Intra-Cellular Therapies - Q2 2020

Transcript

Speaker 0

Good morning, ladies and gentlemen, and welcome to the intracellular Therapies Second Quarter Ended June 30, 2020 Financial Results Conference Call. At this time, all participants As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Doctor. Juan Sanchez, Vice President, Corporate Communications And Investor Relations. Please go ahead.

Speaker 1

Thank you, operator. Good morning and thank you all for joining us for today's conference call. Our earnings press release providing a corporate update and details of the company's financial results for the second quarter ended June 30, 2020, crossed the wire short term ago, and is available on our website at intracellulartherapies.com. Joining me on the call today are Doctor. Sharon Mates, Chairman and Chief Executive Officer Doctor.

Andrew Sakhland, Executive Vice President And Chief Medical Officer Mark Neumann, Executive Vice President And Chief Commercial Officer Larry Highland, Senior Vice President And Chief Financial Officer, and Michael Halstead, Executive Vice President And General Counsel. As a reminder, during today's call, we will be making certain forward looking statements. These statements by include statements regarding among other things, the efficacy, safety and intended utilization of the company's product development candidates, our clinical and on 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 plans and expectations regarding the commercialization of CAPITA, potential impact of COVID-nineteen pandemic on our business and possible uses of existing class and investment resources. These forward looking statements are based on current information, assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These, another risk are described 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 obligation to update such statements. I will now turn the call over to Sharon.

Speaker 2

Thanks, Juan. Good morning, everyone. We hope you have remained safe and healthy this summer. We have completed our first quarter of commercial activities, and I am encouraged by Keplight as week over week prescription growth and increasing prescriber base, while adapting to the unprecedented challenges presented by COVID-nineteen. During these challenging times, the team at Intracellular Therapies has been executing our commercial launch of Keplyta to provide schizophrenia patients a new well tolerated treatment option.

In concert with our commercial execution of Keplyta, we are also advancing our development programs. During this call, I will provide updates on our ongoing Caplata launch and other corporate initiatives. Following my remarks, Mark Newman, our Chief Commercial Officer, will provide additional details on our commercial activities. Andrew Satlin, our Chief Medical Officer, will provide an update of our clinical development programs and Larry Hineline, our CFO, will provide details of our second 30 in the midst of strict COVID-nineteen lockdowns, which resulted in major disruptions in patient care. We are pleased with the swift response a series of programs that enable engagement with healthcare providers with the goal of offering comprehensive education on CAPLIDA.

We have accomplished this in both the virtual environment and most recently with in person deployment of our field sales team. We are pleased with our Medicare Part D And State Medicaid, we have achieved formulary coverage of greater than 95% of covered lives, and commercial coverage continues to grow. I'm happy to report we are seeing great progress. We are encouraged by over week prescription growth, which continued into July in both new and refill prescriptions, as well as the increase in our prescriber base. We continue to increase experience is very positive and in line with our expectations, and psychiatrists have a strong intention to prescribe Keplyta.

Keplyta is an oral medication taken once a day that does not require titration, so a patient can start and stay on the therapeutic dose. Keplyta has a compelling clinical profile, having demonstrated efficacy coupled with a favorable safety profile. Changes in weight, fasting glucose, total cholesterol triglycerides, and extrapyramidal symptoms, including anesthesia, were similar to Placebo in our registration trials. The progress we've made to date is a testament to Keplitis compelling profile as well as our commercial teams resilience and adaptability. We look forward to building on our momentum.

I am also excited to announce that we are augmenting our prescriber facing efforts with a comprehensive consumer campaign called Real Progress, which is launching this week and includes a national direct to consumer television ad and accompanying social media campaign as well as a partnership with the leading telepsychiatry platform. Mark will share further details on these initiatives a little later in his remarks. As we look towards label expansion, Lumateperone is in late stage clinical development for the treatment of bipolar depression. We look forward to reporting top line results from Study 40 2, our Phase III study evaluating Lumateperone as adjunctive therapy in bipolar depression, by mid September. Depressive disorders represent an important part of our lumateperone label expansion strategy, and we plan to commence a later stage clinical trial in MDD late this year.

We also plan to enter clinical trials with our long acting injectable formulation of Lumateperone later this We also expect to initiate early stage clinical studies for ITI333, our novel oral modulator of new opioid and serotonin receptors and for the treatment of opioid and other substance use disorders, pain and mood disorders this year. We recently announced positive top line results from our Phase III clinical trial of ITI-two fourteen. Our lead phosphodiesterase 1 or PDE1 inhibitor in patients with chronic systolic heart failure. Andy will elaborate on this study in his remarks. In addition to the positive results in heart failure, we've continued to investigate our portfolio PDE1 inhibitors in a variety of therapeutic areas.

We are particularly excited about the anti inflammatory effects of inhibiting PD-one and its potential utility in infections, cancers and other disease states. We will be discussing this in more detail later this year. We ended the second quarter of 2020 with $409,000,000 in cash and investments We are in a position of financial strength and look forward to continuing our mission to develop and commercialize novel drugs to improve the lives of patients with neuropsychiatric disorders. Plans and progress, I want to take a moment to thank the intercellular therapies team across the organization, including our scientists and clinical teams for creating and advancing our pipeline and to the commercial team and supporting functions focusing on the Capla launch. We have a great team, and I am particularly proud of how they have quickly adapted and are succeeding in these unprecedented times.

I'll now turn the call over to Mark. Mark?

Speaker 3

Thanks, Sharon, and good morning, everyone. I'm pleased to provide additional details of our first full quarter of launch activities started in late March just as the COVID-nineteen pandemic lockdowns were beginning to disrupt the delivery of patient care in the mental health community and challenging our industry's efforts to access and educate healthcare providers. As a commercial organization, we quickly identified these challenges met them head on. Our team was agile and creative adapting to these market conditions by pivoting to a completely virtual launch for all of our sales force and peer to peer medical education activities, and I'm extremely proud of our team's ability to execute our business plan under those circumstances. Despite this challenging environment, we have seen sustained week over week growth in both new and refill prescriptions.

We are especially pleased with the rate at which patients are refilling their Keplyta prescriptions. The refill rate of Keplyta has grown steadily throughout the second quarter and into July and is ahead of competitive benchmarks at this stage of launch. We're also encouraged by the addition of significant numbers of new prescribers each week to our growing base We've been able to reach our prescribing audience through an effective mix of personal and non personal promotion including both remote and more recently live in person interactions by our sales team peer to peer medical education, journal advertising, virtual medical conferences and product theater presentations and our digital marketing efforts. For the majority of with remote product presentation and sampling capability. In mid June, we began to deploy our sales force into the field in a phased approach consistent with local conditions.

And by theendofJune, we had our entire sales force deployed, conducting a combination of live in person interactions supplemented by continuing virtual engagements Our sales call activity has increased significantly as more parts of the country open up and physician offices begin accepting in person appointments with sales representatives. We expect this trend to continue throughout extremely high, driving stronger than anticipated attendance to our virtual peer to peer medical education programs. In the second quarter alone, we had over 3000 attendees at our in-depth medical education programs on Caplida, which have been exceptionally well received and continue to build awareness of CAPLIDA amongst the medical community. We recently fielded an extensive market research study and found that our combined promotional activities have resulted in increasing awareness and high intent to prescribe levels for Keplida amongst our targeted prescribers. And among those providers who are already prescribing CAPLIDA, they rate its performance highly, citing its demonstrated efficacy, favorable safety and tolerability profile and convenient once daily titration free dosing.

These are all very positive signs in to our optimism that we will continue to see an acceleration in cap light of prescription volume in the coming weeks months. We also continue to and quality of coverage is playing out exactly as we for greater than 95% of covered lives in both Medicare Part D and state Medicaid are 2 largest channels. We are particularly pleased with our advances made in the state Medicaid channel, which has recently opened up to Caplida, where the ability of prescriptions to be processed has been fully activated across the nation, including in high population states such as California, New York, Texas and Florida. We continue to see coverage determination improvements in the commercial payer channel with final coverage to be established by year's end. Additionally, our Lydalink patient access and affordability program is fully operational and supporting eligible patients.

Let me now provide The aim of this campaign is to educate patients and their caregivers about CAPLIDA and to open a dialogue about optimizing care and treatment options. During these challenging times, mental health care has never been more important. People with chronic mental health issues are at risk of the current COVID-nineteen environment has amplified that vulnerability. The campaign features a national television ad, which depicts the hope of real progress that some adults with schizophrenia may see with Caplida. And extends to a digital marketing campaign on social media platforms, which includes home pages and video ads on Facebook and Instagram.

Additionally, to further encourage physician patient dialogue about schizophrenia care, we have partnered with a leading teles psychiatry platform. From the Caplido website, patients will be able to access an independent virtual platform in order to connect with a mental health care provider. While we're still early in the launch, we are making substantial progress in educating our prescribing audience about the benefits of CAPLIDA and are delighted by physician feedback We are encouraged by the comprehensive medical education program, strong market access position and our exciting new DTC campaign, will result in a treating adult patients with schizophrenia. We look forward to continuing to report on our commercial Thank you. And I would now like to hand the call over to Andy to discuss our clinical development programs.

Andy?

Speaker 4

Thanks, Mark, and good morning, everyone. We are very pleased with the reception Capplied has had among medical practitioners, and the feedback we've been receiving about the positive experiences reported by patients being treated with Capla. Schizophrenia is a highly prevalent lifelong psychiatric condition and the majority of patients' discontinued treatment or seek treatment changes a result of side effects such as weight gain, metabolic disturbances and movement disorders. We're proud that Kapalida now provides physicians and their patients an important new treatment option for this serious disorder. Regarding the further development of Lumateperone, we have a comprehensive late stage clinical program in bipolar depression.

Last year, we presented robustly positive safety and efficacy results from study 404, a Phase III trial of Lumateperone in patients with a depressive episode associated with either bipolar 1 or bipolar disorder. As Sharon mentioned, we anticipate top line results by mid September from Study 4 2, This global study enrolled 529 patients with depressive episodes associated with either bipolar 1 or bipolar 2 disorder, who were randomized 1 to 1 to 1 to receive Lumateperone 42 milligrams, 28 milligrams, or placebo, once daily for 6 weeks, while being maintained on lithium or valfroate as mood stabilizers. The primary endpoint is changed from U. S. Patient enrollment in Study 4 3, a Phase 3 global study evaluating lumateperone 42 milligrams as monotherapy in the treatment of depression in patients with bipolar I or bipolar II disorder for which we anticipate reporting top line results the second half of twenty twenty one.

Bipolar 1 and Bipolar 2 disorder are serious, highly prevalent psychiatric conditions, affecting approximately 6,000,000 adult Americans. These disorders are characterized by recurrent episodes of mania or hypomania interspersed with episodes of major depression. Bipolar 1 and bipolar 2 each represent about half of the overall population of patients with bipolar disorder. Bipolar Depression is the most common clinical presentation. These episodes tend to last longer are more difficult to treat, recur more often and are associated with a worse prognosis, than the manic hypomanic episodes.

There are few approved treatments for major depressive episodes in bipolar disorder, with only one of those approved for bipolar 2 disorder. These treatments are associated with tolerability issues. We are enthusiastic about the potential of lumateperone as a new treatment option for major depressive episodes in patients with bipolar I or bipolar new disorder. Turning now to our PDE1 platform. During the quarter, we reported positive top line results, from a Phase III trial of ITI-two fourteen in patients with chronic systolic heart failure.

This study evaluated the hemodynamic profile and safety of single ascending doses of ITI-two fourteen. Currently available heart failure drugs that can improve the contractile strength of the heart muscle are associated with safety risks. Most notably arrhythmia. As a result, their clinical use is primarily limited to severe circumstances, for example, decompensation and are generally administered for short periods of time. In our study, ITI-two fourteen improved cardiac output both by increasing heart transplant The improvement in cardiac output was not associated with the development of arrhythmias.

Consequently, ITI-two fourteen has the potential to be a safe treatment with patients with heart failure and reduced ejection fraction due to diverse ideologies. The reason ITI-two fourteen improves cardiac output without promoting of arrhythmia's lives in its novel mechanism of action. DDE1 inhibition increases cyclic AMP in the cardiomyocyte via adenosine A2B receptor signaling without increases in intracellular calcium levels, In both respects, the mechanism differs from that of currently with ITI-two fourteen strengthens heart contractility without triggering arrhythmia. Preclinical experiments with our PDE1 inhibitors have also found anti inflammatory effects in various models. These data provide opportunities to pursue innovative treatments beyond heart failure, including multiple CNS and non CNS indications.

We look forward to continuing to expand the potential of this novel mechanism for the benefit of patients. I will now turn the call over to Larry who will review the financial results. Larry?

Speaker 5

Thanks, Andy. I will be reviewing our financial results for the quarter ending June 30, 2020. We recorded net product sales of CAPITAL for the second quarter of 2020 of approximately $1,900,000. No net product sales were reported in the same period of 2019. Research and development expenses for the second quarter of 2020 were $25,200,000 compared to $23,700,000 for the second quarter of 2019.

The $1,500,000 increase is primarily due to an increase of approximately $9,200,000 of lumateperone clinical costs and is offset by a decrease of approximately $5,300,000 of manufacturing costs and a decrease of approximately 3,000,000 for $3,000,000 for non clinical related efforts. Selling, general and administrative expenses were $41,400,000 for the second quarter of 2020, compared to $15,400,000 for the same period in of $20,600,000 for selling related costs and an increase of $5,400,000 for general and administrative costs. The increase in selling related costs is due primarily to hiring a sales force and increasing our marketing efforts. The increase in general and administrative costs is due primarily to an increase in labor related expenses and professional fees. Cash, cash equivalents, restricted cash and investment securities totaled $409,200,000 at June 30, 2020, compared to $450,400,000 at December The company completed a $295,000,000 public offering, resulting in net proceeds to the company of approximately $277,000,000 from the sale of 10,000,000 shares of its common stock.

Speaker 0

Our

Speaker 2

first

Speaker 0

comes from the line of Brian Adam Abrahams with RBC Capital Markets. Your line is open.

Speaker 6

Hi, this is Leah on for Brian. Thanks for taking my question. So with the bipolar data on the horizon, can you give us some sense of the regulatory strategy you're envisioning If the study is supportive, but not stat sig, would you consider filing? And can you lay out how you might expect us supportive study to look that might not be stat sig. And do you see any differences or I guess what would your expected label be given that you're going to be filing an adjunctive and a monotherapy?

Thanks.

Speaker 2

Thanks, Leo. I have to say you sound just like Brian. This is Sharon and I'll start and then I'll ask Andy if he would like to add anything. So as you said, we are expecting data shortly on Study 4 2. If the data is positive, then of course, we'll be filing.

The data is not positive, but as you said, shows the trend. And of course, we'll go and we'll talk with the FDA. As you know, we also have if the data is totally negative, there's no signal there, then, as you know, we have a third another study ongoing study 403, which will read out, the second half of next year. So we have multiple stage strategy here. But we're looking forward to the data, that will be coming very soon on Study 4 2.

Andy, did you want to add anything?

Speaker 4

Just that I think the question also was about monotherapy versus adjunctive. So 4 or 2 is positive. We will, of course, be submitting applications for approval, both as a monotherapy and as a adjunctive therapy. And as Sharon said, need to have additional discussions with FDA, that will be part of the discussion as well.

Speaker 0

And our next question comes from the line of Mark Goodman with SVB Leerink. Your line is open.

Speaker 7

Hi, congrats on the quarter. This is Rudy on the call for Mark. So I have two questions. Firstly, regarding Ceplyta commercial. So just want to make sure how is the physician feedback so far on the efficacy versus other like generic antipsychotic?

And secondly, for the study, 442, Just wondering any thoughts on the potential impact from the COVID 19 pandemic, like especially for the placebo response?

Speaker 2

So, thanks for the question. Maybe Mark can take the first part on physicians. Comments on on Keplyta and then Andy on potential impact. On COVID on placebo.

Speaker 3

Yes. Sure, Sharon. Hi, Rudy. This is Mark, and thanks for the question. And yes, to answer that in two ways.

1, as I mentioned in my prepared remarks, we're delighted by the feedback that we are getting from physicians about the experience they're having with patients while on Caplida. And that really cuts across all aspects of the product, including the efficacy of Caplata that they're seeing as well as the favorable safety and tolerability profile. And I think also importantly, the convenient, once daily titration free dosing where they can start the patient at the effective dose and maintain them on that same dose. So through our sales force and their interactions, with the physicians, we've been getting very positive feedback on the profile of Caplida. And as I said, and that includes efficacy as well as as safety and tolerability.

We also recently fielded, a very extensive market research study to get feedback on the initial reaction to the product profile in the marketplace. And that was very much confirming what we were hearing from physicians directly through our sales force, those physicians that have tried Caplida rate the product performance very highly, again, across all parameters, including efficacy, safety and tolerability and dosing. So I hope that answers your question and I'll turn it over to Andy for the second part.

Speaker 4

Yes. So, with regard to the impact COVID-nineteen on Study 40two. First, keep in mind that the study was largely what was well underway and largely, almost in the U. S. Completely done in Europe, toward the latter stages of the study once COVID-nineteen became, was started to have an impact.

It's hard to speculate about the effect on cebo response. I don't think that that's something that we're concerned about. We believe the study is adequately powered. We don't see any reason or didn't have any don't have any reason at this point to be any more concerned about the results in that respect from COVID-nineteen. We there was no impact of COVID-nineteen on enrollment because of the time when that started.

So, we don't think that there's an impact on placebo response or what we're going to see in terms of the results.

Speaker 7

Got it. Yes, that's very helpful. Thanks.

Speaker 0

And our next question comes from the line of Bo Chen with Evercore. Your line is open.

Speaker 8

Hi, thank you for taking our questions. First, I have a question on the adjunct 42 study. It seems that the data analysis will be taking roughly 2 to 3 months Could you remind us what are the timelines for the 301 schizophrenia trial, which seems to have a shorter data analysis then, forward to and if there are any portions, push in the pulls that we should keep in mind?

Speaker 2

I can start that or Andy, Ken as well. I don't frankly, I don't remember how long 301 took. 301 actually was a smaller study though. So I think that there is nothing unusual here, other than remember, after patients come in and they're treated they have 6 week treatment and then a 2 week follow-up. I think that I have not compared this to 301.

So I don't know, but I don't think there's undue, undue, long time here. So I think we're were just fine. Andy, did you want to add anything?

Speaker 4

Yes. Yes. So no, there hasn't been I mean, the data analysis isn't taking any longer this trial and or will not take any longer with this trial than with any of our other large trials. There has been a little bit of extra time to complete that will involved in cleaning the data just because there was there were some limitations on being able to monitor sites due to the COVID 19 situation, but that's had a small impact and, doesn't have any

Speaker 0

Our next question comes from the line of Charles Duncan with Cantor. Your line is open.

Speaker 9

Good morning. Thanks for taking the questions. Congrats, Sharon and Steve on the progress in the quarter. I had a commercial question and a pipeline question regarding the commercial question. I was wondering if you could give us some perspective on the percentage of prescriber target engagement, if you will, that you've seen in the quarter, and whether or not you have a process in place to manage any kind of spikes or a second wave if COVID could come back?

Speaker 2

Mark?

Speaker 3

Yes. Thanks, Sharon and good morning, Charles. Good to hear from you. Yes. So as I mentioned in my prepared remarks, during the second quarter, for the majority of the quarter, we had our sales force operating in a virtual environment as the country was really shut down.

And we were operating consistent with both federal and local guidance in terms of non essential workers. In June, we began to phase our sales force back out into the environment when we felt it was safe to do so both for our employees as well as for the community, the medical community. That they serve. And so by theendofJune, we had our entire sales force out there, operating in person, doing in person appointments, but not all offices are open at this point. And so they are operating both in an in person approach when they can, but they're supplementing that continuing to do virtual engagements either through a teleplatform or by phone, and they're getting better and better and more effective as they do that.

So as you mentioned, Charles, no one knows what the course of the virus is going to do and whether there's going to be additional pullbacks or shutdowns, it's something that we monitor very closely. And as local and federal guidelines get issued, we react accordingly and make appropriate decisions as to whether it's safe for our sales force to be out there or whether they pull back and they they continue to do their virtual engagements. Either way, we feel like we can effectively reach our prescribing audience through that mix of in person and virtual as well as through our non personal efforts with our digital marketing campaign as well.

Speaker 9

And then just if I may, a follow-up on the commercial side. I suppose it's too early to have any persistence feedback, if you will. You did mention the early clinical experience, but have you had any feedback regarding patients continuing to be interested in taking Caplasia?

Speaker 3

Yes, as I mentioned, Charles, we are actually very encouraged by the refill rates that we're seeing and the ratio between new prescriptions and total prescriptions, which is a sort of a leading indicator to us that patients are refilling their medicines. And that would be consistent with our belief that Capplieda is a well tolerated antipsychotic that's effective and an agent that they would look be refilling. So as you mentioned, it's still early. We don't have long term sort of longitudinal tracking. But the early indicators and the metrics that we're looking at, we find very encouraging in terms of patients wanting to refill their medicines.

Speaker 9

Super. And then if I could ask either Sharon or Andy regarding, 402 versus 403, some of us may be trying to gauge probability success. And perhaps if I could just ask you maybe from a mechanistic rationale perspective, if you thought about 4 2 and the activity of lumateperone, as an adjunct of therapy versus 403 and a monotherapy, I know you've got that 404 success. I'm just kind of wondering what your thoughts are in terms of the drug's ability to demonstrate therapeutic pain?

Speaker 2

So I'll ask Andy to start and then, I may chime in.

Speaker 4

Yes. So, We believe the drug is going to work in the adjunctive setting, in a very similar fashion to the way we've seen it work in the monotherapy situation in Study 404. And we've carefully analyzed the results from 404 and the results from a number of things from those analyses

Speaker 2

design and

Speaker 4

far, the conduct of Study 40two and the way we've designed and powered Study 403, we remain very confident that we're on track with those. That we have every reason to believe that, the drug should be with the drug working that we should be able to see a successful result in both of those trials. So we're adequately powered, the where the studies are being done, the types of patients that coming in, all are consistent with what we've been expecting for that.

Speaker 0

And our next question is from the line of Sumant Kulkarni with Canaccord. Your line is open.

Speaker 10

Good morning. Thanks for taking my questions. This is a very specific 4 2 related question. In a scenario where the trial works in either bipolar depression and bipolar disorders, 1 or 2, but not both. Would that mean that you are, open to filing for a narrower label initially and then waiting and watching as to what happen with the monotherapy trial set to report next year?

Speaker 2

I'll start and then I'll ask Andy to give further details. No, I think, remember, we have 404, which, was effective in both bipolar 1 and bipolar 2. So I think that, we would be filing for both bipolar 1 and bipolar 2, upon success of Study 4 2. Andy, did you want to add?

Speaker 4

Yes, no, that's absolutely correct. As long as 4 2 is positive overall, we'll filing and we'll be filing for adjunctive and monotherapy. And that will include both patients with bipolar 1 and bipolar 2. There's no, expectation that individual subgroups in any study need to be positive in order for the overall trial to serve as a positive pivotal trial. So That's how we would be proceeding.

Absolutely.

Speaker 10

And then on the commercial side, we know it might be too early and given the side effect profile of this product the potential for compliance being higher here is pretty high, I would think. But on the other hand, have you seen anyone not continuing with Kaplata once they've been on a prescription?

Speaker 3

Yes. Hi, Suman. It's Mark. As I'd mentioned before, it's a little early on in the launch to be doing the longitudinal tracking of patient data. And so, what we're looking at is the ratio between the new Rxs and the TRxs.

And what we're seeing as I mentioned, is encouraging, especially compared to competitive benchmarks at the same stage of launch, which leads us to believe that patients are adhering to the medicine. I can't speak to whether individual patients are doing that or not. But overall in the aggregate, we've been very encouraged by what we've seen.

Speaker 0

Thank you. And that does end the allotted time that we have for questions. So I'll now turn the call back over to Sharon Maach for closing remarks.

Speaker 2

Thank you, operator, and thank you everyone for joining the call today. We look forward to updating you on our clinical progress and our commercial progress and our, readout soon in our bipolar studies and our other studies that are ongoing as well. So with that operator, we I should say we wish everybody. Hope everyone remains safe and healthy and look forward to talking to you soon. And with that, operator, you can disconnect the call.

Thanks very much.

Speaker 0

Ladies and gentlemen, this does conclude the program.