CRL and identify a mutually agreeable path towards approval with the FDA. We are confident in the science, the data, and the benefit-risk profile of pimavanserin in DRP, as described in our sNDA and we are committed to active FDA approval to make NUPLAZID available to patients, caregivers, and their families who suffer from DRP. As we've said before, we believe that the prospectively agreed development program and the design of the pivotal HARMONY study is scientifically the most appropriate way to evaluate efficacy and safety of pimavanserin as a treatment for DRP. Our position is informed by the following: The pivotal HARMONY study met its prespecified primary and key secondary endpoints, with highly statistically significant and clinically meaningful results. Consistent with these results, in the double-blind portion of the study, pimavanserin demonstrated meaningful separation from placebo on the measures of severity of psychotic symptoms such as hallucinations and delusions, or on a global clinical assessment, all with a notable effect size. Furthermore, in the open-label portion of the study, over 60% of patients met very rigorous treatment response criteria while on pimavanserin, demonstrating meaningful and sustained reduction in psychotic symptoms, consistent across patient subgroups. The consistency of the above-described results in our pivotal HARMONY study further informs our view on the benefit-risk profile of pimavanserin for DRP. We would like to better understand the division's position in hopes that we can align on an efficient plan towards resubmission. We look forward to keeping you updated on our progress. Beyond DRP, we are advancing our pipeline of innovative treatments for areas of high unmet need, with ongoing clinical trials across five disease areas. Let's briefly review the rest of our pipeline, starting on Slide 14 with Rett syndrome. Rett syndrome is a rare neurological disorder with debilitating symptoms, including severe cognitive, emotional, sensory, and motor impairment. Patients often lose spoken communication and purposeful hand use, leading to a loss of independence. Our Phase III program continues to progress well, with top line results expected from our LAVENDER study in the fourth quarter of this year. Please recall that the LAVENDER study uses the same validated endpoints as the positive Phase II study, which are designed to show improvements on the core symptoms of Rett syndrome. Turning to Slide 15. There are over 700,000 patients in the United States who are receiving treatment for schizophrenia but still experience debilitating negative symptoms, including social withdrawal, lack of emotion, restricted speech, and blunted effect. These symptoms can lead to long-term disability and significant caregiver burden. As a reminder, our Phase III program evaluating pimavanserin for the treatment of negative symptoms of schizophrenia includes two pivotal studies, our positive ADVANCE-1 study and ADVANCE-2, which we initiated in the third quarter of last year and is currently enrolling patients. Please turn to Slide 16 for an update on our ACP-044 program. ACP-044 is a novel, first-in-class, orally administered, non-opioid analgesic that is being studied for both acute and chronic pain. I am pleased to announce that we recently initiated a Phase II study evaluating ACP-044 for the treatment of postoperative pain following bunionectomy surgery. The study is a randomized, double-blind, placebo-controlled study, enrolling approximately 240 subjects and evaluating the efficacy and safety of ACP-044. The primary endpoint of the study is the average pain intensity score measured by a numeric rating scale from first dose on the day of surgery through 24 hours. We anticipate top line results from this study before the end of the year. Furthermore, we plan to initiate an additional Phase II study for patients suffering from pain associated with osteoarthritis later this quarter. Slide 17 highlights a brief summary of our ACP-319 program for the potential treatment of cognition and schizophrenia. Transition and continuation of the Phase I program is progressing well, and we look forward to providing more detailed updates on this program in the future. Slide 18 summarizes our ongoing development timelines. In the first quarter, we initiated a Phase II study for ACP-044 for postoperative pain. In the second quarter, we plan to initiate a Phase II study of ACP-044 for pain associated with osteoarthritis. And in the fourth quarter, we expect to announce top line results from our Phase III trofinetide study in Rett syndrome. We look forward to keeping you updated as we advance our pipeline. And with that, I'll turn the call over to Elena.

Thank you, Serge. Today, I'll discuss our first quarter 2021 results and our updated 2021 financial outlook. Please turn to Slide 20. In the first quarter of 2021, we recorded $106.6 million in net sales, an increase of approximately 18% compared to $90.1 million of net sales in Q1 of 2020. This was driven by 4% volume growth year-over-year. Importantly, this comparison is challenging because last year's first quarter was pre-pandemic. Despite this, we delivered increased demand year-over-year. Our performance was led by the office-based channel, with year-over-year growth impacted by fewer patient office visits and the decline in average bottles per patient in the quarter, as Amanda described. In the long-term care channel, demand declined year-over-year, driven by a further decline in census levels in LTC facilities in the first quarter of 2021, following several months of stabilization in the second half of last year. However, we started to see patient office visits in the office-based channel increase and census levels, and our demand improved in long-term care as we exited the first quarter and into April. The gross-to-net adjustment for Q1 2021 was $22.3 million, or 2.3%. As a reminder, gross-to-net is typically highest in the first quarter due to the annual reset of the donut hole for Medicare Part D patients. We saw that inventory in the channel at the end of the first quarter were slightly higher than year-end. Moving down the P&L. GAAP R&D expenses decreased to $57 million in the quarter compared to $72.6 million in Q1 2020. GAAP SG&A expenses increased to $111.7 million in the first quarter, from $102 million in the first quarter of last year. Noncash, stock-based compensation expense during the quarter was $13.2 million compared to $22.3 million for the same period in 2020. Our cash balance at the end of the quarter was $577.8 million. Please turn to Slide 21. For the full year 2021, we are reiterating our NUPLAZID revenue guidance of $510 million to $550 million. Given the impact of the pandemic we observed in the first quarter, we could land at the lower end of the guidance range. Just where we finish will be a function of the timing and pace of recovery in face-to-face field interactions, patient office visits, and LTC new admissions. On the expense side for 2021, we now expect GAAP R&D to be between $280 million and $300 million for the full year, down from a previous range of $300 million to $320 million. This reflects some optimization in our development expenses and includes approximately $25 million in stock-based compensation expense. We are reducing our SG&A guidance to reflect the reduction of expenses associated with the delay in a potential DRP launch. We now expect GAAP SG&A to be between $385 million and $415 million for the full year, down from a previous range of $560 million to $590 million. The revised guidance range includes approximately $50 million in stock-based compensation expense. And with that, I'll turn the call back over to Steve.

Thank you, Elena. Please turn to Slide 23. In closing, we are confident in our long-term commercial outlook for DRP. We are committed to bringing pimavanserin to patients and caregivers struggling with DRP, and we are focused on investing in our clinical programs and business development opportunities. I would like to thank our employees for their unwavering passion for our mission to elevate life. I'll now open up the call for questions. Operator?

Your first question comes from the line of Ritu Baral from Cowen.

I wanted to ask about the path forward for DRP. I guess first, a very quick housekeeping question. Have you formally requested the Type A meeting at this point? And then two, the broader question here is, I guess, if the main issue has to do with the 011 study and potentially records kept around that, is there any way to sort of address those record-keeping quality issues with those clinical trial records that are worth discussing at the Type A or beyond?

Yes. Thanks much for the question, Ritu. I'm going to answer the first part of your question. I'll ask Serge to answer the second part. So the answer is, we have not yet submitted the request. So in order to request a Type A meeting, you first have to prepare a briefing document, which outlines your position and provides a template for discussion. It's important to get this right and lay the right foundation and template for the benefit of future interactions. We believe we have very strong arguments to discuss with the FDA and want to be diligent in preparation before submitting the formal request. This includes input from expert counsel and outside advisers. The document is almost complete and will be included in our official request for the Type A meeting again very soon. And as a reminder, the Type A meeting will be scheduled by the FDA within 30 days of our request. Serge, do you want to take the second part of Ritu's question?

Yes. Ritu, I'll just reiterate first what Steve mentioned earlier, and that is that our principal objective in this meeting is really to understand the concerns and issues raised by the division in the Complete Response Letter. Considering that part of those issues were related to the study of '19 that you mentioned, we certainly, in our briefing document, will be addressing all the issues point by point that were raised in the complete response letter, in a detailed and extensive manner, in hopes that we can provide additional information that will be helpful to the division to understand the context of those concerns and issues and to address that.

Next question comes from the line of Charles Duncan from Cantor Fitzgerald.

Yes. Good quarter on the top line. I had a follow-up question on the DRP indication. I guess I'm wondering if maybe this is jumping the gun, but are you willing to pursue a dispute resolution? Or do you need to learn more information before you determine strategy? And could you imagine refiling with a more limited label based on some diagnostic criteria?

Thank you for the question, Charles. If we can't agree on the appropriate path for resubmission after the Type A meeting, there is an official appeal process within the FDA framework that we could pursue. However, we don’t believe it’s useful to speculate on that process until we have the meeting with the FDA and gather all pertinent information. That will be our next focus. I apologize, Charles; I seem to have lost track of the second part of your question.

Yes, that makes sense. Steve, regarding a limited label based on some diagnostic criteria.

Yes. No, I remember now. Look, there too, we need to have this Type A meeting. We need to learn what we can learn there. And I don't want to speculate about potential avenues beyond the Type A meeting. We've obviously done a lot of scenario planning, but we just need to have the meeting first.

Next question comes from the line of Cory Kasimov from JPMorgan.

This is Turner on for Cory. Just curious, what are your latest thoughts on your European strategy? Does the DRP delay in the U.S. impact how you think about Europe? And is it possible to potentially take this package to European regulators about the PDP?

Yes. Thanks much for the question. So as we previously indicated, we've frame-shifted our European filing strategy. And this is really just a reflection of the very dramatic difference in pricing that drugs like this experience. This is not unique to a drug like this in Europe versus in the United States. In other words, the vast majority of the value pie for a drug like this is in the United States. And because the pricing is so dramatically different, we felt it was important to play out the work that we're doing in other indications in attempts to try to get multiple indications into a common senior data exclusivity. So we don’t have anything more to say on that at this juncture. We'll continue to assess as we go forward. But I want to stress that outside of the U.S., there is value to be secured with pimavanserin, but at this juncture, we don't have anything more to say about the timing of filing in other jurisdictions.

Next question comes from the line of Jason Butler from JMP Securities.

Just had one on the PDP opportunity moving forward. I guess just looking a little into the future midterm as we exit the COVID headwinds. How do you see the opportunity for growth in the office space channel versus long-term care, which one has the larger opportunities for growth? And if you could just remind us of your views on the market size in each channel, how deeply penetrated in each you are today in that context?

Yes. Thanks much for the question. Charmaine, I'm going to ask you to answer that.

Yes, sure. Thanks, Steve. Well, first of all, when you look overall at our opportunity for growth in PDP, we're committed to accelerating growth across all the channels, both office-based and long-term care, and we're going to do this through several means. Namely, our commercial initiatives have demonstrated positive effects across those channels over time. We are going to continue to provide resources to deliver information to patients and caregivers, to activate that caregiver and that patient to request NUPLAZID, and also establish NUPLAZID as the only FDA-approved treatment out there for Parkinson's disease psychosis. Beyond that, we're educating the medical community, which has an impact both in the office-based business and the long-term care setting on important data on pimavanserin and the benefits of NUPLAZID through virtual promotional booths at several congresses that we've already actually participated in, and virtual speaker bureaus throughout the year. In addition to that, we've got a fully integrated consumer awareness program, which is executing in social media, both on the healthcare professional side and on the consumer side. We continue to see strong results coming from our digital platform, across both HCP and consumer, regardless of setting. Overall, we continue to perform or outperform the market basket in long-term care, which is a benchmark of products that we use for comparison, which I think further underscores the effectiveness of these tactics that we're executing on today. So we're very optimistic about our growth prospects, not only in the long-term care channel but also in the office-based channels.

Okay. Great.

Next question comes from Gregory Renza from RBC Capital Markets.

Steve and team, thank you for the update. Steve, I just wanted to focus a bit on the near-term outlook for PDP. It sounds like you had an encouraging exit from first quarter metrics and the reiteration of the full year guidance. I'm just curious if you could just touch a little bit more on those factors. If I heard Elena correctly, I think you indicated that maybe a lower end of the range. So just curious if you could maybe unpack that a bit, maintaining that guidance versus perhaps narrowing that or lowering it just in light of the commentary you added? And then just lastly, related to that, just curious, to what degree, if any, was the DRP opportunity this year a potential potentiator for PDP penetration in the market?

Yes. I'm going to answer the second question first, and then I'm going to ask Elena to answer the first question. So from the time we've launched this drug, we've had very low off-label use. We can't see every bottle in all channels, but the significant majority of scripts come through our hub, and we know exactly the percent of scripts that are on-label, and it's always been in the high 90% range. That hasn't deviated. So I don't see any impact on first quarter from the changes in off-label usage in PDP. In addition, just as a reminder, our overall results in DRP were very compelling. And of course, the results in PDD, patients that have Parkinson's disease dementia, patients with that psychosis were also compelling. So I just don't see any connectivity between DRP and PDP first quarter results. Elena, you want to take the first question?

Sure. So Greg, we are confident in our guidance range. I did comment with regards to the low end of the range, just to remind you and folks that when you lose patients in the first quarter, and have fewer new patient starts than expected, that has an impact on the continuing bottles for those patients through the remainder of the year. As we talked about, in both March and April, we have seen improved trends in both the office-based setting and the long-term care channel, and we expect to see continued growth in both those channels. So we are confident in the guidance range that we reiterated today.

Next question comes from Neena Bitritto-Garg from Citi.

So I guess just another question on the next steps in DRP. I guess can you elaborate a little bit more on, I guess, what's the timeline to us kind of hearing the outcome of the Type A meeting? And is that something that you do plan to communicate right after the meeting, or would you wait until after you have minutes from that meeting? Yes, if you could just talk a little bit more about that, that'd be great.

Yes. Thanks, Ritu, for the question. So the meeting under the FDA's structure should happen within 30 days of their request, and they usually happen right at 30 days. Once we have the meeting, as we would do in most meetings of this nature, whether it's in the Phase II meeting or pre-sNDA meeting or in this case, a Type A meeting following the CRL, we would typically wait until we get minutes from the meeting before speaking publicly, and that's our plan in this case as well.

Next question comes from Jeff Hung of Morgan Stanley.

For DRP, should you go down the path of Otis, I know it's really early, but are there any precedent cases you can highlight where companies went through the appeals process and the CRL was overturned? And any similarities or differences that you would highlight from those cases to pimavanserin in DRP?

First, just to clarify, there is no reversal of the Complete Response Letter because once a CRL is issued, you must resubmit. The key question is what is needed for that resubmission. In some situations, you can resubmit without additional clinical work, while in others, additional clinical work is required. This was regarding a supplemental new drug application. The decision to issue the CRL was made by the psychiatry division, which is the division we will meet with for the Type A meeting. Once that meeting occurs, we will be able to provide more information about our plans and this will guide our understanding of the next steps.

Next question comes from Salveen Richter of Goldman Sachs.

This is Andrea on for Salveen. Maybe some questions on the pipeline. Serge, maybe if you could speak a bit more on the mechanism of action for ACP-044 and if there's any reason to believe the drug may be more effective in acute versus chronic pain? And as you look at those two opportunities, if one is more of a low-hanging fruit, and then I have a second.

Yes. The very interesting mechanism of action. First of all, we are particularly excited about having a non-opioid mechanism of action. This compound has the ability to accelerate elimination of peroxynitrite, which is involved in the development of pain; it's an underlying upstream mechanism for sensitization of multiple pain mechanisms. This is also a peripherally restricted compound, so the risks of any potential dependence or abuse liabilities are not present. From that perspective, we are very excited about the drug. In regard to the question of whether we anticipate a better benefit in the acute versus chronic pain models, we have only indications from the preclinical data that we have. In those mechanisms, we saw quite a bit of efficacy displayed in a variety of different pain models, whether acute or chronic. To some extent, we saw an efficacy that is quite on par or better than opioids. So from that perspective, we are quite bullish in terms of our anticipation of possible ability to demonstrate benefit both in the acute models of pain as well as chronic models. That's why in the Phase II trial, we are pursuing both models. Obviously, we're looking forward to the clinical data for confirmation.

Could you provide an update on the status of your M1 PAM in Phase I, including its nature and when we might start to see some data? That would be helpful.

Yes. As I mentioned, we are well into the process of transitioning and continuing with the Phase I work. This compound is currently in Phase I. We need to continue expanding the exposures as we progress. That's where we are at this moment, both in terms of providing the necessary toxicology support to increase those exposures in humans and conducting the human studies. We are in Phase I right now. Once we complete this work, we will, of course, report back and keep you updated on our future plans.

The next question comes from Paul Matteis of Stifel Financial.

I know there's a lot of moving parts in Q1, and we can form machines about changes in compliance and retail rates. I guess, I wanted to try to simplify it. Did you exit the first quarter with more patients on drug than you had at the end of last year? And I guess what do you see now that things are reopening in terms of the cadence of the patient rate for the rest of the first half?

Yes. Thanks, Paul, for the question. Elena, you want to take that?

Yes. Thanks for the question. As we mentioned at the end of Q1, we experienced growth in both the office-based setting and the long-term care channel. Thus, we ended Q1 on a positive note. I also want to address the continued bottles. We had strong continued bottles for most of our patients. There was a small percentage of patients, in the single digits, who began to receive 90-day fills, which Amanda discussed in her prepared remarks. Historically, pre-pandemic, this was about 5%. During the pandemic, it increased to roughly 8%. In Q1, we saw this trend reverse to 6%, and now in April, it's back down to 5%. We anticipate that starting in Q2, the average bottles for continuing patients will trend more normally.

Next question comes from Brian Miles of Jefferies.

So maybe a few follow-ups on ACP-044, in acute postoperative pain. So if possible, can you speak to the PK profile, maybe its estimated half-life and onset of action? And then as a follow-up, can you outline the dosing strategy? I know there's a high and a low dose, but is this once daily or as needed? And then finally, maybe you could talk about what rescue medications are allowed and how that's going to be handled in the primary endpoint.

Serge, you want to take those questions?

Yes. In fact, the study we are currently conducting aims to determine the optimal dosing regimen for the drug. We are testing the same daily dose but using two different dosing regimens. The trial consists of three arms: two active arms and one placebo. This is one of our main objectives, as we seek to better understand the drug's behavior from both pharmacokinetic and pharmacodynamic perspectives, particularly its potential for providing analgesic coverage. I'm not sure if I fully addressed the second part of your question.

Yes, it's about rescue medications, how they'll be handled for the primary and if they're allowed.

Yes, we don't go into that level of details in the protocols and all that. But obviously, the design of this trial is very classical acute pain design. Of course, we do make records. There are certain medications that are prohibited, which interfere with this, but there are some restrictions regarding rescuing medications.

Next question comes from Yatin Sinha of Guggenheim.

This is Eddie on for Yatin. So on the LAVENDER study, given that the Phase II is only 6 weeks and you're upping it to 12 weeks, and in the Phase II, the drug arm was still decreasing when that study stopped, how much additional benefit do you think you can get on those clinical endpoints with that added time? And then in the Phase III, you're enrolling slightly older patients, was there any age or severity of disease-related differences in that Phase II data that led you to add older girls to the study?

Yes. Our view on the data and discussion with the experts that we had, as well as vis-a-vis the mechanism of action of trofinetide, led us to a conclusion that actually the shorter trial did not provide a full opportunity to display the benefit, and that additional benefit based on the symptom change in symptoms over time would have been potentially obtained. So therefore, we have decided to design the trial in the way we are doing it. We do expect that the additional benefit will be verified. Of course, we did not want to go with an overly extended period for the trial, but we believe that we are at the right timing for the duration of this trial. In terms of the specific characteristics, I mean the important point with this particular patient population is that we have a patient population that is within the span of school age, where the patients are receiving also a number of rehabilitations measures that are applied in these, and patients that are older than that may have a different disease course or stagnating from that perspective. Similarly, we did not include in this trial very young patients. We are doing that in a separate clinical trial. But for the group that is included in this trial, we do not anticipate that there will be significant variability in terms of the symptoms across the group. Some variability is always present, but we do not expect it to be significant and substantive.

Next question comes from Jay Olson from Oppenheimer.

Maybe just a follow-up on trofinetide. Can you talk about the target product profile for trofinetide, and any work that you're doing to prepare for the launch, and how you're thinking about the ultimate market potential for trofinetide?

Serge, do you want to take the target product profile? And Charmaine, do you want to take the question regarding preparations for launch?

Yes. I want to emphasize that trofinetide specifically addresses the symptoms of the disease, which includes multiple symptoms that result in deeper symptom clusters. This is relatively unique compared to existing treatments that have been tested or used in this patient population. Most development programs have focused on targeting respiratory symptoms, seizures, and similar issues. Trofinetide stands out because it aims at a comprehensive range of core symptoms of Rett syndrome, while there are no other treatments available. This broad targeting of symptoms is certainly one of the most important features of trofinetide.

And from a commercialization perspective, as we look to prepare for launch, you see this is a rare disease. Of course, the caregiver is very, very important, and a high-touch relationship with those caregivers and those patients is also going to be important for launch. Some of the things that we're working on are strong relationships with advocacy, particularly rettsyndromefoundation.org or rhet syndrome.org, as well as looking to understand the patient journey and the diagnosis to Rett initially, and then how that patient is managed throughout the course of their disease, and where we might find an opportunity for trofinetide at launch, to help those patients manage their disease. So a lot of the early core foundational brand strategy types of deliverables that we're working on with an extra emphasis on the caregiver and the patient, knowing that this is a rare disease.

Next question comes from Vamil Divan of Mizuho Securities.

I guess this one's for Steve. I asked this question to you previously, but just curious, given the sort of delay here with DRP, how that may be impacting your thoughts around the overall corporate strategy? I'm sure you want to get through the type A meeting and kind of really get more clarity on the outlook there. But just as you think about business development or other steps you could take in order to diversify the story or what has anything evolved in your thinking over the last couple of months since you first got that notification that there are some deficiencies? Any updated thoughts would be helpful.

Thank you for the question. We are certainly disappointed with the setback in DRP, but this does not alter our strategy. We remain committed to seizing the opportunities for strong revenue growth in PDP. Our focus will be on addressing the unmet needs of DRP patients, and business development will remain a key aspect of our strategy. As I mentioned before, you can expect to see more deals from us. We have a solid presence in both neurology and psychiatry, as well as in chronic conditions and rare diseases, and we anticipate a shift towards more deals in neurology and rare disease, particularly in specialty areas. However, there are still valuable opportunities within psychiatry and neurology, as well as in chronic therapeutic areas and rare diseases. We will continue to evolve in that direction, and business development will play a crucial role in our operations. As I have said previously, more deals are forthcoming.

Next question comes from Dannielle Brill of Raymond James.

I've got another question on exenatide. Could you remind us what we should be looking for in the LAVENDER data set later this year, with respect to what do you consider to be a clinically meaningful outcome for the two co-primary behavioral endpoints, the RSTQ and the CGI?

Yes. It's a little bit difficult to describe that in the context of two co-primary measures. As you mentioned, we have red behavior or symptom questionnaire, which is a parent assessed outcome, and then clinical global assessment of improvement, which is the clinician's assessment of the changes. We need to separate on both of these measures in order to declare the trial positive. That's a high threshold, but an achievable threshold, because both of these measures separated significantly in our smaller Phase II trial. We have reasonable expectations that we will be able to replicate. These are difficult trials. I will say in absence of substantially beneficial treatments out there, the improvements that we would see on both of these scales, even on the lower end of the effect size would be tremendously valuable to patients and their families. Although we expect to replicate relatively robust results that we had in Phase II, we would not be disappointed with a win on both primary measures.

Next question comes from David Hoang of SMBC.

Have you spoken to a number of key opinion leaders following the FDA's issuance of the complete response letter and drug approval request? I wanted to understand if they are still enthusiastic about using the drug in the drug review process. Are there any concerns or hesitations on their part, and are they willing to prescribe it after the agency's decision?

Yes, I'll respond to that. We have indeed continued discussions with key opinion leaders even after the CRL was issued. I want to provide some context on these interactions since we first announced the HARMONY study results. At that time, we gathered a panel of 15 key opinion leaders to review the data, and they were extremely enthusiastic about it. That enthusiasm remains unchanged. We've maintained ongoing conversations with a wide range of key opinion leaders in this field. We've shared all the data with them, and they are still very impressed with the efficacy we observed in the study. We've received strong backing from the medical community, which recognizes that this is an appropriate approach for studying this population. Diagnosing in this area can be complicated due to varying causes, and nearly 40% of dementia patients do not receive a subtype diagnosis, highlighting the challenges involved. Regarding safety, the key opinion leaders and the broader medical community we have consulted with are very encouraged that this drug has shown clinically not to impair cognition. This is in contrast to dopaminergic antipsychotics, which are well-known to have detrimental effects on cognitive function. This impairment can equate to about a year of disease progression, which is quite unfortunate when using those drugs. While these medications may alleviate psychosis in this patient group, it’s debated how effectively they do so, particularly considering the cognitive challenges that patients face. As we move forward, we will continue to engage with numerous medical and scientific experts, and we remain very confident in our data.

Got it. Maybe just one quick follow-up. Can you just remind us which subgroups hold the greatest magnitude of benefits there?

Yes, the greatest magnitude that was observed was late Parkinson's disease, dementia patients with psychosis. Owing, of course, if you abstract a dimensional body patient because we couldn't calculate there due to small numbers, but it was also geriatric; there was one relapse in placebo while no relapses on drug. Next in line, with the same number of patients is Alzheimer's disease psychosis subgroup, and in that subgroup, we observed approximately a 40% reduction in the risk of relapse, which is clinically very meaningful. This is in line with all of the data that we are aware of, the clinically meaningful results and statistically significant results from different randomized withdrawal trials.

As there are no further questions at this time, Mr. Davis, you may proceed with your closing remarks.

Great. Thanks so much operator. Thank each of you for joining us today. We look forward to updating you on our progress.

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.