Intra-Cellular Therapies Inc (ITCI) 2018 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Intra-Cellular Therapies Third Quarter 2018 Financial Results Conference Call. (Operator Instructions) As a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to your host, Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Please go ahead.

Thank you, operator. Good morning, and thank you all for joining us for today's conference call. Our earnings press release providing a corporate update and details of the company's financial results for the third quarter ended September 30, 2018, crossed the wire a short time ago and it's available on our website at intracellulartherapies.com.

Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Dr. Andrew Satlin, Executive Vice President and Chief Medical Officer; Dr. Kimberly Vanover, Senior Vice President of Early Stage Clinical Development and Translational Medicine; Larry Hineline, Vice President and Chief Financial Officer; and Michael Halstead, Senior Vice President and General Counsel.

As a reminder, during today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of the company's product development candidates, our clinical or nonclinical plans, our plans to present or report additional data, the anticipated conduct and results of ongoing and future clinical trials, plans regarding regulatory filings, future research and development, our plans regarding the commercialization of lumateperone and possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risk and uncertainties that may cause actual results to differ materially from those obtained in the forward-looking statements.

These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual report. You're cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligations to update such statements.

I will now turn the call over to Sharon.

Thanks, Juan. Good morning, everyone, and thank you for joining us for today's conference call. Today, we will provide an overview of our progress with our programs, summarize our future plans and provide our third quarter financial results. Andy will describe recently presented results from our Phase I/II study evaluating ITI-214, our phosphodiesterase 1 inhibitor in patients with Parkinson's disease. Finally, Larry will review our financial results, and we'll open the line for Q&A.

During the quarter, we completed the submission of our NDA to the U.S. FDA for lumateperone for the treatment of schizophrenia. Pending FDA acceptance of our NDA filing, we look forward to continuing to work with the agency with the aim of bringing this important medicine to individuals living with schizophrenia. With over 1,900 individuals exposed to lumateperone in 20 clinical trials, we believe our schizophrenia clinical development program provides strong evidence of the efficacy and favorable safety profile of lumateperone for the treatment of schizophrenia.

Later this quarter, we plan to present results from the second part of our lumateperone open-label safety switching study in patients with stable symptoms of schizophrenia. This study is designed to examine the safety of lumateperone in stable patients when switched from other antipsychotics and followed for up to 1 year. To remind you, this study is conducted in an outpatient, real-world setting and closely resembles current clinical practice. We have previously presented positive results from the first part of the study, which included 302 patients who were switched from standard-of-care antipsychotics to a 6-week treatment duration with lumateperone, followed by a 2-week period in which they were switched back to standard of care. In that study, lumateperone exhibited a favorable safety profile in stable patients who were switched from other antipsychotic medication. Statistically significant improvements from standard of care were observed in body weight, cardiometabolic and endocrine parameters. These parameters worsened again when patients were switched back to standard-of-care medication. Additionally, treatments with lumateperone was not associated with the motor, metabolic or cardiovascular disturbances often associated with other antipsychotic medications. It is notable that symptoms of schizophrenia did not worsen upon switch to lumateperone from standard of care. Rather, statistically significant improvement from baseline was observed in the Positive and Negative Syndrome Scale, or PANSS, mean total score.

As we prepare for the commercialization of lumateperone and further advance our pipeline, we continue to build our infrastructure and expand our senior leadership team. To lead the commercialization of lumateperone, Mark Neumann has recently joined as Executive Vice President, Chief Commercial Officer. He has extensive marketing and sales experience in categories and areas that match our therapeutic indications. On the clinical side, led by Dr. Andrew Satlin, our Chief Medical Officer, Dr. Suresh Durgam joined as Senior Vice President, Late Stage Clinical Development and Medical Affairs; and Dr. Michael Olchaskey joined as Senior Vice President, Head of Regulatory Affairs. They both have significant clinical and regulatory experience in CNS development, including with respect to a recently approved oral antipsychotic. They complement our strong clinical teams, which includes Senior Vice President, Dr. Kim Vanover. As a result of the growth of our company, Kim, who has been leading our clinical development efforts for over a decade is now overseeing translational medicine and early-stage clinical development.

Beyond schizophrenia, we continue to advance our other lumateperone programs, including bipolar depression, agitation in patients with dementia and depressive disorders. Our bipolar depression program consists of 2 monotherapy studies and 1 adjunctive study. We have completed patient enrollment in our first monotherapy study, Study '401, conducted in the United States, and we expect to complete patient enrollment in our second monotherapy study, Study 404, conducted globally in Q1 2019. Given the relative timing of the completion of Study 401 and Study 404 and to avoid introducing potential expectation bias in the ongoing 404 trial, we anticipate unlocking, analyzing and reporting top line results from these 2 studies simultaneously in Q2 2019.

Expectation bias is a well-documented challenge in clinical trial conduct, in which the reporting of positive results from one study influences the outcome of an ongoing study by increasing overall response rates, including those of patients on placebo. The decision to report both bipolar depression trials concurrently has the aim of mitigating this effect on placebo response. Subject to the outcome of these 2 trials, we expect to submit for FDA regulatory approval for bipolar depression in the second half of 2019.

In addition to the lumateperone bipolar depression program, we continue to make progress in our Phase III clinical trial in patients with agitation associated with dementia, including Alzheimer's disease, for which we expect to conduct an interim analysis later this year. The objective of the interim analysis is to evaluate our assumptions regarding variability of response and effect size. Following the interim analysis, we should be able to make determinations that could include stopping this study, continuing this plan or adjusting the sample size.

We have made substantial progress with ITI-214, our selective phosphodiesterase 1, or PDE1 inhibitor.

I will turn the call over to Andy to further elaborate on the exciting results of our study in patients with Parkinson's disease and to comment on our ongoing program in congestive heart failure. Andy?

Thanks, Sharon. As Sharon said, we recently presented topline results from our Phase I/II randomized, double-blind, placebo-controlled multiple-ascending-dose clinical trial to evaluate ITI-214, our PDE1 inhibitor, in patients with Parkinson's disease. The primary objective of our study was to evaluate the safety and tolerability of ITI-214 in patients with mild to moderate Parkinson's disease maintained on stable concomitant medication, for example, dopamine replacement therapies and to explore the potential for ITI-214 to treat both motor and nonmotor symptoms associated with Parkinson's disease. Topline results demonstrated that ITI-214 was generally well tolerated with a favorable safety profile with no serious adverse events reported and without promoting or worsening motor complications. These favorable safety results were seen across a broad range of doses from 1 milligram to 90 milligrams. No clinically significant effects of ITI-214 were observed on vital signs or cardiovascular or laboratory parameters compared to placebo.

Patients entered the trial with differences in both the severity of the disease and the presence and severity of dyskinesias. In this context, we are encouraged by the improvements in motor symptoms and reductions in dyskinesias seen in this trial. Several patients experienced profound improvements in motor impairment while taking ITI-214, only to have this improvement disappear after cessation of ITI-214 treatment. The efficacy of ITI-214 in improving motor symptoms of Parkinson's disease was demonstrated on multiple scales, providing input for both patients and site raters. Signals of improved motor performance in the on state by the ITI-214 relative to placebo were found on the unified Parkinson's disease rating scale. ITI-214 reduced scores on the UPDRS total scale and 2 of its subscales. Part 3, which reflects clinician ratings of the motor manifestations of Parkinson's disease. And Part 4, which assesses motor complications, including dyskinesias. In addition, ITI-214 reduced dyskinesias systems as measured by the unified dyskinesia rating scale, and increased total on time and on time without dyskinesias as rated by patients using the Hauser patient motor diary. We will present additional results of this study at future meetings.

We are very encouraged by the results of this trial, which translate findings from our preclinical studies to a clinical population and provide us with important information to continue the development of ITI-214 for the treatment of Parkinson's disease. We plan to advance this program with a Phase II clinical trial of ITI-214 for the treatment of Parkinson's next year.

As you know, we also have an ongoing program to evaluate the potential of ITI-214 for the treatment of heart failure. Our ongoing clinical trial aims to determine whether the cardiac effect seen in preclinical models translate to patients. Of note, we are pleased that an article by Hashimoto et al in the October 30, 2018, print edition of the Journal circulation with an accompanying editorial, highlights the inhibition of phosphodiesterase 1 by ITI-214 as a novel approach for the treatment of heart failure, based on positive results in preclinical models.

I will now turn the call back to Sharon.

Thanks, Andy. In summary, we have completed our NDA submission and continued to make progress in our preparation for commercializing lumateperone. We continue to advance our pipeline, which includes our lumateperone programs in bipolar depression, agitation in patients with dementia and depressive disorders as well as ITI-214 and ITI-333.

Lastly, we ended the quarter with $376 million in cash and investments, which places us in a strong position to advance our development programs and commercial activities.

I will now turn the call over to Larry who will review the financial results for the third quarter.

Thanks, Sharon. I will be reviewing our financial results for the third quarter ended September 30, 2018. The net loss for the third quarter of 2018 was $41.5 million compared with the net loss of $22.9 million for the third quarter of 2017. Basic and diluted net loss was $0.76 per share for the third quarter of 2018 compared to a basic and diluted net loss of $0.53 per share for the same period in 2017.

Research and development expenses for the third quarter of 2018 were $35.4 million compared to $18.5 million for the third quarter of 2017. This increase is due primarily to increases of approximately $7.3 million of lumateperone clinical cost, $2 million of costs from lumateperone nonclinical efforts, $2.6 million of manufacturing expense, $1.1 million of stock compensation expense and $4 million of costs related to other projects and overhead expenses.

General and administrative expenses for the third quarter of 2018 were $8 million compared to $5.3 million for 2017. The comparative increase is primarily due to labor, stock compensation and pre-commercialization expenses.

Cash, cash equivalents and investment securities totaled $376 million at September 30, 2018, compared to $464.3 million at December 31, 2017.

This concludes our prepared remarks. Operator, could you please open the line for questions?

(Operator Instructions) Our first question comes from the line of Jessica Fye with JP Morgan.

Couple from me. Will you announce acceptance of the lumateperone filing? And did you request priority review?

Jessica, thanks for the question. This is Sharon. And we hope to be able to announce the acceptance of the filing of our NDA. And yes, we did ask for priority review. As you know, we had fast-track designation and that allowed us to ask for priority review.

Okay, great. And then just a couple more on the label extension opportunities. Are you still expecting to begin a late-stage clinical trial in depressive disorders by year-end? And can you help us think about timing for the adjunct bipolar data? Should we think about it as also coming in 2019 with the monotherapy studies?

I'll answer the first part, and then if -- I think, we were pretty specific of what we said about the bipolar studies. But I'll mention that again. And then if Andy wants to add anything, he can. Just tell me the first question again. I -- oh, the label expansion on the depressive. So we started our program in depressive disorders, and we will be telling you more about that program before the end of the year and into next year as well. And then on the bipolar depression, yes, I think we said that we will be announcing those results in the second quarter of next year. Andy, do you...

Just to clarify, I think, was there a third bipolar depression study that was an adjunctive, and when should we think about that one?

Oh, right. I'll ask Andy to answer that one.

Yes. So we do have an ongoing study, lumateperone in bipolar depression in patients who are on adjunctive therapy, mood stabilizers, lithium and (inaudible). That study is ongoing. As you know, we've expanded the study to be a global study, and we're assessing the pace of the recruitment now, and we'll have further information about that in the future.

Our next question comes from Brian Abrahams with RBC Capital Markets.

This is Owen on for Brian. Just a few real quick ones for you, again, on the bipolar studies for 2Q '19 now. I'm just wondering if there's anything -- was anything specific that may have changed your view on the expectation bias affecting the data release, given that it looks like the enrollment aspects of the time lines are intact? And just to follow that up, is that going to change how you present the data at all in terms of maybe pooling analyses between the 2 studies?

Yes. So thanks. Good question. You're right that the timing of the 2 trials is intact. And as that became even clearer recently, it made sense to us to consider this approach in order to, as Sharon mentioned, to minimize the expectation bias. So given the fact that there's a relative proximity between the completion of the 2 trials in that it's not too close and it's not too far, it makes sense to take this approach to reduce that expectation -- in order to reduce the expectation bias. So what we're going to be doing is, completing the clinical portion of the monotherapy study, as we've already indicated, and we'll only be reporting on the 2 trials once the second trial is complete. This doesn't say anything more about how we might analyze the data though.

Our next question comes from Charles Duncan with Cantor Fitzgerald.

First question, maybe hard to answer, but I'm going to ask it anyway, and that is that we recently witnessed 2 days of a psychopharm ADCOM meeting and the first day was different than the second day. And I guess, I'm wondering if you are expecting and preparing for an ADCOM? And if you could point out 1 or 2 elements that you would cite as being very different from the lumateperone program in schizophrenia from at least the experience of the first day besides the clinical profile of the drug.

Thanks for the question, Charles. I'll start, and then I'll ask if Kim or Andy wants to add anything. So first, to start, I think it's very exciting that we have medicines with novel mechanisms addressing CNS disorders. And while there can be ups and downs, et cetera, I think that let's not lose sight of the goal here. It is develop -- it is to develop new medicines for the treatment of populations in need of these medicines and to bring better medication to patients. So we think that both of these advisory committees, they're seeing novel mechanisms coming forward, and we applaud that. As to us specifically, I think, as you know, it's really up to the FDA whether or not one has an advisory committee meeting. So we'll tell you that we will prepare for an advisory committee meeting, and we'll update you as we progress. And when we know, you'll know. So to that, does Kim or Andy want to add anything?

Sure. Charles, so I think with lumateperone, just to remind everyone that it's really the safety profile that's highly differentiated here among treatments with schizophrenia. And that's what we've received fast-track designation for. And I think when the FDA will look at our data and the whole package, it really -- always looking at the benefit-risk profile for any new drug. And I think that our favorable safety profile will speak loudly here.

Andy, do you want to add anything, or are you okay?

No, I think that's fine.

Okay, great.

Okay, that's helpful, and I agree with you that clearly, you're doing something for patients that doesn't appear to be otherwise done for them with lumateperone. And so I'm going to assume not only filing acceptance but approval and press fast-forward button to the go-to-market strategy, which in my second question. At this point, I'm sure that you're contemplating that, but if you could share with us just little bit of color on your initial plans and should lumateperone be approved for schizophrenia, would you prepared to launch?

Thanks, Charles. Again, so it's a good question. And as you know, we announced a couple of weeks ago, and I mentioned this morning on the call that Mark Neumann has joined us as our Chief Commercial Officer. And he's a proven biopharmaceutical executive, and he has over 30 years of industry experience between Bristol-Myers Squibb and Amgen and has a strong track record of building high-performing commercial teams and successfully executing product launches across a range of therapeutic areas and businesses, which includes areas in the neurosciences and in cardiovascular disease. So he just joined a few weeks ago. He -- we have, little over a year ago now, hired a Head of Commercial Development, and she has been laying the groundwork which Mark has now picked up on. And I think that as we go forward, you will hear more about specific plans. But I think we've been doing all of the groundwork laying that we need to be doing now for a successful launch.

Our next question comes from John Sullivan with Leerink Partners.

Can I shift gears to ITI-214 for a moment? Can you just speak a little bit more about the anecdotal signs of abatement of symptoms of dyskinesia that you saw upon administration of the candidate and abatement -- and resumptions of symptoms that you saw in some cases upon the absence of the drug?

Yes, thanks. So can't really provide a lot of detail about that. But the investigators who monitor these patients very closely did report that anecdotally that they saw in patients who had dyskinesia at baseline, in some cases, they saw really what they report as dramatic decreases in that. And perhaps, even more telling is that when the drug was discontinued, the patients went back to their previous condition. So we think the signals are fairly strong and that gives us a lot of confidence going forward.

And then just a financial question. Can you just comment on the runway created by cash on hand in your view?

I think you cut out at the end. If you could repeat the question, please?

I was -- it was just a question about your view of the runway that's created by the company's cash on hand. Time runway.

Yes, this is Larry Hineline. Yes, we are continuing with our guidance that our cash will be available to continue our progress through and into 2020. So that hasn't changed.

If I could just to go back to just clarify my answer as well. So while we -- there were certain patients that the investigators told us about specifically, overall, we did see reductions in dyskinesia in those patients who had dyskinesia at baseline. This was as measured by the unified dyskinesia rating scale, as I mentioned in the remarks earlier. So -- and it was placebo controlled. So we did see signals there.

And our last question comes from the line of Bert Hazlett with BTIG.

My question is, again, forward-looking with regard to potential launch of lumateperone and schizophrenia. And my question is, is manufacturing a gating item for potential launch there? Sharon, if you or one of the -- your colleagues could comment on that, the status of manufacturing of lumateperone and what plans you're -- that you've made there that would be terrific.

Bert, thanks for the question. No, manufacturing is not a gating item. We have -- manufacturing has gone quite smoothly. And we, as you know, submitted the CMC portion with the NDA. And in fact, we had our pre-NDA meeting way before the clinical portion. So we don't anticipate manufacturing to be a gating item at all.

And that concludes today's question-and-answer session. I'd like to turn the call back to Sharon Mates for closing remarks.

Thanks, everyone, for participating in today's call. And we look forward to further updates for you and further progress from Intra-Cellular Therapies. And with that, thank you, operator. And again, thank you all for joining the call, you can now disconnect.

Ladies and gentlemen, have a great day.