Intra-Cellular Therapies - Q1 2022

Transcript

Speaker 0

Good morning, ladies and gentlemen, and welcome to Intra Cellular Therapy's First Quarter Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to Doctor.

Juan Sanchez, Vice President, Corporate Communications And Investor Relations. Juan?

Speaker 1

Good morning, and thank you all for joining us on the call today. Our earnings press release provides a corporate update And details of the company's financial results for the Q1 ended in March 31, 2022. This press release is available on our website at intracellulartherapies.com. Joining me on the call today are Doctor. Sharon Mates, Chairman and Chief Executive Officer Mark Newman, Executive Vice President and Chief Commercial Officer, Doctor.

Suresh Thorgan, Executive Vice President and Chief Medical Officer And Larry Heinlein, Senior Vice President and Chief Financial Officer. As a reminder, During today's call, we will be making certain forward looking statements. These statements may include statements regarding, among other things, the efficacy, Safety and intended use of the company's product development candidates, our clinical and non clinical plans, Our plans to present or report additional data, the anticipated conduct and results of ongoing and future clinical trials, Plans regarding regulatory filings, future research and development, our plan and expectations regarding the commercialization of CAPLYTA, Potential impact of the COVID pandemic on our business and possible uses of existing cash and investment resources. These forward looking statements are based on current information, assumptions and expectations. Those are This is subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements.

These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You're cautioned not to place undue reliance on these forward looking statements and the company disclaims any obligations to abate such statements. I will now turn the call over to Sharon.

Speaker 2

Thanks, Juan. Good morning, everyone, and welcome to today's call. I'm pleased to present our Q1 2022 results and to provide an overview of our strong launch of Keplida in bipolar depression. Additionally, I will share our progress with our lumateperone clinical development programs and other pipeline programs. We launched CAPLYTA in bipolar depression immediately following its FDA approval in late December of last year and we're off to a great start.

Following this important label expansion, CAPLYTA's prescription growth has accelerated significantly. In the Q1, CAPITALYTON new prescriptions increased by 63% and total prescriptions increased by 45% compared to the Q4 of 2021. Compared to the Q1 of 2021, in Q1 2022, New prescriptions increased by 154% and total prescriptions increased by 134%. Consistent with the strong demand has been the highly positive feedback we are receiving from physicians regarding Keplita's clinical profile To help individuals living with bipolar disorder, we are confident in Keplita's continued growth for several reasons. First, CAPLYTA is a novel antipsychotic with a strong clinical profile, which is clearly reflected in its broad label.

There are only a few approved treatments for bipolar depression, which affects more than 11,000,000 U. S. Adults. CAPLYTA is the 1st and only treatment approved for both bipolar 1 and bipolar 2 depression in adults, both as monotherapy And as adjunctive therapy with lithium or valproate. Depressive episodes in patients with bipolar 1 or bipolar 2 disorder Are significantly more common than mania or hypomania and are linked to worse prognosis, greater impairment, Decreased quality of life, higher morbidity and increased suicide rates.

The prevalence of bipolar 1 and bipolar 2 disorder are similar. Bipolar II is often characterized by a higher frequency of depressive episodes that last longer With lower overall functioning than bipolar 1. Prior to Keplitis approval, only one drug was approved for bipolar 2 depression. 2nd, physicians and patients are looking for effective treatments with favorable side effect profiles and CAPLYTA has shown Existing efficacy across a broad patient population with a favorable safety and tolerability profile. Bipolar patients consistently identify weight and akathisia as side effects of great concern.

Importantly, across our clinical trials, weight gain was similar to placebo and in fact, In our longer term open label studies, patients with bipolar depression had no weight gain from baseline to 6 months, while patients with schizophrenia Lost an average of £7 in 1 year. Additionally, fasting glucose, total cholesterol, triglycerides and EPS, including akathisia, but also similar to placebo. In recent market research, psychiatrists highly rate keploidis performance on efficacy and safety measures. 3rd, CAPITALITIS' administration is simple and straightforward. It is a once a day medication that does not require dose titration.

The starting dose is a therapeutic dose and can be taken with or without food. To address special populations, we recently received FDA approval for the expansion This label provides dose adjustment recommendations for patients concomitantly taking strong or moderate CYP3A4 inhibitors And for patients with moderate or severe hepatic impairment. This label expansion allows an even greater patient population to have access to CAPLYTA. Finally, our confidence about Caplita's continued growth is further fueled by our strong commercial team, Their launch execution and the improving market conditions as COVID continues to subside. Mark will provide more details on our launch We're pleased to report that total revenues were $35,000,000 for the Q1 of 2022, representing 120% increase over the same period of 2021 and a 36% increase quarter over quarter.

Larry will provide additional details in our financial performance in his remarks. In addition to our commercialization of CAPLYTA, We have ongoing programs to expand our label to include the treatment of a broad range of mood disorders, including major depressive disorder or MDD And mixed features in MDD with bipolar depression. These disorders, which affect millions of patients, Have important unmet medical needs. Patient enrollment is ongoing in our registrational MDD studies evaluating lumateperone We expect to file a supplemental new drug application with the FDA For approval of lumateperone as an adjunctive therapy to antidepressants for the treatment of MDD in 2024. In addition, Study 403, our study evaluating the antidepressant effect of Lumateperone in Patients who exhibit mixed features with bipolar depression or MDD is ongoing.

We expect to complete clinical conduct of this study in the second half of this year. We are also advancing our lumateperone long Injectable program for the treatment of schizophrenia, which is currently in Phase I clinical development addressing different formulations and additional sites of injection. In addition to Lumateperone, we continue to expand our robust pipeline with ITI-twelve eighty four ODTSL, Our phosphodiesterase 1 or PDE1 inhibitors and ITI-three thirty three. In 2022, we are advancing ITI-twelve eighty four for the treatment of agitation in patients with probable Alzheimer's disease, followed by studies in dementia related psychosis and certain depressive disorders in the elderly. We also plan to begin patient enrollment in The Phase 2 clinical study of our lead PDE1 compound lenrifodin for the treatment of Parkinson's disease shortly.

In addition, we have successfully completed a Phase 1 single ascending dose study for ITI-three thirty three and plan to continue its development With neuroimaging studies to support dose selection for future studies, including a Phase 1 multiple ascending dose study. We ended the Q1 with $773,200,000 in cash, cash equivalents and investment securities. In January, we received $433,700,000 in net proceeds from our public offering of common stock. We have no debt. Across all our efforts, our goal remains the same.

We're developing effective, innovative treatments to improve the lives of patients With neuropsychiatric and neurologic disorders, we're very proud of our team and the progress we've made towards our goals. We're encouraged by our performance to start off the year and look forward to bringing CAPLYTA to increasing numbers of patients in the months ahead. I'll now turn the call over to Mark, who will provide additional details about our successful launch. Mark?

Speaker 3

Thanks, Sharon, and good morning, everyone. It's great to be here with all of you today. Following the exciting approval of CAPLYTA for both bipolar 1 and bipolar The launch. CAPLYTA has seen a robust uptake and strong upward inflection in prescription trends, Growing new prescriptions by 63% and total prescriptions by 45% versus the prior quarter. This strong performance is driven by a well differentiated product profile, broad market access and successful sales and marketing execution.

Initial feedback from physicians is highly positive regarding the favorable efficacy and safety and tolerability Profile of CAPLYTA in bipolar depression. We've seen utilization of CAPLYTA across a broad range of patients, including both Bipolar I and Bipolar II depression and is both monotherapy and adjunctive use. Newly diagnosed patients are being started on CAPLYTA as well as those switching from other antipsychotics. These switches to Capalyta are coming from both branded and generic products. New patient starts As reflected by new to brand prescriptions or NBRx have increased approximately 300% following Capuleta's bipolar depression approval.

New to brand prescriptions reflect early adoption by prescribers and this metric is considered a key leading indicator We expect the upward trajectory in new to brand prescriptions to continue throughout the launch phase of our bipolar depression indications and are confident in continued overall growth of the brand. We continue to maintain broad formulary coverage for CAPLYTA, including greater than 98% of patients with Medicare Part D and Medicaid and over 80% in the commercial channel. We expect additional coverage gains in the commercial channel in the coming months. Since the bipolar depression launch, We have seen a rapid increase in the number of commercial patients being prescribed CAPLYTA and expect to see additional growth in this channel through the remainder of the year. Supporting this rapid uptake, our LydaLink program is effectively supporting patients through the prescription process as well as minimizing out of pocket costs for those with commercial insurance.

Our sales and marketing team is executing a comprehensive launch plan and our commercial efforts are sized to optimize the large market opportunity in both bipolar depression and schizophrenia. During the Q1, we saw improving market conditions relating to patient visits and physician access for our sales force. Our sales force continues to seamlessly execute a hybrid commercialization model, combining primarily in person presentations with supplemental virtual engagements. These efforts are supported by extensive medical education programming and comprehensive digital initiatives extend the reach to our target physician audience. We're also proud to announce our new lead in the light direct to consumer campaign, which we launched in early April.

Consisting of a national television ad, social media and other digital initiatives, The Lead in the Light campaign reaches out to people suffering from bipolar 1 and bipolar 2 depression, as well as extending awareness to prescribers. We believe patients with bipolar disorder are particularly receptive to this type of campaign because they are typically well informed and vocal about their depressive symptoms and side effects with their existing antipsychotic medications and they are proactive in discussing these concerns with their physicians. In summary, I'm very pleased with our current growth trends and the feedback we are hearing from healthcare providers and patients, And I'm excited about our future growth. We have a strong commercial plan in place and our team will continue to execute to drive results. I'll now turn the call over to Larry.

Larry?

Speaker 4

Thank you, Mark. I will now provide a Summary of our financial results for the Q1 ending March 31, 2022. Total revenues in the Q1 grew to $35,000,000 Compared to $15,900,000 in the Q1 of 2021. In the Q1, we recorded net product revenue of CAPITALIDA of $34,800,000 Compared to $15,600,000 for the same period in 2021 $25,500,000 in the Q4 of 2021. The Q1 of 2022 gross to net percentage was in the low 30s, consistent with our prior guidance.

As Mark mentioned, we had an increase in the number of patients in the commercial channel since the bipolar depression approval. This, Together with standard Q1 seasonal payer dynamics contributed to the gross to net increase over prior quarters. We expect Capalite's gross to net percentage to remain consistently in the low 30s throughout 2022. Cost of product sales were $3,200,000 in the Q1 of 2022 compared to $1,500,000 for the same period in 2021. Research and development expenses for the Q1 of 2022 were $29,000,000 compared to $15,100,000 for the Q1 of 2021.

This increase is due to higher lumateperone clinical trial and non clinical related costs and an increase in Non lumateperone project costs. Selling, general and administrative expenses were $75,500,000 for the Q1 of 2022 Compared to $52,600,000 for the same period in 2021, this increase is primarily due to an increase in commercialization, Marketing and labor related costs. Net loss for the Q1 of 2022 was $72,100,000 compared to a net loss of $52,700,000 for the Q1 of 2021. Cash, cash equivalents, restricted cash And Investment Securities totaled $773,200,000 at March 31, 2022, compared to $413,700,000 at December 31, 2021. On January 7, 2022, We completed a public offering of our common stock in which we sold approximately 10,950,000 shares of common stock for aggregate gross proceeds $460,000,000 and net proceeds of approximately $433,700,000 This concludes our prepared remarks.

Operator, could you please open the line for questions?

Speaker 0

Our first question or comment comes from the line of Andrew Tsai from Jefferies. Your line is open.

Speaker 5

Hey, thanks and good morning. Thanks for taking my question. Congrats on the great quarter. So, last quarter, you all as well as this quarter, you mentioned there A set of leading indicators that were looking favorable, which helped drive your confidence. So can you kind of remind us one more time What these leading indicators are, if any of them have slowed down this quarter or are all of them still trending in the right direction or even accelerating.

So, just trying to gauge your confidence that momentum should indeed continue to accelerate throughout 2022? Thanks.

Speaker 2

Good morning, Andrew, and thanks for the question. I'll ask Mark to address that, please.

Speaker 3

Yes, sure, Sharon, and thanks, Andrew, for the question. Yes, there's really 3 leading indicators that we look at. 1st and foremost, we look at our new to brand prescriptions, which Really represent the adoption of a new medicine or new indication for that medicine By prescribers and is really considered to be the key leading indicator of future prescription growth. And with new to brand prescriptions, since we launched the bipolar depression, we've seen about a 300% increase in that metric And that continues to trend in a very positive direction. So we're very pleased with what we're seeing in the new new brand Another thing we look at is sample demand, samples of the product.

And since the launch of the bipolar indication, We have been getting seeing a very high level of demand for samples and that demand is continuing as physicians Are identifying new patients to put on CAPLYTA and looking to start them on a sample to assess the effectiveness and the safety and tolerability, And that sample demand is continuing. And then finally, just the feedback that we get from physicians about their current use And their expected future use of CAPLYTA, and those trends are continuing to look very positive as well. So To your point, Andrew, across the board, when we look at the leading indicators, they're all pointing in the right direction And suggesting continued future growth of the brand, especially in the new bipolar indication.

Speaker 5

Okay, very good. And a very quick one is, is it fair to assume there was indeed no warehousing effect in Q1 that sales did grow Organically through sales reps and marketing or even word-of-mouth. Yes, I'll stop there. Yes, thanks.

Speaker 3

Yes, sure, Andrew. That's our assessment and that's our belief that there wasn't a significant bolus of patients out there just waiting to be put on Another antipsychotic, we believe this is true organic growth. There's a lot of excitement about the new indication for CAPITALYTA. There's a great deal of interest and support of the clinical profile and the feedback that we're getting from physicians Their early experience with their patients has also been very positive. So all signs are pointing to a very strong launch and that continuing.

Speaker 5

Great. Thank you guys very much.

Speaker 0

Thank you. Our next question or comment comes from the line of Jessica Fye from JPMorgan.

Speaker 6

Continue to grow throughout the launch phase in bipolar depression. I'm curious how long is a launch phase in your mind? Second question, should we think of net price over the year improving as it's just for some other companies when 1Q often has the highest gross to net discounts or maybe because your gross to net is being driven by a payer mix Shift as bipolar depression use grows, could we expect gross to net discounts to widen over the rest of the year? Just looking for a little color there. And lastly, I think you mentioned commercial coverage would continue to grow from around 80% now.

Where do you see it leveling out and when could you get there?

Speaker 3

Sure. Thanks, Jessica. I'll take the first part of the question and the last part of the question, and then perhaps I'll turn it over to Larry to make some comments on Net price and gross to net. So in the launch phase, Jessica, it varies depending on the category, the product, the new indication, new launch, But generally, you can look at the 1st 6 to 12 months of a product indication as the launch phase. And Given the strength that we've seen in the new to brand prescriptions, we would expect to see that continue during that timeframe And all signs are pointing to that happening.

In terms of the commercial coverage, yes, we as we've said before, we've taken the Coverage in the commercial channel from about 55% last year, up over 80% at the time of the launch, and we do expect that to continue The 85%, 90% range, perhaps even higher. And we think that gives us very broad coverage across All three of the channels and combined with our Lidolink program really provides strong access to the product For patients, so that's not a barrier in the marketplace or for the uptake of the product. So with that, maybe Larry, I'll ask you to comment On net price and gross to net?

Speaker 4

Sure. Jessica, as you know that we've had a rapid uptake of Capalite in the commercial channel in Q1. And as you know, this is essential for a successful launch. But what also this uptake in the channel did result in higher utilization of our co pay assistance program, which impacts gross to net negatively. And secondly, the seasonal payer dynamics, as you see with many other drugs, The impact of co pay assistance programs is greater in the Q1 of the year due to the seasonal payer dynamics.

Now what we see going For the rest of the year, we're in the low 30s in the Q1. We see it staying in the low 30s for the rest of the year. And One of the reasons is there's less impact of seasonality and also the impact of the mix of the Medicaid channel as that decreases. So there are pluses and minuses, but we expect to stay in that low 30s range for the remainder of 2022.

Speaker 0

Thank you. Our next question or comment comes from the line of Charles Duncan from Cantor Fitzgerald. Your line is open.

Speaker 7

Hey, good morning, Sharon and team. Congratulations on a great Q1. Thanks for taking my question. I did have a kind of a follow-up to an earlier question for Mark regarding the market feedback Or if he could just really kind of provide us some color on the kind of feedback he's getting from prescribers, What is it about CAPLYTA and its profile in terms of driving adoption for BPD? Is it really on the efficacy side or safety?

And then can you provide us any color on expect Patients regarding persistency in this particular population versus say the schizophrenic patient population?

Speaker 3

Yes, sure, Charles. Thanks for the question. And to answer the first part of the question, it really is all the things you mentioned. So what we're hearing back from Physicians is that they are very impressed by the proven efficacy, 1st and foremost, in both bipolar 1 and bipolar 2 And the FDA approved indication in both of those disorders. So it all starts with safety or it all starts with efficacy.

But what they also really highlight as differentiation for CAPITALYTA is The safety and tolerability profile, Sharon had mentioned in her initial comments That both weight gain and akathisia are two side effects of great concern to patients with bipolar disorder Based on some of the limitations of the existing antipsychotics that they have been using and in our clinical trial program, Changes in weight were similar to placebo with Kapylita and akathisia and other EPS measures were also similar to placebo. And physicians are experiencing the same safety and tolerability profile in the bipolar depression patient population As they saw in the schizophrenia population, so that gives them a great deal of confidence that they can prescribe CAPITALYTA, they'll see the efficacy, And they're assured that there is good and favorable safety and tolerability. And then in addition to that, The dosing, a single 42 milligram dose once a day without regard to food, the physician can start the patient on the effective dose Without having to titrate over multiple weeks to get to that point and then maintain the patient on that same dose and that's being Viewed very much as a benefit as well. The second part of your question regarding persistency, what we have seen historically Is that patients with bipolar disorder tend to persist with their medication, their antipsychotic, a bit longer than patients with schizophrenia do.

And while it's still too early for us to gauge that with CAPLYTA, we do believe that we will see a similar dynamic In patients with bipolar versus those with schizophrenia and as we get that data in the coming months, we'll share that with you.

Speaker 0

Thank you. Our next question or comment comes from the line of Brian Abrahams from RBC Capital Markets. Your line is open.

Speaker 8

Hey, good morning. Thanks for taking my questions. Congrats on the launch. I'm just curious if you could expand a little bit more on access For CAPLYTA, now that you've expanded the commercial channels, with regards to just any potential barriers or step edits, what's sort of the average time to get Started on CAPITALIDA. And then I'm also curious if you could speak about what type of pull through you might expect from the April DTC campaign and when we might see that Start to manifest.

Thanks.

Speaker 3

Mark? Yes, sure. Yes, sure. Thanks, Sharon. Thanks, Brian.

Yes. So we are very pleased with the broad access that we have across all three channels, Medicaid, Medicare Part D and the commercial channel, depending on the payer, each one has different utilization criteria. Certain plans make CAPLYTA available unrestricted, which means that the physician can write a prescription for CAPLYTA Regardless of the indication, if they feel that that, Capalyta is right for that patient, there's others that employ an electronic Step edit, which means that they first want to see the patient started on 1, sometimes 2 generic products. The dynamic in bipolar is very similar to schizophrenia that the vast majority of patients have already cycled through 1, 2, 3 different antipsychotics, and this happens behind the scenes at the pharmacy. So it's not something that the physician or their office staff needs to do, and it is not a barrier at all to the patient being prescribed CAPLYTA.

And then there are some that have a prior authorization in place. And typically, the prior authorization is the payer just wants to make sure that the patient is being prescribed CAPLYTA for an on label indication either schizophrenia or bipolar depression. And we have the Lidolink Program to help physicians and their office staff to navigate that process, and again, is not a significant barrier to access to the medicine for patients or for the physicians that are prescribing it. In terms of DTC, we're very pleased With the early metrics that we're seeing in terms of interest that is being generated by looking at the increase In searches on capitalized that increased traffic to our website, and we would Expect to see the impact of that in typically you see it in a 4 to 8 week period of time after you begin airing your TV commercial and we're about a month into the airing as we started it in early April. So we look forward to that as well.

Speaker 0

Thank you. Our next question or comment comes from the line of Umer Raffat from Evercore. Your line is open.

Speaker 9

Hi, guys. This is Mike DeFurey in for Omar. Thanks for taking my question. Congrats on the quarter. I have a 2 parter on the Mixed feature study, if I may.

The design of Study 403 is very similar to that of the adjunctive MDD trials in terms of the primary endpoint. You have MADRS at day 43 as well as in the number of patients enrolled. So I guess my question is since patients with Mixed features have greater symptom severity and are harder to treat. Is the powering of 403 adequate? And if you can, what are the powering assumptions of that study?

Secondly, again, since this population is historically harder to treat, is there any what gives you confidence that lumateperone would be And handling the mania aspects of these trials and is mania something that we should be more worried about in this disease state? Thank you.

Speaker 2

So good morning, Mike, and thanks for the question. I think I was going to start and then have Suresh add comments. But maybe, Suresh, do you want to start and first talk about What mixed features is so that everyone on the call understands that and then talk about mania and how We certainly monitor for mania, as well as depression and then just talk a little bit about our study design.

Speaker 10

Yes. Good morning. In terms of the mixed features, patients with Both, uropolodepression that is major depressive disorder and bipolar disorder that exhibits manic symptoms are hypomanic symptoms that are below the clinical pressure of these symptoms During the first day episode. So that is the patient population we are studying. Mixed features is a specifier within the DSM-five and This applies to patients and both in the unipolar depression and also in bipolar Depression and they need to have some symptoms of either mania or hypomania that is below the clinical threshold.

And the importance of this is because these symptoms are difficult to diagnose. These patients have greater severity of illness. They have high suicidal rates, they have high recurrence rates and also the high comorbidities and are difficult to be treated with antidepressants. They fully respond to antidepressants. So based on our studies in our bipolar depression In our programs that were completed, we looked at a subset of patients with mixed features and where we have seen And that's what led us to design the study for our current study.

The patients will back to diagnostically meet the criteria for mixed features in the current ongoing 4 O3 study. And the primary endpoint for this is Smedra at week 6 and second, CTI severity at And these patients will include both patients coming in from major depressive disorder as well as From bipolar I or II who have mixed features and these studies are adequately powered. And we are on target right now for completing The enrollment by end of this year.

Speaker 2

So and then to address your question, Mike. So first of all, We have not talked about the powering of the study, but obviously, it is powered To be able to look at efficacy appropriately, to your question about the mania and there's We do and we have in all of our bipolar studies, use the YMRS Gale to monitor chlamagne and we don't see patients slipping into mania overall and we don't We have not seen that in any of the bipolar subsets either. So I think we're very good in knowing that we're not

Speaker 0

Thank you. Our next question or comment comes from the line of Mark Gutman from SVB Securities. Your line is open.

Speaker 11

Good morning. Mark, are these patients, these mixed patients using antipsychotics anyway? I mean, I guess what I'm getting at is, If they're using it anyway, how important is the new indication? How much of inflection point should we see when you get that indication, hopefully, when you do? Just Trying to understand how much off label there's already usage there.

And then secondly, can you just give us an update on the depression studies, how enrollment is going? Some companies have had some trouble with enrollment. Obviously, it's not just COVID, it's also because of The Russia, Ukraine engagement. So, can you talk about that a little bit and how the enrollment is going? Thanks.

Speaker 2

So Mark, do you want to take the first part of the question and then I'll comment on the clinical trials?

Speaker 3

Yes. Maybe just to clarify, Mark, when you're asking that question, is that a follow on question to the mixed features patient population? Or are you talking about the bipolar indication? Okay. I think we Mark may have hung up on that.

So Sharon, maybe I can speak to the bipolar portion of that and then maybe you or Suresh could speak to mixed features if that's the focus of Mark's question. For me as a commercial person, there's really 2 big advantages to a product being On label for a particular indication, 1, when a physician sees that a product is past The rigor of efficacy and safety and tolerability and an indication for a specific Disorder like this, it gives them a lot of confidence that they can use and for Keplida and bipolar depression, when they see Both bipolar I and bipolar II depression being on label, this gives them a great degree of confidence that the patient in front of them, Whether they have bipolar I or bipolar II, CAPLYTA is an excellent choice for them. The second thing for us Is that what this allows commercial organization to do is to engage in promotional activities around on label promotion, which other companies With products that aren't labeled for that cannot do. So for me, there's those 2 big Advantages of having something on label as we do with Bipolar I and Bipolar II depression. So with that, maybe I'll turn it over to Sharon and Suresh to

Speaker 2

Okay. Thanks. And I'll start and I don't know if Mark was able to rejoin or not, but I know it is an important question about what's happening in Russia and the Ukraine And our enrollment in the MDD studies. And I think as we've told you before, for All of our studies are global studies and what we have done is put in place mitigation strategies, whereby we have been able To mitigate the effects of Russia and the Ukraine enrollment. And so We can tell you that our studies are ongoing, and what we have done is mitigate again For Russia and the Ukraine, and we are still on track for our filing in 2024

Speaker 0

Thank you. Our next question or comment comes from the line of Sumant Kulkarni from Canaccord. Your line is open.

Speaker 3

Good Good morning. Thanks for taking

Speaker 12

my questions. It's nice to see all the progress. I have a couple of quick ones. First, how important is the recent approval of the 10.5 mg and 21 mg strength And your ability to round out the currently approved indications and potentially target MDD later. And second, on 1284, Is it fair to assume that you're attending those studies that's already led to selection of optimized doses for clinical studies in the elderly that are set to start later this year?

Speaker 2

I'm sorry, I have to tell you I missed that. Can you repeat the question please?

Speaker 12

Sure. So the first one is how important is the recent approval of the 10.5 mix and 21 mix strengths? And the second was on 1284, do you already have optimized doses selected for the clinical studies in the elderly that are set to start later

Speaker 2

Great. Okay. Thank you. So I'll start and I'll ask Mark or Suresh if they Have any comments to add. So the recent approvals of 10.5 and 21 milligrams are for the special populations, those with hepatic impairment and those CYP3A4 inhibition.

So that means they're taking other drugs that inhibits CYP3A4. So while these are especially for schizophrenia, because it's a smaller population overall and impacts The smaller number of people, the larger we get in your indication, obviously, the more patients can be impacted. So we think that it is an important option for that small percentage of people who Need dose adjustment. That's the first answer. And for 1284, we are still Looking at certain things like we want to look at brain occupancy of different receptor functions for 1284 to ensure that we have selected the appropriate doses for our next studies.

I don't know Suresh, did you want to add anything on the importance of 10.5 and 21 milligrams?

Speaker 10

Yes, I would say that it is important, especially for the special populations And for those there is a small percentage of patients who will be on CYP 3A4 inhibitors or for any severe orthopedic impairment, these doses will provide Average for those populations. So in that sense, it is important.

Speaker 2

Right.

Speaker 10

One thing I want to remind is these doses are just for the special populations. They are not doses for any titration.

Speaker 0

Thank you. Our next question or comment comes from the line of Jason Gerberry from Bank of America. Your line is open.

Speaker 13

Hey, guys. Good morning. Thanks for taking my questions. So I guess first one, just curious if you guys have seen any impact at all from the competitive launch of Alkermesli Balbi Your schizophrenia business. And then my second question is just looking at Vraylar gross That's sort of the gross sales versus net sales dynamic.

It looks like around 25% to 30% gross to net. So just curious like directionally, Given that their sales mix is probably similar to how both The Street forecast capitalized sales mix, is that a good Kind of medium term indicator, again, on a directional basis, not looking for guidance. Thanks.

Speaker 2

Mark, do you want to take that?

Speaker 3

Yes, maybe I can take the first part and then I'll have Larry comment on the gross to net. So, Jason, yes, we're focused On CAPLYTA, we're focused on serving patients and driving CAPLYTA business. What I would say about our schizophrenia business is we have seen In addition to very, very strong growth in bipolar depression, we've also seen our schizophrenia business continue to Increase and continue to grow. And I think our expectation is that over time as physicians get more and more awareness of CAPITALYTA and more and more Experience with Capylita in other indications like bipolar depression, there will be a positive halo on their prescribing in schizophrenia as well, and we are Those increases in schizophrenia also. So with the second part of the question with the gross to nets, perhaps Larry, you could comment on that?

Speaker 4

Yes, I mean, I really can't comment on another company's gross to net. I did mention that our gross to net in the Q1 was in the low 30s And that was impacted by seasonal payer dynamics and that with some adjustments up and down, we should still see our gross to net Going forward in 2022 in the low 30s. I don't know if I can give you any more color than that.

Speaker 0

Thank you. Our next question or comment comes from the line of Corrine Jenkins from Goldman Sachs. Your line is open.

Speaker 2

Yes. Good morning, everyone. I'm curious if you have any visibility on the patients that are coming on to drugs in the bipolar indication, And those are primarily bipolar 1 or bipolar 2? And how this compares to what you might expect given the more limited competitive options in bipolar 2 in particular? So I'll just start with an overall statement.

Yes, let me start with an overall statement and turn it over to Mark. We're very excited about the bipolar 2 indication and we think there is a large number of patients Out there who are either misdiagnosed or under diagnosed who are candidates Continuing to grow with the bipolar 2 indication. With that, I'm going to turn it over to Mark to give further comments on that.

Speaker 3

Yes, sure. And I can comment on characterizing sort of the source of business of CAPITALADE IN Bipolar Depression. And I guess the Overarching statement is that we are seeing use across a broad range of patients consistent with the product's labeling. So we're seeing Use in both bipolar I and bipolar II depression, we're seeing use as both monotherapy and as adjunctive use. In terms of the types of patients, we are seeing an increase in the newly diagnosed patients being put on CAPLYTA, As well as continued strength in those switching from other antipsychotics and when we dig a little bit deeper into the switching, we We find that switches are coming to CAPLYTA from both generic antipsychotics as well as other branded antipsychotics.

And so We view this as a very healthy sign of the launch and utilization across a broad range of patients suffering from bipolar

Speaker 0

From the line of David Amsellem from Piper Sandler. Your line is open.

Speaker 14

Hey, thanks. So I just had a couple of questions on The payer landscape, just thinking longer term, do you envision the loss of exclusivity of Latuda next year is having any sort of impact on access for Caplighter or at least In terms of hassle free access, I should say, that's number 1. And then number 2, just with overall utilization of atypicals Growing considerably in recent years and continuing to grow. Do you think there's going to be over time a trend towards tighter control of the We haven't seen a ton of it over the last decade or so, but do you think that could happen in the next several years Just given the sheer volumes here. Thank you.

Speaker 2

Great. Hi, David, and thanks for your question. I will start with the loss of exclusivity of Latuda and will that have a big impact on us and then ask Mark To comment on the utilization strategies going forward. And we don't believe that The loss of exclusivity of Latuda will have a big effect on CAPLYTA because, First of all, Latuda has been around for a very long time and many patients have already cycled through Latuda. So we don't imagine that to be a burden for us for patients Who if they have a step through, they will already have stepped through Latuda as one of the As a generic, so I think that we're not concerned about that.

Mark, do you want to add anything to that? Or do you want to Go directly to the second question.

Speaker 3

Yes. The only thing I would add is particularly in this category over the years As various brands went generic, that specific brand certainly was impacted by the loss of exclusivity, but the other branded antipsychotics We're not significantly impacted. So I think there's a historical precedent for that as well. And then in terms The trends moving forward with payer management of this category, we also don't expect there to be a significant shift in They like to ensure access to a broad range of antipsychotics for these conditions. They recognize there's an unmet need.

They recognize that there is a significant amount of churn whereby patients Discontinue their existing antipsychotics and they need other effective and safe and tolerable antipsychotics to go to for their next line of therapy. And so we don't expect there to be a significant shift in how payers manage this category.

Speaker 0

Thank you. I'm showing no additional questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Speaker 2

Great. So we're very excited about the progress that we have made on our launch For the treatment of bipolar depression, we look forward to continued progress and we look forward to updating you on this progress and on our pipeline as well as we go forward. With that, operator, you can disconnect.

Speaker 0

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.