Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Q1 2024 Earnings Call Transcript May 7, 2024

Intra-Cellular Therapies, Inc.  isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, ladies and gentlemen, and welcome to Intra-Cellular Therapies' First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would like now to turn the conference over to your speaker today Dr. Juan Sanchez, Vice President, Corporate Communication and Investor Relations. Please go ahead.

Juan Sanchez: Good morning and thank you all for joining us on our first quarter 2024 earnings call. Joining me today on the call are Dr. Sharon Mates, Chairman and Chief Executive Officer; Mark Neumann, Chief Commercial Officer; Dr. Suresh Durgam, Chief Medical Officer; and Larry Hineline, Chief Financial Officer. The slides to help guide today's call are available under the Investor Events section of our corporate website. I'm on slide number two. During today's call, we will be making certain forward-looking statements. These forward-looking statements are based on current information, assumptions and expectations. Those statements 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 are cautioned not to place undue reliance on these forward-looking statements. These statements are made only as the date of this conference call and the company disclaims any obligation to update such statements. I will now turn the call over to Sharon. Sharon will begin on slide four. Sharon?

Sharon Mates: Thanks, Juan. Good morning, everyone, and welcome to today's call. We are pleased to share our results for the first quarter of 2024 and to provide updates on our clinical studies. Our team continued to deliver strong growth for CAPLYTA in our current indications of bipolar depression and schizophrenia. With the overwhelmingly positive top line results from Study 501, we achieved a major milestone as we work to expand CAPLYTA's label into major depressive disorder and establish CAPLYTA as a drug of choice for broad patient populations with mood disorders. I'll talk more about this in a moment, but first, let's start with our commercial performance. Our strong growth continued. First quarter total revenues increased to $144.9 million.

As we preannounced, CAPLYTA net sales increased to $144.8 representing a 53% growth versus the same period in 2023. We are pleased with our performance and we are confident in the continued growth of CAPLYTA. Consequently, we are reiterating our guidance for full year CAPLYTA net sales between $645 million and $675 million. Mark and Larry will provide a more detailed picture of our performance later in the call. Let me highlight our most recent clinical development news. Last month, we announced robust positive top line results from Study 501 evaluating Lumateperone as an adjunctive treatment to antidepressants in patients with MDD. These results are shown in slides 7 through 10. In this adjunctive study, Lumateperone met the primary endpoint of change from baseline at Week 6 on the MADRS Total Score versus Placebo with an impressive 4.9 point reduction.

The p value was less than 0.0001 with a robust Cohen's d effect size of 0.61. As you can see, statistically significant reductions in depressive symptoms as measured by the MADRS were seen at the earliest time point tested Week 1 and these improvements continued throughout the course of the trial. Lumateperone also met the key secondary endpoint of change from baseline on the clinician rated CGI-S with a p value of less than 0.0001 and a robust effect size of 0.67. The CGI-S also statistically significantly improved at the earliest time point tested Week 1. In this study, we also included a measure of the patient's voice to complement the clinician rated scales. On a patient reported measure, the Quick Inventory of Depressive Symptomatology Self Report Scale or QIDS patients reported robust reduction in their depressive symptoms.

There was a robust reduction in symptoms with a p value of less than 0.0001. We are very pleased that the patient reported improvements in depressive symptoms support the clinician rated endpoints in this study. We continue to see a favorable safety and tolerability profile. Adverse events were similar to those seen in prior studies of Lumateperone as a treatment for bipolar depression and schizophrenia. Today, we are pleased to report the results of additional safety information demonstrating that mean changes in key metabolic parameters, including glucose, insulin, triglycerides and total LDL and HDL cholesterol were similar between Lumateperone and Placebo. Importantly, mean changes in weight were also similar to placebo. These strong results from Study 501 underscore the potential for Lumateperone to treat a broad spectrum of mood disorders.

We have now shown Lumateperone's strong antidepressant activity in patients with MDD as an adjunctive therapy in patients with Bipolar I and Bipolar II both as a monotherapy and as adjunctive therapy in patients with MDD and bipolar depression exhibiting mixed features and in patients with comorbid depression in our schizophrenia program. The results of Study 501, coupled with Lumateperone's distinct pharmacology, reinforce our label expansion strategy and the long-term prospects for Lumateperone across mood disorders. Our second Phase III trial in MDD, Study 502, has recently completed clinical conduct. We expect to report top line results from Study 502 later this quarter. Subject to the results, we anticipate filing a supplemental new drug application with the FDA in the second half of 2024.

MDD is a highly prevalent disorder with approximately 21 million adults affected every year, thus presenting a large opportunity to expand on our already approved indications of schizophrenia and bipolar disorder. MDD accounts for 30% of the approximately 68 million annual antipsychotic market prescriptions. Therefore, as seen on slide 12, the total addressable market for CAPLYTA increases to approximately 80% of the annual antipsychotic market prescriptions with the addition of an MDD indication from nearly 50% with bipolar and schizophrenia indications. We are very excited about the possibility of providing a new treatment option for these patients. Let me now provide an update on our pipeline starting with other Lumateperone programs. Our Lumateperone pediatric program includes an open label safety study in schizophrenia and bipolar disorder, a double-blind placebo-controlled study in bipolar depression and two double-blind placebo-controlled studies in irritability associated with autism spectrum disorder.

Patient enrollment is ongoing in the open label safety study as well as in the double-blind placebo-controlled bipolar depression study. We anticipate beginning patient enrollment in the autism spectrum disorder studies in the third quarter of this year. Additionally, we continue to advance our long acting injectable Lumateperone with the initiation of Phase I studies with additional formulations later this year. We continue to advance our other pipeline programs, including 1284. ITI-1284 is a deuterated Lumateperone and is an important drug candidate as we continue to build our neuropsychiatry franchise. This quarter, we expect to initiate patient enrollment in our Phase II clinical trial evaluating ITI-1284 as adjunctive therapy to antianxiety medications in patients with generalized anxiety disorder or GAD.

There are approximately 10 million diagnosed adults in the US with GAD. It is important to note that about half of patients who receive treatment do not respond adequately to initial therapy. We believe ITI-1284 is well suited for this patient population and could offer an effective, safe and well tolerated treatment. Also later this quarter, we plan to initiate patient enrollment in Phase II clinical study in psychosis associated with Alzheimer's disease as well as a Phase II study in agitation associated with Alzheimer's disease. Our Phosphodiesterase I inhibitor program includes Lenrispodun and ITI-1020. Our Phase II study with Lenrispodun in Parkinson's disease is ongoing and top line results are expected in 2025. Besides motor symptom improvement, we are exploring the effects of Lenrispodun in cognition, a key non-motor manifestation of the disease and measuring biomarkers of neuroinflammation to help inform next steps.

Our second PDE1 product candidate, ITI-1020, is being developed for oncology indications. We are currently conducting a Phase I single ascending dose study with ITI-1020 and healthy volunteers. I'd also like to give a quick update on our earlier stage programs. We're exploring ITI-333 to treat opioid use disorder and pain. Our multiple ascending dose study and a positron emission tomography study are both ongoing. Finally, last year we introduced a portfolio of non-hallucinogenic psychedelics for the treatment of mood, anxiety and other neuropsychiatric disorders. ITI- 1549, the lead candidate is advancing preclinical development and we expect to begin clinical testing in 2025. A scientific poster describing the preclinical advancement of ITI- 1549 will be presented next week at the Society of Biological Psychiatry Annual Meeting.

In this poster, we further describe the novel mechanism of action of ITI- 1549. We also demonstrate improvement in preclinical models of anhedonia and a reduction in symptoms of anxiety. We look forward to sharing this information following our poster presentation. We are in a strong financial position to maximize the opportunities ahead of us with CAPLYTA and we continue to build our robust pipeline. We ended the first quarter with approximately $477.4 million in cash, cash equivalents and investment securities. In April of 2024, we received approximately $575 million in gross proceeds from our public offering of common stock. Additionally, we have no debt. I'll now turn the call over to Mark to further discuss this quarter's CAPLYTA performance.

Mark?

Mark Neumann: Thanks, Sharon, and good morning, everyone. CAPLYTA's strong performance continued in Q1 of 2024 with robust year-over-year growth in total prescriptions of 39% despite typical first quarter seasonal dynamics as well as the industry disruption caused by the Change Health cyberattack that occurred during the quarter. CAPLYTA's growth continues to be driven by strong uptake in bipolar depression, where it has solidified its position as the first and only treatment option indicated for patients with Bipolar I and Bipolar II depression as monotherapy and as adjunctive therapy with lithium or valproate.. We also continue to see steady growth in schizophrenia. We continue to expand our prescriber base, which now stands at more than 39,000 healthcare providers since launch.

Physicians appreciate CAPLYTA's proven efficacy, favorable safety and tolerability profile and convenient once daily dosing with no titration required. Beyond a compelling product profile, the team's commercial execution continues to be very strong. Our sales team is currently educating our prescriber base, which includes psychiatrists, nurse practitioners and primary care physicians. Our sales efforts are complemented by a comprehensive marketing program, including extensive peer-to-peer medical education programming, digital promotion and a broad national consumer advertising campaign delivered through television and social media. We're very pleased to have just launched a new consumer TV advertisement, which depicts the experience of people living with bipolar depression and the benefits CAPLYTA may provide them.

We also continue to enjoy a strong market access position with broad access with over 99% of lives covered in Medicare and Medicaid and about 90% of lives covered in commercial. In early Q4 2023, CAPLYTA gained unrestricted status on two of the largest Medicare Part D plans. We are pleased with the initial results of these changes and expect to see the full impact of these changes throughout 2024. As Sharon mentioned, the commercial opportunity for CAPLYTA within its current indications is large and represents nearly half of the approximately 68 million annual antipsychotic prescriptions in the US. We will continue to invest behind the brand, build on our strong momentum and fully optimize the current opportunity as we further penetrate the bipolar depression and schizophrenia markets.

In closing, we are pleased with CAPLYTA's strong performance. CAPLYTA has a very compelling product profile and we are well positioned for continued growth both in the short-term and the long-term as we work to establish CAPLYTA as a first choice treatment across mood disorders. We look forward to continuing to update you on the success of CAPLYTA. I'll now turn the call over to Larry to further discuss our financial performance. Larry?

Lawrence Hineline: Thank you, Mark. I will provide highlights of our financial results for the first quarter ending March 31st, 2024. In the first quarter, net product sales of CAPLYTA were $144.8 million compared to $94.7 million for the same period in 2023, representing a year-over-year increase of 53%. Our net sales growth in the first quarter was primarily driven by increased prescription demand and to a lesser extent higher inventory levels. Our gross to net percentage in the first quarter increased to the mid-30s consistent with our guidance. We expect our gross to net percentage to remain in the mid-30s for the remainder of the year. We believe underlying demand for CAPLYTA will remain strong and we are reiterating our full year 2024 CAPLYTA net sales guidance of $645 million to $675 million.

Selling, general and administrative expenses were $113.1 million for the first quarter of 2024 compared to $98.9 million for the same period in 2023. Research and development expenses for the first quarter of 2024 were $42.8 million compared to $38 million for the same period in 2023. Our financial position remains strong. Cash, cash equivalents and investment securities totaled $477.4 million at March 31st, 2024 compared to $499.7 million at December 31st, 2023. In April 2024, we completed a public offering of our common stock in which we sold approximately 7.9 million shares for aggregate gross proceeds of $575 million and net proceeds of approximately $543 million. This concludes our prepared remarks. Operator, please open the line for questions.

Operator: Thank you. [Operator Instructions] The first question comes from Jessica Fye with JPMorgan. Your line is open.

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