Neurocrine Biosciences Inc (NBIX) 2021 Q3 法說會逐字稿

Good day, everyone, and welcome to today's Neurocrine Biosciences reports third quarter results. (Operator Instructions) Please note, today's call may be recorded. (Operator Instructions)

It is now my pleasure to turn the conference over to Vice President of Investor Relations, Todd Tushla. Please go ahead.

Thank you, Chloe. Good afternoon, and thanks for joining our third quarter 2021 earnings call. On today's call is Kevin Gorman, our Chief Executive Officer; Matt Abernethy, our Chief Financial Officer; Eiry Roberts, our Chief Medical Officer; Eric Benevich, our Chief Commercial Officer; and Kyle Gano, our Chief Business Development and Strategy Officer.

During our call today, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. After our prepared remarks, we'll go into the question-and-answer session. (Operator Instructions)

With that, I hand the call over to Kevin Gorman.

Thanks, Todd. Welcome, everyone. Good afternoon.

I'm just going to start out with 2 brief comments. First, I'm very pleased to see INGREZZA's continued growth. This is the second quarter in a row where we see this growth. And I anticipate we're going to have continued growth for the remainder of the year. Now we're not yet back to pre-COVID growth trajectory, but NRx has continued to increase. COVID's impacts are still being experienced in the field in a number of territories. It is not behind us, but we've adapted well. In addition, telemedicine is still being heavily utilized by health care professionals. But again, we are adapting well and growing our business. And Eric will talk about how we are investing behind INGREZZA.

Now second, we started the year with an extremely aggressive goal to start a number of Phase II and Phase III clinical trials. And we are going to meet that goal, growing one of the most robust neuroscience pipelines in the industry. And Eiry will highlight several of these programs.

So with that, I'm going to turn it over to Matt.

Thanks, Kevin.

INGREZZA's momentum continues with Q3 sales of $287 million, representing 13% year-over-year growth. We were encouraged to see Q3 new prescriptions approach pre-pandemic record levels, even with telemedicine still representing a large portion of psychiatric patient visits.

Q4 is off to a solid start and anticipate Q4 sales of just over $300 million, reflecting strengthening demand, offset slightly by seasonally elevated Q4 gross-to-net discounts. The progress we are seeing with INGREZZA reflects a tremendous medicine; a great team driving strong commercial execution; and most importantly, a significant opportunity to help many more patients with TD.

Looking ahead to 2022, we are seeing strong growth from INGREZZA. And with INGREZZA being our top capital allocation priority, we will invest an additional $100 million to expand our field sales team and continue our DTC campaign throughout the year. Beyond INGREZZA, we continue to invest in our growing pipeline. We expect to exit this year with 12 clinical programs with many important clinical data readouts coming over the next 2 years.

Fundamental to both growing INGREZZA and advancing our pipeline is our people. We continue to invest in our Neurocrine team members and attract top talent into our growing company. Bottom line, we are well positioned for long-term growth, and our people will be the key to executing our strategy of becoming a leading neuroscience company.

With that, I will now hand the call over to Eric Benevich. Eric?

Thanks, Matt. Let's jump right into it.

Our team executed well throughout the quarter, driving record INGREZZA total prescriptions, leading to all-time high sales of $287 million. From an NRx perspective, we continue to see improvements in new patient starts. While NRx levels are not quite back to pre-pandemic levels, we have certainly seen steady improvement since the beginning of the year. I'll note that key performance indicators such as sales call volume, sample distribution and speaker programs were consistently strong throughout Q3, a quarter that historically is a slower growth quarter due to seasonally related challenges.

In Q3, persistence and compliance rates for INGREZZA patients remained at the historically high levels we've come to expect with our medicine. And as Matt said, we are off to a solid start in Q4, but the pandemic is still having an impact on customer access and patient flow in regions throughout the nation. In addition, psychiatrists, in particular, are still relying on telemedicine about half the time, which presents a challenge for TD diagnosis.

I'd like to shift gears now to provide a bit more insight into the decision to expand our sales team. We have articulated since 2017 that this is a learning launch, that we continue to learn and adapt to better meet the needs of patients and health care provider customers. For example, you'll recall in 2018 with strong uptake for INGREZZA and market trends that we saw at that time, we made the decision to upsize our field force to help accelerate TD diagnosis and treatment with INGREZZA. Last year, the pandemic taught us many lessons, including how to better meet the needs of our patients and health care provider customers, especially those who rely more heavily on telemedicine. Importantly, it was clear to us that the base of prescribers and high-potential prescribers has grown larger over time as we've continued to develop the TD market.

The key takeaway was that we needed to evolve our commercial footprint to reach and educate a growing and ever more diverse set of customers. To that end, by Q2 of next year, we will have established 2 new dedicated sales teams focused on movement disorder neurologists and providers in long-term care, respectively. In total, we will have 3 dedicated field teams across psychiatry, neurology and long-term care, which we believe will constitute a more focused and effective sales force. When our expansion is complete around Q2 of next year, there will be approximately 350 specialty salespeople across these 3 teams. Along with the sales force expansion, we have been taking steps to make it easier for patients to get INGREZZA by expanding our distribution network. And with this change, we continue to caution you on reliance on third-party syndicated data.

The sales force and distribution expansions, along with our ongoing branded direct-to-consumer campaign, reflect our conviction in the TD market opportunity. While I'm tremendously proud of the collective effort it has taken to get TD diagnosis rates up to around 20% today, the fact remains that there is much work ahead. We have a strong belief in the long-term opportunity for INGREZZA, and you see that translated into the investments we are making in our people and marketing initiatives to meet the needs of the many patients who still need our help.

Turning to market access. Based on the planned formulary design that had been published thus far, we expect access to INGREZZA in 2022 to be similar to this year. And based on what we know today, we expect INGREZZA net revenue per prescription next year to be similar to 2021 rates. Access for patients remains a critically important priority. Launch to date, greater than 85% of INGREZZA prescriptions have been fulfilled regardless of formulary status. And we expect to carry forward the success we've had with access and reimbursement into 2022.

With regards to ONGENTYS, feedback from the marketplace continues to be positive as more and more patients and prescribers are gaining initial experience with the only once-daily COMT inhibitor approved in the U.S. In addition, we continue to leverage ONGENTYS and INGREZZA together to mean high access levels to our neurology customers.

In closing, I'm very pleased with our team's performance under challenging circumstances and the impact that we're making for patients. Q3 was a strong growth quarter and in fact, represented all-time highs in total prescriptions and net sales. I'm even more optimistic about where we can go from here in terms of continuing to grow our franchise.

So with that, I'll hand the call off to our Chief Medical Officer, Dr. Eiry Roberts. Eiry?

Thank you, Eric, and good afternoon to everyone on the call today.

Building on Eric's comments regarding INGREZZA, Our medical affairs organization continues to focus on education and key data generation in support of patients living with tardive dyskinesia. In fact, we recently expanded the portion of our field team focused on education and support of advanced practice providers, such as nurse practitioners and physicians' assistants, given the critical role that these providers play in the diagnosis and treatment of patients living with TD. We know that the impact TD has on the lives of patients, both functionally and socially, can often be even more important than the movements themselves. And we continue to work to understand this impact through the analysis of data generated from our registrational phase studies using the Tardive Dyskinesia Impact Scale or TDIS, a Neurocrine-developed TD patient reported outcome.

At the recent Psych Congress in October, we presented TDIS analyses from the KINECT 3 study, demonstrating an improvement in patient-reported impact of symptoms, both functional and social, in subjects treated with INGREZZA. Additionally, this analysis showed that questions within TDIS show promise as a potential clinical assessment tool. Additional validation of the TDIS as a clinical assessment tool is now ongoing.

Turning to valbenazine. I'm pleased to announce that we're currently initiating the registrational study of valbenazine for the adjunctive treatment of schizophrenia, with enrollment expected to open this month. This Phase III randomized, double-blind, placebo-controlled study will enroll approximately 400 patients with schizophrenia, who have had an inadequate response to antipsychotics. The primary outcome measure is the change in total PANSS score from baseline to week 10. Key secondary measures include the change in the Clinical Global Impression Severity score or CGIS, and change in personal and social performance scales from baseline to week 10. We estimate this study will be complete in late 2023.

In thinking about the remainder of the year, there are a number of key milestones and activities to highlight. Firstly, we remain on track to share top line results from the KINECT-HD registrational study in Huntington's disease in December. In addition, we're planning to initiate 5 mid- to late-stage studies, which include the registrational study of valbenazine for the treatment of dyskinesia due to cerebral palsy and Phase II studies of luvadaxistat for the treatment of cognitive impairment associated with schizophrenia, NBI-845 for inadequate response to treatment in major depressive disorder, NBI-846 for anhedonia in depression and NBI-352 for focal-onset seizure in adults.

In total, therefore, we anticipate having 12 programs in mid- to late-stage trials as we enter into 2022. With over 50 ongoing clinical trials and more to come, this is an exciting and potentially transformational time at Neurocrine as we look forward to delivering a number of important clinical data readouts over the coming years.

I would like to end by thanking all the teams across our organization and our partners outside the company for their continued hard work in support of our portfolio. Most importantly, I would like to thank the investigators, patients and their families who participate in each of our clinical trials.

I'll now turn the call back to Kevin. Kevin?

Thanks, Eiry. That sums up all of our prepared remarks. So we are now ready for your questions.

(Operator Instructions) And we will take our first question from Neena Bitritto-Garg with Citi.

So I just want to understand a little bit more about where the growth in new scripts is coming from for INGREZZA because it sounds like you're still seeing kind of 50% telemedicine use in the psychiatry offices and a similar 20% diagnosis rate. Can you just talk a little bit more about, is that coming from just an increase in the total number of visits regardless of whether telemedicine versus inpatient, total number of prescribers overall? Is that coming more from psych versus neuro offices? I guess if you could just drill down into some of those dynamics, that would be great.

Eric?

Yes. Thanks for the question, Neena. So it's a little bit of everything. As I mentioned before, we are seeing still significant use of telemedicine within psychiatry and to a much lesser extent, within neurology. It seems as if things have leveled off in terms of volume of patient visits in the psychiatry and the rate of telemedicine use. And in terms of how we've been able to grow, I think that we've adapted to this environment. So it's a combination of things.

Obviously, our salespeople have figured out who are the providers that they can actually see in person versus those that they would need to see virtually. Secondly, being adept at identifying new prescribers, those that haven't yet started to utilize VMAT2 inhibitors and have access to our team. And so I think that, overall, we've just adapted to the environment. And we continue to put resources behind helping those providers, especially in psychiatry, that are primarily seeing their patients virtually to remind them of the importance of screening for TD and providing them with resources to help them do so.

And in fact, just a reminder for everyone on this call, if you want to take a look at some of the educational content we've created for providers out there related to TD screening and diagnosis, go to mind-td.com and you'll see a number of different educational resources that we've been utilizing in the field to help providers become better at diagnosing and treating TD remotely. I hope that helps.

And we'll move next to Paul Matteis with Stifel.

So by our math, for next quarter, the guide that Matt provided would suggest, unless there's benefits from price and inventory, a greater number of net patient adds than was seen in 3Q, even by a small amount. And I would think that just a month into the quarter, you'd probably guide optimistically, but also somewhat conservatively. So maybe can you speak to your level of confidence that demand this quarter could exceed what we just saw in 3Q, assuming my math's right?

Yes. Sure, Paul. Appreciate the question. I think your math is right. We continue to see great progress in driving NRx. NRx continues to go up. It was right below pre-pandemic levels. And I think that's really a testament to what the team has been able to do to engage with the health care providers and keeping tardive dyskinesia on the radar. So our level of confidence, we try to give you what we're seeing. We said that Q4 is off to a good start and what we'd expect throughout the rest of the quarter, and we'll continue to be transparent as we have in the past. But yes, we're seeing good momentum in the commercial team and medical team, and the entire organization is really rallying around helping patients who have TD get treatment with INGREZZA.

And we'll move next to Carter Gould with Barclays.

Maybe just to follow up on some of the earlier questions. In terms of how you guys are thinking about your expectations for telemedicine dynamics looking into next year given sort of the evolving reimbursement dynamics, any insight onto that front and how you're thinking about that would be helpful.

Yes. Sure, Carter. I'll take that. There's going to be new guidelines that are going to be put out by CMS on their reimbursement. We keep saying we anticipate that to come any day or any week now, and we still do. While the public health emergency is still in place, the current pricing guidelines will remain in place and all of the current rules associated with the public health emergency are going to stay in place. There'll probably be a transition time after the public health emergency is relieved before everything new starts again or whatever might be new will start again. But the construct we work under is that we will be in the same telemedicine environment for basically most, if not all, of next year.

And we'll take our next question from Tazeen Ahmad from Bank of America.

So Kevin, as it relates to the decision to make the $100 million investment now for neurologists and providers of long-term care, why do you feel now is the right time? Because I think at the beginning of the year, you had talked about efforts that you had put into place to try to minimize the effect of doctors mostly working from home. So do you think that those efforts that you put into place for your current market has been maximized and you now are looking for additional outlets? Or are you going to be trying to work on all of these at the same time?

Yes. Tazeen, you brought up a number of interesting points there. And I'm going to address a couple of them, and then I'll let Eric chime in. The first point that you brought up was, do we think we've exhausted the current prescriber base that we have been going into, which is primarily psychiatrists? Yes, it is heavily focused on psychiatrists. We do go into neurologists.

With the sales force reorganization, the largest of the 3 teams by far will still be psychiatry. We will be increasing our ability to call on more and go deeper with psychiatrists. So no, not at all do we think that we've fully penetrated the psychiatrists' offices, not even close.

You're right that at the beginning of the year because Q1s are so difficult, we wanted to do a, you kind of like a do no harm here as we go into Q1. As Eric had said, really the rollout of these new teams will take place in Q2. So we are leaving intact our territories and our sales force throughout Q1 so that we're not adding to the disruption coming up to Q1. Eric, do you want to?

Yes. Yes. I'll piggyback on your comments here. So a couple of things. Just to clarify, Tazeen, the increase of SG&A by $100 million is driven both by full year spending for DTC. Keep in mind, this year was only a partial year for FIs as well as the sales force expansion. So it's a combination of those 2 initiatives.

And then getting back to sort of what's driving it. The bottom line is that we recognize that, as we have developed the TD market, there continues to be an expansion of VMAT2 prescribers or INGREZZA prescribers as well as high-potential prescribers to treat TD. And we did this analysis and we believe that there's an opportunity to reach, educate and motivate more neurologists as well as psychiatrists.

And then we had looked at the LTC opportunity actually prior to the launch and decided at that time, back in 2017, that we didn't have the resources to cover all the different opportunities for INGREZZA in TD from Day 1. And so we deferred our decision to invest and focus on LTC until we got further along and had done more to develop the market opportunity. And we feel the time is right for us to essentially have dedicated resources to focus on that LTC opportunity. So it's really, the changes to our sales force size and structure are really driven mostly by the development of the market and our need to better meet the needs of a growing and more diverse customer base.

And we'll take our next question from Phil Nadeau with Cowen and Company.

We have one on the pipeline actually. You note that there's 12 programs that are likely to be in clinical trials by the end of the year. In the press release, you mentioned important data events over the next 12 to 24 months. It's a little unclear to us exactly when some of those trials are going to read out. So in particular, which trials are likely to read out next year in 2022 and which ones are more likely to produce data in 2023?

Phil, so the first trial that's going to read out is going to be in December of this year. And that's going to be the Huntington's study that is going to read out. The next study after that, that's going to read out is going to be the Phase Ib basically in essential tremor. And then the last one is going to be CSWS. That will be reading out later next year.

Great. And the others are 2023?

Yes.

And we'll move next to Anupam Rama with JPMorgan.

On KINECT-HD in Huntington's disease, how are you thinking about the market dynamics there? Like is this a take a share from AUSTEDO market? Or based on the profile of INGREZZA, is there potential to expand the market here for you guys?

So I guess, Anupam, it's Eric. I guess I'll take the question. And then, Eiry, if you want to add on to it. So I think the answer is a little bit of both. We've noticed that there are a significant number of patients with Huntington's and associated chorea with moderate-to-severe symptoms that could benefit from treatment with a VMAT2 inhibitor but don't for various reasons, including concerns around tolerability, concerns around safety or even convenience of multiple times a day dosing.

So there is opportunity for us, we believe, to grow the proportion of patients treated with the VMAT2 inhibitor. And there's also the opportunity to potentially have some patients switch over if they find the profile that emerges from our Huntington's trial to be attractive, which we believe it will be. So I think it's a combination of those 2 things. We're excited about the opportunity to complete the trial and unblind the data towards the end of the year and looking forward to being able to share more about what our commercial thinking is as we move into 2022. Eiry?

Yes. No, I think you said it well, Eric. I'll just build on a couple of things. I mean, just to make the point. I mean, there are 30,000 patients in the United States with Huntington's disease, about 90% of them have chorea, and 70% of those have moderate-to-severe form of chorea that merits a more aggressive treatment. And in spite of that, we know that only 20% of patients get treatment with a VMAT2 inhibitor. And so we really believe there's a lot of room for improvement there. And we particularly think that the simple, flexible, once-a-day treatment with valbenazine could potentially be very important for patients with Huntington's disease.

The reason being that these patients take many, many medications oftentimes and also many patients have difficulty swallowing. And so the numbers of patients and the complexity of the regimen can be very important. The numbers of tablets needed to be taken and the complexity can be very important for patients in this space. Also, obviously, currently, INGREZZA for the treatment of tardive dyskinesia has no black box warning. And so as Eric mentioned, we're very interested to see our results at the end of this year and to be able to discuss further how we're thinking about going forward to regulators and hopefully, if successful, be able to get approval of a new VMAT2 approach in valbenazine for the treatment of Huntington's disease.

And we'll take our next question from Josh Schimmer with Evercore.

So it looks like your branded VMAT2 market share this quarter was at the low end of where it's ever been. To what do you attribute that and where do you see this evolving?

Actually, Josh, I think that it stayed basically the same. I think that if you take out the competitor's Huntington's sales, as they describe them, that by dollar amount it's still a 65-35 market share split, which is what it has been now for quite a while.

And we'll move next to Brian Abrahams with RBC Capital Markets.

A pipeline question for me on valbenazine in schizophrenia. You talked a little bit about that upcoming Phase III trial design. I wonder if you could talk more about what influenced the design there. I think a 10-week endpoint is a little bit longer than we've seen for other schizophrenia studies. Wondering if that was guided by some of the anecdotal data you're seeing in terms of time to full effect for valbenazine or other evidence of activity. And then curious on the 400 patients, what's guided your powering there? What are your expectations? And will that be just one dose level?

Eiry?

Yes. I'll answer some of those and some of the information we haven't actually released in the context of the trial. So first of all, to answer the question about the study design and the primary endpoint choice. One thing, just one point just to make right upfront. As you see in the tardive dyskinesia environment, the onset of effect in terms of valbenazine's impact on the movement tardive dyskinesia is very rapid in many patients. And so we have a rapid onset of effect in that setting. And also in any preclinical or other data that we generated, we have seen a rapid onset of effect. And so we don't anticipate needing longer and neither do we anticipate needing longer to get to effect in terms of the need for some form of complex titration and that's certainly not the case in this ATS setting.

In terms of the, if you look at the trials that have been done in terms of the duration of treatment out to the primary endpoint, they are actually quite variable. This is a registration study. In many circumstances, the agency is keen to see somewhat longer duration of effect out to the primary endpoint. And so in a discussion with the agency, we were able to land upon that primary endpoint timing as being appropriate for evaluation in this setting, particularly of patients who had failed to get adequate treatment from their antipsychotic alone. So that's the first piece.

In terms of the size of the study, the study, I'll say, is powered to detect a clinically meaningful reduction in the PANSS total score. And this, we believe this is an appropriate size to allow us to do that very readily if the treatment is then effective in that setting.

And then your final question, we haven't actually talked a great deal about the dosing schedule for this program right now. But as you'll see from the clinicaltrials.gov posting, it is an active versus placebo randomized parallel group study.

And we'll move next to Jeff Hung with Morgan Stanley.

For valbenazine in cerebral palsy, you've indicated that about 15% experienced dyskinesia. How does that rate of dyskinesia change from diagnosis of cerebral palsy in early childhood versus adulthood? And for the Phase III that you're starting this year, can you talk a little bit more about the specific subpopulation you're focusing on such as the specific age range? And would you split up the adult versus pediatric patients into different studies?

Eiry?

Thanks very much, Jeff. We haven't actually talked about the trial design as yet, although we have indicated that the trial will include both pediatric and adult subjects. You're correct that dyskinesia due to cerebral palsy occurs in about 15% of cerebral palsy and persists into adulthood in a proportion of that population. And so we think it is important given the persistence of cerebral palsy into the adult population that we have the opportunity to establish whether or not valbenazine can be an important medication or a useful medication for individuals who continue to suffer with cerebral palsy and dyskinesia into adulthood.

In terms of the remainder of the trial design, we are intending to start this trial later in Q4. And once the trial is posted on clinicaltrials.gov, we'll obviously be prepared to talk much more about the design.

And we'll move next to Brian Skorney with Baird.

Just trying to get an idea of what to look for in the Huntington's chorea data that you have upcoming. I know in TD, you maintain an advantage over AUSTEDO due to both safety, dosing and as well as sort of the perceived advantage on a numerical basis in terms of efficacy. I just want to look at AUSTEDO's pivotal. I think their improvement that they showed from a 12.1 to 7.7 improvement from baseline. Just how should we be thinking about the outcomes here, in particular, given that this drug has been on the market for a while and you're excluding patients who have history with a VMAT2 inhibitor. Are there any considerations to take into account in the patient population that's going to be here when we see the efficacy or do you think we could be looking at the same sort of efficacy advantage here that we see in TD?

Thank you, Brian. That's very, oops, sorry.

No. Go ahead, Eiry.

Do you want me to go ahead with that? Sorry, Kevin.

Yes. Go ahead.

So Brian, thanks for the question. I think the registration trial in HD that we've designed is designed to fully elucidate the benefit, potential benefit and the tolerability profile of valbenazine in HD. And we think it will be a combination of both the efficacy that we see and the tolerability and the once-a-day dosing and flexibility associated with that, that will be important in the overview of the totality of the data. So that's the first point to make.

Secondly, in terms of the trial design, the sizing of the trial, it's designed in order to be able to detect a clinically meaningful reduction, similar to the way in which the AUSTEDO program was designed. Just one clarification point, the exclusion of patients who have failed to respond to a VMAT2 inhibitor is done in order to ensure that we don't have patients in the trial who are unresponsive to that VMAT2 mechanism of action, since there may be a small proportion of patients that are such. Previous exposure to a VMAT2 inhibitor is a little different. And so I just want to clarify that. But we're really looking forward to seeing the totality of the data, which I think includes both the tolerability profile and the efficacy that we're able to generate in this registration study. And if we're successful in reaching our primary endpoint, then we obviously will be going forward to discuss with regulators how we should position this in the treatment of patients with Huntington's disease.

Just to clarify, are you saying that you are including patients who have previously established -- have previously taken a VMAT2 inhibitor just because on clinicaltrials it says that's exclusion criteria.

The exclusion criteria is meant to eliminate those who have failed to have adequate response to a VMAT2 inhibitor. As you probably are aware, many patients and one of the reasons why with use of deutetrabenazine, many patients fail to get to an outcome that is acceptable for them because of the issues of side effect profile and tolerability associated with the titration of deutetrabenazine. So if people have had a short trial of a VMAT2 inhibitor, then we're not necessarily excluding those individuals if they meet all other criteria.

And we'll move next to Chris Shibutani with Goldman Sachs.

You made reference to a decision by CMS as far as the payment reimbursements for 2022 being quite imminent. Can you clarify if you're expecting any particular changes that would have an impact on how you would execute your commercial strategy? In particular, just in reviewing some of the proposals on, particularly for Medicare programs, I think within psychiatry, mental health, there is a subdivision between audio-only services versus ones that combine video. The point there being that, obviously, video would appear to be very important for INGREZZA. Can you just comment about what the scenarios that you're expecting are and the impact?

Yes. So I'll start out. There were a number of changes that were under the public health emergency, one of which is that audio-only, audio plus video or in-person were reimbursed all at the same level and continue to be today. There are other changes that are in there also. They're relieved from having a minimum number of in-person visits. They're also relieved that it had to be from a secure site that you would be having the, doing your telemedicine from, that there would be another health professional at that other site, a nurse practitioner. And also, it allowed for the practice of medicine across state lines. So we're looking to CMS to really take on all of those and then see what they do come out with.

As we've alluded to before, we're seeing very good growth with INGREZZA right now. We've adapted to the public health emergency. So I see that as going well for us. But it's really too soon to tell what CMS is going to publish as their final physician fee schedule. All I'm saying is that it appears imminent.

Can I just ask, do you know what the mix of audio-only versus audio and video as far as the telehealth component in psychiatry has been?

Do you have that, Eric?

Yes. I can't report claims data. What I can tell you is, from our market research and then anecdotally hearing from our customers, that at least in psychiatry, about half of the telehealth visits are audio plus video and about half are video or excuse me, audio-only. And the audio-only tends to be more predominant for patients that are being seen in community mental health settings. And certainly, that makes it more challenging to screen for or recognize TD. And once again, if you go to the MIND-TD website, you'll see the materials that we created to help providers be more adept at screening for TD, regardless of whether it's an audio-only call, an audio plus video and how to advance that diagnostic process.

So as Kevin said, for 2022, we're expecting status quo because of the extension of the public health emergency into next year. And then at some point, when the public health emergency is lifted, those temporary waivers that Kevin described will also likely change. And the upcoming publication of the CMS physician fee schedule will give us some insight into what the telehealth environment will look like post-pandemic and post temporary waiver removal.

And we'll move next to Ami Fadia with Needham.

I had a quick follow-up on the Huntington's disease chorea study. Do you anticipate the possibility of superior efficacy to existing treatments with that study? And then with regards to essential tremor, the Phase II study readout next year, what should we be looking for as a positive proof of concept in Phase II?

Eiry?

Thanks. So the Huntington's trial is not designed as a head-to-head comparator study. And so in terms of a claim of superiority, we haven't designed that trial in order to answer that question. There will be no direct head-to-head data of ourselves versus any other VMAT2 inhibitor or in a controlled way versus any other treatment. This is a placebo-controlled trial.

With that said, as I mentioned earlier, we will be particularly interested in the totality of the data, understanding both the efficacy that we're able to generate on the Huntington's chorea score, but also other functional endpoints that are built into that study and the tolerability profile in the setting of that registration study. And with those data in hand, we'll obviously move forward if we're successful in that trial.

On the essential tremor study, this is actually a proof-of-concept study. And so it's a placebo-controlled crossover study in individuals with moderate essential tremor. And it includes 28 patients with 2 treatment arms. And the primary outcome measure will be the change from baseline to Day 28 for each treatment period and the amplitude of peak frequency of postural tremor. So with that in hand, looking at the within subject and cross-subject comparison between the active treatment 104 and placebo, we'll be able to determine the next step in terms of whether we go forward for a full registrational quality Phase II dose finding study.

And we'll move next to David Amsellem with Piper Sandler.

So given your commentary earlier in the call regarding the direction of net revenue per Rx in 2022 versus 2021, would it stand to reason that you'd be in a position to provide 2022 INGREZZA sales guidance and I guess, provide a range regarding sales or at least a floor? How do you think about that?

Yes, David. Well, the time has definitely come for us to step up and provide an annual guidance. And we do intend to do so in our February call for our Q4 call, we'll give a 2022 guidance number for INGREZZA. And of course, we'll include a range that would reflect both the environment and also our latest thinking on the impact on the direct-to-consumer advertising campaign as well as the sales force expansion. So we're continuing to progress and gaining understanding of this market, and that's something that we look forward to having those conversations in February.

And we'll move next to Kelly Shi with Jefferies.

So for KINECT trial in Huntington's disease, on the primary endpoint, total maximum chorea score from baseline, the previously approved VMAT inhibitor showed a 2- to 3-point reduction. I wonder if this is a benchmark for the clinical benefit on KINECT trial? What kind of impact it is for, including the patients that are pre-exposed to VMAT inhibitor on the trial? And also, how do you think the placebo effect to change over time?

So I think as we've previously stated, the primary endpoint for the KINECT-HD trial is the total chorea score. And what you articulated in terms of the deutetrabenazine impact is indicative of a clinically relevant change in that score. Our study is adequately powered and designed in terms of the sample size to be able to identify a clinically meaningful change in that score and reduction in that score relative to placebo. We have no reason to believe that the placebo response should change in this disorder over time, unlike other conditions such as schizophrenia and elsewhere, where obviously, there has been a significant change in placebo response over time.

I think I clarified a little earlier about the situation for previous exposure to VMAT2 inhibitors. This population, we believe, will be appropriate for us to be able to detect adequately the effect of valbenazine in treating the chorea associated with Huntington's disease.

Just to reiterate again, we're interested in looking at the totality of the data generated from this trial, both in terms of the effectiveness of the medication and also the tolerability and profile associated with once-a-day use. We also have functional endpoints relative to the study, as I think I articulated earlier. And we'll be looking at the totality of that data as we read out the data at the end of this year in terms of making the decision to go forward for potential registration if we're successful.

And we'll move next to Vamil Divan with Mizuho Securities.

Maybe just one on ONGENTYS. I know it's a smaller product, maybe not talked about as much, but it's only, think, about $2 million or so per quarter here about a year in the launch. I'm just curious kind of what you see might be a catalyst to kind of get that product going more, whether it's COVID-related or payer access or anything you sort of see going forward, how we should think about that maybe changing its trajectory?

Yes. Thanks, Vamil. So I think it's a combination of things. Obviously, launching a new medicine in the face of a pandemic has been challenging. And certainly, we've seen the ups and downs in terms of the surge of, especially the Delta variant over the course of this year impacting our ability to access, especially those important movement disorder specialists. And so we've seen steady progress in terms of trial and adoption. And certainly, the feedback that we've gotten from prescribers has been very positive in terms of their experience and the experience that's being read back to them by the patients. And so we're continuing to put our best foot forward in terms of driving initial trial and adoption with ONGENTYS.

And I mentioned in my prepared remarks that we believe there is synergy between ONGENTYS and INGREZZA in terms of being able to access neurology customers going forward. So what's going to drive continued growth with that product? Well, a few things.

One, we are building out a dedicated neurology team. And we think that, that's going to benefit both INGREZZA and ONGENTYS in those neurology practices. Secondly, going into next year, we do believe that we will have better access for ONGENTYS. So we will continue to put the resources that we've built for INGREZZA, the field-based reimbursement team, the base support programs and so on behind ONGENTYS and those Parkinson's patients. And then, of course, as we continue to learn about the market and where ONGENTYS is fitting into practices, we'll continue to fine-tune our approach to the launch. So we feel good about the direction that it's moving. Certainly feel like the environment externally, if it gets better and there's a reduction in the impact of COVID, that will benefit ONGENTYS as well.

And we'll move next to Myles Minter with William Blair.

Just back on schizophrenia, with the pivotal trial for INGREZZA, the 10-week endpoint, you mentioned that was kind of like a balance between the FDA wanting to see longer-term data from the 5 to sort of 6 weeks that we might be used for. Is that in the absence of the need for an open-label extension with that trial? And also, are you enrolling patients that have extrapyramidal symptoms as part of their therapy?

Yes. So there will be potentially patients with tardive dyskinesia and other extrapyramidal syndromes included in the trial. There is no exclusion associated with that. And we are looking separately at the long-term safety and tolerability data that would be necessary in the context of a new indication for schizophrenia.

One thing I will say is that, obviously, from our tardive dyskinesia program, we have a significant number of patients with schizophrenia and tardive dyskinesia who have been treated for long periods of time with INGREZZA, and our safety and tolerability data are very strong. And that was one of the things that made us encouraged about going into the schizophrenia indication.

And we'll move next to Charles Duncan with Cantor Fitzgerald.

Congrats on the new patient adds this quarter. I had a question on the pipeline in valbenazine, particularly along the lines of KINECT-HD. I think that I heard Eiry talking about taking a look at the totality of data, but could we assume that it's possible that you'd be filing an sNDA next year with positive KINECT-HD data? And then back to kind of Myles' question regarding valbenazine in schizophrenia, I guess I'm wondering if you could provide a little bit more color on what you think modulates the timing to data. Is that simply enrollment or something else?

On the first question associated with Huntington's disease, we will read out the data at the end of this year. And then with positive data in hand, if we're successful, we'll go forward to the agency to consider as rapidly as possible being able to submit a regulatory application in the U.S. for that indication. On the ATS side, can you just repeat the question, so I make sure I understood what you were asking.

Yes. I'm just really trying to better understand timing to data. I think it was mentioned '23. And I think you said complete late in '23. And so I'm just trying to wonder what is the biggest factor that you're considering for that time.

Yes. I mean I think we are just starting this trial and opening for enrollment this month. We will obviously be moving as rapidly as possible on this global trial to enroll as rapidly as possible. I think our date of late 2023 is our first guess around enrollment, and we'll clearly update you on that as we go through the trial.

And we'll move to our next question, Yatin Suneja with Guggenheim.

This is Eddie on for Yatin. Just a quick follow-up on Huntington's, if you are successful, what are the other gating factors and for filing and sort of how quickly can we see approval here? And then on the Xenon 352 collaboration, which we haven't really talked about, how are you thinking about prioritizing the focal versus sort of pediatric indications for that asset? And sort of what's the optimal regulatory path forward there in both the U.S. and the EU?

So on the HD trial first, I think we haven't really signaled very much about the path to a regulatory filing as yet. We've been focused very much on the generation of the data and the release of the data at the end of this year. And obviously, after that, once we have shared those data and had the opportunity to interact with the regulatory authority, we'll have a much better handle on the timing and path forward there. With respect to approval, obviously, we don't comment on the timing of approval at this stage. With respect to 352, I'm sorry.

Eiry, yes, just to be specific, if the data were to be positive, our assumption would be we would be filing an sNDA sometime next year, just to make sure that's clear.

Okay. Thank you. Thanks for that clarification, Matt. With respect to 352, I think we're excited about the opportunity for this highly selective Nav1.6 inhibitor in both the rare pediatric epilepsy of SCN8A and also potentially in focal-onset seizures. With respect to the design of our SCN8A trial, we're making every patient in this program count. And so this is a placebo-controlled trial from the outset. And our goal is to be able to demonstrate if we're able to demonstrate the effectiveness of this agent that we have a trial that's appropriately designed to be able to look at efficacy even in this first setting. And we're hopeful that, that would provide us a rapid path forward towards interaction with the regulators.

On the focal-onset side, obviously, we're initiating a Phase II study. And in both cases, I think the unmet need is very significant. And in the focal-onset seizures environment, it's really because of the fact that a lot of patients do not get adequate response to currently available treatments. And so we're excited here as well about the opportunity to bring a more selective agent into this space and to do it in a way that enables us to be successful in delivering efficacy and outcomes for patients. It's a little early on the Phase II side for that program to be able to say how that would stack up against the SCN8A indication. But we're really focused on delivering data as rapidly as possible in both settings.

We'll move lastly to Laura Chico with Wedbush Securities.

I guess I have one question just with regards to a number of the ANDA filings that have come through recently. Just with respect to not only generic AUSTEDO challengers but to generic INGREZZA challengers. I'm wondering if you could comment at all upon maybe how you're thinking about not necessarily patent protection, but the longer-term pricing strategy for INGREZZA in an environment with a generic competition. And it also seems, obviously, like you're making a number of investments in future valbenazine indications. So I'm not sure if you could kind of talk to your confidence at all in terms of navigating that.

So Laura, the ANDA filings that have been made against both products are basically business as usual. This is nothing unusual. We're handling them in the normal course of business. We have patent protection on INGREZZA that goes many years out. At a minimum, I would say, out to about 2032 with some extensions, but we have a number of patents in the Green Book that can take us longer than that. So we don't see any challenges to our business on the near horizon at all.

So in closing, I would like to thank everyone for joining us today. We look forward to seeing you. It's hopefully in person at several of the upcoming meetings in later this year and early next year. And I think as you can see from today that we're making very good progress against all our goals even amid the challenges that have existed out there. This is something that we've adapted to, both with INGREZZA and our pipeline. And we look forward to having even more rapid progress in the future. So thank you, everyone.

This does conclude today's program. Goodbye. Thank you for your participation. You may disconnect at any time.