Neurocrine Biosciences Inc (NBIX) 2016 Q2 法說會逐字稿

Good day everyone and welcome to today's Neurocrine Biosciences reports second-quarter 2016 results conference call. (Operator Instructions)

Please note, this call may be recorded and I'll be standing by if you need any assistance. It is now my pleasure to turn today's program over to Mr. Kevin Gorman.

Thank you very much and welcome everyone to our second-quarter earnings call. I'm joined today by Tim Coughlin, our CFO; and Chris O'Brien, our CMO. Before we get started, Jane, could you please read our Safe Harbor statement?

Yes, good afternoon. I want to remind you of Neurocrine's Safe Harbor cautions. Certain statements made in the course of this conference call that state the company's or management's intentions, hopes, beliefs, expectations, or predictions of the future are forward-looking statements which are subject to risks and uncertainties.

Information concerning factors that could cause actual results to differ materially from those contained in or implied by the forward-looking statements is contained in the company's SEC's filings including but not limited to the company's annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by visiting the investor relations page on the company's website at neurocrine.com.

Any forward-looking statements are made only as of today's date and we undertake no obligation to update these forward-looking statements to reflect subsequent events or circumstances. Kevin?

Thank you, Jane. It's been an extremely busy quarter for us. As you can imagine, we've been very busy readying our NDA submission for valbenazine for tardive dyskinesia. In addition, very active in building out our commercial group; and also our medical affairs group has been active on multiple fronts in working with the medical community, who are at the forefront of treating these patients with this very serious disorder. Chris will go into that in a bit of detail.

In addition, we've had several milestones with our Kinect 3 and our Kinect 4 clinical programs and Chris will go into more detail there. And then finally, in my opening remarks, I'd also like to say that about two to three weeks ago we had a very good meeting with our partner AbbVie on our elagolix program -- their elagolix program I might add also. And the very pleased, couldn't be happier with the level of enthusiasm, the amount of commitment, and the tremendous resources they are putting towards that program.

It truly indicates that this is a multi billion-dollar opportunity for them and it is very nice to see the team that they have working on that and how it has expanded even just since our last meeting.

What I would like to do now is I would like to turn this call over to Tim and he can take you through the financials.

Thanks, Kevin and good afternoon everyone. Thanks for dialing into our second-quarter 2016 earnings call. This quarter is fairly straightforward from a fiscal perspective so my comments will be brief.

We had another very productive quarter, as Kevin already mentioned, with most of it spent on compiling a preparing the NDA, as well as commercial preparation. This is reflected in the financials with a significant increase in expenses for both the year over year and quarter over quarter numbers. From a cash perspective we ended the second-quarter with over $416 million in cash, investments, and receivables; a very strong financial position.

Our loss for the quarter was $40.3 million or $0.46 per share. This compares to a loss of $24 million or $0.28 per share for the second-quarter of 2015. Our net loss for the first half the 2016 was $59.5 million compared to a loss of $25.2 million for the first half of 2015.

When comparing expenses from 2015 to 2016, for both the standalone second-quarter, as well as year-to-date, we show an increase of $16.5 million for the quarter and $30.3 million for the first half of 2016 respectively. R&D expenses in the second-quarter increased by $8.2 million over the comparable period in 2015. And they're up $15.5 million year-to-date 2016 compared to 2015.

The primary drivers of these increases in R&D expenses are: the costs associated with completing the clinical efforts in tardive dyskinesia, and our NDA preparation activities; expenses during the second quarter of 2016 including the NDA filing fee of $2.4 million; as well as other scientific consulting costs, which increased by almost $3 million over last year. This increase of scientific consulting was primarily related to preparing the valbenazine NDA for tardive dyskinesia.

We also saw external development costs increase as clinical efforts continued across tardive dyskinesia, Tourette's and our essential tremor programs.

General administrative expense also increased quarter over quarter and for the first months of 2016, compared to the same period in 2015. It was up $8.4 million for the quarter and $14.8 million year-to-date.

The main driver of this increase was personnel related expenses, which were up approximately $8 million for the first six months of the year. Half of this increase is related to increased share-based compensation expense. The balance of the increase in G&A costs was driven by pre-commercialization activities related to valbenazine and these costs were incurred across our medical science liaison group, marketing health economics, payer relations, and sales.

Looking forward, we expect overall expenses to continue to increase in each of the two remaining quarters of 2016, mainly concentrated in general and administrative expenses.

In summary, another solid operational quarter highlighted by significant progress across all facets of the company and we ended it in an excellent capital position.

So with that I will conclude my prepared remarks and for those looking for additional details our Q is on file with the SEC and for now I will turn it back over to Kevin.

Thank you Tim. As you can see there are no surprises there in our financials. Now I'd like to turn it over to Chris.

Thanks Kevin and thanks for the participants for joining the call this afternoon.

Let me start with elagolix. Kevin mentioned the recent meeting between Neurocrine and AbbVie, and indeed, now that the two Phase III endometriosis trials have completed the on-treatment portion of the studies, and the results have been shared with the Neurocrine team, we're really happy with what we see. These confirm what AbbVie has already released, namely the efficacy and safety results that are very conducive for a product like this moving forward.

It is our understanding that they have a fairly extensive publication plan in place and in fact, I think for those who are interested, at the upcoming American Society of Reproductive Medicine, the ASRM meetings coming up in Atlanta, sorry, Salt Lake City later this year, they should be having extensive amount of data for their clinical trials with elagolix.

So good progress. On track. We're very lucky to have them as a partner and look forward to additional data to become available.

Our next program to talk about is the congenital adrenal hyperplasia program. As we've discussed in the past, we had nice proof of concept with our initial 860 molecule. We had a finding in a juvenile toxicology study that we conducted which led us to elect to take a follow-on molecule forward that doesn't have that finding, and we are working intently to have all the materials ready for a new IND filing later this year. So that is moving along as scheduled.

Third program to talk about is the essential tremor program. We successfully completed the single-ascending dose Phase I study in healthy volunteers earlier this year. Very pleased with what we got from that, namely the safety and PK data that we are interested in. And that has allowed us to move on to the next study which is a Phase I multiple-ascending dose trial in healthy volunteers; that study is queued up to start in the near future.

And the information from that trial will let us make a determination about going into a trial in patients with essential tremor as the next study after that. So that is on track. Obviously the next piece of information from that study would be about our impression of the safety and tolerability and PK after repeated dosing of the molecule and then our interactions with the FDA going into the next study.

We have been continuing to work with our colleagues and consultants in the field of tremor and have tremendous enthusiasm from talking to them. They are very eager to get a new molecule into the clinic to help the 8 million to 10 million people in the US with ET. So we're eager to keep that moving forward.

So let's move on now to the main focus of our work; it keeps all of us busy and very excited; that is the valbenazine program. We've made some considerable strides over the last few months.

By far and away, as Kevin pointed out and Tim emphasized, the overwhelming focus of work at everyone here at Neurocrine and with some of our consultants and vendors has been NDA preparation and submission plans. It is the primary focus. We are on track and very pleased with the progress that we are making with this submission.

Now, I thought what it might be useful to do is to walk through the scope of some of the studies that contribute to the NDA. So I will talk about a range of activities.

We have conducted over 20 clinical trials with valbenazine across Phase I, Phase II, and Phase III and this is a very robust collection of data for safety and efficacy. The Phase I studies, of course, are the fairly classical ones that you would do. I would emphasize that more recently, we have completed some of the special types of Phase I studies that one does for an NDA.

So for example, a Phase I study of valbenazine in subjects with known or existing hepatic impairment dosed with valbenazine, this helps us understand dosing and metabolism and exposure in people with liver disease. This kind of data then helps the FDA, Neurocrine determine dosing in people with that kind of disease.

We have completed a number of Phase I drug-drug interaction studies. All of these have been designed either to look at the impact of valbenazine on concomitant medication with a known enzyme dependence; or vice versa, the effect of a concomitant medication on valbenazine exposure and clearance. And those have been completed successfully.

We have also completed our Phase I study on cardiac repolarization. This was using supra-therapeutic doses of valbenazine in healthy volunteers. The study confirmed what we have pointed out at earlier times. Namely, in our early Phase I studies, we see a slightly positive slope for the relationship of plasma concentration and QTcF. This translates into about a 3 millisecond QTcF change on 80 mg dose.

We've also confirmed that there is no clinically significant effect on QTcF. In our Phase II and Phase III studies, we've done an extensive analysis of ECG data collected in triplicate on patients that are on long-term clinical trials, as well as the placebo controlled portion of these trials, and very satisfied with the output of that analysis.

Talking about Kinect 3, I'll mention as we speak the last subject is completing their last study visit for the Kinect 3 trial. We're very grateful to the patients, obviously, the caregivers, the investigators, and the coordinators who have helped make this study a reality. There is no precedent really for this kind of large sponsor-driven, well-controlled registration trial for TD historically. So it has really been an effort on many people's part and we are very grateful for everything that the team has done. Obviously, this data is key and as I'll mention in a moment, we hope to share some of this long-term efficacy and safety data in upcoming scientific meetings, later this year.

The Kinect 4 study, is a one-year open-label safety study in patients with tardive dyskinesia. As you may be aware the enrollment for that study closed earlier this year. Patients will continue -- or subjects will continue in this trial throughout the year. This is not a rate limiting or gate-keeping step for NDA submission; this is something that can continue to run even after NDA submission.

Now these Kinect 3 and Kinect 4 studies, although they were up to one year duration, we continue to have requests from investigators and from subjects and caregivers that subjects be given an opportunity to have continued access to valbenazine. So we set up the study that we call the rollover study. If you look on clinicaltrials.gov it is NBI98854-1506. This was a really good opportunity not only to help patients, of course, but to continue to gather additional safety data over extended periods of time.

So it is conceivable that patients will have access to valbenazine up until the time of product launch, knock on wood it gets approved as planned. So that study is going well, and subjects will continue to have an opportunity to enroll in that study up until the time of approval.

Obviously, all of the data that comes from these Phase I and Phase II and Phase III studies is incorporated into the NDA. I know people often ask me -- well what is the label going to look like and what is the dosing language and the risk language? And all of that obviously has to come from the review process with the FDA.

Recall that we do have breakthrough therapy designation. We have had considerable discussion and interactions with this psychiatry division at the FDA. That process of communication has been going quite well. But at the end of the day, it comes down to their review of the entire safety and efficacy package, as to whether the drug not only gets approved but what language goes in the label. So we will need to wait and see how that unfolds.

Obviously, in parallel to the tardive dyskinesia effort is our Tourette syndrome program. And we have the two ongoing placebo-controlled Phase II trials: The T-Forward study, also known as the 1505 study in adults with Tourette's and the T-Force GREEN study, the 1501 study. Those are both going well.

Very happy, a little surprised that the adult study is recruiting a little faster than I thought it would. That is going well, so we should have data, topline data by end of year if things continue to go well for that study.

And for the T-Force GREEN study, we're continuing to bring on the sites that we had identified so we're not quite complete in getting them all up and running, due to some of the challenges of working with academic institutions and local IRBs. But that part is going well.

Recruiting is going well. I'm very happy with the characteristics of the kids with TS that are joining this study, as well as the adults. They have moderate to severe Tourette syndrome, based on the Yale global Tic Severity Scale.

They are very appropriate candidates for these clinical trials and so far we are very pleased with the safety and tolerability of enrollment in these studies. That T-Force GREEN study we would expect topline data sometime around turn of the year, depending on how the rest of recruitment goes.

Now, we also got feedback from the Tourette investigators, the Tourette syndrome subjects, and their caregivers, families, that they wanted access to valbenazine after participating in the placebo-controlled trial. So we have designed and have just now implemented the 1601 study, called T-Fusion and I think this was in our press release last week, and should pop up on clinicaltrials.gov shortly. We don't control when it gets posted but it should be sometime in the next few days I would think, if you want some more details.

This is an extension study for children or adults with Tourette's that have completed the T-Forward or the T-Force GREEN study. They can rollover into the T-Fusion study as an extension trial. So we're very happy about that, as are investigators and subjects.

So that is the summary of the valbenazine clinical trial activity.

It is worth also pointing out, as Kevin mentioned, the medical affairs group has been very busy. Our field based MSLs have been calling on scientific leaders throughout the country learning from them what is the state-of-the-art of what's happening in TD diagnosis and management. They have been sharing the information from what has been published about valbenazine from our recent publications, as well as the recent presentations at the American Academy of Neurology, the American Psychiatric Association, and the Movement Disorders Society.

We've also submitted, I should mention, or are in the process of submitting some additional presentations that we hope will be accepted for upcoming scientific meetings later in the second half of this year. These are presentations regarding long-term efficacy of valbenazine, long-term safety of valbenazine, and additional work on pharmacology and pharmacokinetics. So some, a rich trove of information that is being prepared for public dissemination.

So they will continue to work. The medical affairs team is quite busy for MSLs, publications, health economics and outcomes, and a variety of other activities. So I think probably what I should do is stop there. Kevin, and --

Thank you, Chris. Your group, along with regulatory, have really done an outstanding job in keeping all of our programs on track, moving them forward, while simultaneously putting together the NDA submission. And I might add, simultaneously getting ready for a potential advisory committee meeting, which we don't know whether we would have or not; but we have to plan well in advance, as we have done, in being ready for that.

Right now I would like to open it up for questions.

(Operator Instructions) And we'll take our first question from Geoff Meacham with Barclays.

This is Evan on for Geoff. Thanks so much for taking my questions and congrats on the progress. One, regarding the safety and I'm sure you've talked about this a lot, but with the recent -- not so recent CRL for the Teva product what are some of the things you are doing proactively to ensure that you don't have a similar safety issue? I know the molecules are slightly different, but how should we think about the high level safety path forward there.

Evan, just to be clear the Complete Response Letter that Teva got was not specifically a safety issue, it was, as I understand it, it was a question about had the metabolites of SD-809 been adequately characterized. And we understand that they have a plan in place to address that question. That is a non-issue for us, because our molecule is quite different.

We don't have any unknowns about our metabolites. Those have been characterized from the very beginning of our preclinical program, through our IND opening interactions with the FDA; and in every step along the way those have been discussed, data provided, and clarified. So that is a non-issue for us.

Okay perfect. And then one with the essential tremor program, what is really the gating factor in that second trial that you need to see to move in to sick patients?

I'm looking for making sure that I have adequately characterized the PK profile of repeated doses, that I know what the variability of exposure is. Obviously we do a lot of work in animal models and hepatocyte systems et cetera, to project what we think exposure is with humans and how clearance will be.

But I want to be able to predict quite accurately, what kind of exposure range I'm going to get, make sure that I am within safety margins that I need to be in given the amount of preclinical data that is available, and that I am in an exposure range of our drug that I think reflects what we saw in our animal models of essential tremor, that we have adequate exposure to really make a proof of concept assessment. So whenever you go from a single-dose to a multiple repeated dose, over let's say a week of dosing, you really need to have that well-characterized before you go into patients. Otherwise that proof of concept may have been a study that's not informative.

Okay. Thanks so much for taking the questions. Appreciate it.

We'll take our next question from Ian Somaiya with BMO.

Thanks and let me add my congratulations on all the progress. I have four questions, if you don't mind I'm just going to state them all because I am going to forget otherwise.

First, if you could just share with us your thoughts on regulatory review timelines. Should we expect an eight-month clock for valbenazine in TD?

Second, from a commercial viewpoint, challenges in developing this market, given you are going to be first to get approval?

Third, from a dosing standpoint do you expect there to be any overlap with Tourette's? I know you haven't disclosed the exact doses in your Tourette's Phase II trial.

And Chris, what are your goals for the Tourette's program? Are they the same for adults and the adolescent trial?

Good questions Ian. Thank you. Maybe we can -- we will share these a little bit.

For the first one, the review timeline, as I think you are aware most drugs that are granted breakthrough therapy designation do receive what is called priority review. So as you correctly pointed out eight months reflects the initial two months on the clock and then the six-month review cycle.

We have requested that. We will assume that that is highly probable, but it is always a decision that is made by the FDA once they have the NDA in hand. So we won't know that for sure, until they actually let us know what our PDUFA date is. That would be that anticipated timeline.

The second question was about market challenges for TD. I am happy to talk about that (multiple speakers).

Let me have Tim or Kevin talk about that.

So we're doing all the work right now. We look at it as an action opportunity. Right now we are out with our MSL teams, I'll say conditioning the prescribers and educating, advising. We're doing all the work from a payer standpoint, health economics. So we will be well-prepared at the point of approval to launch into this market.

When we look at how the uptake is going to be, we've always said this isn't a three-year to peak. But we will have, I should say after a couple years, if we stick to our timelines in the clinic, we will have Tourette's as a fast follower. We're excited about the opportunity. There are a lot of patients out there.

But again when we look at the TD market the question we get most from the investment community is: what is the pricing going to be? And our response has been consistent: we'll tell you the pricing once we get the approval.

We look at it as a significant opportunity. It is an untapped market. We have, we believe, a lot of demand and that has been reflected in some of the rollover clinical trials that Chris is running. As our current rollover study is almost nearing capacity, we may have to enlarge it.

And what I would add to what Tim has said and Chris a little bit in his opening remarks, is that we are really working closely with the scientific leaders out there. It is not just talking to them, it is listening to them, and what they have to say. There has been a lot of learnings there. There's a lot of enthusiasm from them.

Really though, our MSL team needs to then and what they're doing now, is working with them and now going down deeper down in, into where a lot of your prescribing physicians are going to be and utilizing our scientific leaders to help with access there and education that's going on there. So both from a publication standpoint, from the one-on-one meetings, from group meetings, and then eventually through medical education, we will be going deeper and deeper into the market place.

The main challenge is there has been no treatment for tardive dyskinesia. There has been disincentive to diagnose tardive dyskinesia and therefore it's been a hidden entity.

We know the patients are there. We see them. They enroll in our trials. We go out and look for them and we find them. So that educational piece will be, as Tim said, a slow steady rise as we are successful in that realm.

I'm going to take number three real quickly and then let Chris finish off. And as far as the dosing overlap with Tourette syndrome, Ian, with that I'm sure you're coming from and where it's important is, will the safety database from the TD program be able to translate over into the Tourette's program; and yes it will.

Yes, to the extent that for adults the doses are completely overlapping. All of the long-term safety data that we have for adults with TD is very much supportive of adults with Tourette's. We have made appropriate adjustments to doses for the children and adolescents in our pediatric program based on their body size, so there is a corresponding adjustment of dose there. But we have not disclosed the details of that.

And then obviously, kids are not just small adults so they have their own unique safety requirements. And if I were the FDA, I would want more safety data from the kids' studies than I would I would need from the adult studies.

What is the regulatory path in adults versus the adolescent or kids?

Obviously that has to be agreed to with the FDA. What we've discussed with them to date is that we will bring them data from these two Phase II studies and depending on how robust the efficacy is and what the safety profile is, that will determine what our options are going forward. You could imagine in best case scenario, the adult process would be quite a bit quicker if you believe that the long-term tardive dyskinesia safety data would support the TS market. Then as an sNDA basically for Tourette's that would be a lot faster and less onerous a submission than a full program.

The kids program, I would expect that to be a more traditional safety and efficacy package. Now their last question was on my goals for Tourette's? I wasn't quite sure.

Yes I think you answered that in terms of -- if the goals are the same for the Phase II program in adults versus the adolescent population.

Yes, I think we addressed that.

Yes. Thank you.

And we'll take our next question from Charles Duncan with Piper Jaffray.

Hi, guys. Thanks for taking the question and thanks for the thorough overview in the prepared remarks. I just had a couple of quick questions.

One of them though is kind of a clarification on valbenazine NDA filing plans. I was wondering if you were talking about filing the NDA by the end of the year or seeing it perhaps accepted for review by the end of this year.

Chaz I think that the terminology, the only difference between this press release and any other press release is all we did was we are using the appropriate language. I think we got into a shorthand previously. It has nothing to do with timelines or expectation changes.

What a sponsor does is submits the NDA. What the FDA does is accepts it for filing. So we're just using the appropriate regulatory language.

But Chaz, you picked up on the nuance that we thought people would pick up on. It is usually a two-month cycle after you submit to file and we anticipate having both those happen this year.

Okay. Super, I appreciate the clarification. Then I'm not sure but Ian may have asked this question. Wondering if you could provide us any additional color you've heard in terms of feedback on TD awareness.

I guess what I'm really wondering is, have you heard any new concerns or different concerns regarding psychiatrists' recognition of TD, or at least being more focused on psychiatric stabilization over TD burden? Or do you think that they are willing to use an effective tool like valbenazine could be.

Obviously Chaz, that is an intense focus. A lot of the market research that is going on right now and also with the medical affairs team is engaged in discussions with docs out there.

I think you correctly identified three key pieces. That in the psychiatrist community the question is: what is the most important thing? And it has been and probably always will be the most important thing is stabilizing the underlying psychiatric condition.

Then the next question is: is TD recognized? And the third question is: is the risk-benefit of managing TD in keeping with the need to keep the psychiatric state stabilized?

And I tell you if you go out and talk to 100 docs or psychiatrists, you will find examples where -- you will find some docs that say that TD does not exist anymore. We don't see it.

You will find other docs say: this problem is more pervasive than I ever realized it was. I am seeing TD as commonly now as I did 20 years ago, but it is just not as severe.

You will then see docs that say: yes my patients have TD but I don't want to do anything that is going to destabilize them. And obviously that was a key focus of our trial designs is that we had a simple once a day add-on medication that required no changes in underlying therapy. And we showed no worsening of psychiatric state.

Once you talk to docs about what valbenazine has shown in trials to date, that is when, as Kevin says, they start to get excited about it. They say: you mean I can use something that is once a day, easy to use, and you are showing me videos about the phenomenology of what tardive dyskinesia is; I can do this safely. Then their attitude changes. But this is obviously part of what has to happen for a successful launch of the drug.

Okay, that is helpful. I appreciate that, Chris. And my last question is just jumping over to the Tourette syndrome program. I am still wondering, as you look at the pediatric disease versus, say, the adolescent or adult disease, are you detecting any -- or do you have any additional information in terms of etiology or really severity and the potential for effective treatment with valbenazine?

I think as we've discussed before, Chaz, we believe the etiology of Tourette's in kids and adults is the same. What we don't understand is, as most children outgrow their disruptive tics by the time they are in adulthood, some do not. We don't fully understand the why of that.

Is there an underlying difference in pathophysiology? I don't know. But we think Tourette's and tics, they all have the potential to respond to VMAT2 inhibition with valbenazine regardless of whether they are adults or kids.

And that is what these trials are designed to do. I have no reason to believe that a six-year-old kid versus a 16-year-old adolescent versus a 36-year-old adults with tics, would not respond to the appropriate dose of valbenazine.

Anecdotally, we're hearing that in these Phase II trials, patients are doing better. Obviously they are blinded placebo-controlled trials.

But I don't think that is a big hurdle or a big issue. Of all of the things I worry about, that is not one of them.

And qualitatively Chris the characteristics of the people we are getting into the trials are --?

Yes, one thing that we've been -- and I think I mentioned this on our last call; we look carefully at the blinded baseline data to make sure that the patient characteristics are appropriate for these studies and would support the parallel calculations and sample size estimates that we did for the trials, and they are spot on. Historically, these successful Tourette trials have Yale Global Tic Severity Scores at baseline in the 30 range and we are spot on. So, very nice mix of patients so far.

That's perfect. That really addresses the question that I had, because I was a little concerned about the risk of readout in an adult trial, perhaps quality of patients, but I think you've got it nailed. Or you nailed the answer. Thanks.

And we'll take our next question from Brian Skorney with Robert Baird.

Hey; afternoon guys, thanks for taking the question. My question also is around the Tourette's studies and the path forward. I know in the recent press release on the initiation of the open label, you indicated planning for a Phase III study next year. You guys are usually pretty conservative in your communications and I think this is the first time you've explicitly mentioned Phase III plans.

I'm just wondering what we should take that to mean, in terms of what you are seeing data-wise right now. What is driving the decision and comfort level to start talking publicly about a Phase III?

Is there anything in terms of anecdotal feedback from the Phase II study and studies in Tourette's, or is it primarily driven by what you saw from the long-term safety data from the open-label TD study? Any color there would be helpful.

I guess I wouldn't over-interpret it, Brian, that the logical conclusion of having two placebo-controlled trials and then additional long-term open-label safety studies will put us in a position to have a discussion with the FDA in the early part of next year. And that is when we would seek to clarify what additional studies would need to be done for adults, if any; what additional studies would need to be done for pediatrics, if any; what the design of those trials would look like; what would constitute an adequate Phase III package, et cetera?

I wouldn't over-read it. Obviously, you asked about anecdotal or even well controlled data, we're very pleased with the information that's come out of the TD program. And now that we're in the process of assembling and getting ready to submit the NDA, we have had a chance to look in depth at integrated safety and efficacy data across multiple studies. So, if anything I am even more enthusiastic today than I was six months ago about the TD program.

Obviously, that is nice to know, thinking about Tourette's, but particularly in the pediatric population, that really is something you have to -- you have data, you have to sit down with the FDA, and ideally that would be in 2017. We'd reach some kind of plan of agreement with the FDA and I would hope that would include a Phase III study in kids.

Now gentlemen, if I could just ask one more question. On the essential tremor program I know you guys have been a little tightlipped about mechanism. So I'm just wondering in terms of the SAD, MAD studies when and where do we think we might see those presented and when and where do you think we might start getting a little guidance on the structure of the molecule and mechanism?

I think the Phase I studies we're probably not going to be presenting those really anywhere. What will happen and when we will start discussing the mechanism is probably going to be after we have created some proof of concept data in the human population.

Great, thanks, guys.

And we'll take our next question from Anupam Rama with JPMorgan.

Hi, guys. This is Eric in for Anupam this evening.

Thanks Chris for all the additional color on the supportive Phase I studies with valbenazine. Maybe just a follow-up on the cardiac repolarization study. Wondering if you could give a little bit more color on the patient context there, whether these studies were in normal volunteers, or maybe there were patients that might have been at-risk CV patients, whether there is the inclusion of concomitant meds and whether data from some of the supportive studies might be presented at a medical meeting prior to feedback from the FDA?

Thanks Eric. I think I did say that the cardiac repolarization study that we did was in healthy volunteers, not patients with tardive dyskinesia. It was with supra-therapeutic dosing, but I did not disclose the details there. And it is unlikely that I will publish that kind of information.

That is part of, obviously, the FDA review. It's just one piece of an overall cardiac safety package.

In contrast, the data from our Phase II and Phase III trials in patients with TD is so remarkable because of the extensive amount of data we have. And more than three-quarters -- or around three-quarters of the patients that we have in our trials actually are on concomitant medications that have known potential to prolong QT. So drugs like Paxil for example or some of the antipsychotics.

And so nobody has ever done a large controlled trial looking at QTcF in these subjects, in this kind of population. So we think this is really interesting. Obviously we are pleased with the lack of any safety signals seen so far, and I would love to publish that as soon as we can. And I've already mentioned that we hope to publish some of this long-term safety data later this year, at upcoming scientific meetings and then in manuscript shortly thereafter.

Okay great. Thanks.

And maybe just a follow-up Tourette's, just to check the box, is it unreasonable to expect to presume that T-Forward and T-Force might be registration enabling? Or really should we be thinking that as opposed to Phase III even?

Right now, I'm calling them for what they are there. They are both Phase II placebo-controlled trials. And it would be -- the conservative position is that, for at least in children, where there is no long-term adequate safety database of valbenazine in children, one would anticipate going on to a more typical Phase III program, for registration.

Now in contrast for adults, you can conceive of the TD safety database being sufficiently supportive to support an sNDA of Tourette's. But again, it depends on the quality of the data.

And I'm just talking out of my mouth right now in that I haven't sat down with the FDA and had that discussion yet. I really can't tell you what the FDA is thinking; and obviously I'll do what they want us to do. So that discussion will come after we have data.

Great, thanks very much, guys.

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

Good afternoon, thanks for taking my questions. A few commercial questions, at last year's analyst meeting you said that you thought there were about 250,000 to 300,000 moderate to severe tardive dyskinesia patients. As you've done your work with physicians and rolled up your sleeves, have you've seen any reason to adjust those numbers? Do those still seem accurate?

No. We've always tried to stay, Phil, on the conservative side. So the 250,000 to 300,000 is really staying in the most conservative situation where we're looking at actual ICD-9 codes. Now we do know that physicians -- it takes them a long time if ever to actually put a formal diagnosis of TD on there. But we still think that is the best number for us to use.

Others completely independently from us have used much higher numbers, some exceeding 1 million total TD patients there. But we're going to stick with that 300,000 patients that have moderate to severe TD.

And I don't mean that to say that, at the end of the day when we get together with the FDA, and knock on wood, we're discussing labeling, we have treated in our clinical program mild patients also. So I'm not saying that we restrict it just to moderate to severe; but that is all going to be part of the label negotiations.

Got it, okay. Do you have a sense of what proportion of that population would be accessible to you? So for example either seeing a physician or not institutionalized?

That is a great question because this is a fragmented population. Some are being seen by private practice psychiatrists. Others are being seen by private practice neurologists. Some are in community mental health clinics, is where they are receiving their care. Others are in long-term care facilities.

They transition, for many of those in an out of a hospital setting. And then you have those that are in the VA setting that are also in the prison system. So, where we're going to focus our efforts on is where we think the highest value patients are and so we are not going to be trying to spread ourselves too thin across all of those initially upon launch.

Okay, good; and then touching on something that you -- your comments there of the fragmented nature of the treating community, who do you think is the most appropriate physician to detail? Would it be psychiatrists? Or movement disorder clinics or neurologists? Just based on your preliminary work, which one of those groups sees a lot of patients but then also seems most willing to write for a TD medicine?

With all of the additional work that we've done over the last couple of years -- and especially valuable is having an actually externally facing MSL group out there -- it is still -- we believe that the vast majority of our details are going to be to psychiatrists and then that would be followed by neurologists.

Great. Thanks for taking my questions. Very helpful.

And we'll take another question from Birin Amin from Jefferies.

Yes, thanks for taking my question, guys. Just to start on valbenazine, did you guys have your pre-NDA meeting with FDA on valbenazine and if so can you share any thoughts from that meeting?

Yes we did; it went well.

Great. Then I guess on the QT comments on the call, did you compare valben to moxifloxacin in the study and can you tell how it performed in relation to moxifloxacin?

Yes, we did and moxifloxacin did what it's supposed to do. And valbenazine did what it, what I said it did. No surprises.

Can you maybe provide a long-term update regarding safety and whether you continue to see lack of a suicide signal?

Yes. Absolutely; that is correct.

And then just on labeling, Chris, with the 40 mg dose, do you anticipate getting that on label, given the 80 mg CGI missed?

Obviously that is a discussion that comes with the FDA. Based on all the work that we have done, our discussion with ex-FDA consultants, and our understanding of what the division has said to us so far, one would assume that we would have both doses. But I won't know until the ink is on the paper.

Got it. And then just one last question maybe for you, Tim. I may have misheard in your prepared comments, but did the company incur a $2.8 million NDA filing fee in the quarter? Did I hear that correctly?

It was $2.4 million. And just so we're clear, before we can start submitting anything, we have to pay that money. So we have not pressed the button officially yet. But we've put certain documents in, and before you can put document one in, you have to pay the toll.

And how far in advance do you have to pay the toll?

When you want to submit the first document.

This concludes the time allotted for question and answers. I will now turn it back to our speakers for any additional or closing remarks.

Thank you very much. I really appreciate all the questions and the attention today. What I would like to close with is that, here at Neurocrine, when we begin any program at the very earliest stages of research, we always put patients first and wanting to make sure that we're bringing something of very high value to patients.

Obviously as a program goes forward, the patient comes into an even sharper focus. And now as you can imagine with valbenazine that is very much the case. It actually guides everything that we are doing at this point.

And maybe not in such obvious ways. We want to put the highest quality NDA together that we can, and that is such that the FDA is going to have as easy a time reviewing this document and to give us the quickest timeline that we can so that we can provide this to patients. We've invested heavily in our MSL force, our medical affairs force, because we want to make sure that the appropriate amount of medical education is taking place in order to smooth the entry of the first medicine for tardive dyskinesia out there.

And we have been working with payers and engaging them because we want to make sure that we have the broadest access for patients, not only at the time of launch, but as we continue to move along. We want patients to have access to this drug.

And then finally within our marketing and our nation sales group at this point in time, we want to be able to put together a commercial organization that understands the needs of not only that patient but their families and their caregivers.

So we really are guided by that fundamental philosophy that we start with every program. And I have to tell you it is very gratifying I'm sure among everyone in the company and the guys in this room here, how gratifying it is to see that coming to fruition. So with that I'd like to thank you for your attention.

And I hope everyone is having a good summer and we look forward to seeing you at meetings that come up late summer and into the fall. Take care.

This does conclude today's call. We appreciate your participation. You may disconnect at any time and have a wonderful day.