Earnings Call Transcript - NBIX Q1 2021

Operator, Operator

Good day, everyone, and welcome to today's Neurocrine Biosciences Reports First Quarter Results. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. Please note, this call may be recorded. I will be standing by, if you need any assistance. It is now my pleasure to turn the conference over to Vice President of Investor Relations, Todd Tushla. Please go ahead.

Todd Tushla, Vice President of Investor Relations

Thanks, Clay. Good afternoon, and thank you for joining us on our First Quarter 2021 Earnings Call. Here with me today is Kevin Gorman, our Chief Executive Officer; Matt Abernethy, our Chief Financial Officer; Eiry Roberts, our Chief Medical Officer; Eric Benevich, our Chief Commercial Officer; and Kyle Gano, our Chief Business Development and Strategy Officer. I'll remind everyone that during today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. Following our prepared remarks, we'll then head into Q&A. With that, I'll turn the call over to Kevin.

Kevin Gorman, CEO

Thanks, Todd. Yes, it's good talking to you all today. Our remarks will be very brief, so we have plenty of time for questions this afternoon. As we've discussed for four years now, Q1 has always been a challenging quarter with many TD sufferers needing reauthorizations. Each year, we've learned from the previous year and have improved our ability to prepare prescribers and our specialty network of pharmacies for the onslaught of these prior authorizations. However, this year, despite our best efforts, the lack of direct access and communication between prescribers, patients, and pharmacies, led to a much more protracted delay in refills than what we normally see. Now, while that's the bad news, the very good news is patients did receive their refills, and we did not lose them. Now, we traditionally see looking forward that Q2 as a stronger quarter, and we expect Q2 versus Q1 sales growth will be in the range of what we saw last year, not quite as strong. But certainly, there will be a great deal of growth. Now both Eric and Matt will discuss our Q1 experience in more detail in a moment. Importantly, we've made considerable progress in a number of our clinical programs. If you recall, at the beginning of the year, I told you about our ambitious goal of starting eight new mid to late stage clinical programs this year, and I'm – Eiry is going to take you through our pipeline on this call. So without any further comments, I'd like to turn the call over to Matt.

Matt Abernethy, CFO

Thanks, Kevin. Good afternoon, everyone. First quarter INGREZZA sales were $230 million, reflecting the payer-related seasonal dynamics Kevin just mentioned, and also the seasonal impact from gross to net. Importantly, the team did an excellent job ensuring patients remained on INGREZZA. However, the extended insurance reauthorization process due to the pandemic resulted in a lower-than-normal refill rate per patient. As the quarter progressed, we saw strengthening NRx performance and commercial activity. Although encouraged, lack of in-person care continues to impact the growth trajectory of the TD market, given greater than 50% of patient visits to psychiatrists are still being conducted virtually. As physicians and patients return to visits in person, we expect TD diagnosis rates will increase, leading to improved INGREZZA performance. Based upon what we've seen so far in April, we would expect on an inventory adjusted basis, sequential dollar growth from Q1 to Q2 to be somewhere in the ballpark of what we saw in 2020, reflecting both improved gross to net and refill rates. We have a strong financial position with over $1.1 billion in cash, and are deploying our capital towards growing INGREZZA and advancing our pipeline. We increased our 2021 operating expense guidance to reflect our INGREZZA-branded DTC campaign called TD Spotlight, which Eric will cover next. With that, I hand the call over to Eric Benevich, our Chief Commercial Officer. Eric?

Eric Benevich, Chief Commercial Officer

Yes. Thanks, Matt. I'm happy to provide additional commercial insight into our Q1 performance. And today, I'll keep my prepared remarks focused on INGREZZA. First off, there has already been discussion of our Q1 business dynamics during Kevin's and Matt's prepared remarks. But it's important to note right upfront that we exited the quarter with more patients on INGREZZA treatment than when we entered the quarter. In many ways, Q1 represented the most challenging quarter we've had since launching INGREZZA just four years ago. Typically, Q1 performance is characterized by the first portion of the quarter being impacted by seasonal payer dynamics, and then an increase in new patient starts occurs over the latter part of the quarter. Over the past few years, our field teams have done a great job helping patients, healthcare providers, and their office staff manage through this annual process where many continuing patients need insurance reauthorization to get their INGREZZA refills. However, the external environment was different this year. The surge in COVID-19 pandemic in January made it especially difficult to support our HCP customers and the TD patients they care for. With many clinics restricting access or even closed altogether, this limited our ability to mitigate the typical Q1 payer dynamics. In short, the pandemic exacerbated the impact of seasonal payer reauthorization requirements causing higher-than-normal delayed refills and treatment interruptions for many INGREZZA patients. However, it was encouraging to see continued strong persistence rates throughout Q1, and that we finished the quarter with more patients treated with INGREZZA than when we started the quarter. In addition to these payer and pandemic-related external factors, we saw a tick down in gross to net price as additional health plans added INGREZZA to their formularies, as Matt noted. During the latter part of Q1, as COVID cases waned and the HCP practices started to open up again, our field teams did an excellent job of reengaging with customers, and we saw improved performance metrics across all fronts, including in-person sales calls, peer-to-peer speaker programs, and product sampling. Looking ahead, we expect to build on our momentum with key initiatives, including launching our first ever INGREZZA-branded direct-to-consumer campaign, which we call TD Spotlight later this month. In addition, we will be introducing a new INGREZZA 60-milligram dose strength, which provides healthcare providers and their TD patients with increased flexibility by offering three effective dosing options, while maintaining the simplicity of one pill, once-a-day dosing with no mandatory or complex titration required. We believe this will be a meaningful enhancement to our INGREZZA franchise, and we're excited to roll out the new 60-milligram dose to HCPs later this quarter. In reflecting back on where we were at this time last year, much has changed, but there are some things that remain the same. INGREZZA, with its attractive product profile, is still the most preferred and most prescribed VMAT2 inhibitor for TD. Our commercial team remains strong, energized, and as committed as ever. And there remains a huge unmet need to diagnose and treat the roughly 600,000 patients in the US who suffer from Tardive Dyskinesia. We're firmly committed to continuing shining a spotlight on the substantial impact TD has on patients and their care partners, and the meaningful benefits of treatment with INGREZZA. So with that, I look forward to answering your questions during the Q&A portion. And I'll go ahead and turn the call over to my colleague, Eiry Roberts, our Chief Medical Officer.

Eiry Roberts, Chief Medical Officer

Thank you, Eric, and good afternoon to everyone on the call. I'm happy to provide a quick update on recent progress with our clinical portfolio. At the beginning of the year, I indicated that we plan to initiate a total of eight new mid to late-stage clinical programs in 2021. We're making good progress and continue to be on track with this plan, with the potential to add a ninth new program start by the end of the year for luvadaxistat in the treatment of cognitive impairment associated with schizophrenia. Since our last earnings call, we have initiated two important programs, namely the pediatric registrational study of crinecerfont for the treatment of classic congenital adrenal hyperplasia and the Phase 2 study, evaluating the efficacy and safety of the T-type calcium channel antagonist, NBI-104 for the treatment of essential tremor. Essential tremor, or ET, represents the second potential indication for NBI-104 acquired through our partnership with Idorsia. T-type calcium channels have been identified as having a critical physiological and pathological role in ET, where abnormal oscillatory activity occurs in the brain. As background, ET is the most common neurological movement disorder and is associated with physical and cognitive impairments, avoidance of social settings and related difficulties that negatively impact the lives of patients. ET affects approximately 2.5% of the population worldwide, with the prevalence of more than 5% in adults aged 65 years or older. In addition to essential tremor, the Phase 2 study for NBI-104 in the rare pediatric epilepsy indication of continuous spike in wave during sleep continues to progress in the clinic. Shifting gears now, I'll provide an update on our luvadaxistat program, formerly known as NBI-844. Following a thorough review of the clinical data from the recently completed Phase 2 INTERACT study, we are moving forward to initiate a Phase 2 study for the treatment of cognitive impairment associated with schizophrenia, with the goal of replicating the potential signal of cognitive improvement that we saw within the INTERACT study. Cognitive impairment is an area of significant unmet need in schizophrenia with no currently approved treatments in the United States. We're currently on track to initiate this new study by the end of the year. In closing, I want to thank the many teams who are helping advance our large, growing and diverse pipeline. With two new mid to late-stage programs now ongoing in patients and an additional seven more planned this year, the momentum for our pipeline is strong. So with that, I'll turn things back to you, Kevin.

Kevin Gorman, CEO

Thank you, Eiry. So while the operator is getting the questions to be teed up right now, I'd be remiss if I didn't note that this month is mental health month. And this week is tardive dyskinesia awareness week, or TDA for short. This year marks the fourth year we've partnered with the Mental Health Community to recognize TDA by spurring conversations about TD and the importance of seeking a diagnosis and treatment. This year, 48 states and Washington, D.C. have formally declared this first week in May as TD Awareness Week, and I'm very happy that our hometown here of San Diego has done the same. So Chloe, I think we're ready for the questions now.

Operator, Operator

And we will take our first question from Brian Abrahams with RBC Capital. Please go ahead.

Brian Abrahams, Analyst

Hey, guys. Thanks so much for taking my question. So, unpacking the INGREZZA dynamics a little bit more. By our rough math, it looks like inventory adjusted TRx were down about 7% sequentially, which will imply about 5% to 6% lower revenue per script. And so, I'm wondering if you could give us a sense of the degree of seasonality to this gross to net change versus how much of this change we should expect to persist throughout the rest of the year with additional formulary access. And then, along these signs, I'm just curious how quickly and meaningfully you'd expect to see pull-through from the DTC investment to TD diagnosis and new patient starts, and whether that's baked into your second quarter dollar growth expectations? Thanks.

Matt Abernethy, CFO

Hi Brian, this is Matt. Thank you for your question. Regarding the growth to net dynamics, we experienced an increase in discounts during the quarter, mainly influenced by seasonal factors like the Medicare Part D donut hole and co-pay assistance programs in the commercial sector. We also saw some additional discounts from contracting. However, I would say that the majority of the increase in gross to net discounts should recover throughout this year. I had previously indicated that we anticipated a sequential increase in gross to net discount of about 5%, and it ended up slightly higher, around 6% for the quarter. I hope this provides you with the clarity you need. As for our DTC investment, the main goal is to speed up TD diagnosis and ultimately benefit more patients with INGREZZA. There is typically a lag between the launch of a direct-to-consumer advertising campaign and when it results in patients receiving medications. Therefore, we expect to see some return later this year, but more significantly in 2022.

Operator, Operator

Next question from Paul Matteis with Stifel. Please go ahead.

Paul Matteis, Analyst

Thank you very much. Hi, Matt. I wanted to ask for some clarification on the second quarter guidance. I'm a bit confused because you've mentioned in the past that the average script per patient tends to fluctuate in the first quarter, sometimes decreasing by 0.1 or 0.2. If we assume it decreased by 0.2, that could represent a $20 million headwind. Given that, the reversion could bring you close to what you're suggesting for the second quarter based on last year, adjusted for inventory. Could you respond to that? Additionally, in relation to the second quarter guidance you provided, what factors are influencing the organic patient growth? Thank you.

Matt Abernethy, CFO

Yes, Paul. This is Matt. I'm happy to answer that question for you. If you look back at what happened last year, we had a strong first quarter. We did an excellent job of keeping patients on medication and also achieved a record number of new patients, showing great momentum as we moved from Q1 into Q2. The benefits we experienced in Q2 reflected our performance in Q1 last year, particularly the record number of new patients. Adjusting for inventory, I believe we saw an increase of around $28 million to $29 million sequentially last year. When considering the dynamics this year, we did notice a slight decline in refill rates per patient. However, we are still operating in a market where patients are not visiting clinicians' offices in person yet, which limits the new prescriptions we can generate. We do anticipate decent growth, but getting new patient additions back to historical pre-pandemic levels is essential for driving growth. On the patient side, we actually had more patients exiting the quarter than entering, which is a positive indicator, and we expect to see something similar at the end of Q2. Nonetheless, our growth may be somewhat restricted due to patients not going to the office. However, we have various strategies that Eric can discuss, which are aimed at driving commercial activity and engaging patients through direct-to-consumer efforts. Eric, do you have anything to add regarding the commercial aspect?

Eric Benevich, Chief Commercial Officer

Probably the only thing that I would add, and I mentioned this in my prepared remarks that normally we do see the first portion of the Q1 with a lot of focused effort around reauthorizations and getting patients going on refills. And typically, we see the second part of the quarter more focused on new patient starts, and we did see that dynamic here this year as well. But with a more interruption in those refills than what we've seen in years past because of the challenges related to communication caused by the pandemic. And, therefore, the pickup in the lift from NRx is kicking in a little bit later in the quarter than maybe what we've seen in prior years. So similar kinds of dynamics happening, but the pattern was a little bit different this year because of the external environment. And the timing of new patient starts makes a big difference when you think about how many potential refills you might get over the course of a quarter.

Operator, Operator

Question from Phil Nadeau with Cowen & Company. Please go ahead.

Phil Nadeau, Analyst

Good afternoon. Thank you for taking my question. I want to ask about the Q2 dynamics, and I apologize for this. Matt, I want to ensure I understood what you just said. Last year, the revenue increased by $35 million to $36 million, but there were inventory effects in both Q1 and Q2 of last year. From your comments, it seems you're suggesting we should exclude the inventory effects when calculating the quarter-over-quarter growth for last year and what it will be in Q2. Is that correct? If so, could you please repeat that number? Additionally, why not provide specific guidance for Q2 with a revenue range? This seems more complicated than it should be.

Matt Abernethy, CFO

Yes. Thanks, Phil. Yes, you have the numbers correct. Last year, there was an increase on an inventory adjusted basis. We had $227 million in Q1, and we went up to about $255 million. So that's a $28 million increase on an inventory adjusted basis. We felt it important to be really direct this quarter as to what we would be expecting out of the second quarter, given the dynamics we saw in Q1. And the evolving landscape of the pandemic. We're going to continue to think about providing a more formal guide. It would likely be an annual guide, if and when we ever provide, that guidance. But for right now, Phil, we just wanted to give as much clarity as possible, but not provide an annual guide.

Operator, Operator

Question from Brian Skorney with Baird. Please go ahead.

Brian Skorney, Analyst

Hey. Good afternoon guys. I'm going to only ask the part from the Q2 dynamic question for a second here. And just ask a little bit about ET. We've seen some recent results on competitive Phase II programs, in ET that showed some interesting efficacy that seems to have had a very lukewarm investor response due to some of the safety signals seen there. So I guess maybe you can just kind of try and help characterize, in terms of what you're looking for in Phase II, what you want to see out of 104? And how to really think about an appropriate therapeutic index for an indication like a essential tremor? Thanks.

Eiry Roberts, Chief Medical Officer

Sure, I appreciate the opportunity to discuss this. Regarding the recent results in essential tremor, the disorder's prevalence and the demographics of the affected population make the therapeutic index and safety profile of new treatments critical. So far, we are very pleased with the tolerability profile of 104 based on the data from healthy subjects in the Phase I study, which gives us encouragement as we begin our first Phase II study. This trial is a proof-of-concept study involving 28 subjects, half under and half over the age of 65, and it has just started in Europe. We prioritized obtaining objective efficacy and tolerability data from the older population as early as possible to ensure we gather valuable information from this study. Additionally, the design includes a crossover aspect, allowing us to compare changes within subjects between 104 and a placebo. Besides focusing on quality of life outcomes, we will assess the objective measure of tremor amplitude after a 28-day period. Therefore, we will collect both objective and subjective efficacy measures in this study, alongside an initial evaluation of tolerability.

Operator, Operator

Question from Josh Schimmer from Evercore ISI. Please go ahead.

Josh Schimmer, Analyst

Thanks for the update. Regarding your comment about 50% of psychiatry visits still being telehealth, it seems like that number has been fluctuating. Are there any recent trends or updates as we move into the second quarter that might indicate a normalization? Additionally, concerning your direct-to-consumer campaign, have you conducted any pilot programs to assess the potential impact of the campaign on INGREZZA adoption? Thank you.

Kevin Gorman, CEO

Certainly. I will address both of your questions. There are various data sources available that estimate telehealth usage across different medical specialties. Our data, along with feedback from customers and our sales team, shows that telehealth usage in psychiatry is significantly higher compared to other specialties like neurology. While it has decreased from levels seen last summer and fall, more than half of psychiatric patient visits are still conducted through telehealth, whether via video or voice only. We have made considerable progress in adjusting our business model and educational materials to support providers conducting remote consultations. I encourage you to visit mind-td.com for more information on the tools and resources developed in collaboration with leaders in neurology and psychiatry to help them recognize and diagnose TD during virtual visits. Telehealth remains a major component of healthcare today and will likely continue to be in the future. We have successfully adapted to this new method of care delivery. Regarding the TD Spotlight campaign, we see this as a long-term market development effort. Initially, our educational outreach focused on patients and their caregivers through advocacy organizations. As we moved forward, we launched an unbranded educational campaign called Talk about TD, which has aired for about two years and has received positive feedback in website visits and information requests. We have consistently monitored our effectiveness in raising awareness among patients on antipsychotics experiencing abnormal movements, and over time, we have observed an increase in their understanding of TD and its connection to both their psychiatric conditions and treatments. We believe it is the right time to transition to a broader campaign that not only educates about TD but also introduces treatment options. Our research shows that the primary reason patients do not seek treatment for their TD is their unawareness of available options. We are excited to launch the TD Spotlight campaign later this month and are optimistic about its potential effectiveness based on prior testing with psychiatric and neurology leaders and advocacy groups.

Operator, Operator

Question from Neena Bitritto-Garg from Citi. Please go ahead.

Neena Bitritto-Garg, Analyst

Hey, guys. Thanks for taking my question. And I apologize if somebody already asked about this earlier. But just on the crinecerfont, the pediatric study for CAH, I thought that, that was posted, and so the primary endpoint there is change from baseline and serum anderson dione versus the glucocorticoid burden reduction in the adult study. So I guess, can you just walk us through kind of the rationale there in terms of the different end point? Thanks.

Eiry Roberts, Chief Medical Officer

Thank you for the question. We are very enthusiastic about launching the crinecerfont pediatric registrational trial. In the process, we gained valuable insights into the trial's design and background from various key stakeholders globally, including regulators, patients, clinicians, and payers. This input was crucial in defining the primary and secondary endpoints. It's essential to emphasize that hormone levels, particularly androgen levels, and glucocorticoid dosing are very significant in treating pediatric patients with congenital adrenal hyperplasia. In these young patients, androgen levels are particularly important due to their impact on growth and other developmental factors. Therefore, the primary endpoint for the study is the four-week androgen level along with other hormone levels. Furthermore, the study design also reflects our continued interest in the six-month glucocorticoid dosing levels for pediatric patients. We will be monitoring the potential to reduce overall glucocorticoid dosing as part of the treatment with crinecerfont. Overall, the endpoints align closely with those in the adult program, with the four-week measurement of androgen levels being the primary focus in the pediatric setting.

Operator, Operator

Question from Jay Olson with Oppenheimer. Please go ahead.

Jay Olson, Analyst

Thanks for taking the question. Since you grew INGREZZA, pretty rapidly to nearly $1 billion in annual revenues last year, just on TD and just in the US and now you have another indication on the way potentially in Huntington's Korea and potentially new market in Japan, and you've got two other new indications you'll be studying in neurology and psychiatry. Can you talk about how important those are for the future growth of INGREZZA? And how long it might take to get to $2 billion? And can you get to $2 billion on TD alone in the US? Or do you need the new geographies and the new indications? Thank you.

Kevin Gorman, CEO

Thank you for the question, Jay. We haven't discussed what we believe is the maximum market revenue potential. As Eric mentioned, the majority of patients remain undiagnosed and untreated. Out of those diagnosed, only about half are currently receiving treatment with the VMAT2 antagonist. This indicates that there is considerable room for growth in patient treatment. We have always believed there would be multiple indications for the VMAT2 mechanism that are now becoming apparent, and we aim to continually expand the types of patients for whom this mechanism will be crucial in managing their diseases and disorders. We have identified several key areas in this regard. Additionally, when we target a specific area, we typically do so not just for one disease but because we regard it as a significant biological system relevant to many diseases. This applies to both our internal programs and our partnerships. Eric, do you have anything to add?

Eric Benevich, Chief Commercial Officer

No. I mean other than just reinforcing that TD market alone represents significant potential for us. It's an, as yet, mostly undeveloped market. There are many patients that are undiagnosed and untreated. And we're certainly excited about the mechanism of VMAT2 in its potential utility in additional disease areas, in neurology and psychiatry and the potential to help many more patients. And so that's what gives us a lot of energy and passion.

Operator, Operator

To Anupam Rama from JPMorgan. Please go ahead.

Anupam Rama, Analyst

Hey, guys. Thanks for taking the question. Maybe I'd just like to ask a little bit more of a clarifying type of question. With everything, Matt, that you've kind of said about how we should be thinking about 2Q and get to last year. You're essentially guiding to like mid-250 to kind of high 250s kind of range if you could confirm that. And then why wouldn't it be greater than what you saw last year of the script trend that you're seeing exiting like, what was holding you back from saying, you know what, the quarter is going to be better than what we observed last year? Thanks.

Matt Abernethy, CFO

Yes. Yes. You're breaking up a little bit, Anupam, but I think I made my way through what you were asking. In general, yes, in the 250s is – in mid-250s is what we would be anticipating based upon what we're seeing right now. The piece that – I know it's difficult to understand. But our performance last year, for example, in Q1 is what drove our Q2 results. Q2 was a derivative of Q1 activity. In Q1, we had record numbers of new patients last year. So you added the new patients, heavily concentrated in the back half of the quarter last year. And then you get a full quarters of refill rates from those patients. Now when you think forward into what happened last year in Q3, that's when the impact from the patients not going in person into the offices really kicked in. And so those were activities that were being done in Q2, and that showed up in our Q3 revenue more – in a more pronounced way. So similarly, this year, what we saw in Q1, we did see nice growing new patient additions. We also saw record levels of commercial activity. So our expectation is, yes, we performed pretty well in Q1. Our NRxs should continue to improve in Q2, and that should set you up for a much better Q3 or Q4, as compared to what we saw last year. So it's a delayed reflection in our sales results.

Kevin Gorman, CEO

And all of that is with the assumption that this improving environment for COVID continues in the direction that it has been going, which we all hope.

Operator, Operator

Next to Carter Gould with Barclays. Please go ahead.

Carter Gould, Analyst

Thank you for taking my questions. Regarding the DTC campaign, it seems like you're viewing this as a natural progression of your overall awareness and education efforts. However, I'm curious about the timing. Why is now the right moment for this campaign? Additionally, is there a set duration or specific scale for this initiative, or should we view this as an ongoing aspect of your SG&A spending going forward? Thank you.

Kevin Gorman, CEO

Yes, I would agree that our approach reflects a natural evolution in our overall effort to reach, educate, and motivate patients and their care partners. Over the past four years, we've been testing various initiatives, and we've now decided to transition into a broader campaign that introduces INGREZZA directly to patients. This decision was made some time ago, and we are just now rolling it out. Regarding the duration of this campaign, we plan to carefully monitor its effectiveness, analyze key performance metrics, and make adjustments along the way. Typically, a branded ad campaign is effective for several years, and I expect TD Spotlight to follow suit. There may be opportunities for extensions and refreshes, but ultimately, we see this as a crucial tool for educating and motivating patients to speak with their doctors. We are very optimistic about the development of the campaign and the positive testing results, and we're excited to roll it out later this month.

Operator, Operator

Next to Myles Minter with William Blair. Please go ahead.

Myles Minter, Analyst

Hi. Thanks for taking the question. Just a question on luvadaxistat and cognitive impairment for schizophrenia. Very curious about the type of patients you're going to be enrolling in that trial. Are they stable on all other in symptoms and predominantly have cognitive symptoms? And are you going to be meeting with regulators before you start that trial? I just understand there's a little bit of conjecture around that metric's end point. What a talking academic circles about whether it's the right one to use, and there's no formal FDA guidance here to my knowledge. So any color you can provide there would be great?

Eiry Roberts, Chief Medical Officer

Thank you for the question. We have put considerable effort into analyzing the information from the INTERACT study. Just to remind everyone, the cognitive measures that showed positive signals were secondary endpoints. These included the brief assessment of cognitive symptoms and scores, which measure slightly different aspects. One score is generated by the patient and clinician, while the other provides a more functional interpretation of cognitive impairment, incorporating input from the caregiver. What stood out to us from the INTERACT study, encouraging us to advance to the next generation of testing, was the positive findings in both measures. To our knowledge, such results have not been demonstrated in a clinical trial context before. As you mentioned, the data in this field has been mixed, with many negative results and only a few positive signals historically. Therefore, we are designing a study aimed at replicating this finding using the appropriate endpoints. When the time is right, we plan to engage with the regulatory agency to discuss a potential registration plan, assuming the study is successful. Our main focus right now is the intriguing signal we observed, acknowledging the significant unmet medical need in addressing cognitive impairment related to schizophrenia, and we aim to determine if this finding is genuine as quickly as possible.

Operator, Operator

Question from Vamil Divan with Mizuho Securities. Please go ahead.

Vamil Divan, Analyst

Okay. Thanks for taking the question and color you provided so far in the 2Q dynamics. So I guess, maybe one other product, which I think is maybe covered as much as ONGENTYS has been approved for about a year. I know you didn't launch until, I think, September or so. Can you maybe just share any details there around kind of the progress you had with that product? I don't think you get great fuller position 3 months ago. I'm just curious if you made progress there and sort of how the initial sort of reception into that product in the market? Thank you.

Eric Benevich, Chief Commercial Officer

Yes, I'll provide some insights. We launched ONGENTYS at the end of Q3, effectively at the start of Q4. We understand that launching a product during a pandemic is challenging, but we felt it was necessary given the improved product and sufficient supply available for patients in need. While the limited ability of medical practices to see patients in person has impacted the initial trial and adoption of ONGENTYS, this was anticipated. The feedback from neurologists and Parkinson's specialists has been very positive, particularly regarding the convenience of once-daily dosing and, in many cases, the efficacy has exceeded expectations. We are also observing consistent week-over-week growth in new patient starts. Moreover, ONGENTYS provides us with an opportunity to engage further with neurologists about INGREZZA and TD, allowing us to promote both products during our visits. As we are now two quarters into the launch, we recognize that new branded products typically do not have immediate payer coverage. Our payer team has been actively presenting ONGENTYS to various Medicare, commercial, and Medicaid formulary committees. Since we launched right after the bid cycle for Medicare in 2021, we expect ONGENTYS to be included in Medicare formularies by 2022. For commercial and Medicaid, that will happen throughout 2021. In the short term, we are assisting our customers with obtaining approvals for prescriptions via the formulary exceptions process. As we progress through the year and into next year, we will monitor the coverage patterns, particularly from a Medicare standpoint. Eiry, do you have anything to add?

Eiry Roberts, Chief Medical Officer

I would like to reinforce what Eric said regarding our medical affairs team in the field. As we interact with neurologists about their initial experiences with ONGENTYS, the feedback aligns with our expectations based on BIAL's observations in Europe during ONGENTYS's launch. Clinicians are finding that the efficacy for their patients may exceed what was seen in the clinical trials, and the patient tolerability is improving steadily. Additionally, we have an ongoing trial in the U.S. aimed at generating real-world data about patients using ONGENTYS. This study, known as the OPTEON study, is currently enrolling participants, and the recruitment is progressing well, reflecting the strong interest from both patients and clinicians in this medication.

Operator, Operator

Next to Paul Choi with Goldman Sachs. Please go ahead.

Unidentified Analyst, Analyst

Hi, everyone. This is Charlie on for Paul. Thank you so much for taking our questions. Just a quick one from us going back to NBI-104. You say with enrollment progressing. We were just wondering how that enrollment is progressing, what rates are you seeing currently and when we might be able to see some pediatric epilepsy data from that study of 104? Thank you.

Eiry Roberts, Chief Medical Officer

Yes. So that study is ongoing. We have centers open in the United States, and a couple of centers in Europe as well. We have guided that the data from that study, which is a 24-patient study would be available sometime next year. And as we continue to progress with that study, we can give updates as required.

Todd Tushla, Vice President of Investor Relations

Clay? I think you cut out. I know we are moving to David, if you're not.

Unidentified Analyst, Analyst

Hi. Can you hear me?

Todd Tushla, Vice President of Investor Relations

Yes, hi.

Unidentified Analyst, Analyst

Okay. Sorry about that. I didn’t hear the operator. Okay, all right. I thought it wasn’t me again. Okay. Well, just real quick, just looking at the trajectory of INGREZZA, and then just looking at the trajectory of Teva's AUSTEDO, it kind of struck me that it seems just looking at the volume trajectory that INGREZZA has struggled a little more amid the pandemic compared to AUSTEDO. It's not lost on me that AUSTEDO, of course, is approved in Huntington's chorea. But is there an explanation for that? Is this simply just that AUSTEDO has Huntington's in the label and INGREZZA doesn't? Or is there another reason why it seems that INGREZZA has seemed to struggle more over the past year, where AUSTEDO perhaps hasn't?

Eric Benevich, Chief Commercial Officer

I would say that they have the Huntington's indication. I would also note that neurologists returned to seeing patients in the office full-time some time ago. As a result, over 90% of the patient visits in the neurology office are now in person. However, as we've discussed, that hasn't been the case for psychiatrists. This may help explain the differences we've observed during the pandemic. We have always been the market leader, and we continue to maintain that dominant position in everything we do.

Operator, Operator

Question from Marc Goodman with SVB Leerink. Please go ahead.

Marc Goodman, Analyst

Yes, hi. Matt, can you provide some insight into how we should consider the net price per prescription for the entire year? There was a significant increase this quarter. Also, Kevin, since I'm approaching the end of the call, could you share your goals and your level of comfort with what AbbVie is doing? It appears that the product is not performing as expected. Thank you.

Kevin Gorman, CEO

Yes. I'll address the first question. Regarding the last question, we have all anticipated and continue to anticipate improved performance from Algolux for the two approved indications. However, its progress has taken longer than expected. This is entirely under AbbVie's control, and they are continuing to invest in it. Like you, we are waiting to see the drug's outcome. I must emphasize that it addresses two significant conditions, endometriosis and uterine fibroids, and we maintain a strong belief in its potential. It is a highly effective medication. Matt?

Matt Abernethy, CFO

Yes. On the net revenue per TRx, what I would expect something, like I said earlier, similar to last year. Last year was around 5,600. I would expect this year would shake out around, call it, 5,500 to 5,600, so somewhere in that 5,500s range is what we would be anticipating right now based upon what we saw in the quarter as well as contracts that we payers in place.

Operator, Operator

Question from Yatin Suneja with Guggenheim. Please go ahead.

Unidentified Analyst, Analyst

This is Evan Tadio on for Yatin. Congrats on the quarter. And thanks for taking our question. If you get positive data in the Korea and Huntington study, would this be enough to support filing? And what else, if anything, would you need from this program to file? Thanks.

Eiry Roberts, Chief Medical Officer

Thanks. It's Eiry here. Our goal is to complete this study and share the results. If the results are positive and we are successful, we plan to submit a supplemental NDA for Huntington's in Korea. Additionally, we have a longer-term open-label tolerability study ongoing, which will contribute further safety information to our submission.

Operator, Operator

Question from Laura Chico with Wedbush Securities. Please go ahead.

Laura Chico, Analyst

Thanks very much for taking the question. I just wanted to follow-up. I don't think I heard this ask, but what is the typical duration for folks on treatment now, I guess, relative to what it was pre-pandemic? It sounded like there were a lot of efforts made to keep folks on therapy during this quarter. And then you've kind of answered this question a little bit throughout the call, but I just wanted to maybe more explicitly ask, what gives you confidence in the size of the addressable TD market as it stands now? Thanks so much.

Kevin Gorman, CEO

I will start by addressing this, and then Eric can add his thoughts. We've consistently observed strong adherence to our drug. When we first launched it, we analyzed the patients, including those with psychiatric conditions, to assess the average duration they remained on their medications. Generally, they would take their medications about 50% to 60% of the time, translating to roughly six to seven months a year on their medications. This encompasses not only their mental health medications but all their prescriptions, such as those for diabetes and cardiovascular issues. In our clinical trials, these patients were typically on an average of seven daily medications. We didn't anticipate INGREZZA to perform any better than that, viewing it as a characteristic of this patient group. However, we were pleasantly surprised to see that the adherence and persistence from the outset were significantly higher. Initially, I thought this might be temporary, perhaps due to the novelty of the drug in a market with few new entries. But as we progressed into years three and four, the trend continued, indicating that this is a straightforward solution for a complex patient population, which is greatly valued by patients, caregivers, and healthcare providers. There was a minor dip in Q2 of last year due to the pandemic, as our sales team transitioned to a fully virtual model. As we mentioned in previous discussions, they focused on maintaining continuity of care for existing patients, and they excelled in that regard. As a result, we saw an increase in adherence, even beyond our already high baseline. However, we recognized that this increase wasn't sustainable, as our focus shifted to bringing in new patients for the drug. Consequently, we returned to our historically high levels of adherence in Q3 and Q4. Q1 presented a different challenge, with delays in refill processing, but we do not foresee any ongoing issues. As we've stated, we ended with more patients on INGREZZA than we had in Q4, so we remain confident in our ability to maintain this elevated rate of adherence and persistence.

Eric Benevich, Chief Commercial Officer

Yes. And I'll tackle the second part of your question. But I do want to tack on to Kevin's comment here, really two things. One, the persistence numbers that we saw in Q1 were consistent with what we've seen in prior quarters and remained very high. And one other thing that we've looked at is we've tracked the persistence of various cohorts of patients, really from the very beginning of the launch. And so looking at patients that might have started in 2018 versus patients that started in 2019, haven't seen any meaningful differences in terms of the expected duration of treatment and that continues really all the way to the present. In terms of what gives us confidence around the market size, you might have heard me mention that we're estimating currently that the TD market is around 600,000 prevalent patients. How do we get to that number? Well, there's a number of different things. Certainly, we continue to look at the various prevalence publications in the peer-reviewed literature that all point towards numbers in that range or even higher. We continue to do market research with healthcare providers. And importantly, we're seeing an increasing trend in terms of the number of TD patients they think they have in their practices. We look at claims databases, and we're certainly seeing an uptrend in terms of the claims related to TD treatment. And really, what's the underlying driver here? There continues to be an increased use of antipsychotics, which are associated with causing TD. So these are all indicators for us that give us confidence that the size of the prevalent population is at least as big as we think it is. And importantly, for us, our near-term focus remains to drive recognition and diagnosis and bridge the gap between the diagnosed population and the TD treated population -- excuse me, the prevalent population. And as Kevin mentioned, of those that are diagnosed today, only about half you even get offered a VMAT2 inhibitor. So there's a lot of upside potential for us to not only improve diagnosis, but to improve the rate of people that are treated for their TD, and that's really the core part of our mission.

Kevin Gorman, CEO

So that brings us to the end of our call. I think what you've heard this afternoon is that we firmly believe, based on data, we have a growing market and a patient population that is suffering needlessly; probably at least 80% of TD patients are unnecessarily in distress. That is where our mission lies, and that's what we're focusing on. We are utilizing every possible avenue to address this. Over the last four years, you’ve seen our efforts to shift the perception of this marketplace, moving from a time when physicians denied that TD even existed, to now having a significant number of TD patients receiving treatment and finding support for every aspect of their lives. This progress will continue to grow over time, and we are committed to it. Thank you all for your attention today, and we look forward to speaking with you again soon.

Operator, Operator

Thank you for your participation today. You may disconnect at any time.