ACADIA Pharmaceuticals Inc (ACAD) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals' third-quarter 2011 financial results conference call. My name is Karas 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 toward the end of today's call. (Operator Instructions).

I would now like to turn the presentation over to Tom Aasen, Executive Vice President and Chief Financial Officer at ACADIA. Please proceed. Please proceed.

Thank you. Good afternoon and welcome to ACADIA Pharmaceuticals' third-quarter 2011 financial results conference call. This call is being recorded and an archived copy will be available on our website at www.ACADIA-pharm through November 23, 2011.

Joining me on the call today from ACADIA are Dr. Uli Hacksell, our Chief Executive Officer, and Dr. Roger Mills, our Executive Vice President of Development. Following some introductory remarks by Uli I will briefly comment on our financial results for the third quarter. After this, Roger and Uli will provide you with an update on our development programs and we will then open the floor to your questions.

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 including statements regarding our and our partners' research and development programs and plans including the timing, design and results of clinical trials and partnering activity, the benefits to be derived from our product candidates in each case, including pimavanserin and AM-831, benefits to be derived from changes to clinical trial designs, plans regarding the development of pimavanserin and AM-831 and our future expenses, collaboration payments, cash position and financial performance.

These forward-looking statements 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 from those contained in the forward-looking statements.

These factors and other risks associated with our business can be found in our filings made with the SEC including our Annual Report on Form 10-K for the year ended December 31, 2010, and other filings. You are cautioned not to place undue reliance on these forward-looking statements which are made only as of today's date. ACADIA disclaims any obligation to update these forward-looking statements.

I'll now turn the call over to Uli Hacksell, our Chief Executive Officer.

Thank you, Tom, and good afternoon. Let me first take this opportunity to thank all of you for joining us on today's conference call.

2011 has been a period of important progress for ACADIA and we look forward to building on this momentum as we close out the year and embark on what we expect to be an exciting and value-driving 2012 year. Most importantly, we continue to make solid progress in the execution of the ongoing pivotal trial in our lead Phase III program with pimavanserin for Parkinson's disease psychosis, or PDP.

As you will hear later from Roger, we remain positioned to complete this study next year and we believe that the trial is effectively designed to enroll patients with the intended clinical profile. We believe this Phase III trial will provide the opportunity to significantly increase the value of our pimavanserin program.

While pimavanserin is clearly our primary focus, we announced earlier this week that we have moved into the clinic with another one of our products candidates, AM-831 which we are developing a collaboration with Meiji Seika Pharma. This compound has an innovative profile and we believe it offers the potential to be the first drug to combine true cognitive and antipsychotic effects thereby offering a new and improved treatment option to schizophrenia patients.

With this recent achievement, our pipeline now includes four product candidates in clinical development led by our Phase III pimavanserin program.

On the financial front following our successful equity financing in January this year, we continue to demonstrate financial discipline and maintain a solid cash run rate. Overall, we believe our progress this year has provided ACADIA with a strong foundation to advance and build substantial value on our pipeline of product candidates led by pimavanserin.

Before we review our clinical programs in a bit more detail, let me ask Tom to briefly comment on our third-quarter results.

Thank you, Uli. Our financial results once again reflect the focus on our Phase III pimavanserin program and our ongoing efforts to carefully manage our cash resources. We reported a net loss of $5.1 million or $0.10 per common share for the third quarter of 2011.

The net loss for the third quarter compared to a net loss of $4.2 million or $0.11 per common share for the comparable quarter of 2010.

Revenues totaled $584,000 for the third quarter and, once again, were comprised of revenues from our collaborations with Allergan and Meiji Seika Pharma as well as from other agreements. This compared to revenues of $2.3 million for the third quarter of 2010, which included $1.7 million from our collaboration with Biovail, which was concluded in October last year.

Our research and development expenses decreased to $4.2 million for the third quarter from $5 million for the comparable quarter of 2010 reflecting savings in facilities and other expenses associated with our internal organization as well as lower external service costs. Our general and administrative expenses totaled $1.5 million for the third quarter and were consistent with the third quarter of 2010.

Turning to our cash position and guidance, we closed the third quarter with $36.2 million in cash and investment securities which continues to provide us with a solid cash runway. Going forward, we expect that our existing cash resources and anticipated payments from our collaborations will be sufficient to fund our operations at least into the first half of 2013.

I will now turn the call back over to Uli.

Thanks, Tom.

Our clinical pipeline consists of four product candidates which are pimavanserin in Phase III clinical development, two partnered clinical stage product candidates that are fully funded by Allergan, and AM-831, which we recently advanced into Phase I development in collaboration with Meiji Seika Pharma. Behind this clinical pipeline, we have additional preclinical programs that may offer innovative disease modifying approaches for treating Parkinson's disease and other neurological disorders.

Today we will focus our remarks on our Phase III program in PDP with pimavanserin and on our AM-831 schizophrenia program.

Let me start by asking Roger to provide you with an update on our pimavanserin program.

Thank you and good afternoon. As Uli mentioned, our primary focus is on the ongoing pivotal Phase III trial referred to as the -020 study. This study builds on the wealth of clinical experience we have generated in our PDP program with pimavanserin.

-020 is a randomized multicenter double-blind placebo-controlled study designed to evaluate the efficacy, tolerability, and safety of pimavanserin in patients with PDP. Importantly, it incorporates several design enhancements that were guided by previous data showing placebo response and variability, the lowest in the United States, and among patients with more marked psychosis at entry.

Let me take a moment to highlight key elements of the study protocol. This study is being conducted exclusively in North America. It is expected to enroll about 200 patients over approximately 50 clinical sites. Patients initially participate in a screening phase which includes a structured psychosocial therapy program. This is designed to help patients adjust to participating in a clinical trial setting, provide additional support for patients and caregivers during the running period to the study, and pull initial placebo responses ahead of the baseline assessment.

To participate in the study, patients are required to have moderate to severe psychosis as measured by the Neuropsychiatric Inventory Scale, or NPI, at screening and the Scale for the Assessment of Positive Symptoms, or SAPS, at the time of the baseline assessment. Patients must have both adequate severity and frequency of symptoms to be included in the study.

Importantly, the baseline SAPS score is assessed independently from the NPI which provides a further check and balance.

We continue to be pleased to see that the design enhancements we have implemented in the -020 study aimed at ensuring that sites enroll the appropriate patients; those exhibiting relatively greater severity of psychotic symptoms appear to be functioning as planned. You will recall that based on our observation of a larger placebo response in patients with less severe psychosis in previous studies we increased the NPI score required at screening and the SAPS score required at the baseline in the -020 study.

We believe that these enhancements, together with the psychosocial therapy used during the running period, have been effective in filtering out patients with more mild psychotic symptoms who are likely to respond to placebo. Consistent with the new study design, we are very encouraged to observe that patients enrolled in the -020 trial to date have overall exhibited a more marked psychosis at study entry compared to our earlier trials.

In conjunction with this, we have observed an increase in the number of subjects that do not qualify for randomization at the conclusion of the screening phase due to the inadequate severity of symptoms.

Upon qualifying, patients are randomized on a one-to-one basis to receive either 40 milligrams of pimavanserin or placebo once daily for six weeks. Patients also continued to receive stable doses of their existing dopamine replacement therapy used to manage the motor symptoms of Parkinson's disease.

The primary endpoint of the study is antipsychotic efficacy as measured using nine items from the hallucinations and delusions domains of SAPS which best reflect the expressions of psychosis in patients with Parkinson's disease. By using this refined nine-item scale, we expect to reduce data variability and enhance sensitivity in measuring the treatment response.

This is supported by observation that when we applied this refined nine-item scale to the data in our previous PDP studies, we saw a clear reduction in variability, enhanced sensitivity, and an improved effect size relative to the use of the larger 20-item SAPS.

We are using an independent group of highly trained centralized raters to assess the primary endpoint in the -020 study. Our previous experience has shown that this approach helps to mitigate placebo response and leads to less variability in the data. This pivotal study is powered at a standard 90% to provide a statistically significant antipsychotic efficacy as measured using the nine-item SAPS.

Motoric tolerability is a key secondary endpoint in the trial and is measured using parts two and three of the Unified Parkinson's Disease Rating Scale, or UPDRS.

We remain enthusiastic for the study design for the -020 study and confident that the design enhancements we have incorporated should significantly improve the likelihood of achieving a successful outcome. Let me also add that we are planning to present more information regarding our optimization of the -020 design to reduce placebo response and enhance treatment effect at the upcoming World Congress on Parkinson's Disease next month.

We are encouraged by the enthusiasm displayed by many of the investigators and sites and believe that the prior experience that many of them have had with pimavanserin has contributed to the increased awareness of the -020 study. Importantly, we continue to make solid progress with study enrollment while maintaining our focus on ensuring we enroll what we believe are patients with the right clinical profile to position the study for success.

Based on our progress and past experience, we anticipate completing enrollment in the -020 study during the second quarter of 2012, and reporting topline results during third quarter next year.

Let me now turn to another important ongoing study in our Phase III PDP program, our Phase III open label safety extension study referred to as -015 study. This large study involves patients who completed previous Phase III PDP trials as well as patients who complete the -020 study and who, in the opinion of the treating physician, may benefit from continued treatment with pimavanserin.

Once again, I am pleased to report that the overwhelming majority of patients who complete the treatment phase in the -020 study have rolled over into the -015 study. This study is allowing us to generate a large amount of valuable long-term safety data regarding the use of pimavanserin in patients with PDP.

Overall, in our Phase III and Phase II extension studies, we have now accumulated over 600 patient years of exposure in this patient population. Importantly, we far exceeded ICH guidelines required for one-year exposures, with well over 200 patients having been treated for one year or longer. Our longest single patient exposure exceeds six years.

We are encouraged to see that many patients have continued on treatment with pimavanserin for long periods of time. This growing base of clinical experience increases our confidence in the program. Importantly, our experience to date suggests that the long-term administration of pimavanserin appears to be generally safe and well-tolerated in this fragile, elderly, patient population. We believe that the favorable safety profile observed to date provides additional support for the potential of pimavanserin to offer significant advantages, relative to current antipsychotics used off label for the treatment of PDP.

Let me now turn the call back over to Uli.

Thank you Roger. We believe that the successful -020 study will allow ACADIA to significantly increase the value of pimavanserin and to drive value for our stockholders. PDP represents a large unmet medical need in what we believe is an ideal lead indication and specialty market opportunity for pimavanserin.

PDP is a progressive and persistent condition that occurs in an estimated 40% of Parkinson's patients and deeply affects their quality of life. It is associated with increased mortality, caregiver burden, and is the major cause in nursing home placements among Parkinson's patients.

The FDA has not approved any drug to treat PDP and neurology has currently faced overwhelming challenges in managing patients with this debilitating disease.

We believe pimavanserin with its innovative non-dopaminergic profile has the opportunity to be a first in class therapy that will effectively treat psychosis in Parkinson's patients without compromising motor control.

While our strategy currently focuses on advancing our Phase III PDP program toward registration, we also intend to use this program as a foundation to develop and commercialize pimavanserin for additional neurological and psychiatric disorders that are underserved by currently available antipsychotic agents.

We believe that there is a significant commercial potential for pimavanserin beyond PDP in a range of indications, including Alzheimer's disease psychosis, or ADP, and as a co-therapy for schizophrenia. In both of these indications, we have established well-defined paths forward.

With ACADIA holding worldwide rights to pimavanserin as we continue to advance our Phase III PDP program, we will consider potential opportunities that may allow us to further accelerate and broaden the development program of pimavanserin and drive increased value for our stockholders.

Let me now change gears and move to our update on the AM-831 program.

We were pleased to announce earlier this week that we reached an important stage in our collaboration with Meiji Seika Pharma with the advancement of AM-831 into clinical development. We believe that this innovative product candidate has the potential to take schizophrenia therapy to the next level by offering patients a new treatment with both antipsychotic and pro-cognitive effects.

Schizophrenia is a devastating disease that affects about 1% of the population. It frequently debuts in a patient's late teens or early 20s and has profound psychosocial consequences.

Currently available therapies leave a lot to be desired. While they are relatively effective in treating the so-called positive symptoms, the hallucinations and the delusions, they may actually worsen the cognitive dysfunction in patients. This cognitive impairment is considered the most debilitating and persistent symptom of schizophrenia.

It is believed that the existing atypical antipsychotics exert their antipsychotic effect by blocking dopamine D2 and serotonin 5-HT to A receptors while off-target interactions with H-1 and alpha-1 receptors are responsible for many of the common metabolic and cardiovascular side effects.

AM-831 is designed to provide a unique combination of antipsychotic and pro-cognitive activities. This is achieved through antagonist or D2 and 5-HT2A receptors, coupled with stimulation of muscarinic m1 receptors. In preclinical studies, AM-831 has demonstrated a promising profile including robust antipsychotic effects in traditional psychosis models. Importantly and in contrast to most current antipsychotics which worsen cognitive performance, AM-831 exhibited proved cognitive effects in preclinical behavior models.

We are excited to initiate clinical studies with this compound. Following the completion of the FDA's review of our R&D, we will begin our initial Phase I study with AM-831 shortly.

This study is designed to assess single-dose safety, tolerability, and pharmacokinetics of AM-831 in healthy volunteers and to help inform the design of future studies in patients with schizophrenia. Recall that through our collaboration with Meiji Seika Pharma, we are planning to develop AM-831 through completion of proof of concept clinical studies.

Meiji Seika has exclusive rights and is solely responsible for continued development and commercialization in the licensed Asian territory. Meanwhile ACADIA retains rights to AM-831 in the rest of the world, including the United States and Europe.

Meiji Seika is responsible for funding the initial $15 million of AM-831 development costs, after which we will share remaining expenses through clinical proof of concepts, subject to possible adjustment if we further sublicense AM-831.

We look forward to updating you on our progress with AM-831 and believe this represents a promising addition to ACADIA's clinical pipeline.

In closing, our portfolio of four product candidates in clinical development led by our Phase III program with pimavanserin positions ACADIA with multiple product and commercial opportunities. With a well-designed Phase III program for pimavanserin and a solid cash runway, we believe that we have a strong foundation in place to advance this late-stage product candidate and drive value for our stockholders.

We will now be happy to answer questions that you may have.

(Operator Instructions). Charles Duncan from JMP Securities.

Thanks for taking my question and congratulations on the progress, particularly the recent -831 news. Uli, I had a quick question on the -020 trial. You mentioned that you are on track to complete that next year. Can you give us a sense of either -- more simply the number of patients enrolled or percentage of patients enrolled thus far?

We don't provide entry numbers when it comes to recruitment. What I can say is that based on the progress and our past experience, we anticipate completing the study, the recruitment of patients in the second quarter and we anticipate being able to report topline data in the third quarter.

We -- and as you may recall, we normally report also when we have completed recruitment as well.

So you might mention that as it comes up here for the data. Roger said something interesting that is perhaps a good thing, but might be bad in terms of enrollment or tough -- tougher on enrollment. And that is the percentage of screened patients that are actually enrolled in the trial has gone down. And that is perhaps because you are being more selective with your enrollment criteria.

Can you give us that rough percentage, just order of magnitude in the current -020 trial versus what it was in the previous trial?

I think as Uli just highlighted, we don't give individual numbers in these updates.

But it is fair to say that we have seen an increase in the number of patients that screen failed due to having low psychosis. And importantly, a number of those would have been able to enroll in the previous studies.

On the other side, we have had reports that the -- of good reports of the working of the brief psychosocial therapy, and obviously one of the key things for that, for adding that to the study was to enable sites to feel more comfortable in enrolling patients with more severe psychosis.

So it sounds like at least from those early leading indicators that it appears to be working in terms of a more strict enrollment.

That's exactly the point. We intentionally made these changes in the protocol. And it is rewarding to see that in fact they are having a positive effect.

Roger, how many patients have been added to the ongoing -015 trial this year?

Again, I don't have numbers on the exact number. What I think, as indicated in the earlier message, we still see a large number of patients, by far the vast majority of patients who complete -020 continue on to enroll in the -015 study.

And do you have a sense of the number of patients that are actually completing -020 that are enrolled?

I think it's -- the number of patients who complete -020 who enroll in -015?

No, that are enrolled in -020, the number that actually complete.

Once again, we are not giving figures on this call. But what I can say is the majority of patients who enter -020 complete the whole six-week period.

Then perhaps one question on partnering strategy. What is your thought, Uli, in terms of completing this trial? I know you are very focused on that, but do you believe that it would be enough sufficient to complete this trial to attract a second partner? And would it be your intent to wait to start a Phase III, the second Phase III, until you get a partner? Or do you think that you will be able to rapidly get going on the second Phase III once you have the data from this one?

Yes, you are asking two questions. Let me start with answering the last one. Our intention is to make sure that we start the second Phase III study in such a way that we maximize synergies between the two. As you know, we don't want too much time to lapse between the two. That is basically the key thing here, because we want to have a quick upstart of the second study as well to save both time and money.

When it comes to our partnering strategy as you said, we are currently very much focused on the ongoing Phase III PDP program, because we think that this really provides us with a significant increase in the value of pimavanserin. And we now have as well worldwide rights to pimavanserin, which we think is a great asset.

And we now have the ability to consider any kind of partnering in the future, regional or global partnering. And we certainly will consider opportunities that will allow us to accelerate the PDP program and potentially to broaden the pimavanserin program as well into additional indications to provide us with and to drive additional value for -- in the pimavanserin program.

Okay, thank you. I'll hop back in the queue.

Jason Napodano, Zacks Investment Research.

Good afternoon. Can you help me understand the psychosis that happens in patients with Parkinson's disease? Does that -- if we call it an event, do these events vary in terms of frequency or severity? Or is it once a patient progresses to where you would consider them to have severe PDP, they essentially stay there?

Maybe I can talk and you can add to that, Roger. So what we know is that it has to -- the psychosis in Parkinson's disease is clearly different from, for example, psychosis in schizophrenia. So you don't have the same kind of exacerbations in PDP as you have in schizophrenia. And you have in fact a worsening of the psychosis in PDP with increasing demands here. You see that throughout. Perhaps you can add to that, Roger.

Yes, I think as Uli said, it is not that you get an acute episode that then recovers. Patients start with relatively mild symptoms, usually fleeting hallucinations. They were traditionally described as benign, but where the field is today is such that they are not benign in terms of they just continue in the background. They really are the initial symptoms of what becomes a worsening condition over time.

So the mild hallucinations that occur early on in the disease get worse over time. And in conjunction, you see the origin of delusions in the patient's symptoms. It really represents a more malignant change for want of a better word in terms of the course of the disease, as Uli mentioned, in conjunction with this and after worsening dementia at the same time.

So over a period of years, the symptoms just steadily worsen and at some point, as we have seen from the data, it often very frequently becomes a trigger point for patients being institutionalized because the caregivers, the families looking after the patients, just can't manage them any longer.

That helps, because I was concerned that maybe your new screening procedures you could have had maybe a patient with mild or moderate PDP coming in that potentially was just having a bad day and then they get into the trial and they are not as severe as maybe you had originally thought. But that doesn't seem to be the case.

No, that's not the case. And that actually is one of the great benefits of us doing the NPI screening and then the SAPS a couple of weeks later at the baseline. But you do take into account there that any sort of fluctuation due to an event that occurs. And the other great thing is that the SAPS at baseline is done by independent raters who are actually blind to the visit. They are not just blind to the patient, but they are blinded as to which particular visit that is for that patient.

Got you, that's helpful. One of the things that -- correct me if I'm wrong, but one of the things I think they do when patients start developing severe PDP is cut back on their -- the other medications that they are taking. And I'm wondering with the advent of some drug delivery firms that are out there working on long-acting release dopamine replacement therapy products that aim to smooth out the peaks and troughs that you get from a multi-day dose with DRT, I'm wondering if something like that would reduce the symptoms or the signs of PDP?

Here's an interesting point, because I think traditionally there was a belief that the psychosis arose because of the dopamine therapy. And therefore that was the etiological agent in the derivation of the condition.

The field has moved on from there and where it currently is is that you see psychosis in patients that are not exposed to dopamine. And it is felt that it is just a part of the general neurodegenerative condition that's occurring in these patients, very similar to the dementia that occurs in parallel. And in many respects that is very similar in Alzheimer's psychosis.

So there is an under -- the expression of the psychosis is really an element of the disease itself. Where they may well be a role from the dopaminergic therapy is that that may exacerbate the symptoms at any point. And therefore, it is still reasonable to look at how well the patient is being managed.

But smoothing out that dopaminergic therapy will really have no impact on the incidence or ultimate severity of PDP either in the patient or the population.

Got you, and then one last question. Is there a milestone that is associated with the IND acceptance on AM-[183] (sic), a milestone coming from your partner?

Yes, our collaboration with Meiji is structured such that they are responsible for funding that initial $15 million of development. And that is really aimed at us completing that proof of concept program in the US.

In exchange, essentially they will have the exclusive rights in an Asian territory and we retain the rights in the rest of the world. We did receive initial fees and we are eligible for the development and regulatory milestones and also royalties related to the advancement of AM-831 in the Asian territory. We, however, we won't earn milestones on the ongoing US development, but we will be eligible for all development that is occurring in Asia and that is all the responsibility funding-wise at Meiji as well.

So after this, after you complete a proof of concept study, that's when you guys would look to go out and either do another deal or find a partner?

Yes, I think fundamentally we clearly see the desire to integrate a partner in the future to allow us to complete that development and to commercialize in the key territories of the US and the rest of the world, including Europe. Timing, we will certainly keep our options open as we build value in this program.

(Operator Instructions). Boris Peaker with Oppenheimer.

Congratulations on the progress. My question initially is around pimavanserin. In terms of centralized assessment, I'm just curious from your perspective how are the physicians viewing the centralized assessment process? Do they feel that it somehow interferes with their own ability to assess patients? Any pushbacks, any thoughts, what are you seeing from your sites?

Obviously this is -- a number of studies we have now used this process in the assessment of patients as the end point. I think on a number of fronts there is the technology that we actually use. It is actually a video interview. And that has been not just by the physicians at the sites, and the site staff, but importantly by the patient.

That's been very well received, encouragingly so. In fact, many of them feel it is a very straightforward experience.

In terms of using external raters, the question is whether -- it is a good question -- whether the physicians feel that that bit of their professionalism has been taken away. One key element here is that the SAPS really came from -- it's a psychiatric rating scale and it has been adapted following adoption from the schizophrenia area. The vast majority of the physicians that we are using in the study are neurologists by training and therefore it is not really part of their everyday practice.

So there's been really quite -- in some respects it actually helps -- it really helps and they feel it is a help. They don't have to worry about the application off the scale. And obviously for us, what it means is we have a limited number of highly trained people who are doing this on a day-by-day-by-day-by-day basis.

I see. And in terms of NPI and SAP criteria, particularly the more stricter criteria in this study than in prior studies, do you have a sense of what fraction of the PDP market those criteria represent?

We haven't translated that into a percentage of the market. However, it would be unlikely that our indication would be limited by an MPI assessment. The MPI assessment is really there to just support the studies. The indication would likely be for PDP.

In terms of treating, I think initially, obviously, as physicians gain comfort using the drug, as traditionally happens, you use it in more severe patients, then you go to moderate, and then you move down as you feel comfortable. And with the great safety profile we have got, there's really no barrier to using it in an earlier stage of the disease. A very -- as there are no other therapies out there that would be approved, I think that adoption along the severity scale to less severe would actually be fairly rapid.

And, Boris, this is Tom, I may add as well the marketing research we have done, well, Roger is right, there is not explicit percentages. We do see a very significant base when we do our research that are in the moderate and advanced stages, a significant number of the patients in both of those, in addition to a smaller slice that is in the mild. So we think it stacks up very well in terms of the focus we have in this current trial.

I see. And have you learned or any takeaways in terms of the overall market size and dynamics based on the screening process and the patients that you are seeing just coming in and wanting to participate?

I think when it comes to our estimation of the market size, it really comes from the percentage of Parkinson's patients that develop PDP. So what appears to be happening is that there is a realization that PDP is quite frequent indication in Parkinson's patients. We see -- we believe that 40% of patients develop PDP, but in fact it may be large enough; some reports indicate that.

So this is a large number of patients of a very significant population with -- there is over 1 million Parkinson's patients in the US and over 4 million patients worldwide. So we are talking about a large market where we would be the first drug, the only drug on the market that can deal with this problem efficiently and in a safe way. So we are very excited about this opportunity.

Great. And my last question is about pipeline, your partner candidates. How much input and control do you have in terms of development decisions for those candidates? Is that completely out of your hands or are you actively involved?

So let me start with the Meiji Seika Pharma where we and Meiji are driving the development program together in collaboration, in a very good collaboration. When it comes to Allergan's responsibility in the two development programs that they are -- have with us, they have the responsibility and are driving the development and are also paying for all of the development. We are continuously being informed, but we are not directly involved in the key decisions being made.

Okay. Thank you very much for taking my questions and again congratulations on the progress.

Charles Duncan with JMP Securities.

Thanks for taking my follow-up. I had a couple of housekeeping questions for Tom. One is related to the R&D expense guidance for 2010 or -- excuse me, for 2012. With the completion of the enrollment, how do you see the R&D spend in say the first half versus the second half?

Sure, Charles, we haven't provided the specific guidance on expenses. I would first refer you to overall guidance on our expected cash usage and, again, what we have indicated is that the existing cash resources are expected to be sufficient to fund at least into the first half of 2013.

What I can tell you in general, just to give you a sense, we have used about $15 million to fund our operations over the nine-month period to date. So it has been running about $5 million a quarter. You know, clearly, we can have fluctuations on a period to period basis.

We do expect that we will have some increase in overall R&D expenses in conjunction with not only continuing the pimavanserin but moving AM-831 in the clinic. However on the AM-831, we don't expect that to have overall impact on our cash over the course of 2012 since Meiji is responsible for reimbursing the external clinical costs we incur on that program. There can be fluctuations in it quarter to quarter, but clearly we don't expect that impact to affect our cash position.

And I assume the vast majority of the R&D, like 90%-plus is going to direct costs for the pima trial, ongoing pima trials?

Yes, clearly the vast majority of our focus and clearly spend is on pimavanserin.

But operationally, do you see a cut point at which you've fully enrolled patients and expenses start to roll off? Or is that going to take a couple of quarters as you do more data analysis and pay out the trial sites?

Yes. I think what we have seen certainly from our previous studies is these tend to be a reasonable level of consistency. There can always be fluctuations on given studies within a quarter, but these tend to be a pretty large base of the cost just continues and moves kind of through from the time you begin to the time you are completed and done with the study.

So while there can be some spikes, it's not as dramatic as one might guess. So we think it's -- there is a relative stability overall. And in fact, we would see probably that occurring in 2012 and, again, the additional thing that will enter into the equation is AM-831.

Then, if we were to just do some simple math if we were to consider call it a $5 million hit per quarter, got roughly seven quarters right now on the balance sheet, but you talked about getting into or through 2013, could you give us a little bit more clarity as to whether or not you would anticipate any milestones, milestone payments to be earned and paid over the course of that time?

Yes, we haven't provided any guidance in terms of the timing of potential milestones. Clearly as I indicated with respect to the AM-831, on there, we are -- the milestones where eligible relate to development in the Asian territory and continued advancement and with the program that is ongoing now, aimed at driving for that proof of concept. We benefit by them fully funding that first $15 million but we don't earn milestones on that, and then we haven't given a specific timing on the rest.

Clearly what I can tell you though is we have a comfortable kind of cash runway that's clearly at least into the first half of 2013, and specifics we will continue to provide as we move forward and know exactly the timing of additional studies and the like.

Yes, you guys are doing a good job of keeping a pretty buttoned up ship, so appreciate that and thanks for the added color.

Dr. Hacksell, please proceed the closing remarks.

Well, thanks again to everyone for joining us on today's call and for your continued support. We look forward to updating you in the future on our ongoing progress. Thank you.

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