Intra-Cellular Therapies Inc

NASDAQ:ITCI

Earnings Call Transcript 2020-Q2

[Operator]

Good morning, ladies and gentlemen, and welcome to the Intra-Cellular Therapies' Second Quarter Ended June 30, 2020 Financial Results Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session [Operator Instructions] As a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to your host Dr. Juan Sanchez, Vice President, Corporate Communications and Investor Relations. Please go ahead.

[Juan Sanchez]

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 a short time ago and is available on our website at intracellulartherapies.com.

Joining me on the call today are Dr. Sharon Mates, Chairman and Chief Executive Officer; Dr. Andrew Satlin, Executive Vice President and Chief Medical Officer; Mark Neumann, Executive Vice President and Chief Commercial Officer; Larry Hineline, 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 may include statements regarding, among other things the efficacy, safety and intended utilization 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 plans and expectations regarding the commercialization of CAPLYTA, potential impact of COVID-19 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 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 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 obligation to update such statements.

I will now turn the call over to Sharon.

[Sharon Mates, Chairman & Chief Executive Officer]

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 CAPLYTA's week-over-week prescription growth and increasing prescriber base, while adapting to the unprecedented challenges presented by COVID-19.

During these challenging times, the team at Intra-Cellular Therapies has been executing our commercial launch of CAPLYTA to provide schizophrenia patients a new well tolerated treatment option. In concert with our commercial execution of CAPLYTA, we are also advancing our development programs.

During this call, I will provide updates on our ongoing CAPLYTA launch and other corporate initiatives. Following my remarks, Mark Neumann, 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 quarter financials.

Let me begin with our commercial progress. We launched CAPLYTA on March 30 in the midst of strict COVID-19 lockdowns, which resulted in major disruptions in patient care. We are pleased with the swift response of our commercial and medical teams to navigate and adapt to this environment. We have launched a series of programs that enable engagement with health care providers with the goal of offering comprehensive education on CAPLYTA.

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 very strong market access position. In our two largest payer channels 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 week-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 the awareness level of CAPLYTA among prescribers. Most important, we are encouraged by physician feedback that patient experience is very positive and in line with our expectations and psychiatrists have a strong intention to prescribe CAPLYTA.

CAPLYTA is an oral medication taken once-a-day that does not require titration. So a patient can start and stay on the therapeutic dose. CAPLYTA 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 akathisia were similar to placebo in our registration trials. The progress we've made to date is a testament to CAPLYTA's compelling profile as well as our commercial team's 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 402 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 and MDD late this year. We also plan to enter clinical trials with our long-acting injectable formulation of lumateperone later this year.

We also expect to initiate early-stage clinical studies for ITI-333, 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 I/II clinical trial of ITI 214, our lead phosphodiesterase one 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 of PDE1 inhibitors in a variety of therapeutic areas. We are particularly excited about the anti-inflammatory effects of inhibiting PDE1 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 million 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.

Before turning the call over to Mark to provide details on our commercial plans and progress, I want to take a moment to thank the Intra-Cellular 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 CAPLYTA 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 will now turn the call over to Mark. Mark?

[Mark Neumann]

Thanks, Sharon and good morning, everyone. I am pleased to provide additional details of our first full quarter of launch activities and the initial commercialization of CAPLYTA. As Sharon mentioned, our CAPLYTA promotional activities started in late March, just as the COVID-19 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 health care providers.

As a commercial organization, we quickly identified these challenges and 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 CAPLYTA prescriptions. The refill rate of CAPLYTA 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 of existing CAPLYTA riders. 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 the second quarter our sales force was operating in a 100% virtual environment, engaging our prescribing audience 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 the end of June, 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 the remainder of the year. Additionally the interest in CAPLYTA by health care providers has been 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 CAPLYTA, which have been exceptionally well received and continue to build awareness of CAPLYTA 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 CAPLYTA amongst our targeted prescribers. And among those providers, who are already prescribing CAPLYTA, 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 and contribute to our optimism that we will continue to see an acceleration in CAPLYTA prescription volume in the coming weeks and months.

We also continue to make strong progress in all market access payer channels where the timing of coverage determinations and quality of coverage is playing out exactly as we thought it would. CAPLYTA has now achieved broad formulary coverage for greater than 95% of covered lives in both Medicare Part D and State Medicaid our two largest channels.

We are particularly pleased with our advances made in the state Medicaid channel, which has recently opened up to CAPLYTA 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 LYTAlink patient access and affordability program is fully operational and supporting eligible patients.

Let me now provide some additional details about the exciting new consumer campaign, Real Progress that Sharon announced earlier in the call. The aim of this campaign is to educate patients and their caregivers about CAPLYTA, 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 not receiving the care they need. Patients with schizophrenia are particularly vulnerable of the social and health care challenges they often face. The current COVID-19 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 CAPLYTA and extends to a digital marketing campaign on social media platforms, which includes homepages and video ads on Facebook and Instagram.

Additionally, to further encourage physician patient dialogue about schizophrenia care we have partnered with a leading telepsychiatry platform. From the CAPLYTA 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 CAPLYTA, and are delighted by physician …feedback that patient experience is very positive and in line with our expectations. We are encouraged by the week-over-week growth in CAPLYTA prescriptions, and we're confident that our increasing prescriber access, comprehensive medical education program, strong market access position and our exciting new DTC campaign will result in a further acceleration of prescription performance.

We continue to believe CAPLYTA will become a leading choice for health care providers treating adult patients with schizophrenia. We look forward to continuing to report on our commercial progress.

Thank you. And I would now like to hand the call over to Andy to discuss our clinical development programs. Andy?

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

Thanks, Mark, and good morning, everyone. We are very pleased with the reception CAPLYTA has had among medical practitioners and the feedback we've been receiving about the positive experiences reported by patients being treated with CAPLYTA. Schizophrenia is a highly prevalent lifelong psychiatric condition, and the majority of patients discontinued treatment or seek treatment changes as a result of side effects, such as weight gain metabolic disturbances and movement disorders. We're proud that CAPLYTA 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 3 trial of lumateperone in patients with a depressive episode associated with either bipolar I or bipolar II disorder.

As Sharon mentioned, we anticipate top line results by mid-September from Study 402. This global study enrolled 529 patients with depressive episodes associated with either bipolar I or bipolar II disorder, who were randomized 1:1:1 to receive lumateperone 42 milligrams, 28 milligrams or placebo once daily for six weeks, while being maintained on lithium or valproate mood stabilizers. The primary endpoint is changed from baseline on the MADRS total score at week 6.

In addition in the first quarter of this year, we commenced U.S. patient enrollment in study 403 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 in the second half of 2021.

Bipolar I and Bipolar II disorder are serious highly prevalent psychiatric conditions affecting approximately six million adult Americans. These disorders are characterized by recurrent episodes of mania or hypomania, interspersed with episodes of major depression. Bipolar I and Bipolar II 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-II 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 II disorder.

Turning now to our PDE1 platform. During the quarter, we reported positive top line results from a Phase 1/2 trial of ITI-214 in patients with chronic systolic heart failure. This study evaluated the hemodynamic profile and safety of single ascending doses of ITI-214. Currently available heart failure drugs that can improve the contractual 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-214 improved cardiac output both by increasing heart tranquility and decreasing vascular resistance that is ITI 214 functions as an INO dilator. The improvement in cardiac output was not associated with the development of arrhythmias. Consequently, ITI-214 has the potential to be a safe treatment with a possible benefit in a broad range of clinical situations including acute and chronic treatment of patients with heart failure and reduced ejection fraction due to diverse etiologies.

The reason ITI-214 improves cardiac output without promoting severe arrhythmias lies in its novel mechanism of action. PDE1 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 used PDE3 inhibitors such as milrinone. As a result PDE1 inhibition with ITI 214 strengthens hard contractility without triggering arrhythmia.

Preclinical experiments with our PDE one 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?

[Larry Hineline, Senior Vice President & Chief Financial Officer]

Thanks, Andy. I will be reviewing our financial results for the quarter ending June 30, 2020. We recorded net product sales of CAPLYTA for the second quarter of 2020 of approximately $1.9 million. No net product sales were reported in the same period of 2019. Research and development expenses for the second quarter of 2020 were $25.2 million, compared to $23.7 million for the second quarter of 2019. The $1.5 million increase is primarily due to an increase of approximately $9.2 million of lumateperone clinical cost and is offset by a decrease of approximately $5.3 million of manufacturing costs and a decrease of approximately $3 million for nonclinical related efforts.

Selling, general and administrative expenses were $41.4 million for the second quarter of 2020, compared to $15.4 million for the same period in 2019. The increase of $26 million is due to an increase of $20.6 million for selling related costs and an increase of $5.4 million 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 $409.2 million at June 30, 2020, compared to $450.4 million at December 31, 2019. In January 2020, the company completed a $295 million public offering resulting in net proceeds to the company of approximately $277 million from the sale of 10 million shares of its common stock. This concludes our prepared remarks.

Operator, could you please open the line for questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is open.

[Leo Timashev, RBC Capital Markets]

Hi, this is Leo 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 step sig, would you consider filing? And can you lay out how you might expect a supportive study to look that might not be step 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.

[Sharon Mates, Chairman & Chief Executive Officer]

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 402. If the data is positive then of course we'll be filing. If the data is not positive, but as you said shows a trend, then 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 one-third -- another study ongoing, Study 403 which will read out the second half of next year. So we have a multiple stage strategy here. But we're looking forward to the data that will be coming very soon in Study 402. Andy, did you want to add anything?

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

Just that -- I think the question also was about monotherapy versus adjunctive. So if 402 is positive, we will of course be submitting applications for approval both as a monotherapy and as an adjunctive therapy. And as Sharon said, if we need to have additional discussions with FDA that will be part of the discussion as well.

[Leo Timashev, RBC Capital Markets]

Thank you so much.

[Operator]

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

[Rudy Li, SVB Leerink]

Hi. Congrats on the quarter. This is Rudy on the call for Marc. So I have two questions. Firstly, regarding CAPLYTA commercial. So just want to make sure how is the physician feedback so far on efficacy versus all other like generic antipsychotics? And second is for the Study 402. Just wondering any thoughts on the potential impact from the COVID-19 pandemic like especially for the placebo response?

[Sharon Mates, Chairman & Chief Executive Officer]

So thanks for the question. Maybe Mark can take the first part on physicians comments on CAPLYTA and then Andy on potential impact on -- because COVID on placebo.

[Mark Neumann]

Yes, sure, Sharon. Hi, Rudy, this is Mark. And thanks for the question. And yes, I answer that in two ways. One 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 CAPLYTA and that really cuts across all aspects of the product including the efficacy of CAPLYTA 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 CAPLYTA and as I said and that includes efficacy as well as safety and tolerability.

We also recently feel that 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 CAPLYTA 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.

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

Yes. So with regard to the impact of COVID-19 on Study 402, first keep in mind that the study was largely -- well was well-underway and largely almost in the U.S. completely done and in Europe toward the latter stages of the study once COVID-19 became -- was starting to have an impact. It's hard to speculate about the effect on a placebo 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 an -- I don't have any reason at this point to be any more concerned about the results in that respect from COVID-19. We -- there was no impact of COVID-19 on enrollment because of the time when that started. So we don't think that there's an impact on placebo response or -- and what we're going to see in terms of the results.

[Rudy Li, SVB Leerink]

Got it. Yeah. That's very helpful. Thank you.

[Operator]

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

[Bo Chen, Evercore ISI]

Thank you for taking our question. First I have a question on the adjunct 402 Study. It seems that the data analysis will be taking roughly two to three months. Could you remind us what are the timeline for the 301 schizophrenia trial which seems to have a shorter data analysis than 402? And if there are any push and pulls that we should keep in mind?

[Sharon Mates, Chairman & Chief Executive Officer]

I can start that or Andy can 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 six week treatment and then a two-week follow-up. I think that I have not compared this to 301. So I don't know. But I don't think there is undue long time here. So I think we're just fine. Andy, did you want to add anything?

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

Yeah. So, no there hasn't been -- I mean the data analysis isn't taking any longer with this trial than 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 -- involved in cleaning the data just because, there were some limitations on being able to monitor the sites due to the COVID-19 situation, but that's had a small impact and doesn't have any effect.

[Bo Chen, Evercore ISI]

Thank you very much.

[Operator]

[Operator Instructions] Our question comes from the line of Charles Duncan with Cantor. Your line is open.

[Charles Duncan, Cantor]

Good morning. Thanks for taking the questions. Congrats Sharon and team 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?

[Sharon Mates, Chairman & Chief Executive Officer]

Mark?

[Mark Neumann]

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 the end of June, we had our entire sales force out there operating in person -- doing in person employments.

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 tele-platform 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 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.

[Charles Duncan, Cantor]

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 CAPLYTA?

[Mark Neumann]

Yeah. 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 CAPLYTA is a well-tolerated antipsychotic that's effective and an agent that they would look to 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.

[Charles Duncan, Cantor]

Super. And then, if I could ask either Sharon or Andy regarding 402 versus 403. Some of us may be trying to gauge probability of success. And perhaps, if I could just ask you maybe from a mechanistic rationale perspective, if you thought about 402 and the activity of lumateperone as an adjunctive therapy versus 403 in 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 in?

[Sharon Mates, Chairman & Chief Executive Officer]

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

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

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 analysis design and so far the conduct of study 402. 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. Where the studies are being done the types of patients that are coming in all are consistent with what we've been expecting for that.

[Charles Duncan, Cantor]

Thanks for taking my questions.

[Operator]

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

[Sumant Kulkarni, Canaccord]

Good morning. Thanks for taking my questions. This is a very specific 402-related question. In a scenario where the trial works in either bipolar depression and bipolar disorders type one or two, 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 might happen with the monotherapy trials set to report next year?

[Sharon Mates, Chairman & Chief Executive Officer]

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 I and bipolar II. So I think that we would be filing for both bipolar I and bipolar II upon success of Study 402. Andy, do you think you want to add?

[Andrew Satlin, Executive Vice President & Chief Medical Officer]

Yes. No that's absolutely correct. As long as 402 is positive overall we'll be filing and we'll be filing for adjunctive and monotherapy and that will include both patients with bipolar I and bipolar II. 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.

[Sumant Kulkarni, Canaccord]

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 CAPLYTA once they've been on a prescription?

[Mark Neumann]

Hi Sumant, it's Mark. As I 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.

[Operator]

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

[Sharon Mates, Chairman & Chief Executive Officer]

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 readouts soon and 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.

[Operator]

Ladies and gentlemen, this does conclude the program. You may now disconnect. Thank you for participating.