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Good day, ladies and gentlemen, and welcome to the Acadia Pharmaceuticals Conference Call. My name is Shannon, and I will be your coordinator for today.

I would now like to turn the presentation over to Al Kildani, Senior Vice President of Investor Relations and Corporate Communications at Acadia. Please proceed.

Thank you. Good afternoon, and thank you for joining us on today's call to discuss Acadia's fourth quarter and full year 2024 earnings. Joining me on the call today from Acadia are Catherine Owen Adams, our Chief Executive Officer, who will provide some opening remarks; followed by Tom Garner, our Chief Commercial Officer, who will discuss our strong commercial brands, DAYBUE and NUPLAZID. Also joining us today is Elizabeth Thompson, PhD, Executive Vice President and Head of Research and Development, who will provide an update on our pipeline programs; and Mark Schneyer, our Chief Financial Officer, who will review the financial highlights. Catherine will then provide some closing thoughts before we open up the call for your questions. We are using supplemental slides, which are available on our website, Events and Presentations section.

Before proceeding, I would like to remind you that during our call today, we will be making several forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, future results and 2025 financial guidance are based on current information, assumptions and expectations that are inherently subject to change and involve several risks and uncertainties that may cause results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place unique reliance on these forward-looking statements, which are made only as of today's date, and we assume no obligation to update or revise these forward-looking statements as circumstances change, except as required by law.

I'll now turn the call over to Catherine for opening remarks.

Thank you, Al. Good afternoon, everyone, and thank you for joining us. Now 5 months into my role as CEO of Acadia, I'm excited to share an update on the significant progress we have made. During our last call, my first with Acadia, I expressed my enthusiasm for the company's strong foundation and the potential of our pipeline. Since then, the developments we've achieved have only reinforced my confidence in our future. These recent developments include delivering strong financial results in both commercial brands, as we will detail later in the call, with revenue guidance targeted at over $1 billion in the U.S. in 2025 with volume growth for both brands.

Announcing new commercial leadership with Tom Garner joining Acadia as our new Chief Commercial Officer; submitting our marketing application authorization with the European Medicines Agency for trofinetide, setting us up for our first approval outside North America; announcing a second indication we intend to study with ACP-204, Lewy Body Dementia Psychosis, adding to our pipeline an exciting new neuroscience program in ACP-711 for the treatment of essential tremor, providing greater transparency into the depth and diversity of our pipeline in both neuroscience and neuro-rare diseases by disclosing more details about our programs, culminating in our announcement of Acadia's first R&D Day to be held on June 25.

And further strengthening our balance sheet with the sale of our priority review voucher. Acadia's corporate strategy is anchored by our neuroscience and neuro-rare disease franchises, and we plan to deliver long-term growth by expanding these franchises, including exploring investments into additional adjacencies in rare disease. We also expect to execute some important value-creating milestones in 2025 and 2026, which I will detail later in the call.

Now turning to our commercial highlights. Our commercial brands finished the year strong with record quarterly revenues and are both poised for volume and revenue growth in 2025. I'll begin with DAYBUE, which generated sales of $96.7 million in the fourth quarter, up 11% year-over-year and 6% sequentially. For the full year, DAYBUE sales were $348.4 million, up from $177.2 million in 2023, which was DAYBUE's launch year.

While our base of patients on therapy remains stable, we have continued confidence in the opportunity to grow this brand, both in the U.S. and abroad. Tom will detail our key initiatives to accelerate patient and volume growth in the U.S. and our expectations for initial revenues from outside the U.S.

Now turning to NUPLAZID, which generated sales of $162.9 million in the fourth quarter, up 13% year-over-year and full year sales of $609.4 million, up 11% from the prior year. We are very pleased with continued strength of NUPLAZID growth, driven primarily by volume as we begin to see the initial impact of our direct-to-consumer and unbranded campaigns, which were launched in mid-August of 2024. These efforts have boosted traffic to our disease awareness and NUPLAZID websites, sparking more patient doctor discussions about Parkinson's-related hallucinations and delusions.

Turning next to our pipeline. As I noted at the outset, Acadia's robust pipeline was a key factor in my excitement to join the company. Last month, we introduced this slide at an investor conference, providing a more in-depth look at our diverse pipeline. I'd like to highlight a few key observations. Our pipeline is significantly broader than was previously disclosed with programs spanning neuroscience, rare disease and areas where the two intersect. These product candidates cover all stages of development from discovery to Phase III, leveraging a diverse range of unique mechanisms of action.

Furthermore, the indications we are pursuing align with our mission to bring new treatment options to underserved patient communities while also representing substantial market opportunities with either first-in-class or potential best-in-class therapies in areas of high unmet medical need. We also look forward to sharing more information about our programs at our first-ever R&D Day planned for June 25 of this year in New York.

During the fourth quarter, we also strengthened our executive leadership, in particular, on the commercial side. I'd like to introduce Tom Garner, our new Chief Commercial Officer, who will provide additional color on the performance of our commercial brands. Tom joined us in December and has hit the ground running, already making a significant impact on our commercial organization. Having previously worked together successfully at Bristol Myers Squibb. I'm pleased to be collaborating with him once again.

Thank you, Catherine. I'm truly excited to join Acadia for many of the reasons that you've highlighted. To share a little about my background, I bring over 25 years of commercial experience, spanning both large pharma and biotech, including 2 decades at Bristol, where I led the U.S. Cardiovascular and Established Brands business unit, overseeing a portfolio exceeding $10 billion in revenue. This experience included leading rare disease launches such as CAMZYOS and large brands such as ELIQUIS, which aligns well with my focus at Acadia.

Having successfully led and expanded commercial brands across a diverse range of therapeutic areas, I'm confident in the significant growth potential for both DAYBUE and NUPLAZID, both in the near and long term. As demonstrated in our strong Q4 results today, we are well positioned to continue driving momentum and delivering sustained growth for both brands.

Let's begin with DAYBUE. We achieved record quarterly sales of $96.7 million in the fourth quarter, bringing us to $348.4 million for the year. Growth in the quarter was primarily driven by volume through increased bottle use per patient as more stable patients titrated their doses upwards towards the recommended dose. We did see some expected year-end pull forward, even excluding this dynamic, it was the third straight quarter of sequential bottle volume growth.

During the quarter, 920 unique patients received paid shipments, which was essentially flat with the prior third quarter. An important factor for the future growth profile of DAYBUE is the fact that we have a stable and growing base of patients who remain on therapy long term, with over 62% of our current patients now having been on therapy for 12 months or longer. In Q4, this group of patients accounted for around 90% of the total DAYBUE volume. Additionally, we observed a 15% quarter-over-quarter improvement in patient discontinuations.

As we move forward, ongoing proactive support for Rett patients and their caregivers will remain an important element of our patient strategy to ensure individualized care for these considering or receiving DAYBUE. Overall, DAYBUE's persistency is impressive for a chronic rare disease, and I've observed many drugs with a considerably lower persistency at this point in the product launch cycle. As you see here, our overall persistency for patients on drug at 12 months remains at about 50%.

With regards to prescribers, we continue to broaden our prescriber base with about 830 HCPs having prescribed DAYBUE, up from around 800 at the end of the third quarter. While pleased with the ongoing expansion of our HCP customer base, we believe there is still significant room for us to continue to broaden this as we aim to meet Rett patients wherever they may be in their specific journey. This will be an important component of our 2025 DAYBUE expansion strategy.

Let's now review other strategic initiatives we are executing to further enhance and accelerate adoption. We strongly believe we have a meaningful opportunity to grow the DAYBUE brand, both in the U.S. and beyond. Starting in the U.S., currently 35% of our patients are treated at Rett centers of excellence, or COEs, with the remainder being treated at either high-volume institutions or community settings. Over time, as we've noted, we expect to see more patients starting therapy outside of COEs where the vast majority of Rett patients receive treatment.

Today, our penetration for DAYBUE in these accounts is around 25% versus 55% for the centers of excellence, representing a significant growth opportunity. With almost 2 years in the field, we now have a deeper and more nuanced understanding of the Rett patient journey and DAYBUE treatment dynamics and as a result, have identified additional opportunities to educate physicians outside of the centers of excellence about the benefits that DAYBUE offers.

To capitalize on these opportunities, we're significantly enhancing our ability to reach patients beyond the 21 centers of excellence. As we announced last month, we are expanding our field force by around 30% with a focus on increasing engagement with more treating HCPs and their patients. Most of these new roles will be demand generating, but we're also strengthening support for caregivers and patients throughout their treatment journey.

Since launch, we've learned how crucial these support efforts are in helping caregivers and patients stay on therapy and in partnership with our HCPs, confidently adjust their dosage over time, which is an important driver of volume growth. Beyond the expansion of our customer model, we're also launching several key initiatives to drive growth and expand both our HCP and patient universe, including direct-to-consumer campaigns and new opportunities for peer-to-peer engagement, whether it be patient to patient, caregiver to caregiver or HCPs sharing their experiences. Additionally, we continue to bring the DAYBUE data to life through omnichannel strategies, highlighting our clinical trial data and the real-world data from our LOTUS study. With these efforts, we're confident in our ability to build momentum and make a meaningful difference to the Rett community, where only about 30% of patients have even tried DAYBUE to date.

We're also very excited to begin laying the foundation for the commercialization of DAYBUE outside of the U.S. beginning this year. The opportunity in Europe is substantial with an estimated 9,000 to 12,000 individuals affected by Rett syndrome. With the EMA approval anticipated in the first quarter of 2026, we've been actively building our EU launch team and we will soon welcome a General Manager for the region as well as a Managing Director in Germany, who will complement a highly experienced team we have already started building. These key talents will be focused on developing our market entry plans in 2025 and beyond. While caregivers and patients eagerly await approval, we're committed to making trofinetide available in certain European countries through managed access programs, subject to country-specific regulatory guidelines for those specific markets.

Meanwhile, following last year's approval by Health Canada, we're on track for our first DAYBUE sales in Canada in the third quarter of this year. Additionally, we are fully evaluating our approach to making DAYBUE more widely available to Rett patients in select markets outside of the U.S., EU and Canada. We are excited to record Acadia's first revenues outside of the U.S. later this year.

In summary, as we look at the outlook for DAYBUE in 2025, while we anticipate volume growth, the majority is expected to occur in the second half of the year as we expand our customer model and deploy new tactics to further broaden HCP engagement. We're continuing to actively engage with the Rett community through various channels according to their preferences. Moving forward, we expect to see growth in both new patients and the number of unique patients receiving shipments.

We anticipate maintaining stable persistency and increased utilization over time and are continuing to strengthen our tactics to support the growing number of stable patients on DAYBUE. We expect to record revenues related to managed access programs and named patient programs in select countries outside the U.S., and we will continue to build upon the growing body of real-world evidence with DAYBUE, reinforcing its positive impact and value in the lives of Rett patients and their caregivers.

I'll now turn to NUPLAZID. NUPLAZID achieved fourth quarter sales of $162.9 million, representing 13% revenue growth year-over-year. Overall, for the year, the brand grew top line sales by 11%, which is the highest rate of annual sales growth since 2020, with total sales of $609.4 million. It's important to note that more than half of this growth or 6% is coming from volume, and this volume growth is happening across all market segments. Taken together, we believe that NUPLAZID has significant room to grow given the positive momentum we saw through the second half of 2024.

What I find most exciting about NUPLAZID sales performance is that we still only have about a 25% market share in those patients receiving atypical antipsychotics for the treatment of Parkinson's-related hallucinations and delusions. This is up from the 20% we have reported previously, meaning that we still have a tremendous opportunity to expand this share and continue growing the brand.

Our key growth drivers in 2024 were the two key initiatives we have described as influencing HCP prescribing decisions over the past 2 years. One, leveraging the published real-world evidence showing an association of pimavanserin use compared with other atypical antipsychotics in important outcomes like all-cause mortality and educating the market about last year's label clarification, which helps HCPs understand that they can treat Parkinson's disease patients experiencing hallucinations and delusions with or without comorbid dementia.

Building on the momentum these initiatives created, starting in Q4, we also began to see the positive impact of both our branded awareness campaign and our branded campaign. Together, these initiatives drove increased traffic to our disease awareness and NUPLAZID websites, encouraging more conversations between patients and their doctors about the hallucinations and delusions associated with Parkinson's disease.

Turning next to our commercial strategy and outlook for NUPLAZID. Our strategy to drive continued growth of NUPLAZID is straightforward. We want to continue activating and educating consumers and the HCP community about the clinical benefit that NUPLAZID offers through our highly impactful targeted DTC campaign and in-person sales efforts. We want to drive market share gains against off-label generic antipsychotics by further leveraging real-world evidence to support prescriber decisions. And we're looking to maximize our field force efficiency with the use of predictive analytics and other analytical tools to be at the right place at the right time to educate about NUPLAZID.

As you will see in our 2025 sales guidance for NUPLAZID, our outlook is for continued sales growth, increasing market share and the publication of more real-world evidence data to support those goals, including 5-year data, further highlighting the long-term value that NUPLAZID offers.

In summary, we're excited to see the progress NUPLAZID is making and plan to build on that momentum through 2025.

I'll now turn it over to Liz.

Thanks, Tom. I'll begin with a brief regulatory update and then turn to our later-stage pipeline programs. We were pleased to start 2025 with our first European submission for marketing approval. As announced last month, we have now submitted our MAA for trofinetide in the EU. With this submission, we anticipate approval in the first quarter of 2026. In Japan, we continue productive discussions with PMDA about trofinetide and expect to begin a Phase III study in Japanese patients living with Rett syndrome in the third quarter of this year.

Now I'll comment briefly on our later-stage clinical programs as well as the recently licensed ACP-711. I'll start with our ACP-101 program in Prader-Willi syndrome. As a reminder, Prader-Willi is a rare genetic neurobehavioral disorder affecting roughly 8,000 to 10,000 patients in the U.S. The defining characteristic of Prader-Willi is hyperphagia, which is an intense persistent sensation of hunger. The symptoms of hyperphagia appear very early in life, often leading to obesity and myriad complications like type 2 diabetes or heart disease as well as behavioral changes like anxiety and aggression. And unfortunately, life expectancy is currently only around 30 years old, largely due to cardiovascular disease.

Carbetocin, a long-acting analog of human oxytocin, was developed to more selectively bind to the oxytocin receptor. With ACP-101, we're delivering carbetocin intranasally to provide direct delivery to the brain. Our current Phase III study called COMPASS PWS is global, multicenter, randomized, double-blind and placebo-controlled. The trial design is informed by prior Phase III experience in terms of both dose and endpoint selection. As we shared last month, we expect this trial to be fully enrolled by the fourth quarter of this year, setting us up to see top line results in the first half of 2026.

Turning next to our second late-stage clinical program, ACP-204. ACP-204 is a new 5HT2A inverse agonist that's been designed based on learnings from pimavanserin. We have three specific areas of focus with ACP-204. The first is to mitigate or eliminate the QT prolongation signal seen with pimavanserin; second, to enable testing of higher doses of ACP-204; and third, to improve time to onset of action.

Our data to date are supportive of each of these. We're starting to share these data at medical meetings with publications in the medical literature planned to follow. For example, in December, at the American College of Neuropsychopharmacology meeting, we shared some of the nonclinical characterization we've done with ACP-204. Of particular importance, ACP-204 demonstrated lower potency for certain cardiac ion channels, supporting a lower likelihood for QT prolongation.

Beyond the nonclinical program, our Phase I program included over 200 patients, which we intend to publish through the course of this year. With this promising foundation, the first indication we are pursuing with ACP-204 is Alzheimer's disease psychosis, a condition about 30% of Alzheimer's patients develop that commonly consists of hallucinations and delusions. Currently, we are testing ACP-204 in a global double-blind, placebo-controlled Phase II study. We've designed the program for seamless enrollment from Phase II to Phase III.

As with ACP-101, we provided our first substantive update on the time line for this program last month. We plan to have the Phase II enrolled by the first quarter of 2026 and then see those top line results around the middle of next year. We've also announced plans to study ACP-204 in a second indication, Lewy Body Dementia Psychosis, or LBDP, which is a disease associated with abnormal deposits of a protein called alpha-synuclein in the brain. Patients living with Lewy body dementia can have changes to thinking, movement, behavior and mood. Lewy body dementia is one of the most common causes of dementia. In the U.S. alone, it is estimated that over 1 million people are affected.

In prior studies with pimavanserin, there were promising results in the small subgroup of patients with LBDP, suggesting that ACP-204 could have the potential to provide a meaningful impact on hallucinations and delusions for this profoundly impacted patient population. We plan to initiate a Phase II study of LBDP in the third quarter of this year.

I'll now turn to our newest addition to our clinical stage pipeline, ACP-711. In November of last year, we announced an exclusive license from Saniona for ACP-711, a potential first-in-class, highly selective GABA alpha 3 positive allosteric modulator that we have chosen to develop for the treatment of essential tremor. Essential tremor is characterized by shaking and uncontrollable movements, mainly in the upper body. It may include difficulty using the hands, a shaky voice and a nodding head, all of which can worsen over time. In addition to its functional impacts, essential tremor can lead to social avoidance and a reduced quality of life. Essential tremor is common, impacting roughly 7 million patients in the U.S. with roughly 1 million of them currently receiving some kind of therapy.

The only approved product for essential tremor came to the market in the U.S. more than 50 years ago, and literature estimates suggest that as many as half of treated patients don't improve with treatment. We look forward to initiating a Phase II study in 2026. Between now and then, we're collecting more data in Phase I. Our particular focus is an elderly cohort to ensure that our dosing and development plans take into account the needs of the full potential patient population.

Before I conclude, a quick comment on our upcoming R&D Day on June 25. As Catherine mentioned at the beginning of the call, last month, we shared for the first time a more expanded view of our pipeline, showing the breadth of programs in development across a range of indications, mechanisms of action and stages. We look forward to spending some time on the newly disclosed parts of our pipeline at our R&D Day as well as the opportunity to introduce some additional members of Acadia's R&D team.

And now I'll turn it over to Mark for a financial update.

Thank you, Liz. Let's now review our fourth quarter and full year 2024 financial results. In the fourth quarter of 2024, we recorded $259.6 million in total revenue, up 12% from the fourth quarter of last year. For the full year 2024, we recorded $957.8 million of total revenue, up 32% from the prior year.

Fourth quarter DAYBUE net product sales were $96.7 million, up 11% year-over-year. Sequentially, DAYBUE sales were up 6% from the third quarter, comprised of 5% volume growth and 1% net price growth. Full year DAYBUE sales were $348.4 million, up 97% compared to $177.2 million for the full year 2023. DAYBUE gross to net was 18.8% for the year.

Fourth quarter NUPLAZID net product sales were $162.9 million, up 13% year-over-year, essentially split evenly between volume and net price. NUPLAZID gross to net for the quarter was 23.2%. Full year NUPLAZID net product sales were $609.4 million, up 11% compared to $549.2 million in the prior year. The increase in net sales for the year was also essentially split evenly between volume and net price. The NUPLAZID gross to net adjustment for the full year was 26.1%.

R&D expenses for the full year decreased to $303.2 million in 2024 from $351.6 million in 2023, mainly due to decreased business development payments in 2024, partially offset by increased costs from clinical stage programs.

SG&A expenses for the full year increased to $488.4 million in 2024 from $406.6 million in 2023, primarily driven by increased marketing costs to support the NUPLAZID and DAYBUE brands in the U.S., investments to support commercialization of DAYBUE outside the U.S. and onetime costs related to our CEO transition. Our cash balance at the end of 2024 was $756 million, substantially up from our cash balance on December 31, 2023, of $438.9 million, primarily driven by cash flows from operations and the net proceeds resulting from the sale of our priority review voucher for $146.5 million in Q4 2024.

Let's turn to our 2025 guidance. We expect total revenues in 2025 to be in the range of $1.03 billion to $1.095 billion. Beginning with DAYBUE, we expect U.S. net sales for DAYBUE in 2025 to be in the range of $380 million to $405 million. While this guidance range takes into consideration many assumptions and scenarios, the primary factor influencing the range is the number of new patients who are referred into the top of the funnel for DAYBUE during 2025. At the midpoint of the range, we expect to generate approximately 10% more new patient referrals in 2025 as compared to 2024.

In terms of total volume growth across the range, we anticipate 9% to 16% year-over-year growth as we only anticipate net price growth of approximately 0.5%. We project DAYBUE gross to net to be between 21.5% and 24.5%. Our gross to net is expected to increase year-over-year as we accrue additional rebates related to our early January pricing action as well as accounting for the impact of the Medicare Part D redesign as part of the Inflation Reduction Act, where DAYBUE does not qualify for the specified small manufacturer phase-in as it was launched after August 16, 2022.

I'd also like to share some additional insights on how we expect the year to progress for DAYBUE. We expect a sequential decline in DAYBUE net product sales in Q1. This is attributable to three factors: one, the fourth quarter pull-through estimated to be approximately $3.5 million of net sales; two, typical beginning of the year seasonality in Q1; and three, a sequential decline in the net price per bottle of DAYBUE, which is primarily due to the accruals for the Medicare Part D redesign that I just mentioned. As we progress through the year, starting in Q2, we expect DAYBUE volumes and net price to increase on a quarter-by-quarter basis. In addition to U.S. net sales for DAYBUE, we expect managed access program-related revenues in certain ex U.S. markets to contribute a modest amount of net sales in 2025. Net sales from ex U.S. markets are not included in our DAYBUE or total revenue guidance.

Moving to NUPLAZID. We expect 2025 net sales to be in the range of $650 million to $690 million. At the midpoint of the range, we expect the net sales increase to be split roughly evenly between volume and net price. We expect NUPLAZID gross to net to reduce by approximately 300 basis points due to the specified small manufacturer phase-in as part of the Inflation Reduction Act and for this reduction to be partially offset by gross to net increases in other channels. As such, we project gross to net for NUPLAZID to be between 22.5% and 25.5% for the full year. Furthermore, we no longer expect to see meaningful quarterly fluctuations in gross to net for NUPLAZID due to the Medicare Part D redesign.

We expect R&D expense to be between $310 million and $330 million. The increase in R&D spend expected in 2025 compared to 2024 is primarily attributable to an increase in clinical and personnel costs as we advance and have broadened our R&D portfolio. We expect SG&A expense to be between $535 million and $565 million for the full year. The growth in SG&A year-over-year is primarily due to the continuation of DTC to support NUPLAZID, an increase in personnel costs to support DAYBUE in the U.S. and investments to support commercialization of DAYBUE outside the U.S.

Finally, with regard to the outlook for cash, while we expect to remain profitable on an operating basis, there are a number of cash outlays in 2025 that I'd like to call your attention to. These include payments to Neuren in Q1 2025 totaling approximately $98.8 million, reflecting both the payment of the initial sales milestone for DAYBUE, which was achieved in 2024, plus Neuren's share of the net proceeds from the sale of our priority review voucher. We also anticipate a net cash outflow of approximately $25 million related to the timing of rebate accruals netted against the payment of the first rebate invoice under the Inflation Reduction Act for NUPLAZID.

And now I'll turn the call over to Catherine for closing remarks.

Thanks, Mark. 2025 marks a new era for Acadia, where we intend to drive substantial growth in our commercial brands to over $1 billion, globalize our business and advance new innovations for the benefit of patients in need. As you can see on this slide, we expect to achieve a number of significant milestones in 2025 and 2026.

Now that we have filed our MAA for Europe, we will soon be making trofinetide available through managed access programs in certain ex-U.S. countries that will actually generate our first ex-U.S. revenue in 2025 as we await approval in Europe anticipated in Q1 of 2026.

For ACP-101, we're expecting to have Phase III fully enrolled by the end of this year with a top line readout expected in the first half of 2026. In terms of ACP-204, we expect to complete enrollment early next year in our Phase II study in ADP with top line results expected around mid-2026, and we'll also initiate a Phase II study in LBDP in the third quarter of this year.

From a corporate standpoint, it's a new era at Acadia. We'll have our first ever R&D Day. And as you can see from our guidance, we expect to exceed $1 billion in annual net sales, joining a very select group of companies in biotech. I'm really pleased with the progress we've made in recent months and excited to share more with you as the year unfolds.

With that, I'll turn it over to the operator for our Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Ami Fadia with Needham & Company.

Just with regards to DAYBUE, how should we think about sort of the evolution of gross to net over sort of the foreseeable future over the next 1 or 2 years? And where do you see this drug peaking as you continue to invest more behind growing the product?

And just with regards to NUPLAZID, there seems to be obviously an improvement in gross to net this year. How do we think about that over the next couple of years?

Thanks, Ami. Yes, there's definitely some things with both gross to net that I think it's going to be helpful for Mark to give you a few more details around.

So I'm going to ask Mark to talk to the DAYBUE and NUPLAZID gross to net as well as maybe talk about the peak sales.

Yes. Thanks, Ami. On gross to net, starting with DAYBUE, we felt it was helpful to give some color this year, more specific color as there are some changes year-over-year. As you see, it's kind of -- it's going to increase year-over-year, primarily due to us factoring in changes in the Medicare Part D redesign as it impacts DAYBUE. Medicare is less than 10% of the volumes of DAYBUE, but it does add a point or 2 to gross to net. As we see it evolving over kind of the next year, it's probably going to remain in this low 20 range, but of course, could fluctuate due to mix and fluctuate doing to future pricing actions as it may or may relate to rates of inflation going forward.

Transitioning to NUPLAZID, we had, again, a change this year due to the Medicare Part D redesign. We expect a 300 basis point price benefit in gross to net due to that. There are other mix changes that influence our overall gross to net for NUPLAZID. And as we do qualify for the small manufacturer benefit for NUPLAZID starting this year, that does unwind over the next handful of years. So you'll see NUPLAZID's gross to net inching up over time over the next several years.

And as far as peak sales, thanks for the question on that. We -- it's been our policy not to give a specific point to DAYBUE peak sales. But our expectations from here is meaningfully growth above and beyond where we are this year, and we look to achieving that over the years to come.

Our next question comes from the line of Tess Romero with JPMorgan.

So for DAYBUE, is the correct way to think about 1Q that you expect to have a decline in active patients on therapy from where you ended 4Q?

And as a follow-up, is there a target number of patients that you think could be on or have been treated by the drug by the year end here?

And what is the long-term target you think you can get to in terms of penetration?

Tess, thank you. I appreciate the question. I'm going to let Mark talk about the Q1 dynamics that we're expecting, but the short answer on the decline in patients is no, but there are other dynamics going on. So I'm just going to ask Mark to give you a little color there. And then we can talk to the target numbers of treated after he's taken you through that dynamic.

Yes. I think -- so Catherine kind of hit the point there on the -- the patient base is stable at this time. And so we'll continue to report the number of unique patients served, and we'll share the number for the first quarter on our next call, but it is stable. We don't expect a meaningful decline in patients sequentially.

What's driving our expectation for sequential revenue decline are a number of the things that I mentioned in my prepared remarks. One, we do have kind of the seasonal pull forward of revenue between the first quarter back into last year's fourth quarter as caregivers and families go through and anticipate their insurance renewal process in early in the year. That does also impact overall utilization in the first quarter. And we do expect due to some of the changes in gross to net that I mentioned on the last question to have a sequential decline in net price.

So those are the factors that are really going to drive an expectation on a sequential revenue decline quarter-over-quarter, not due to a patient decline.

Thanks, Mark. So I think in terms of the overall vision for the target numbers treated, I'm just going to ask Tom to sort of elaborate on some of the points you've already brought up in the call earlier and then talk about the future.

Yes. Thank you, Tess. Thank you for the call. So per the preprepared remarks, and as I mentioned, we still estimate that there's around 70% of the Rett population are yet to try DAYBUE. And as we think about our expansion strategy for the year ahead, tapping into that group of patients is going to be our #1 priority.

Again, as you think about where those patients sit today and we think about our expansion strategy, especially with our broadened commercial footprint, we know that 65% of those patients currently are treated outside of a major center of excellence.

So our goal, given the relatively low penetration rates there of around 25% is going to be a key focus for us as we expand our reach, expand our frequency so that those customers understand the value that DAYBUE offers when they have a discussion with a Rett patient or a Rett family.

Our next question comes from the line of Joel Beatty with Baird.

The first one is on -- I noticed since the last earnings call, there's been an increased estimate of diagnosed U.S. patients from about 5,000 before to between 5,500 to 5,800 now. Could you kind of discuss how you arrived at that number and your confidence in that?

And then as a second question is on ACP-711. Can you discuss how that compares with SAGE-324, which I think has a somewhat similar but different mechanism, and we saw that fail in Phase II in essential tremor last year?

Yes. Thanks, Joel. I'll take the diagnosed patients real quick, and then we'll transition over to Liz.

So as you know, when we launched DAYBUE, we were talking about around 5,000 diagnosed patients in the U.S. And as we've been through the last sort of 2 years, we've gone up to 5,500 and now 5,800. And we continue to monitor that. We have a number of different data sources that we look at in terms of ICD-10 codes, et cetera, that come in from the various sources. So we keep track that.

And it's -- I would sort of say it's normal for a rare disease to see an increase in diagnosed patients, especially for the first in-market product. It tends to drive patients in, but also as payers ask for specific diagnoses, clinics tend to tighten up the diagnostics around each patient. And so that's typically tracking to what we would expect around a sort of a 10% to 15% increase. That will probably start to plateau, but for now, that's how we're getting the data.

So Liz, why don't you take the 711 question?

Yes, absolutely. So thank you for the question. The SAGE program and 711 are similar insofar as they are both targeted at GABA, but I think there's a very important distinction here, which is that the SAGE program was really -- had impact across different GABA containing receptors. And part of what we really like with 711 is that this really has the opportunity to focus in on alpha 3 containing receptors. And we think this gives us the best opportunity to really target the dysregulation and the dysfunction that you see in the GABA system in essential tremor while sparing some of the potential safety side effects.

Thanks, Liz.

Our next question comes from the line of Tazeen Ahmad with Bank of America Securities.

Our next question comes from the line of Marc Goodman with Leerink Partners.

This is Basma on for Marc. Our first question is related to 204 and its life cycle management strategy. Given that you recently initiated a new trial in dementia with Lewy bodies, if the drug proved to be efficacious in both Alzheimer's disease psychosis and Lewy bodies, would you expect going back to the FDA and maybe revive the whole basket trial opportunity in other dementia-related psychosis?

And we have another question on NUPLAZID regarding the product awareness. You mentioned before that it's gone down from 30% in 2020 to 8% currently. What is your goal with the current unbranded campaign in terms of the -- what level of awareness you need to achieve? And what is the time line for that?

So let's take the 204 question first, and then we'll tackle the NUPLAZID question.

Yes. Thank you. So for ACP-204, we are investigating both in our currently ongoing trial in Alzheimer's disease psychosis as well as our planned upcoming trial in dementia with Lewy bodies and -- sorry, Lewy body dementia. And we would not anticipate going to FDA to try to get a dementia-related psychosis type of approval in the future. I think what we've learned through our interactions over time is that it's very important to FDA to see impact in the specific disease under consideration.

So we do plan to continue with those two separately. Our currently existent Phase II Phase III program for Alzheimer's disease psychosis, we anticipate is going to be consistent with the data package that we would need to support approval, assuming we see the results we're looking to see in that program. And we would design the Lewy body trial based on the results we see out of the Phase II.

Thanks, Liz. In terms of NUPLAZID, I think you were referring us back to last call where we talked about the reason for launching the DTC campaign, which was the low levels of unaided awareness around hallucinations and delusions amongst caregivers. And the reason to start the campaign was to raise that awareness and therefore, encourage them to come into their doctors and ask for a conversation about treatments. And so we have been measuring awareness, and we now see that at a much higher level.

But Tom, I wonder if you could also talk to some of the other DTC we're now seeing for patients coming in to sort of help the team understand a little bit more about the metric.

Absolutely. So as we mentioned during the opening remarks, our goal behind both the branded and unbranded campaigns is to ensure that patients are aware as to what ADP means and what they should be doing as they kind of run into the symptoms associated with the disease. We're actually seeing some really nice uptick in terms of engagement from our -- both our branded and unbranded campaigns, driving traffic through both raise awareness campaign, the More to Parkinson's, but also to nuplazid.com.

Remember, the primary goal behind doing this is making sure that we have patients who may be suffering from delusions and hallucinations, engaging with their caregiver, a, to discuss the disease itself, but also then to have a discussion around NUPLAZID. And we've been really encouraged by the early metrics that we're seeing, bearing in mind that this campaign only really went live in the middle of Q3. So more to come. But again, this is what gives us a good sense that we are leaving 2024 with some good momentum as we move into 2025.

I think just to put a period behind that, Tom talked earlier about the increase in the market share that we've seen in NUPLAZID, and that was in our NBRxs. And we've seen that jump from 20% to 25% by the end of last year. So again, just to show that the campaign is not only raising awareness and driving action, but actually, we're now seeing new scripts come through. So we're very encouraged by those specifics. Thanks for the question.

Our next question comes from the line of Tazeen Ahmad with Bank of America Securities.

Okay. Great. I had a question on Prader-Willi. As you think about the secondary endpoints that are going to be important to look at, can you talk to us about some of those and what we should be looking for with those secondaries?

And maybe an overall question about the competitive landscape in Prader-Willi. It does seem like a few companies are pursuing approaches with different twists to treat the same disease. And I was curious about what you think if there is just one right approach? And if not, what the advantage of your approach could be?

Thanks, Tazeen. So I'll let Liz answer specifically more about the trial. I think just at a high level, in areas of unmet medical need like Prader-Willi, we are very confident that there will be multiple mechanisms of action that are going to be able to treat patients, especially looking at the fact that we're targeting different areas than Soleno is.

But Liz, why don't you maybe talk more specifically to some of the specifics of the trials?

Yes. So as I think about our trial and how we think about that in the context of the overall landscape. So what I'll say is that we believe, and I think there is good appreciation in the community that hyperphagia is in and of itself a really important portion of the patient and family experience here. And so I think that really, we've designed our study to focus on hyperphagia as the primary endpoint, and that is reflective of the fact that we think this is important in terms of the overall patient and family experience.

So I think that really seeing an impact there, seeing an impact on -- we have not just the continuous variable, which is our primary endpoint, but we also are looking at defined responder levels, which I think is going to be important to help people contextualize the extent of benefit they might expect with ACP-101 treatment.

I think those are going to be primarily important in terms of how we evaluate success in our 101 trial. Certainly, there are other assessments that we have in our secondary endpoints, looking at caregivers assessment and physician assessment. And those are important as well. But I think that the hyperphagia being able to impact there is going to be very meaningful.

I'll just echo what Catherine says in terms of there are a number of different approaches out there. And I think that -- and we think that this reflects the fact that this is a complex patient population with different needs. For example, one of the other programs that's out there is focusing in particular on the daytime sleepiness. So there's a lot that goes on in this patient population. And again, to echo, we think there is room for multiple agents that work in different ways that meet the needs of individual patients.

Thanks, Liz. Thanks, Tazeen.

Our next question comes from the line of Paul Mattias with Stifel.

This is Julian on for Paul. On the NUPLAZID guide, it's a little bit wider than what you provided in years past. Can you just talk a little bit about the swing factors there and what could be driving potential incremental uncertainty?

And then for the EU, obviously, a large opportunity with just the prevalence of Rett in the continent. I guess what gives you confidence that the data you've generated thus far will allow you to achieve favorable reimbursement in that region?

Thanks, Julian. So yes, we've guided NUPLAZID with slightly wider guidance this year versus last year. I'll ask Mark to take you through some of the thinking. What I'll say at the outset is we've aimed for our guidance to be pragmatic and achievable, and I feel very comfortable with the ranges that we've set for both brands this year.

But there are some specific dynamics going on with NUPLAZID, particularly around the new Medicare landscape that I'll just let Mark talk to a little bit.

Yes. I think Tom highlighted kind of our commercial initiatives. So there's a range of volume that can come out of the effectiveness of that, which I would put to your question kind of would be more our typical range for NUPLAZID. What's new this year is the Medicare Part D redesign as it possibly could impact volume. I talked about impact to net price earlier. So there's some potential tailwinds as well as headwinds.

As you know, the patient out-of-pocket cost this year will be less. So that can provide incremental benefit on volume, while on the payer side, their costs will be increasing. So it's possible that there could be some headwinds there. So with this just being a new environment, and some uncertainty, we thought it was prudent to widen the range as our expectations could be a little broader this year than they have been in previous years.

And I think it's fair to say as we move through the year and we see the impact of those dynamics, we start to understand them better that we'll look to guide to a narrow range, but we wanted to start the year with a nod to the fact that the Medicare landscape is quite volatile, and we wanted to really understand it before we narrowed our guidance.

So with that, I'll ask for next question.

Our next question comes from...

Sorry, Shannon, I apologize. Julian had another question around the EU, which I've not forgotten but temporarily did. So Tom, why don't you talk to our EU confidence and what we're doing there?

Sure. So as I mentioned during the prepared remarks, we're very excited about the opportunity that we believe exists in Europe. We can already say that we've had a number of requests from rep caregivers asking for the drug already, which we're handling carefully and judiciously.

And at the same time, as I also referenced, we're building a highly tenured, experienced but focused team that's going to be based in Zug to really make sure that we can meet the demands of the European market quickly as we see an approval that we're anticipating in Q1 of next year.

So I think the engagement that we're seeing from thought leaders, KOLs and also the patient community has been really, really encouraging. which gives us a good sense as to where we're going. I think as it comes to kind of the data, obviously, we are generating more data all of the time. We'll have our additional data from LOTUS this year that's continuing, and we believe that this will give us a supplementary opportunity to really bolster our filing as we go through the European discussion. So we feel very confident about DAYBUE's outlook in Europe.

Thanks, Tom. Now we can open up the next question. Thanks, Shannon.

Our next question comes from the line of Gregory Renza with RBC Capital Markets.

Team congrats on the progress. Catherine, you've aptly noted that Acadia's pipeline looks vastly different than even a quarter ago. And as you build that out, I'm just curious with respect to exploring those additional external investments that you speak of, where are the current gaps in Acadia's portfolio right now? Perhaps a little color on where you see dimensions of rightsizing and getting to the optimal pipeline state, whether it's across the stage, the technical success or even the area of therapeutic interest.

Thanks, Greg. Thank you for acknowledging the pipeline. We are excited for the milestones that we're going to be looking at in both '25 and '26 and also the additional color that Liz and the team will be sharing at our R&D Day. And we're all very excited about the possibilities within there to deliver on our promise.

But as you say, Acadia has always had a strong eye to BD. That's how we've built our company, and we continue to focus there. I think with our strong balance sheet, which Mark outlined earlier, we're excited to look at our neuroscience core areas, our neuro-rare core areas, but also as we announced earlier this year to look at some additional areas in rare in aligned therapeutic spaces such as endocrine, cardiovascular, immunology, which might also fit under the Acadia capabilities and competencies and allow us to sort of expand our expertise beyond neuro-rare into those adjacent spaces.

I think as the team come out of several investor meetings earlier this year, and we move into sort of the end of Q1, we're very diligent about looking at opportunities. We're looking to fill our pipeline at any stage. I think the key for us is our high bar for strong clinical and scientific evidence, looking at areas of high unmet medical need where a company like Acadia can play to win and importantly, where we can bring to market something that's either first-in-class or potentially best-in-class.

And I think that's been written with NUPLAZID and DAYBUE. It will be the same for 101 and 204 and 711, and that's the bar that we will hold that Liz keeps held high to and that we will continue to focus on. So thanks for the question.

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

Congrats, Catherine and team, on the commercial execution in '24 and refreshed communication. I appreciate all the guidance. But I had a pipeline question and specifically around ACP-101, I noted that you are enrolling a big range in terms of age 5 to 30, and that's not new. But I'm wondering if Liz has a thought on the dynamic range of HQCT and whether or not she expects there to be an age-related, call it, impact on being able to see a signal. And if there is an open-label extension study going, has there been rollover? And is there persistence in that?

Charles, great to hear from you. I'm going to ask Liz to take that.

So Charles, great to hear from you. Thanks for the great question. As usual, I'll start with the easy one first, which is, yes, we do have an open-label extension for the program, and we are seeing good rollover into that, which I try not to overread, but that's always at least a neutral to positive sign that patients are interested in continuing on to the open-label extension.

As far as the dynamic range of age, I don't know that we have tremendously strong data out there across the age range. That said, this is a lifelong disease for these patients. We think it's important to generate information that helps us understand the impact across the age range, and we think that we're well set up to do that in this study. So I think that we don't have the perfect answer, but I do think that it is important to make sure that we understand the impact across the patient population.

Right. I think it's something that we're definitely going to learn through the study, right? Good question. Thank you, Charles. Next question, operator?

Our next question comes from the line of Ritu Baral with TD Cowen.

This is Athena on for Ritu. Some questions on DAYBUE. You mentioned that more stable patients have been titrated to the recommended doses. What percentage does that represent out of all the patients who are currently on drug? You also noted there was a 15% improvement in discontinuation rates. What drove this improvement? And what strategies is your expanded sales force going to try and deploy to maintain the stable utilization of DAYBUE?

Thanks, Athena. I'm going to ask Tom to give you some color on those questions.

Okay. So thank you for the question. So focusing on consumption to begin with. So yes, we continue to see consumption actually tick upwards slightly over time. At the moment, on average, for the complete cohort of patients we've had on treatment since launch, we're seeing about a 70% alignment with our target label. So that is kind of reflective of the fact that we know that patients do titrate their dose on occasions per guidance that they're potentially getting from their HCP. But 70% is kind of what we're seeing, and that's what we saw tick up slightly through the end of the year towards 75%. So we're encouraged by what that looks like.

In terms of your second question, which was regarding the 15% discontinuations. So as you know, we've learned a great deal both about the Rett patient journey, but also about DAYBUE dynamics since we have launched the product.

And one thing that we have learned is obviously the requirements of starting a patient really well, making sure that they understand what to expect with DAYBUE as they begin treatment. And through our Acadia Connect team, and we have a dedicated team of family access managers, we can make sure that they get one-to-one care as they start their DAYBUE journey.

So a lot of this is just around education. It's making sure that they understand what to expect with DAYBUE, how to make sure that we make sure that they have everything on hand that's needed to be able to manage that patient as they start the product and that they fully appreciate the value that they're going to see with DAYBUE for the long term because one thing that we're going to be focused on a great deal through 2025 is ensuring that the benefit and the efficacy message, both for our HCPs and consumers is writ large.

The other thing that I would want to mention, and I think we mentioned this during both my prepared remarks and Mark, is that we do now have this very stable group of patients. 60% of our patients have now been on treatment for greater than 12 months or longer. So we're encouraged that we have this growing and stable base of patients. And that, again, given that dynamic, we actually do see our consumption rates ticking up over time. So I hope that answers the question.

Thanks, Athena. We'll take the next question.

Our next question comes from the line of Sumant Kulkarni with Canaccord Genuity.

It's a bit of a bigger picture question, but has a specific Acadia-related angle. Given you're well into your Phase III program in Prader-Willi, do you foresee any changes at the FDA that might make things different versus what you might currently expect in terms of a potential back and forth with the agency on the data that you generate in what is a high unmet need indication?

Thanks for the question. We thought somebody might ask about FDA interactions. So yes, Liz, would you want to talk to that?

Yes. I mean it's a little hard to speculate right now. I think that this is obviously quickly evolving space. We know that there was a memo that came out just today about potential across all agencies, potential reorganizations and large-scale risks. So -- what I'll say so far is that we have not yet seen impact on our interactions. And I would say generally, broadly speaking, not specific to PWS. But broadly speaking, we've not seen either changes in time or in tenor of those interactions. But we, like everyone else in the space, are going to be watching this carefully and carefully keeping an eye on the tenor of regulatory interactions we have over time.

I would now like to turn the call back over to Catherine Owen Adams for closing remarks.

I'd just like to thank everybody for their questions today and for their interest in Acadia and look forward to connecting with you all in the future. Thanks.

This concludes today's conference call. Thank you for your participation. You may now disconnect.