Cerevel Therapeutics Holdings Inc (CERE) 2023 Q1 法說會逐字稿

Good morning, and welcome to Cerevel Therapeutics First Quarter Financial Results Conference Call. (Operator Instructions) Please note that this call may be recorded.

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

Thank you. Good morning, everyone. We appreciate you joining us for our first quarter 2023 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.

During our call today, please refer to our press release from this morning detailing our first quarter 2023 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, and thank you, Matt. Thank you for joining us for our first quarter 2023 business results call. This morning, we announced the appointment of Ron Renaud, the next President and CEO of Cerevel, and I am really looking forward to partnering with him as I return to where my career with Cerevel began in 2018, and that's as Chairperson of the Board. I have known Ron for more than a decade, and his tremendous experience and leadership will serve the organization well as it prepares for an exciting future, most notably the 7 data readouts that we expect in the coming year.

As I worked with the Board to plan this transition and return to my role of Chairperson, we knew that a smooth change in leadership required the right timing and the right successor. The fundamental strength of the company made now the right time, and we know that in Ron, we have found the right successor. Ron brings deep experience in the life sciences sector. And as the former CEO of both Translate Bio and Idenix Pharmaceuticals, he is truly the perfect fit to become the next CEO of Cerevel. I have great confidence in Ron's ability to lead Cerevel into its next phase as we work together to unravel the mysteries of the brain.

Ron will join Cerevel at a time when we are steadfast and focused on executing our clinical trials and optimizing our cash runway with thoughtful fiscal discipline. Cerevel has a tremendous pipeline that is poised to transform what is possible in neuroscience, and we look forward to bringing new treatment options to as many patients as possible as soon as possible.

Let me first review the status of our lead programs, starting with emraclidine, our M4-selective positive allosteric modulator, or PAM. Our emraclidine program has maintained strong momentum, and our robust Phase II EMPOWER program for adults living with schizophrenia is enrolling well and remains on track for a data readout in the first half of 2024. At Cerevel, we're committed to advancing our emraclidine program on an accelerated basis, and we continue to prioritize this important Phase II program and the completion of the other necessary preclinical and CMC registration-enabling activities, in addition to an open-label extension trial, in order to bring this potentially transformative medicine to the people who need it.

Driven by our strong belief and conviction in the differentiated advantages of a targeted, selective M4 muscarinic mechanism, we are also exploring emraclidine for the treatment of Alzheimer's disease psychosis. We were pleased to receive FDA fast-track designation for emraclidine for the treatment of hallucinations and delusions associated with Alzheimer's disease psychosis, and we initiated a Phase I healthy elderly volunteer trial to support development in ADP at the end of last year.

Beyond our work with emraclidine in schizophrenia and ADP, we are also advancing therapies for other serious neurological conditions by targeting new pathways with novel selective approaches. Darigabat, our selective alpha-2/3/5 GABAA PAM, is another Cerevel program with multiple potential indications. The first dives is epilepsy, the fourth most common neurological disorder. Through our Phase II REALIZE trial, we are studying darigabat in focal epilepsy, an area of tremendous unmet need for patients who need better control of their seizures. We announced today that we expect this program to read out midyear 2024 as one of our 7 anticipated mid- to late-stage data readouts next year. We have tremendous confidence in the potential of darigabat to address important unmet medical needs, not only for epilepsy, but in the potential treatment of anxiety-related disorders, given its selective receptor subtype profile and its avoidance of alpha-1, the key receptor subunit we believe is the main driver of side effects for benzodiazepines. We will be initiating our Phase II trial in panic disorder this quarter as planned and look forward to providing you with future updates as that trial progresses.

Turning now to tavapadon, the first D1/D5 partial agonist in development for the treatment of Parkinson's disease. We believe our registration-directed Phase III program has the potential to establish tavapadon as the cornerstone treatment across the spectrum of Parkinson's disease therapy. We believe tavapadon could serve as both the preferred monotherapy choice for the newly diagnosed patients and the ideal adjunctive therapy choice to levodopa as disease progresses.

All 3 of Cerevel's Phase III trials in Parkinson's disease, known collectively as the TEMPO trials, are ongoing, along with the corresponding open-label extension trial. We expect data from TEMPO-3 now in the first half of 2024 and data from TEMPO-1 and TEMPO-2 in the second half of 2024.

While we remain single mindedly focused on executing our broad range of clinical trials, we recognize the need for continued fiscal discipline. As Mark will explain in detail in a moment, we have reduced our planned 2023 operating expenses while maintaining a rigorous focus on our key priorities, specifically the data readout timelines for our lead assets and investing in our early pipeline where we believe there is long-term value creation potential. We will continue to monitor our expenses for additional opportunities to manage and gate spend where possible, and we will explore external business development and partnering opportunities, such as risk-sharing arrangements or ex-U.S. partnerships as appropriate.

Cerevel's cash, cash equivalents and marketable securities are expected to support our 7 anticipated data readouts in 2024 and fund our operations into 2025. Importantly, we have ample cash and runway to see us through the top line data readout of our emraclidine Phase II program. The strong fundamentals of our business make this the ideal time to welcome Ron to the team as we look forward to a bright future for Cerevel and the patients we seek to serve.

With that, let me 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. First, let me say how delighted I am to welcome Ron Renaud to the organization. Ron's operational expertise and experience leading dynamic organization like ours is a fantastic fit for Cerevel as we seek to develop new treatment options in some of the most challenging neuroscience diseases.

Let me start with a review of emraclidine. Our robust Phase II trials are enrolling well. We expect this progress to continue and look forward to data in the first half of next year. These 2 adequately powered 3-arm trials called EMPOWER-1 and EMPOWER-2 are being conducted worldwide and will each randomize 372 adults living with schizophrenia and experiencing an acute exacerbation of psychotic symptoms. The first trial will test emraclidine 10 milligrams and 30 milligrams once daily versus placebo, and the second trial will test emraclidine 15 milligrams and 30 milligrams once daily versus placebo. We designed these trials to potentially meet the criteria necessary to serve as pivotal trials based on what we expect the FDA will evaluate in a registrational package.

We are also enrolling patients in EMPOWER-3, our 52-week open-label safety extension trial, and we are prioritizing the completion of the necessary non-clinical and clinical pharmacology studies in order to accelerate a potential registrational package for emraclidine in schizophrenia. This program is clearly a top priority for Cerevel, and I am very pleased with our progress to date. We are also moving forward with our Phase I healthy elderly volunteer trial to support the development of emraclidine in Alzheimer's disease psychosis, the results of which will guide our clinical development plan.

Turning now to darigabat, our alpha-2/3/5 selective GABAA receptor PAM, currently in development for epilepsy and panic disorder. We believe darigabat has the potential for both antiepileptic and anxiolytic activity comparable to currently available benzodiazepines but reduced side effects. Darigabat's novel mechanism of action and expected tolerability profile provide the potential for a new treatment option that may be used chronically. Our Phase II REALIZE trial is progressing, and we now expect results midyear 2024.

We are steadfast in our commitment to advance this important therapy, and we have an experienced team that is continually deploying new mitigations to address enrollment headwinds while remaining focused on data quality. We remain encouraged in our ongoing efforts by the 90% rollover rate into the REALIZE open-label extension, which speaks to the potential benefit to patients of darigabat in focal epilepsy.

Beyond epilepsy, we're excited about expanding the potential application of darigabat through the initiation of our Phase II trial in panic disorder expected later this quarter. Panic episodes present with a constellation of symptoms, including a rapid pounding heart rate, sense of impending doom, weakness, dizziness, disorientation and chest pain. It is estimated at least 1/3 of panic disorder patients remain untreated, and a significant proportion of patients on therapy have a partial response to treatment. Benzodiazepines, which are non-selective GABAA PAMs, are commonly used in panic as an acute treatment option. But utilization is typically reserved for more severe patients due to addiction potential and other side effects. We believe darigabat as a selective GABAA PAM can provide anxiolytic benefit while minimizing the side effects that result from the non-selective nature of benzodiazepines. Darigabat's potential as a well-tolerated daily option of the treatment of panic attacks could potentially improve the experience of patients living with panic disorder. We will provide more details on our Phase II panic disorder trial design and progress at a future time.

Turning now to tavapadon, our D1/D5 partial agonist in development for Parkinson's disease as both a monotherapy and adjunctive treatment. The number of Parkinson's cases is expected to double worldwide from approximately 6 million in 2015 to 12 million in 2040. We believe that Tavapadon could serve as a preferred monotherapy early in disease with a potentially reduced side effect burden compared with existing therapies. For the more advanced Parkinson's patient, tavapadon could be a preferred adjunctive treatment with L-dopa due to its longer half-life and potentially improved tolerability profile and reduced incidence of dyskinesias. The clinical objective for new therapies is, of course, to enable 24-hour motor symptom control and delay the need for L-dopa dose escalation.

As Tony discussed, all 3 of our tavapadon Phase III trials, known collectively as the TEMPO trials, are ongoing along with the corresponding open-label extension in which we are seeing high rollover rates of 90% or more. We now expect data for TEMPO-3 in the first half of 2024 and data for TEMPO-1 and 2 in the second half of 2024. Our other D1/D5 program, CVL-871, which we are pursuing in the novel indication of dementia-related apathy, is also expected to read out a Phase IIa trial in the second half of 2024.

We have an experienced team advancing a broad and deep pipeline of neuroscience assets. We remain intensely focused on maintaining the quality of the clinical trials we conduct, and importantly, not compromising the collection of data for the sake of expediency. I am looking forward to updating you on progress as we look ahead to data from 7 mid- to late-stage clinical trials in 2024.

With that, Dr. John Renger, our Chief Scientific Officer, will provide an update on our early stage portfolio. John?

Thank you, Ray. Good morning, everyone. First, I'd like to underscore Tony and Ray's warm welcome to Ron. I'm personally really excited for all that we'll be able to accomplish together to write Cerevel's next chapter. I'm extremely pleased with the progress that we've made in our research and early clinical development programs. Let me start with an overview of our clinical stage selective kappa-opioid receptor antagonist, or KORA, called CVL-354.

Kappa-opioid receptors represent a key mediator of behavioral reinforcement, linking the forebrain limbic neural circuits with brainstem monoaminergic nucleic. Reward effects of both drugs of abuse and natural behaviors, including stress responses, coalesce at the key point of the kappa receptors via dynorphin signaling. Therefore, we believe the KORA approach is one that could correct behavioral dysregulation and address a range of psychopathologies, including major depressive disorder and substance use disorder. Recently, this novel mechanism of action has shown promise across a number of preclinical models of depression, anhedonia and opioid withdrawal symptom improvement. We were further encouraged to see a demonstration of clinical proof of concept in the Phase II major depressive disorder trial completed by one of our peers.

Our recent progress on our internal program has been featured in scientific presentations, which revealed the receptor subtype selectivity of our lead molecule, 354, in non-human primate PET receptor occupancy studies. These studies demonstrate dose-dependent target engagement of 354 with at least a 10-fold more potent binding in kappa receptors over mu-opioid receptors, providing compelling evidence for the receptor selectivity of our compound. These data are being confirmed clinically, currently, and have recently initiated human PET receptor occupancy clinical trial, examining the human kappa and mu receptor selectivity of this compound. We believe the clinical exploration of PET receptor occupancy binding at 354 will be important to inform appropriate dose ranging across multiple potential indications. This will be important data to have at hand alongside our Phase I single and multiple ascending dose studies currently concluding.

Shifting gears, the second area I would like to highlight is our work with the M4 pathway. We firmly believe the therapeutic potential of muscarinic M4 receptor selectivity based upon our own clinical experience with emraclidine to date. As previously disclosed, in addition to our robust emraclidine program, we advanced a highly selective M4 full agonist molecule into IND-enabling studies. Our current understanding of the science behind receptor selectivity strongly supports our confidence in the ability to utilize the full agonist pharmacological approach designed to enable therapeutic indication expansion, bolstering our desire to create a muscarinic M4 selectivity-based therapeutic franchise. We'll be further updating our progress on this program in the near future.

I want to sincerely thank the teams that are hard at work in earlier stage research and clinical development as well as supporting our late stage program NDA-filing activities. As I have stated previously, we have are purpose built to unravel the mysteries of the brain to treat neuroscience diseases, and our scientists are committed, passionate, experienced and highly skilled at what they do and are actively expanding our earlier stage asset portfolio to ensure continuity in our pipeline for many years to come. We will continue our updates in the space as appropriate.

I'm now going 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. Good morning, everyone. And let me also add a warm Cerevel welcome to Ron. I'm pleased to provide an overview of Cerevel's strong financial position as we target investments in spend on the highest value opportunities in our pipeline.

As of March 31, 2023, our cash, cash equivalents and marketable securities totaled $863 million. And in April, we received an additional $31.3 million from our tavapadon risk-sharing arrangement. Our cash resources are expected to fund our operations into 2025, which will support us through the 7 mid- to late-data stage readouts we expect in 2024 and allow us to achieve the next inflection point for each of our lead programs.

For the first quarter 2023, total operating expenses were approximately $100 million, which includes R&D expense of $78 million and G&A expense of $21 million. Relative to the first quarter last year, R&D expense increased by approximately $23 million. This increase is primarily due to investment in our emraclidine program, including the advancement of our 2 ongoing Phase II trials and the open-label safety extension trial in schizophrenia; and personnel-related and other infrastructure costs supporting the continued growth and expansion of our pipeline. G&A expense for the first quarter increased by approximately $4 million over the first quarter last year. This was primarily due to higher personnel-related costs and other costs to support organizational growth in the advancement of our programs.

As Tony mentioned, we reduced our planned 2023 operating expenses, while maintaining a rigorous focus on key priorities and timelines, including executing and achieving emraclidine timelines and appropriate NDA-enabling readiness activities, as well as driving tavapadon/darigabat clinical execution and trial completion. To achieve these reductions in planned spending, we shifted certain activities commensurate with our changes in timelines, gated incremental spend pending the achievement of top line data, and reduced planned headcount growth for this year. We will continue our focus on fiscal discipline and monitor our expenses for additional opportunities to manage and gauge spend where possible.

In closing, we remain well capitalized. We expect our cash resources to fund our operations into 2025 that will support us through the 7 mid- to late-data stage readouts expected in 2024 and allow us to achieve the next inflection point for each of our lead programs. And we will continue to think creatively and opportunistically about further strengthening our balance sheet.

I will now hand the call back to Tony for concluding remarks.

Thanks, Mark, and thank you all for joining us to discuss the first quarter results. We're pleased with what we have accomplished to date, and we are very proud of the work our team is doing in the pursuit of bringing much needed medications to patients living with some of the most debilitating neuroscience diseases. We're executing a smooth leadership transition and are pleased to welcome Ron as the next CEO at a time when our underlying business fundamentals are healthy and strong.

We have continued momentum in our emraclidine program in adults living with schizophrenia and look forward to a robust set of data catalysts in 2024 and are pleased to announce the expected darigabat results in the middle of next year and TEMPO-3 results in the first half of next year. We remain fiscally disciplined with cash to fund our operations into 2025 and deliver the next inflection point for each of our lead assets. And we remain open to new opportunities to maximize the value of the pipeline through creative deal making, especially under Ron's leadership, given his track record of partnerships and collaborations in his prior roles.

Let me also add, since this will be my last quarterly call as CEO, that this has been a tremendous privilege to lead Cerevel through such an exciting time. I took on the additional role of CEO more than 3 years ago with a very specific set of goals to launch this new organization, to raise sufficient capital, improve the Cerevel scientific thesis that are focused on neurocircuitry, receptor subtype selectivity and differentiated pharmacology could advance important new medicines for patients facing vexing diseases. And with those objectives met, I've done what I came to do. Now is the time to return to my role as Chairperson, and I am proud of all that we've accomplished to date. I'm grateful for the tremendous team we've assembled. And I look forward to partnering closely with Ron, the team and the Board as we continue on our journey to become the premier neuroscience company.

And with that, operator, I'd like to open the floor for questions.

(Operator Instructions) Your first question comes from the line of Paul Matteis from Stifel.

And I appreciate it. And Ron, it's great to reconnect with you again, and Tony look forward to continuing the dialogue. Ron, I wanted to ask you a question now stepping in as CEO. Right or wrong, one of the investor concerns on Cerevel has been a number of pipeline delays and if there's an underlying execution issue or if there's something that I guess operationally needs to be fixed. So I was just curious your perspective on that and what you might be kind of looking at as you step in and what you might look at to do differently. And I guess to that end, just on emraclidine specifically, is there anything you can convey on a more granular level that can help solidify confidence in the investor community that first half 2024 is fully on track?

I hate to disappoint you, Paul, but Ron is actually not on the call. He doesn't begin his tenure with the company until the middle of June.

That is my bad. I assumed he was on the call. I'm sorry.

No, that's quite all right. That's quite all right. But I appreciate the sentiment of your question, and so let me address that. I have reflected on all of the accomplishments that we've had in the business. And obviously, the lens to which I look at this is over the last 4 years or so. So I think we'd be harder pressed to find a company that has raised the amount of capital, delivered the kind of data and proved the underlying thesis for the company, particularly in neuroscience. And as CEO, as I reflect on all of these things, you control the things you control, and you make the best of everything you can't control. And in this case, when we did have disappointing news surrounding clinical trial timeline delays that we've announced earlier this week, obviously no one likes that. But we can't let a simple matter overshadow the key achievements of a business that has been as valuably created as this one.

So what we expect from Ron's great leadership, and this is one of the things I'm looking forward to, is that he'll bring his own unique style of leadership, his own particular insights and his long track record of success and make the company even better than it is today. That's what a great CEO does, and that's what a great leader does.

And let me reassure you on emraclidine as well. Everything is on track with emraclidine as of today. The kinds of things that have impacted the industry in terms of some of the trial timeline delays don't seem to be impacting our inpatient studies, and this is evidenced by the ABPM study we announced in the fourth quarter of last year which finished ahead of time, and our emraclidine studies, which also are on track for data readout and delivery in the first half of next year. And importantly, we've made up ground and created significant momentum for tavapadon and darigabat in terms of getting those trial timelines back on track.

So in all, as I reflect on the thrust of the question, I'm really proud of what the team has done. We can control the things we can control, and we make the best out of things that we can't. Let's take the next question, operator.

Your next question is from the line of Umer Raffat from Evercore ISI.

This is Mike DiFiore on for Umer. Just 2 for me. Tony, it's been an absolute pleasure working with you, and we certainly wish you continued success in your role as Chairman. Okay. So here are my questions. An SEC filing recently surfaced which said that your SPAC sponsor is currently engaging in preliminary discussions about a potential strategic transaction. Tony, if you could offer any color on this, and is this in any way related to your stepping down as CEO? And separately, on Karuna's EMERGENT Phase III results, we saw that the placebo response increasingly improved over the course of the 3 trials. So remind us what is Cerevel doing to mitigate the risk of an outsized placebo effect in their Phase II EMPOWER trials.

Thanks for the question, Mike. And on the SEC filing from one of our investors, this was a filing that Perceptive made. There are no strategic transaction conversations underway, so I can dispense with that. And I can't comment or won't speak to their particular filing. What I will draw your attention to is the following day, they did update that particular filing with revised language. So I can't comment on where that came from, but what I can tell you is they did retract and issue an update the following day. So I'll refer you to their SEC -- full set of SEC filings.

As to the EMERGENT-3 question and the placebo response, Ray, why don't you take that one?

So Mike, thank you for the question. And you are correct that placebo response is something that really plagues a lot of the CNS landscape. And so it's really driven by so many factors, but this is what we're doing to mitigate the risk. And that is really, one, we're ensuring that the right patients are enrolled in the trial because that ultimately really drives the success of a trial, and we have methodologies in place to achieve that. We're limiting the number of sites in each of the trials to no more than 25 to 30 sites per trial. And we're also limiting the number of countries that we're going into with emraclidine that also mitigate the risk of placebo response. And finally and importantly, we're also implementing placebo mitigation protocols at each site to ensure that the risk of placebo response is attenuated as much as we can. So collectively, we feel very confident that we're approaching it just like we approach the Phase Ib trial where we got very robust results to really mitigate the placebo response. So thank you for raising that.

Thank you for the question, Mike, and thank you, Ray. Operator, we'll take the next question.

Next question is from Joseph Thome from TD Cowen.

Maybe one on the darigabat epilepsy study. Maybe what are you seeing in terms of recent enrollment trends that gives you confidence in issuing that mid-2024 readout guidance? And when we look forward to the Phase III, do you anticipate that you will be able to include patients on concomitant (inaudible) or kind of what were the decision points that would go into that?

Yes. Let me just make an introductory comment on that. We monitor all of our clinical trial timelines very, very carefully, and I get updated regularly by the clinical operations team so we are clear about our expectations. We thought long and hard about the various permutations. But I'll let Ray speak to the impact and the momentum that some of our mitigation planning has created. Ray?

Yes. Thank you, Tony. Yes. So Joe, despite the industry headwinds we've seen, we've seen increased momentum in our epilepsy program, which is extremely encouraging. We're confident that we can deliver that data by midyear next year, and we've implemented several mitigation approaches to achieve that. Regarding the Phase III program, we will be conducting a drug-drug interaction trial that will give us clarity in terms of how we can design that Phase III trial to allow for a CYP3A4 inducers that are the rate-limiting really medicines that are limiting the patient enrollment. So we have an approach that in Phase III that we're now using -- we'll be using the DDI trial to be able to clarify that moving forward. So we don't anticipate the same enrollment challenges that we've seen in the proof-of-concept trial.

Next question, operator.

Your next question is from Michael Yee from Jefferies.

Thanks, Tony, on behalf of a lot of us. I appreciate all the work you've done here. I know we're going to miss you. We had a...

Thank you, Michael.

Yes, absolutely. We had a question on emraclidine. You mentioned in the press release, of course, as a reminder, there's also necessary non-clinical and clinical pharmacology studies ongoing. Can you just remind us what those are, the timing of those? And really the question is around assuming very strong data in the first half of 2024, how quickly you could get this all together filed, presuming very strong data, appreciating that that's only really a year behind the competitor.

Well, thank you for the question. Michael, I'm going to ask JR to take that one. I do think -- and he'll comment specifically about some of the additional work that we are doing. I do think our decision to do the ABPM study early and ask and answer that question, move that off the table as an overhang was a really good, strong, smart and strategic decision, because that's now in the rearview mirror for us. And we've got a clear pathway to at least knowing what we need to present to the agency to have a conversation about the package. But JR, why don't you talk about some of the other enabling work that's ongoing. And Ray, you may actually just comment as you will on the regulatory approach as we think about bringing all this together. JR?

Sure. Thanks, Tony, and thanks for the question, Michael. So yes, so what the objective is for all the work that we're doing, as you mentioned, is to minimize the time between data readout and the potential for submitting our NDA. And so as you're fully aware, much of the work that we have to do is to complete all of the tox studies, the preclinical studies, evaluation and modeling of all the clinical pharmacology studies. We have a significant amount of work that we need to do to make sure that we have all of the CMC module completed for submission. So that work is actively underway, making sure that we have all of the controls and validations in place for that. And so we are making sure that nothing controllable is on the critical path to getting that filing done as soon as possible. And so we are full steam ahead to make sure that once we have the data, we can go to submission as quickly as possible. So I don't think I need to go into more details as you're aware of everything that needs to be included in a submission, but all that work is getting achieved.

And Michael, as you know that these 2 trials are adequately powered and well controlled. They explore the full dose range, and we also will have the safety exposures that are needed for ICH of 300 at 6 months, 100 at 1 year at least. And so collectively, the path forward for a schizophrenia indication is clear and meets the FDA criteria. So we're hopeful that if these trials read out as we hope they will, that we will have a comprehensive package to go to the FDA with when the trials read out.

Next question, operator.

Next question is from Jessica Fye from JPMorgan.

With the emraclidine trials and TEMPO-3 now all expected in the first half of 2024, I'm curious which you expect to read out first. And can you remind us, should we anticipate the EMPOWER trials reading out concurrently or in sequence?

Ray, do you want to take that one?

Sure. So Jessica, what we can say is that the trials will read out in the first half of 2024. We don't have any more specifics at this time. In terms of the readout for EMPOWER-1 and 2, they're enrolling very well, and they will come in within a short amount of time within each of those trials. But at this juncture, we're not ready to really give more specifics on those, but we will give more specifics as we get closer to that timeline.

Very good. Next question, operator.

Next question is from Graig Suvannavejh from Mizuho Securities.

I appreciate the time that you've spent with many of us, and we'll miss you as well. So thanks again, and good luck in focusing on the chairperson's role. I did want to pick up on that. Was curious that as you go back to just being the chairperson "just", are there any Cerevel-related activities or initiatives that you feel that you'll be able to maybe better prioritize or will be able to spend more time on versus before in the past when you've had to have dual roles? So that's kind of my first question.

And then my second question is just more broadly on the emraclidine program and the accelerated regulatory strategy that Cerevel is employing. I know Ray just commented a little bit more in answering a question. But maybe to ask the same question a different way. Can you point specifically more to things that give you confidence that if you get the data that you're looking for, that the FDA will in fact accept the data package and they won't, for example, require any additional late stage studies? I think we've been getting a lot of questions as to what level of confidence you have, and investors thus should have, in your EMPOWER-1 and 2 studies being sufficient for an approval.

Thank you, Graig, for the question. Why don't we start with the second question first, then I want to comment on one chair.

Yes. So Graig, so we feel very confident that these 2 trials, the 2 EMPOWER trials meet all the requisites that the FDA has historically put forth in terms of the registrational potential. Obviously, it's in their purview to request additional data, and we can't speak for the FDA. But we are very confident that in fact the 2 trials, and all the additional work that's being done that John described earlier, are requisite that meet the criteria for registration. But again, it'll be data driven, and we'll have that discussion with the agency. But we feel confident about the criteria that are being met here.

And as to chair, I think what I'd say is I think it's really important that when Ron joins as CEO, that he have full range and full ability to lead the company, to continue to build the company on the strong foundation that the team and I have put into place to date, and to really work to continue to unlock and create value for patients and obviously for shareholders. I think the role of chair, particularly with the board we have, which is a deeply experienced, very smart, very strong collection of individuals, will be enough of the role in partnership with Ron. And because I have known Ron for more than a decade, we like each other. We get along quite well. He's a values-based leader. I think that partnership will be a really effective partnership both across the Board as I lead the Board and as I work with Ron and the team to realize everything that we always wanted for the company. So no new projects. My job will be to lead the Board in great fashion, and that's what I expect to do. But thank you for the question. Operator, let's take the next question.

Next question is from Madhu Kumar from Goldman Sachs.

This is Omari on for Madhu. We have one question. How do you think about the evolving competitive landscape in the muscarinic receptor space for schizophrenia and Alzheimer-related psychosis?

I'm going to ask JR to make a few comments there first, at least on the scientific and the target side of things. And Ray, I don't know if you have some comments clinically, but JR?

Sure. Thanks, Tony. Thanks for the question. So, yes. I mean I think what we see is exciting. I mean when you find a new effective and safe mechanism of action, it's always predictable, I would say, that you see quite a number of companies entering the space to try to take advantage of new knowledge that's been created in the field. I do think that as a company, we always focus on what we call best-in-class. And so what that means to us is having a highly effective compound that has a really beneficial side effect profile for patients. And I think that what you've seen us achieve through our chemistry is important selectivity in receptor pharmacology that's delivered in both efficacy and a benign side effect profile to date.

And so I think that thinking about what it is that the patients, the physicians are seeking, thinking about what we're looking at as far as having a meaningful medicine for patients to treat the symptoms of schizophrenia, I think we've really hit the mark. And I think that it is going to be -- while there's a lot of excitement, it's going to be very difficult for a company to come in and try to usurp us in best-in-class. I really have a lot of confidence in our molecule. You've seen the side effect profile and the efficacy to date. And so while I expect a lot of entrants into this area, and particularly into Alzheimer's, as you mentioned, I do really believe that we have a best-in-class molecule here that can really achieve the goals that we've set for this mechanism. And we have a lot of confidence in the team in delivering as quickly as possible. So it's always great to have competitors to expand the information and knowledge in the field, but I really have a confidence in us being best-in-class.

Well, and before Ray comments, the great thing, and JR reminds me of this all the time, is that we have the M4 agonist that is in earlier stages of exploration. The strategically good thing about that is that as emraclidine comes online, if the data are positive and if it's approved by the FDA, we will have a second act with an M4 agonist. So if we're right about the selectivity of M4, and we believe that we are, having both a PAM and an agonist that can be brought through development into patients later gives us a broad portfolio opportunity to really build a strong franchise in this area and leverage it. So I just make that comment because JR reminds us about it all the time.

Ray, some clinical comments on M4 selectivity.

Yes. So I think we're -- a new dawn is upon us, and as a former clinician, I couldn't be more thrilled. I'm excited that we have a molecule that requires no titration and only once-daily dosing, which as you know, are 2 key factors that are important for patient adherence. And as you know, patient adherence is something that's critical and really lack adherence leading to recidivism. And now we have a class of therapies that have a benign side effect relative to standard of care currently. So we're delighted to have this best-in-class approach and really have this franchise upon us that we're excited to deliver to patients as soon as possible.

Very good. Operator, we'll take the next question.

Next question is from Douglas Tsao from H.C. Wainwright.

Can you hear me?

Yes, we've got you.

Okay. Great. And congrats on, Tony, on the shift in the role. So maybe just following up on the last question. It might be helpful to expand upon the value of having 2 different molecules, both emraclidine as well as the M4. I mean typically, I know with the M4, you've spoken about that as potentially well suited for bipolar, or better suited. A lot of times, assets are pursued both schizophrenia -- the same asset is pursued for both schizophrenia and bipolar. So maybe talk about the value of having 2 of them, and not just commercially, but also scientifically.

Okay. JR, why don't you take that one? It is, of course, early days on the M4 agonist, but we can speculate a little bit on how this might play out. Go ahead, JR.

Sure. Thanks, Tony. Thanks for the question. So from a scientific perspective, so the difference between a compound like emraclidine, which is a positive allosteric modulator, and the molecule that we're bringing up behind that, which is the full agonist, is really how long does the drug have an impact on the receptor system that we're targeting, which is in this case the M4.

So a positive allosteric modulator can be thought of something that amplifies the neurotransmission that occurs within the system naturally. So what we're doing is really ramping it up, and it only really has an effect when that system is active. If you think about a full agonist, on the other hand, as long as the molecule is present in concentrations that are effective, it will be activating the receptor that it's intended to go after. And so what you're thinking about is what the full agonist is treating a condition where you want to really push the mechanism as hard as you can continuously by keeping the molecule levels high all the time.

So what we've learned about schizophrenia in this case with the PAM approach is that it's really provided something that's been very effective and has been able to actually take advantage of the endogenous activity of the system that's overactive in schizophrenia patients and be used to actually correct those symptoms. If you think about the most severe cases where you actually start to think about things like prevention of psychosis or you think about the most difficult to treat types of psychotic breaks, what you're thinking about in that situation is really dampening and preventing what could happen in the occurrence of a psychotic break and really hitting the system really hard and continuously. That's where a full agonist can really have a benefit over a PAM.

And so what we're thinking about is what is the condition of the neurocircuitry that we're trying to treat in specific diseases? In which cases do we really want to push the mechanism continuously as hard as we can with a full agonist, and which conditions does it make sense to actually have a drug that's going to work in a way that doesn't actually have to be there all the time and fully activating a system? Because the downside of a full agonist is when you push a system continuously very hard, you kind of remove the effectiveness of that system because you're over activating it. But there are cases where treating specific diseases, that would be a beneficial thing.

And so as we've always said, we're thinking about indication expansion. We're not thinking about a backup position for the agonist. We're not thinking about an insurance for emraclidine. This is really about picking the best molecule for the best disease state and so that we get the best treatment to the right patient group.

And that's -- I agree with all that. I think that's terrific. And as I acknowledged a moment ago, from a commercial business point of view, the opportunity to bring patients both the M4 and emraclidine is obviously a great appeal to us. So stay tuned for more. We are excited about the M4 franchise. Operator, we'll take the next question.

Next question is from Mohit Bansal from Wells Fargo.

This is [Ahmed] for Mohit. For the upcoming Phase II trial in panic disorder, are there any key design differences we should expect relative to the previous study as you enroll panic disorder patients in place of healthy population in the Phase I?

Great. Thank you. I think the question has to do with the proof-of-principle Phase Ib study that was done in healthy volunteers, that particular design and the Phase II. So, Ray?

So as you know, the proof-of-principle trial that read out in February of last year was the hypercapnia trial that was in healthy volunteers. The proof-of-concept trial that we're going to be conducting this quarter, the Phase II trial, will be in patients with panic disorder. We're currently finalizing that design with the FDA. So stay tuned as we reveal what that design will look like in the near future. But that trial is very consistent with what's been done recently or historically, I should say, but it's been about 15 years or so since the last venlafaxine was approved in panic disorder. So we want to ensure that the agency agrees with we're doing and working very closely with them. So stay tuned for that design reveal soon.

Operator, we'll take the next question.

Next question is from Charles Duncan from Cantor Fitzgerald.

This is Elaine Kim on for Charles Duncan. I just wanted to ask how enrollment is going into the open-label extension for EMPOWER. And specifically, what color can you provide on treatment compliance with persistence?

Thank you for the question. Ray, do you want to take those? And operator, I think this has to be our last question. So Ray, why don't we wrap with you, and then I'll make some closing comments.

Yes. So Elaine, the rollover rate for the EMPOWER trials is not as robust as we're seeing for tavapadon and for the darigabat epilepsy program. But the dynamic of acute schizophrenia trials are fundamentally different, and we've expected that. And so we're confident that we can meet the exposures that are needed to ensure that they're not rate limiting to our NDA filing at any point. And the way we're doing that is really by having a high volume of trial sites to ensure that we get the needed exposures. It's a very different population, a very different dynamic, but we're ensuring that the exposures are not rate limiting to the filing.

Okay. Thank you. Thank you for that, Ray. Operator, I'm going to make some closing comments. Then I'll turn it over to you to end the call.

As I said in my prepared remarks, this has been a remarkable experience, and it's been a wonderful way for me to cap my 30-year career in the industry. 15 of those years, obviously reflecting this morning, have been spent as CEO. And in that time, I have watched a significant amount of evolution in the industry. The people have changed, the faces have changed, but the essential mission of what we have to do hasn't, which is to do the work that we do well and on behalf of patients, and in that, create value for you as our shareholders and those who really do care about bringing new therapies to patients. So it's been a great pleasure for me to cap my career in the biotech industry with this particular experience where I believe we are just at the beginning of making a significant difference in neuroscience.

I thank my teammates, I thank the employees, I thank the Board of Cerevel, and importantly, I thank you guys because I have truly enjoyed all of our interactions and the opportunity to describe and discuss with you all the exciting things that I think we can do to enhance lives and make families and those affected by these diseases live a better existence. Thank you. And this does feel a little bit like a news anchor sign off. It really isn't. I just wanted to reflect more openly than I usually do about how you guys have impacted me. So thank you very, very much, and thank you for all the well wishes, the texts, the e-mails. They are deeply, deeply appreciated, and I will do my best to answer each one. Thank you, operator, for helping us with the call today.

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