Cerevel Therapeutics Holdings Inc (CERE) 2022 Q2 法說會逐字稿

Morning and welcome to the Cerevel Therapeutics Second Quarter 2022 Financial Results Conference Call. (Operator Instructions)

I will now hand the call over to Matt Calistri, Vice President of Corporate Strategy and Investor Relations.

Thank you. Good morning, everyone. We appreciate you joining us for the second quarter 2022 earnings call. On today's call, you'll be hearing from Dr. Tony Coles, our Chairperson and Chief Executive Officer, Dr. Ray Sanchez, our Chief Medical Officer, Dr. John Renger, our Chief Scientific Officer, and Mark Bodenrader, our Interim Chief Financial Officer, Abe Ceesay, our President, will join us for Q&A.

During our call today, please refer to our press release from this morning, detailing our Q2 2022 performance as well as our updated corporate presentation, both of which are available on our website. I would like to remind you that we will be making forward-looking statements that reflect our current views related to, among other things, the potential attributes and benefits of our product candidates and the format and timing of our product development activities and clinical trials. We strongly encourage you to review the information that we file with the SEC regarding specific risks and uncertainties.

I will now hand the call over to Dr. Tony Coles, Chairperson and CEO of Cerevel to provide an overview of our achievements and outlook.

Good morning, everyone. And thank you for joining us for our second quarter 2022 business results call. At Cerevel it's our aspiration to become the premier neuroscience company and we are certainly well on our way achieving this distinction with a broad and deep pipeline of new programs, compelling early data in schizophrenia, which has led us to initiate a potentially pivotal large Phase II program for emraclidine. 5 new data readouts expected next year and a robust set of mid to late stage programs that have the potential to bring transformative medicines to the [moon] millions of people living with schizophrenia, Parkinson's, epilepsy and dementia related apathy.

And with our announced intention today to study emraclidine in Alzheimer's disease psychosis, and darigabat and panic disorder. We have even more ways to unlock the value of our rich portfolio. We're advancing a pipeline of neuroscience programs that we believe is unmatched among our peers, with additional early stage programs that hold promise in major depressive disorder and other high unmet need conditions.

For our mid to late stage programs, as we mentioned, we expect a remarkable 5 data readouts before the end of next year. 3, Phase III readouts for tavapadon in Parkinson's disease, a Phase II readout in darigabat for focal epilepsy, and a Phase II readout for CVL-871 in the novel indication of dementia related apathy. With so many near term milestone Cerevel has positioned to bring tremendous value to both our patients and shareholders over this period of time. As we seek to transform what's possible in neuroscience.

And following closely after the 5 upcoming data milestones in the first half of 2024. We expect the Phase II program data readout for emraclidine a novel muscarinic M4-selective Positive Allosteric Modulator or PAM which we're investigating in adults living with schizophrenia. We're rapidly advancing this very important program and we have already initiated our Phase II program in June as promised. We're all well aware that the patient need in this area is tremendous. More than 2.7 million people in the U.S., alone live with schizophrenia. A disease that dramatically affects families, loved ones and entire communities. Individuals living with schizophrenia are more likely to be unemployed, experience homelessness, and most sobering they're 20 times more likely to die by suicide.

At Cerevel we're committed to advancing this program with its innovative mechanism of action, leveraging a new potential approach for treatment in a condition that has not seen innovation in 50 years. And we're working to do this on an accelerated basis in order to bring this potentially transformative therapy to as many individuals as possible as soon as possible.

The M4 pathway also holds promise for other devastating conditions. And not only are we committed to developing emraclidine to its full potential as part of a broader M4-franchise with a second potential new therapy that acts as an agonist at targeting the M4 receptor, we have an additional opportunity to leverage the targeted selectivity of the M4 pathway. John Renger will provide additional details on this exciting new program in just a moment.

With emraclidine, we intend to initiate a Phase I trial evaluating safety, tolerability and pharmacokinetics in healthy elderly volunteers to support future development in Alzheimer's Disease Psychosis, or ADP. The behavioral and psychological symptoms of Alzheimer's such as delusions, hallucinations and paranoia exert an enormous toll on those suffering from them and their loved ones. We're eager to explore emraclidine's potential and ADP and ultimately, other conditions.

Our work with emraclidine in schizophrenia and ADP is only one part of the several story though. Earlier this year, we announced positive anxiety data for darigabat, our selective alpha-2/3/5 GABAA PAM. The darigabat trial demonstrated for the first time, proof of principle in the clinic that a compound targeting alpha-2/3/5 and sparing alpha-1 can generate anxiolytic activity and at the same time, may be able to minimize the side effects that limit Benzodiazepine to only episodic use.

Anxiety is another area of tremendous unmet need. In the first year of the COVID-19 pandemic, anxiety and depression worldwide increased by a staggering 25%, and that figure is likely higher than reported. Related to anxiety, 17 years have passed since we have seen innovation in the treatment of panic disorder. Following our evaluation of the results of our anxiety trial earlier this year, we announced today that we have selected panic disorder as an additional indication for darigabat behind epilepsy, as panic is the second most common anxiety disorder and can be the most debilitating. Ray Sanchez will have further comments more specifically in his section of the call.

Cerevel is advancing with clear purpose and our late-stage pipeline has the potential to deliver important medicines to individuals living with neuroscience, diseases who need and deserve new treatment options. We believe the future at Cerevel is driven by the strength of our pipeline and our programs, and we remain committed to changing the face of neuroscience.

I'll now turn the call over to Dr. Ray Sanchez, our Chief Medical Officer, to provide some added color about our lead programs. Ray?

Thank you, Tony, and good morning to all of you. As Tony has outlined, Cerevel is well positioned to open new frontiers in neuroscience. Our pipeline seeks to address some of the most challenging neuroscience diseases and bring forward new treatment options with enhanced tolerability profiles. I spent many years as a clinician and the need for better medicines with fewer off-target side effects is what motivated me to transition into a career in the life sciences industry. I'm excited and energized by our results so far and eager to transform what is possible in neuroscience.

As Tony mentioned, we recently initiated both Phase II EMPOWER trials of emraclidine in adults living with schizophrenia. I am delighted that we are dosing patients in these 2 trials, and I'm eager to see the results, which we expect in the first half of 2024. For background, the Phase Ib emraclidine data we announced last year were truly impressive. Both doses demonstrated clinically meaningful and statistically significant antipsychotic effects with no meaningful differences in gastrointestinal side effects, extrapyramidal symptoms or weight gain compared with placebo.

We are very encouraged by these robust results as we conduct our Phase II trials. These 2 adequately powered 3-arm trials are being conducted worldwide and will each enroll 372 adults living with schizophrenia and experiencing an acute exacerbation of psychotic symptoms. The first trial will test emraclidine 10 milligrams QD and 30 milligrams QD versus placebo, and the second trial will test emraclidine 15 milligrams QD and 30 milligrams QD versus placebo. Running these 2 trials in parallel enables us to fully explore the therapeutic dose range of emraclidine while minimizing the number of treatment arms with the hope of reducing the variability observed in clinical trials as well as the placebo response.

We designed these trials to potentially meet the criteria necessary to service Pivotal based on what we expect the FDA will evaluate in a registrational package. These trials also reinforce Cerevel's commitment to diversity and the needs of individuals living with schizophrenia with the focused inclusion of groups often underrepresented in clinical trials.

In order to accelerate a potentially registrational package for emraclidine in schizophrenia, we expect to initiate a 52-week open-label safety extension trial in EMPOWER 3. In the third quarter of 2022 and are also conducting an 8-week ambulatory blood pressure monitoring trial in emraclidine with data expected by the end of the year.

Moving now to the potential of emraclidine in Alzheimer's disease psychosis as a life cycle management opportunity. As Tony mentioned, we plan to initiate a Phase I trial evaluating the safety, tolerability and pharmacokinetics in elderly healthy volunteers, 65 to 85 years old by the end of this year. The design of our multiple ascending dose trials will evaluate 5 doses, 2 to 30 milligrams in 5 cohorts lasting 14 days each.

Pivoting now to panic disorder. Panic disorder, which is characterized by panic attacks, presents with the constellation of symptoms that include a rapid pounding heart rate, sense of impending doom, weakness, dizziness, disorientation and even chest pain, making some people feel like they are experiencing a heart attack. Panic episodes can be quite debilitating and can be triggered by various factors, including trauma, stress, fear or illness.

I'd like to share a bit more information about our plans to pursue darigabat as a potential treatment for panic disorder, which is the second most common anxiety disorder. We are currently developing plans for our Phase II proof-of-concept trial, and we'll be meeting with the FDA in the fall to gain alignment on our path forward. We will provide additional updates as our plans progress.

As a reminder, this plan comes on the heels of the very encouraging positive top line data from our darigabat Phase I healthy volunteer hypercapnia trial in acute anxiety earlier this year. These results provide strong evidence of darigabat's potential as a differentiated daily maintenance treatment for anxiety-related disorders while minimizing tolerability concerns in contrast to benzodiazepines. We know that there are many people who suffer from panic disorder and need better treatment options. We also understand the limitations of benzodiazepines with side effects that include sedation, cognitive impairment, efficacy tolerance and abuse potential, limiting their chronic use. Consequently, our goal is for darigabat to be a daily maintenance treatment for people with inadequately managed panic attacks with the hope of providing much-needed relief.

Turning next to tavapadon, our D1/D5 partial agonist, which we are developing for Parkinson's disease has both a monotherapy and adjunctive treatment to levodopa for symptomatic motor control. We continue to dose in all 3 of our Phase III trials known collectively as the TEMPO trials and all remain on track. We expect data from TEMPO 3, the adjunctive trial in late-stage Parkinson's to read out in the first half of 2023 and data from TEMPOs 1 and 2 trials in early-stage Parkinson's to read out in the second half of 2023.

Turning to CVL-871, our second D1/D5 partial agonist, which we are currently evaluating in a Phase IIa exploratory trial in dementia-related apathy. We expect data in the first half of 2023. In June of last year, we received fast track designation for CVL-871 in this indication, which enables early and more frequent interactions with the FDA as well as the potential for rolling NDA submission and priority review. We are looking forward to interacting closely with the agency in determining the best path forward for developing a treatment in this novel and much-needed indications since there are no currently approved therapies.

With that, Dr. John Renger, our Chief Scientific Officer, will speak about our early-stage portfolio and our presentations at medical conferences. John?

Thank you, Ray, and good morning, everyone. I'd like to begin this part of the presentation by providing an overview of our earlier-stage clinical and preclinical programs. First, we have an active program to identify an M4 selective full agonist clinic-ready molecule as part of our goal of creating an industry-leading M4 selective therapeutic franchise. We believe this novel asset will provide for additional clinical indication optionality as we consider the therapeutic utility of this mechanism of action and has demonstrated potential in treating psychosis. This additional program will also give us an opportunity to complement what we are doing to develop emraclidine and expand our presence in additional neuroscience indications.

Second, I would like to highlight our kappa opioid receptor antagonist program CVL-354, which continues to progress in our ongoing Phase I single and multiple ascending dose trials. We believe this mechanism of action has the potential to address major depressive disorder and substances disorder based upon prior clinical and preclinical data that have been generated with compounds that selectively target the kappa opioid receptor.

We continue to build a robust discovery engine in labs in Cambridge Crossing with additional ongoing discovery stage and pre-IND programs. We are leveraging our differentiated understanding of disease-based neurocircuitry and world-class chemistry to develop and explore the therapeutic potential of small molecules to address major unmet patient need. We believe this research engine, which is driven by some of the most talented scientists that I have been able to work with in my career, to fuel innovation for many years to come, and we look forward to keeping you updated on our progress on these earlier-stage efforts as appropriate.

Finally, I also want to emphasize how proud of our team's ongoing presence at key medical meetings, which is an important facet of our journey to becoming the premier neuroscience company. Our teams have recently presented our positive darigabat Phase I hypercapnia data at the 2022 American Society of Clinical for Psychopharmacology Annual Meeting. And this presentation underscored our enthusiasm for pursuing a panic disorder indication and potentially redefining how we envision the future treatment of anxiety disorders. At ASCP, we also participated in a panel discussion focused on achieving diversity in clinical trials.

Cerevel's mosaic vision of diversity, equity and inclusion touches on all aspects of our organization, including our clinical trial enrollment and the operational barriers that can exist to the broad inclusion of diverse populations. We have developed a patient-centric guidance, informs our investment in focusing on the demographic distribution of both patient populations and healthy volunteers. Seeking input from advocacy organizations, addressing historical presence that may impact clinical trial participation and deploying thoughtful considerations about cultural differences when engaging with diverse communities.

Our diversity, equity and inclusion principles enabled thoughtful clinical trial design and directly reflect how we embrace authenticity and diversity and service for our mission to push boundaries, develop solutions and transform lives for all patients with neuroscience diseases. I like to publicly extend my congratulations and gratitude to our teams for their ongoing commitment to our company, our mission and the patients who are relying on us.

I'd now like to hand it over to Cerevel's interim Chief Financial Officer, Mark Bodenrader, to review our financial performance for the first quarter. Mark?

Thank you, John, and good morning, everyone. I'm pleased to provide an overview of Cerevel's strong financial position in our second quarter 2022 financial results. Please refer to this morning's press release for the full details of our financial update.

For the second quarter, total operating expenses were approximately $93 million, which includes R&D expense of $73 million and G&A expense of $20 million. As expected, total operating expenses for the second quarter grew over prior quarters, driven by the continued progression of our clinical trials and increased personnel costs to support the advancement of our pipeline. Relative to the second quarter last year, R&D expenses increased by approximately $35 million. This increase was primarily due to the continued advancement of our tavapadon and emraclidine and darigabat programs, investment in our preclinical and discovery efforts and increased personnel and other infrastructure costs as we expand capabilities to advance our pipeline. On a sequential quarter basis, R&D expense grew by approximately $18 million over the first quarter of 2022. This was primarily due to costs associated with advancing our emraclidine program. We expect R&D expense for the remainder of the year to be relatively consistent with our second quarter results.

G&A expense for the second quarter increased by approximately $7 million over last year, primarily due to higher personnel costs as we continue to grow our organization. We expect G&A expense to increase slightly for the balance of the year as we support the continued growth of our company, including the progression of our R&D programs and our commercial planning activities. As of June 30, 2022, our cash, cash equivalents and marketable securities totaled approximately $531 million.

In closing, we remain well capitalized. We expect our cash resources to fund our current operations into 2024. We look forward to multiple value-creating data readouts over the next couple of years, and we will continue to think creatively and opportunistically about further strengthening our balance sheet.

With that, I'll hand the call back to Tony for closing remarks.

Thanks, Mark. As you can see, we're advancing our broad and diverse set of programs and building what we believe is truly becoming the premier neuroscience company with the potential to unlock significant value for both patients and shareholders. The 5 near-term late-stage data readouts across 3 development programs coming up in 2023, a diverse set of therapeutic indications that we're exploring robust life cycle management plans to optimize each of our programs and a vision to transform treatment of a broad range of neuroscience diseases, Cerevel is on the leading edge of the next great frontier in medicine.

Thank you for joining us this morning. I want to thank our teams dedication and commitment to make this possible. And I also want to extend my deepest gratitude and appreciation to the clinical trial participants and investigators who contribute to the development of these important therapies.

With that, operator, let's open the call for questions.

(Operator Instructions) Our first question comes from Michael Yee with Jefferies.

I just wanted to ask on emraclidine and the announcement of Alzheimer's disease psychosis. And just wanted to understand maybe, what some of the drivers of announcing that today. And also, as you think about that, how important hitting M1 is in that type of indication. So maybe just talk a little bit about that move forward there and what drove that and how you feel in regard to the confidence?

And then just a follow-up on emraclidine, I know you reiterated today, you'll have an update on the blood pressure study, I think, later this year. I guess, what is -- I guess, what are the expectations there? And what will you actually be able to say about that study?

I think one of your questions was about our announcement of the pipeline updates. We've been working on our next steps for darigabat in anxiety after we got the data earlier this year. So the announcement today about darigabat is just keeping everyone apprised of our latest thinking now that we have more firmly planted our feet in panic disorder. And the same is true for emraclidine in Alzheimer's dementia psychosis. We've been looking at this opportunity for quite a while. We've said before that we wanted to very carefully lay out the next steps. The team is now prepared with a full development program to study the pharmacokinetics in healthy elderly and these are just part of our regular pipeline update.

With regard to our [ABPM] study, I'm perhaps going to ask Ray to just cover that notably what can we say or what can people expect from that later this year. And then we certainly feel free to add any additional comments on either darigabat and panic or emraclidine and ADP. Ray?

You are correct that we are -- as I mentioned earlier, expecting the results of the ambulatory blood pressure monitoring trial later this year. As you know, that is a Phase I trial that per guidance is required for any therapy that has shown a pressure effect in their development. But just to remind you that those pressure effects were transient, they minimized over time and the average at the end of 6-weeks -- in our 6-week Phase Ib trial or showed no clinically meaningful differences versus placebo. So the agency is really interested in understanding as are we. The sustained pressure effects in systolic blood pressure over an 8-week period. And this is a trial that is required for guidance like other Phase I trials, drug-drug interaction trials from -- to understand the pharmacokinetics as well. So it's just another trial that is required for registration, but is not gating to approval. So it's really to inform practitioners and patients in terms of the labeling on how to best leverage emraclidine when it's approved.

And JR, maybe if you could expand on the mechanism aspect of Mike's question, I think the question had to do with, how do we think about selectivity for M4 in the ADP indication versus M1?

So as you know, very early on the muscarinic pathway, was established in the Alzheimer's patient population with an early study that demonstrated that Xanomeline by itself had a -- in patients that could tolerate the drug had a benefit in vocalization outburst, paranoia and some other measures. And so we really believe it is the M4 receptor that's driving the change in dopamine levels decreasing the hyperdopaminergic activity that's associated with the psychosis part of Alzheimer's disease. As you know, there have been M1 compounds that have gone into Alzheimer's in terms of cognition with prior companies compounds and so they have not shown benefit. So we really think that the M4 selectivity is really what we'll be able to drive efficacy and looking at the psychosis symptoms in Alzheimer's patients. And so we don't believe that the M1 will confer benefit. But we'll be finding out as we pursue this indication.

Our next question comes from Matthew Harrison with Morgan Stanley.

I was hoping to ask on tavapadon and I guess a 2-part question here. So first, obviously, TEMPO 3 is going to come first before TEMPO 1 and 2. Can you just talk about how you view the results in late PD to have a read through to early PD or not?

And then secondly, can you talk about what you view as a clinically meaningful result in terms of separation in those studies?

Yes. Ray, if you'd be kind enough, I guess -- thank you, Matthew, first of all, for the question. I think, Ray, this would be perhaps a good time to just overview the TEMPO program and draw the distinction between the TEMPO 3 data that we expect in the first half of next year and the TEMPO 1 and 2 data that we expect in the second half of the year. I think Matthew's question about the potential read-through for results in the TEMPO 3 together would be a main focus. And then we'll come to the specific question of clinical efficacy standards in Parkinson's and what we might consider success.

So Matthew, as you know, this is a novel mechanism. There hasn't really in the last 20 years, been any novel therapies to address the symptoms of Parkinson's disease. And we have a comprehensive program that we think will address the benefits of tavapadon at the inception of being diagnosed all throughout the course of the disease. So TEMPO 3 is adjunctive treatment to levodopa. So the primary endpoint there is the on time without troubling dyskinesias and the clinically meaningful threshold is of at least 1 hour, so it's powered accordingly to achieve at least 1 hour of on time with troubling dyskinesias.

And so the read through is really not balanced in terms of what we expect in the early Parkinson's trials. Those are powered differently to look at different in the unified Parkinson's disease rating scale. And as you know, in the 15-week trial, a very impressive 4.8 points was achieved on Part III. In those early trials, the primary endpoint is that UPDRS Parts II and III, which we saw another robust outcome in the 15-week trial that was conducted several years ago.

So our hope is that in the 27 weeks that we can show a significantly improved benefit, not only on the motor symptoms, but it's also in the functionality of the patients as assessed by Part II. So our hope is that the collective trials will show the benefits of tavapadon. Again, going back to my earlier comment of being a really backbone therapy from its inception when you're diagnosed throughout the course of the disease.

And Abe, you might want to add your perspective as you think about how we might think about commercialization, competitive profile, why some of the existing launches haven't met standards? Maybe just expand on those topics just a minute.

So one of the things that we reflect on is the Parkinson's patient population, as Ray outlined, continues to have significant unmet need. And when we look at the history and really kind of the recent launches of Parkinson's Therapies, a couple of things really come forward for us. One is, as Ray mentioned, there hasn't been much innovation. There has not been novel mechanisms actions introduced to this patient population. And ultimately, those profiles really haven't led to a strong commercial presence of the most recent therapies that have been launched in the Parkinson's space. When we step back and we look at tavapadon, we see a novel mechanism of action that we think can offer a lot of benefit to patients, but also a very robust data package that really supports, as Ray said, tavapadon potentially being a backbone of therapy across the spectrum of Parkinson's disease, early initiation, but also really supporting patients through base stage Parkinson's as well, which we think will really set us up well for, I think, a strong commercial presentation as we think about tavapadon.

Our next question comes from Paul Matteis with Stifel.

I have one emraclidine question and then one question on the Capa compound. On the ambulatory blood pressure monitoring study that you're going to disclose some data by the end of this year. Can you walk a little bit through your thought process around the math regarding the primary goal of that study, I think you said you're hoping to rule out statistically a 3 millimeter mercury increase in blood pressure, understanding that the error bars are reflecting a small [sample] size in the Phase Ib. I think they were pretty wide and the upper bound there is above 3%. Maybe you could just kind of comment on, why you're confident that this study is likely to meet a statistical goal, and if we're kind of mismatching time points in comparing. And then on the Capa compounds, I was curious if you have direct plans there yet or might soon to study that in major depressive disorder given the J&J data that have flown somewhat under the radar?

There are probably a couple of things to level set from your question. Notably, the 3 millimeters and mercury aspect of your question and the (inaudible). Ray, why don't we just provide the context for everyone. So we have a good understanding for thinking about this particular study as a Phase I requirement from the FDA.

And as you know, as I mentioned earlier, that this is a Phase I trial that per guidance is required for agents that have shown a pressure effect in their development. And so it's another Phase I trial like any other Phase I trial that's required for registration really to inform the labeling, but it's not gating to approval. And what we're really trying to understand here is not the absolute, as you know, the absolute pressure effect at any given time. But really over the 8 weeks, is there a sustained systolic blood pressure effect over those 8 weeks.

And so the goal here is really to look at the 2 doses of 10 milligrams and 30 milligrams, so a low dose and a high dose. And to understand, as you mentioned correctly, is there a greater than 3 millimeter of mercury sustained effect over time. And that really -- it's powered 90% powered to show a probability of a 95% confidence interval for change from baseline -- for 24-hour baseline mean to ambulatory systolic blood pressure at Week 8. And so understanding that dynamic and looking at the upper bound of the confidence interval is what we'll be looking for what the agency will be looking for and understanding what that outcome is. But again, this is really more informative for labeling than it is for approval, but it's needed for registration.

Great. I think it's fair just to add that this really is about sustained increases in blood pressure. I know you said that, but I want to draw everyone's attention to that because I think one of the points in the question asked, was, did we have episodic increases in blood pressure above 3 millimeters in mercury. That is, of course, not the point of this particular study, because what the agency cares about is the sustained elevation of blood pressure, but I don't know if you had any more that you wanted to add beyond that clarification in that not so subtle distinction.

No. I think what we're looking at is really 24-hour blood pressure monitoring and using at the week 8 versus the baseline. And so understanding the average during that 24-hour measurement is really what's important. But if we look at the week 6 average in the Phase Ib trial, that it gives us confidence that we'll be able to really describe the benefits of emraclidine without concerns of a pressure effect overall. But in case the data suggests differently, that we will then inform labeling, but we still are confident that emraclidine has great benefit for the patients who need it.

If I could just clarify, in the Ib study, the data you've shown so far, what time point was that taken? And was that closer to C max versus, I think, the study of 24 hours? Just trying to understand the context around the 6-week data that we saw in the 1b.

So it was -- the measurements were taken at several points, but one of -- they were taking 2 hours post dose, so closer to C max. The data that we showed was the 7-day average of the daily measurements at week 6, and so that's closer to what ultimately we will want to show because it really shows the average over time, which is what we'll see in a 24-hour period, Paul. And so that's the difference in that it speaks to the sustainability of the effect and not just an acute effect at any given time point.

JR, I know that your team was involved in leading that Phase I study. Any additional comments on the C max aspect of the question, just to complement what Ray has [often]. And maybe a few would lateral from that into the answers around our intentions for the core program in MDD.

Yes. So the data that was reported for 6 weeks was at the 2-hour time point, and so that is what we estimate to be C max based on average pharmacokinetics, what we've seen. And so what you're looking at really is, what is the worst deviation that you would expect to see based on what we know about when we did see the tranche increases, which maximize at the C max. And so what you saw was the worst that we could see. And then what you have to consider is if you take the fact that there's a transient effect even on the first days of dosing, that transient effect goes away over time. And so if you're averaging over a 24-hour time period, and this -- what you've seen is the worst that it could be, we don't anticipate that we'll be in an area where we'll have to worry about the 3 millimeters at this point, but we're doing the study to confirm that. But the data we reported was that at around the estimated C max point.

To your second point, Paul, around KORA. So yes, we're really very excited about our molecules. So as you know, J&J has reported positive data in a Phase II design study in depression. We do know that there are additional studies with their molecule around GI tolerability. They've been reported on clinicaltrials.gov, our molecule from a tolerability and safety perspective based on preclinical talks and what we've seen to-date in the clinic is very promising. And so the data that we're getting back shows that it's very well tolerated within a SAD study. So I think what we're looking forward to is being able to take the next steps once we've completed the SAD and MAD portion. Obviously, we're very engaged in planning what those next steps look like to maximize the understanding of the molecule and giving us the options for our next indications. But we are considering how those trials will be dosed and designed based on what we're seeing, as far as, feedback and data that we're getting in the clinical study.

Our next question comes from Tiffany Sun with JPMorgan.

Can you provide some more color on the [key next steps] for emraclidine, you mentioned prioritizing moving forward. So the nonclinical pharmacology studies, CMC manufacturing scale up, et cetera? And what's the expected time line for these? And more broadly, what do you expect to be the gatekeeper for approval, one of these or the 52-week safety trial?

JR and Ray I think I'll ask the 2 of you to respond, JR largely on the product development CMC side. But Ray, if you don't mind providing an overview of the Phase II program that we've been talking about, that would be terrific, and I think we'll be able to answer Tiffany's questions.

Tiffany. Yes, so as you know, as we mentioned, that we are conducting a robust Phase II program that consists of 2, 6-week trials of 372 individuals living with schizophrenia each as well as the 52-week open label, which is slated to start soon since these individuals have the opportunity to roll over into the open-label extension. We will also be adding de novo patients in the future to ensure that, in fact, the open-label extension does not become rate limiting to our being able to file if indeed, the data supports both trials data supports potential for registration. But we are -- we've started dosing in both trials. They are being conducted in the U.S. in Bulgaria, Serbia and Hungary. The countries have been separated between the 2 trials.

So from that perspective, we're meeting what we believe the agency is looking for, which is, of course, the long-term safety data, but as well as understanding and characterizing the full dose range, which we're doing and then, of course, showing a statistically -- statistical separation from placebo. There's a lot of other -- a lot of work that's being conducted in terms of technical operations and preclinical work and pharmacokinetic work and so forth that John can outline. But our hope is that if the data reads out as we hope it will, that we will have a package that can be provided to the agency and with their support, try to get emraclidine to patients as soon as possible. But John?

So yes, so from a [check-ups] perspective, we are being very aggressive about being able to bring forward a registrational package so that we have done all of the check-ups work on the manufacturing and the quality controls, et cetera and all the qualification and stability work that will be necessary to support that successful NDA filing if the data comes back positive, from preclinical work that as you know, one of the things that usually takes a lot of time is a [Kar-C], Kar-C will be done in time to support an NDA submission around the time that we're getting the other key data points. And so that has been initiated, is on track to deliver the necessary NDA submission package in the time frame that we expect the other studies to complete, including the OLE.

I take your question about extra indications, we've had a very constructive meeting with the FDA around our plant. We're going into the elderly population. As Ray mentioned, the same doses that we've covered in the under healthy population will be carried forward. And so we'll be including from 2 milligrams up to the highest dose that we think that we need to achieve, which is the 30 milligram dose in that study that we've announced today. And so we're excited to get that safety and tolerability data in the elderly population to support our life cycle management opportunities in ADP. So we do have vendor selection to support all the compound manufacturing to support this on a commercial scale. And so we're getting ready to have a successful follow-up work on to have the positive data from the Phase II studies.

No, that's perfect. I mean, I think the thrust is we are doing everything we can in parallel to ensure that when the clinical data are ready, we're ready with everything else. So thank you guys for that.

Our next question comes from Douglas Tsao with H.C. Wainwright.

First on darigabat in acute panic disorder. I'm just curious, do you have a sense -- I think in the earlier study with [8M] point the duration of dosing and the primary endpoint for the Phase II study.

Doug, let me just make sure I got the question, because you broke up a little bit. You're asking about duration of booking in which study?

Darigabat panic disorder study.

Ray, do you want to -- we haven't finished with all the details there. Ray indicated, we're going to talk to the agency. But Ray, what can you say?

Sure. So Doug, as you know, there hasn't been a drug approved for the treatment of panic disorder since 2005, so 17 years ago. The duration of trials historically in terms of present have been anywhere from 8 to 12 weeks. We are currently finalizing our proposal for a proof-of-concept trial in patients with panic disorder. And we will be going to the agency this fall to align to ensure that there hasn't been any change of thought within the agency given that it's been that long time -- lot of changes within the FDA. And so we want to make sure we're aligned. But obviously, our construct for that program is really based on [precedent]. We just want to make sure that precedent still upholds currently.

And then just a follow-up in terms of emraclidine study in dementia-related psychosis. Just curious, I think you -- John just mentioned that you were going to testing doses as low as 2 milligrams. I'm just curious, do you anticipate or how are you thinking about that study and the readout and what you'll get in terms of potential dosing for a patient-driven study? I mean do you think the dosing will differ significantly from what you've seen for schizophrenia?

JR, your team is going to be conducting that particular program. Why don't you start with the answer to the other question.

So as you know, we've had to-date a very well-tolerated profile in both patients and [healthies]. We need to confirm that as the next step before we go into the ADP study. So we are covering the full dose range in the multiple dose study that we've announced. We don't expect the elderly to have a shift in their dose response based on what we know about how the drug is metabolized and the things that can impact metabolism in the elderly. And so what we anticipate is based on the side effect profile that we've seen to-date based on what we know about how the drug is cleared, we don't expect to see differences in [DC] or expect to need a dose adjustment -- but obviously, we'll get the data and determine whether that's the case, but that's the point going in.

And so just to confirm, so it sounds like this is more sort of confirmatory rather than sort of an exploratory status?

Well, I mean, we have to get the data. So we'll be making sure that what we've seen to-date is extended into the elderly population before we go into the patient population. But based on what we know to-date, we don't expect to see something that would -- we would forecast that we would need to do a dose adjustment elderly. But again, we have to get the data first.

Our next question comes from Madhu Kumar with Goldman Sachs.

This is [Rob] on for Madhu. I was just wondering for darigabat and panic disorder, how are you thinking about the population is that patients already on Benzodiazepine (inaudible) or something broader?

Ray, what can we say, given our upcoming planned discussions and our further work?

So the plan is really to enroll patients who are suffering from panic disorder, meaning they have panic attacks and the frequency, of course, is something that we'll have to understand better in terms of what that threshold is, because the patient profile, as you know, is critical and drives the success outcomes of trials. We're still looking at that internally when we will be making that proposal based on historical precedent. So we'll stay tuned for those details, as soon as, we align with the agency.

And then just one other quick question on emraclidine. Are you thinking of any drug-drug interactions with elderly population that might differ from previous population?

JR, do you want to hit that one quickly?

Sure. So there is -- as you can see from clinicaltrials.gov we've excluded some of the strong SIP compounds. And so whether they're inducers or inhibitors. And so there's a potential for that. We updated to collect yet to inform that. But that's the -- that's what we'll be looking for. But I think that this is not something that's unusual in this population. And so there is the ability, obviously, to inform physicians about that should it occur, but we'll all get that data as well.

You don't expect anything out of the ordinary just because it's not population. I think that was the second part of the question.

No. The answer is no. No.

(Operator Instructions) Our next question comes from Graig Suvannavejh with Mizuho.

Tony, I was wondering, we've been doing a lot of work on our end with KOLs on -- specifically on emraclidine. And I'm wondering from the market research that perhaps you have done or the company has done, have you been able to get a sense from your clinical advisers on whether they're seeing a meaningful difference between what an M1 and M4 compound offers versus an M4 selective compound at the end of the day. Also wondering if you've gotten any feedback on -- at least on the [PAN] score, especially ahead of the Phase III KarXT readout like what really is clinically meaningful in terms of what doctors want to see from a muscarinic based agent in terms of the placebo adjustment on PAMs. So that question is really around kind of what you're hearing from clinicians?

And then secondly, I was wondering if you could offer just your thoughts on what we might be able to see from the Phase III data for Karuna and what that might mean for emraclidine?

And then my last question just was on the ADP program for emraclidine, and I'm wondering if there are any lessons learned or key takeaways that you've gotten either from looking at the Acadia experience or how Karuna is running their ADP program?

Okay. Because it's come up a couple of times in our conversation, JR, I think it'd be useful to go through the M4 versus the M4, M1 thesis that we're operating with and what you think the relevant contribution is? I know that you've said that you think that it's largely the antipsychotic effect is driven by the M4, but there might be some additional clarification. I know that we're always engaged with our strategic thought leaders in a variety of conversations. But I thought we'd start with the ground truth of what the science has for us and what the science tells us. And then Ray will add…to you to talk a little bit about the PAN score. But JR, if you take that first piece, that would be great.

Yes. I mean, as you know, Graig, the history here has been that the approach was anomaly and it's really one that's gone after the muscarinic -- and as you know, with the nonselective compound, Xanomeline was able to show benefits in both the Alzheimer's population where I mentioned before that they saw specifically impacts on the -- in that study, they were looking at impact on the psychosis measurements. And so in that population, they were particularly interested in things like localization and outburst, paranoia, things that have to do with what we understand to be related to hyperdopaminergic activity. And as you know, in that study, even though it was not well tolerated, the patients that were able to complete that study, we're benefited in a dose-dependent manner.

So also in the schizophrenia study in a younger population, they also showed benefits in the psychiatric schizophrenia symptoms that are related more towards the PAN score. So what we were able to do with our data, which was the first compound that is actually M4 selective what you saw was a very similar result to what was seen with the Karuna compound. And so with that -- to me, what that validates is the fact that M4 selectivity confers the antipsychotic benefit that was demonstrated by Xanomeline. And what we were able to do with an M4 selective compound also was avoid the side effects that caused intolerable side effects that we're seeing with a nonselective compound.

And so really, what we're talking about is looking for the benefit of the muscarinics and treating symptoms that are related to schizophrenia or psychosis. And as we know, this is related to the increase in dopamine levels. And so if you look at where M1 is expressed in the brain war M4 is expressed, M4 is really on the neurons that provide input into the dopaminergic system. M1 is much more broadly expressed and there's been a target of interest for cognition.

But the indications that we're looking at are really around the diseases where psychotic symptoms, whether it's measured by the pain score or whether it was measured by the earlier study that Lilly did whether you are looking at specific features in psychosis in Alzheimer's patients, those seem to be more related to dopamine, and we know that the M4 receptor is selectively expressed in -- highly expressed in Australia, much more selectively expressed at high levels in that area the brain that controls dopaminergic activity that can drive the psychiatric symptoms that have been seen in the populations that we're talking about today.

So I think that the selectivity question that we've been able to answer with our compound is that M4 by itself can drive an antipsychotic benefit in this study that we reported, and it can avoid the side effects that are seen commonly with compounds that antagonize the muscarinic M1, for instance or other muscarinics. So I think that what the data supports today from our point of view is that M4 selectivity is able to provide an antipsychotic benefit. We don't believe that the data that was generated by a nonselected compound in the PAN-score, which is different from a compound that's selective.

But what we did see that was different between the 2 types of compounds was that the M4 selectivity did confer a better tolerability profile. We did not see the GI-related issues. We did not see the dropouts that we're seeing previously was anomaly. So really, our belief is it's really M4 is important in driving the antipsychotic benefit. It's been demonstrated in 4 different studies by 3 different sponsors to-date. And so we have a lot of confidence in this mechanism -- we think we understand the neural network and the circuit treated drives psychosis, and we believe that we understand how the pharmacology M4 receptor can drive that benefit. So with that, I'll turn it over to Ray.

Ray, I'm sorry. If you could, I was just thinking about the bridge to JR's answer. I know you talked to thought leaders quite a bit you and your team. Can you just talk a little bit about how well you think both prescribing physicians and thought leaders will appreciate the distinction JR just made, that is namely about M4 selectivity and how they might actually view the PAN score standard, if you will, for what good clinical efficacy might be. And then we'll come back to the other 2 questions that Graig has asked. And then operator, I think we will be out of time. So this will be our last question.

Absolutely. So Graig, as you know, historically, on average, the absolute total PANS reduction for any psychotics existing, antipsychotics has been somewhere between 10 and 15 points, placebo-adjusted about 5 to 10 points. And so we have therapies for any therapy, obviously, we're going to look at that absolute PANS reduction as placebo response and the variability introducing these trials, especially as you enlarge them, definitely increases and it waxes and wanes over time, depending on how many trials you conduct. But I think to Tony's point that there is definitely a need in the landscape for therapies that have a robust antipsychotic effect, but more importantly, have a side effect or tolerability profile in terms of metabolic issues, in terms of extrapyramidal side effects and so forth, that are fairly benign. And what we're seeing, at least in the data that's been generated to-date, is that this is a pathway that can actually have a very impressive side effect profile and much more -- better tolerated in existing therapies.

But in terms of the efficacy provided that, we're hoping that the efficacy will be as good as, if not better, than what we've seen historically. And I think the selectivity of this mechanism for emraclidine as well as the once a day and no need for titration characteristics of this therapy. I think speak to the compliance issues and the recidivism that you see in this patient population because of multiple dosing, because of the need for titration and so forth. So we're overall, extremely confident not only with the mechanism, but also with what the data can support and the benefits it will bring to the landscape.

I think I would just end. Thank you, Ray, that was very good and very clear. I think what I would do I'll probably just end with the following notion that, obviously, we don't make a practice of commenting on other companies. And we certainly won't speculate about what other companies might be. Our perspective is that if we have a success, because there's another therapeutic that shows benefits in patients than we all win. And on that basis, we will learn as the field evolves, but are really focused not just on emraclidine, but all of the other things that we have ongoing darigabat in panic, the upcoming epilepsy data readout, tavapadon in Parkinson's, the really exciting program for MDD, the dementia-related app. We have so many things to focus on. So we will stay abreast of all of these things.

As to learning's in terms of Alzheimer's dementia psychosis, I think we have watched how the agency has responded to other companies who have explored that potential indication. And obviously, we're incorporating those learning's into our designs and plans. So let's stay abreast. Let's stay tuned. I will certainly keep you guys informed as we know more. Operator, thank you for assisting us today. Thank you team for the excellent work and thank you each for just past the hour. We appreciate your time and your support, and we will look forward to future updates. Thank you, guys.

This concludes today's conference call. Thank you for participating. You may now disconnect.