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Edited Transcript of ADMS earnings conference call or presentation 2-Nov-17 8:30pm GMT

Thomson Reuters StreetEvents

Q3 2017 Adamas Pharmaceuticals Inc Earnings Call

Emeryville Nov 6, 2017 (Thomson StreetEvents) -- Edited Transcript of Adamas Pharmaceuticals Inc earnings conference call or presentation Thursday, November 2, 2017 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alfred G. Merriweather

Adamas Pharmaceuticals, Inc. - CFO

* Ashleigh Barreto

Adamas Pharmaceuticals, Inc. - Director of Corporate Communications & IR

* Gregory T. Went

Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO

* Rajiv Patni

Adamas Pharmaceuticals, Inc. - Chief Medical Officer

* Richard A. King

Adamas Pharmaceuticals, Inc. - COO

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Conference Call Participants

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* Caroline H. Palomeque

NOBLE Capital Markets, Inc., Research Division - Senior Research Analyst of Biotechnology

* David A. Amsellem

Piper Jaffray Companies, Research Division - MD and Senior Research Analyst

* Irina Rivkind Koffler

Mizuho Securities USA LLC, Research Division - MD of Americas Research & Senior Analyst

* Joshua Elliott Schimmer

Evercore ISI, Research Division - Senior MD & Equity Analyst

* Kenneth Charles Cacciatore

Cowen and Company, LLC, Research Division - MD and Senior Research Analyst

* Serge D. Belanger

Needham & Company, LLC, Research Division - Senior Analyst

* Timothy Francis Lugo

William Blair & Company L.L.C., Research Division - Co-Group Head of Biopharma Equity Research

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Presentation

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Operator [1]

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Welcome to the Adamas Pharmaceuticals Third Quarter 2017 Financial Results and Corporate Update Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

I would now like to turn the call over to your host, Ashleigh Barreto, Director of Investor Relations and Corporate Communications at Adamas. Please go ahead.

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Ashleigh Barreto, Adamas Pharmaceuticals, Inc. - Director of Corporate Communications & IR [2]

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Thank you, operator, and good afternoon, everyone. Joining me on the call today are Dr. Greg Went, our Chairman and Chief Executive Officer; Alf Merriweather, our Chief Financial Officer; Richard King, our Chief Operating Officer; and Dr. Rajiv Patni, our Chief Medical Officer.

Before we begin, I'd like to remind everyone that the call will contain forward-looking statements, which are subject to risks and uncertainties. Any statements regarding future events, results or expectations are forward-looking statements. Please note that these statements -- these forward-looking statements reflect our opinions only as of the date of this call. We undertake no obligation to revise or update these forward-looking statements in light of new information or future events. Information concerning factors that could cause actual results to differ materially from those contained in or implied by forward-looking -- such forward-looking statements are discussed in greater detail in our most recent Form 10-Q and other SEC filings.

I'd now like to turn the call over to Greg.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [3]

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Thank you, Ashleigh, and good afternoon, everyone. Thank you for joining us today.

It's been a very eventful and rewarding quarter for Adamas as we continue on our mission to improve the lives of patients and their care partners suffering from neurological diseases. We believe that neurological diseases represent an increasing health care burden and cost driver in the U.S., and we are committed to bringing medicines to people impacted by these conditions. Our time-dependent biology approach is an idea whose time has come, with the potential for large and durable clinical benefits.

In this third quarter, we saw the FDA approval of GOCOVRI, the first and only medicine approved to treat dyskinesia in Parkinson's disease patients receiving levodopa-based therapies. This medicine represents the most important proof point to date of our time-dependent biology approach and a major advance in treatment.

Parkinson's disease, as the second largest neurodegenerative disease, is particularly burdensome and costly. In the U.S., medical and indirect costs for Parkinson's disease were estimated to be approximately $14 billion in 2014 and by 2020, costs are estimated to increase over $20 billion a year.

With that background, I am proud to report that GOCOVRI is now available for patients and their physicians through our distribution network with GOCOVRI Onboard. On this call today, Richard will provide an update on how we're preparing for the full commercial launch of this innovative product in January 2018.

Also in the quarter, we announced top line Phase Ib data from our ADS-4101 lacosamide program. ADS-4101 is in development for the treatment of partial-onset seizures in patients with epilepsy. Consistent with our approach, we have understood the timing patterns of the disease and drug activity and are advancing a medicine that allows the drug concentration to reach over twofold during the daytime when seizures tend to occur, which we believe could generate increased efficacy without compromising tolerability. We expect to meet with the FDA in 2018 to discuss the potential Phase III program.

In addition, we continue to execute on our plans for taking ADS-5102 forward into Phase III for multiple sclerosis walking, where there are currently only one available drug, which is believed to be effective in only a subset of MS patients. We look forward to initiating that Phase III program in the first quarter of 2018.

Finally, we are ready to tackle new patient needs with now proven approach. The time is now, and we are just embarking on the most rewarding phase of our mission.

With that, I'd like to turn the call over to Alf to review our financials.

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Alfred G. Merriweather, Adamas Pharmaceuticals, Inc. - CFO [4]

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Thanks, Greg. For the full financial results for the quarter, I'd like to direct you to the press release and Form 10-Q that were filed today. Let me make a couple comments about revenue expectations.

Remember that our strategy is to make GOCOVRI available to physicians and patients in need during the fourth quarter prior to full commercialization in January.

As Greg mentioned, GOCOVRI is in our distribution channel, and we have received and processed our first prescriptions. To be clear, however, we do not expect the revenues in the fourth quarter to be significant. The fourth quarter is about gearing up all aspects of our commercial infrastructure in preparation for launch with the deployment of our sales team in January. And these activities are progressing well.

As a reminder, we're not giving revenue guidance for 2018, but for the 2018 revenue and expense framework that we provided at Investor Day, I refer you to the slides on our website.

Finally, moving to our cash position, we completed the quarter with $130.7 million in cash, cash equivalents and investments. In addition, we expect to receive in the fourth quarter the remaining $65 million in funding from HealthCare Royalty Partners as part of our $100 million royalty-backed financing.

We announced last week that we had received a letter from the office of orphan drug products recognizing the orphan drug exclusivity that we earned upon approval of recovery in August. And the FDA has also updated its orphan drug database. We will receive the funding following the listing of GOCOVRI's orphan drug exclusivity in the Orange Book, which we happen to happen shortly. This will provide approximately $195 million in cash resources on a pro forma basis to fund the company as we prepare for full commercialization in January.

With these funds, we believe we will be sufficiently capitalized to launch and commercialize GOCOVRI, complete the Phase III clinical studies of ADS-5102 in multiple sclerosis walking and initiate a Phase III study of ADS-4101 in patients with epilepsy.

I'll now turn the call over to Richard, who will discuss progress towards the January launch of GOCOVRI.

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [5]

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Thanks, Alf. As Greg mentioned at the beginning of the call, we believe GOCOVRI is a major advance to people with Parkinson's disease, their care partners and for physicians trying to manage their patient's dyskinesia. Dyskinesia represents a turning point for people in their Parkinson's disease journey. Social withdrawal, depression, pain, risk of injury, poor quality of life and increased care burden are all challenges borne by these patients and their care partners.

Dyskinesia is a consequence of levodopa-based therapy, the gold standard medicine used to treat the symptoms of Parkinson's disease and is characterized by involuntary movements during waking hours that are nonrhythmic, purposeless and unpredictable. These movements are distinct from tremors with Parkinson's disease and affect approximately 150,000 to 200,000 people in the U.S.

Prior to GOCOVRI, people with Parkinson's disease taking levodopa-based therapy and their physicians faced the challenge when treating Parkinson's disease. As treating the off symptoms of rigidity and stiffness associated with Parkinson's requires an increase in levodopa dose, but that in turn can lead to dyskinesia. Having a choice of either being dyskinetic or being off is a poor choice for anyone to have to make.

To address this challenge, physicians have employed 3 alternative, but unsatisfactory strategies. They can reduce or split the dose of levodopa, the most common strategy, but of course, places the patient at the risk of being off. Another alternative has been to add amantadine IR, but both physicians and patients have been frustrated with the lack of efficacy, sleep disorder challenges and lack of durability of effect from this option. There is also an invasive surgical procedure, deep brain simulation, which involves the insertion of electrodes into the brain, but dyskinesia can still occur after surgery.

With the approval of GOCOVRI, Parkinson's disease patients now have an FDA-approved medicine, clinically proven, specifically to treat their dyskinesia. GOCOVRI not only significantly reduces dyskinesia by about 30% compared to placebo, it also reduces off time by about 45% and increases functional time by about 4 hours a day, as measured by on time without troublesome dyskinesia. This means that for the first time, physicians treating Parkinson's patients don't have to choose between managing dyskinesia and treating off symptoms.

Reacting to this product profile, presented in market research, physicians reported they would use GOCOVRI in a little over half of their dyskinesia patients. They specify that they would use it in place of all 3 of the unsatisfactory dyskinesia management strategies that they currently use as well as in patients who are currently not being treated at all for the dyskinesia.

With this strong interest from physicians in GOCOVRI identified, let me now turn to the progress we have made in preparing for commercial launch since our last call.

Our sales, marketing, market access and commercial operations teams are all now in place. Since the summer, we've been working with an outstanding senior leadership professional, Dean Hart, who's been providing leadership support to us in establishing our sales organization. Historically, Dean was responsible for establishing and running Eisai, USA's sales organization, where he launched Aricept for Alzheimer's into the neurology market. In addition, he also led Takeda Pharmaceuticals, North American sales organization for many years, building that team from several hundred to several thousand professionals.

More recently, he's been running a consulting practice focused on optimizing sales organization performance, which is how we initially engaged him. Dean has recently agreed to join Adamas as Senior Vice President of Sales, a decision which finalizes the leadership team for the commercial organization, and one which I and the entire management team at Adamas are thrilled with.

You will recall that immediately following approval, we hired, with the help of Dean, 6 outstanding regional business directors. Since that time, we've conducted a recruitment campaign to hire our 59 neurology account specialists. We were able to attract and phone screen over 1,600 highly qualified applicants. And we have now filled almost all of the 59 positions with extraordinarily talented people, averaging 17 years of pharma industry experience, 9 years of neurology experience and with more than 75% of the appointed neurology account specialists having specific movement disorder experience. We plan to have everyone onboard for disease state and product training in early December and plan to fully launch GOCOVRI in January 2018.

We have also begun outreach to payers and have scheduled clinical presentations with 7 out of the top 10 payers in the country for later this year. The payers are particularly interested in GOCOVRI as a first in indication medicine for dyskinesia patients, who they recognize are in need. We anticipate broad payer coverage for GOCOVRI that will grow over the course of 2018.

We are committed to ensuring access to GOCOVRI for people with Parkinson's disease who have dyskinesia. To that end, we have launched GOCOVRI Onboard, a patient support service to provide benefit verification, reimbursement and financial support as well as product information for our patient population.

GOCOVRI Onboard will be administered through a single specialty pharmacy point of care to provide dedicated support to our patients in need. Although we are not yet promoting GOCOVRI to physicians, we have received our first scripts, which we have processed through our distribution network and we're very pleased with the way that the fulfillment and distribution channels are working.

Finally, a quick word on manufacturing. I'm happy to say that we have enough drug and a finished drug in our supply chain to satisfy our anticipated demand well into 2019.

With that, let me hand it over to Rajiv.

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Rajiv Patni, Adamas Pharmaceuticals, Inc. - Chief Medical Officer [6]

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Thanks, Richard, and good afternoon. On the approval call August 2017, I spent time reviewing GOCOVRI's newly approved prescribing information. Today, I will provide some additional context and will then provide an overview of our recently completed and upcoming medical conference presentations for the remainder of 2017.

Since the approval, we have received numerous questions about GOCOVRI and about how it is differentiated from existing treatment strategies for dyskinesia, including the use of amantadine immediate release.

Some have commented that GOCOVRI is simply a long-acting amantadine. This is not the case.

First, we did not extend the half-life of amantadine in the creation of GOCOVRI. As indicated in the labels, the half-life for both GOCOVRI and amantadine immediate release is approximately 16 hours. What we discovered is that the CNS-related adverse reactions are associated with how quickly amantadine concentrations initially rise in the blood and the time of day amantadine immediate release is taken. This limits the unit dose to 100 milligrams and the typical total daily dose to only 200 milligrams. Knowing this, we employed extended-release technology to deliberately slow the initial rise in amantadine concentration. Coupled with bedtime administration, GOCOVRI was designed to achieve high sustained concentrations of amantadine from awakening and throughout the day, when dyskinesia symptoms frequently occur.

We confirmed the efficacy, safety and durability of the 340 milligram amantadine hydrochloride once daily dose in the Phase III program. As you recall, 340 milligrams of amantadine hydrochloride corresponds to 274 milligrams of amantadine.

And second, based on our Phase III data, GOCOVRI can be used in a broad Parkinson's disease population with dyskinesia and is appropriate for all patients, irrespective of dyskinesia severity or dyskinesia duration.

As part of our launch effort, we are deploying a 6-person medical science liaison team to educate the movement disorder neurology community on the role of glutamate and the mechanism of motor complications, the temporal pattern of the disease as well as the totality of the GOCOVRI data. We are very excited about the caliber of this team. They are all highly qualified with many years of industry MSL experience in the CNS and movement disorder space.

Now onto the poster presentations. At the recent annual meeting of the American Neurological Association, we presented additional data on the treatment effect of GOCOVRI on a percentage basis.

As you'll recall, the placebo-corrected treatment effect of GOCOVRI on the Unified Dyskinesia Rating Scale total score was approximately 30%. This large treatment effect is now further corroborated by the cumulative response curve on the percentage basis, which indicates that approximately 40% of GOCOVRI-treated patients experienced at least a 50% reduction in the Unified Dyskinesia Rating Scale total score.

At the Society for Neuroscience meeting later this month, we have one poster where we will present the amantadine EC50 data in animal models of dyskinesia. The EC50 is the concentration of amantadine needed to reduce dyskinesia by 50%.

Finally, at the American Epilepsy Society meeting in early December, we have 2 posters on ADS-4101. Our high dose once nightly lacosamide investigational product. In these posters, we will present the single dose and multiple-dose studies in healthy volunteers.

In the third poster, we will present preclinical data that further supports our discovery of the time dependence of lacosamide, namely that the rate of initial rise in lacosamide concentrations contribute to CNS adverse reactions.

With that, I will hand the call back over to Greg.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [7]

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Thanks, Rajiv. What Rajiv has just outlined, in addition to the approval of GOCOVRI, is further evidence that Adamas has created a scientific foundation and a resulting discovery engine built upon our understanding of time-dependent biology.

With the upcoming commercial launch of GOCOVRI, we are fulfilling our corporate strategy of building a multiproduct company that discovers, develops and commercialize medicines to treat chronic neurological disorders.

At Adamas, we always start with the end in mind, which is helping patients in need. For that reason, we strive to deliver clinically-differentiated medicines that provide large and durable clinical effects to improve the lives of people suffering from CNS disorders. These are large costly problems that need solving. We will continue to apply our knowledge and understanding of time-dependent biology to this end. We are very excited about moving forward with commercialization of GOCOVRI and having it realize its potential as a new medicine for physicians, and a valuable treatment for patients in need.

We look forward to keeping you updated on our progress as we continue to deliver on our commitments to patients and their care partners.

With that, I would like to open up the call for questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Ken Cacciatore from Cowen and Company.

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Kenneth Charles Cacciatore, Cowen and Company, LLC, Research Division - MD and Senior Research Analyst [2]

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Just a couple questions around managed care. It sounds like and maybe I took the notes down that you have meetings set up with 7 out of the top 10 or maybe you've had meetings. I just didn't catch that. And the follow-on to that would be, can you give us a sense of how those kind of conversations are progressing, maybe a little bit of context? And then also the product is available. Sounds like you are getting some scripts. Can you just talk about a general sense of the clinician awareness even ahead of your formal introduction early next year?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [3]

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Ken, it's Greg. Thank you for that. I'm going to turn it over to Richard handle those commercial questions. Richard?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [4]

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Sure. So I said that meetings were scheduled. So I'm going to defer on the sense of color about those clinical meetings. Obviously, what we're doing in the initial instance is, initial introductory phase through our grouping that we've retained, [banking] to communicate with the payers about the availability of GOCOVRI. Those initial meetings are going well and, as I say, we're coming up to the point where we'll have some feedback from the first clinical meetings. In terms of your second question, which was awareness related, the awareness of GOCOVRI is actually -- you can split it into 2 areas actually, you can split it into an unaided awareness and then a prompted or aided awareness. In terms of unaided awareness, it's still relatively low of the brand GOCOVRI. It's in the sort of 10%, maybe up as high as 20% range. But unaided awareness is actually relatively high. People are aware of the fact that there is a product that's been approved to treat dyskinesias in Parkinson's and when they are asked do you know about a product called GOCOVRI, they'll come back and say, in the majority, yes, I'm aware of that product. So prompted awareness is reasonably high. Unaided awareness is still relatively low. And that's inevitable given that we haven't deployed a sales force at this stage to communicate detail about the brand.

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Operator [5]

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And our next question comes from the line of Josh Schimmer from Evercore ISI.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [6]

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First, a quick one on GOCOVRI. Will you be allowing release of the prescription data to IMS?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [7]

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A short answer on that is, no.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [8]

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Not be releasing it, okay. And then...

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [9]

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So, Josh, we will be reporting on a quarterly basis on our calls.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [10]

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Okay. But we won't be able to follow script data.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [11]

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Correct.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [12]

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Okay. For 4101, is there data that correlates lacosamide PK levels to seizure activity in individual patients? I know you had showed that for GOCOVRI and concentration effect correlation. Do you have something similar for lacosamide?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [13]

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Josh, I'll hand it over to Rajiv. But if you refer back to our Investor Day presentation, the data from the UCB program was presented that showed in a analysis of the population that in fact, that dose response exists. Rajiv, any?

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Rajiv Patni, Adamas Pharmaceuticals, Inc. - Chief Medical Officer [14]

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No. It's exactly that, Greg. We presented those data from the UCB program where there was evidence that as the concentration increased, there was a larger effect on the frequency of seizure reduction.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [15]

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Okay. I think what the 10-Q filing says you plan to meet with the FDA post Phase II in 2018, is there a Phase II trial planned for 4101? Or what -- maybe you can talk to that next step before you get to the FDA.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [16]

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We're preparing for an end of Phase II meeting right now, Josh, that will occur in early 2018. And upon that meeting, we'll have a clear sense of what the final program design is that we'll take forward for Phase III.

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Joshua Elliott Schimmer, Evercore ISI, Research Division - Senior MD & Equity Analyst [17]

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So to be clear, the healthy volunteer data is going to count as the Phase II component?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [18]

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To be clear, we have sufficient data to move from the healthy volunteer data into Phase III in our view right now. Phase II is obviously hard to get a handle on dose response relationships. There was no substantial evidence to base anything on with amantadine hydrochloride in a dyskinetic population, which is why we had to do a full Phase II dose response with GOCOVRI. In this case, our view is there's adequate PK/PD data to proceed and are preparing for that end of Phase II meeting, as we speak.

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Operator [19]

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And our next question comes from the line of David Amsellem from Piper Jaffray.

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David A. Amsellem, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [20]

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Just a couple. So first on GOCOVRI. Can you talk about what you think will be the steady-state gross to net? And has your expectation changed at all since your Analyst Day, given that you embarked on conversation with payers? My understanding is the product won't be heavily contracted. So just give us a sense of how you expect that to play out? And then, secondly, in MS gait, you talked about -- you alluded to a competitor, AMPYRA, working in a subset of patients. I wanted to get your thoughts preliminarily at least on positioning of GOCOVRI versus AMPYRA, at least in the context of the proof of concept data that you've already presented?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [21]

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Alf, why don't you tackle this?

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Alfred G. Merriweather, Adamas Pharmaceuticals, Inc. - CFO [22]

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Yes. With regard to gross to net, first of all, nothing has changed since the Investor Day presentation to affect our comments there. And you may remember, we suggested that for this kind of product at this stage, we threw out 25% to 35% as kind of a reasonable bracket for planning purposes. We don't have any additional information at this point of -- to really form a more robust answer. And that will clearly take some time over the course of 2018 to evolve. So as and when things evolve over the course of 2018, if there is something more specific to say, we'll comment on it. But I think for the time being, that was the framework that we suggested investors focus on.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [23]

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With regard to the second question, David, with -- on the MS, it is true there is a product approved that works in a subpopulation. In fact, the product -- program design was based upon that subpopulation response. Our expectation from our Phase IIa data and our understanding of the mechanism of action of amantadine in this indication strongly suggests that we'll have a broader response across all MS patients. And so in a market where you'll have generic AMPYRA present, I think, the -- what will make ADS-5102/GOCOVRI exciting in this population is its breadth of response, its ability to improve a wide number of walking dimensions both from AMPYRA responders and nonresponders. So that's kind of the business case. Rajiv, anything to add on that?

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Rajiv Patni, Adamas Pharmaceuticals, Inc. - Chief Medical Officer [24]

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Well, a comment from our Phase IIa study is, to further expand on Greg's point is, when we looked at the effect of ADS-5102, GOCOVRI versus placebo, we saw approximately in our 4-week study, a 17% placebo corrected difference in walking speed and that's in the overall study population. And that just goes back to why we believe that ADS-5102 will have an effect in a broad MS population based on that analysis, which we aim to confirm in Phase III.

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Operator [25]

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And our next question comes from the line of Tim Lugo from William Blair.

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Timothy Francis Lugo, William Blair & Company L.L.C., Research Division - Co-Group Head of Biopharma Equity Research [26]

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Can you talk about your interactions and maybe some of the work your MSLs have had with the patient assistance programs focused on Parkinson's patients? Do you have an idea of how many patients might be in these programs? And then also I've heard some interest from neurologists who specialize in other movement disorders, like ataxias. Do you have any plans for studying GOCOVRI in other movement disorders?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [27]

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Tim, let me take the second half first. As you know, amantadine, the molecule, in its immediate release form has been studied in a whole host of populations through investigator studies over the years. Ataxia, being one of the more interesting and compelling ones, acute traumatic brain injury, but there are a host of others that range from mood to hyperkinetic disorders to hypokinetic disorders. And beyond multiple sclerosis walking, we continue to assess. We are going to be interacting with the medical community now that GOCOVRI is approved to get ideas and insights about directions we could head. So we're very excited -- exciting to embark on this next stage of the journey. With regards to patient assistance programs, I'm not sure how they're coupled to the MSLs, but let me let Richard describe what we're doing for patients who are in need of assistance.

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [28]

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Yes. So I think there's a -- I'll take it at a kind of broad level first and maybe this is where you are headed, Tim. But there's some broad feedback from the marketplace that these patient assistance programs that gain access to drug and support patients in getting access to drug, can work well. But they can often be frustrating both at the physician level and potentially sometimes at the patient level. So that is a -- certainly a lead for us in designing our program through a single specialty pharmacy, where the interaction is singular and uniform for both patients and physicians as well as for payers, by the way, and in terms of the management of reimbursement support for patients. And also in terms of then the follow-on distribution of product to the patient themselves, that also acts as a -- we've designed it to be a single point of interaction, rather than potentially multiple points of interaction for the patient. We've also designed the treatment form, which the physician uses in lieu of a prescription to establish the ability for GOCOVRI Onboard to support patient reimbursement, seeking for on behalf of patients, as a single page form. It's easy to fill in, and we've taken a lot of input there from physicians to make sure that, that is a simple-to-use form. So I think we've designed this patient interaction, this patient assistance program well to meet the needs of both physicians and patients. And I hope that, that's responsive to the question that you raised.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [29]

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Tim, was that what you were going for?

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Timothy Francis Lugo, William Blair & Company L.L.C., Research Division - Co-Group Head of Biopharma Equity Research [30]

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Yes. No, that's definitely clarifying. I guess, for these first scripts that are coming through that -- -- are those going through GOCOVRI Onboard? Or are those just maybe physicians who have awareness of the product and writing their own scripts independently. And are you hearing any feedback whether those scripts are going through reimbursement and -- or being rejected by payers or...

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [31]

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Yes. So I can certainly answer the first part, which is physicians are writing GOCOVRI. Sometimes they're writing them on a prescription pad. It's going to a retail pharmacy and we're picking them up and converting them to support through GOCOVRI Onboard, it's the only -- through our specialty pharmacy is the only mechanism to gain access to GOCOVRI. It's not available through a retail pharmacy chain, for example. The -- so we are seeing prescriptions come in initially through retail. There's a need out there for GOCOVRI and make their way to our specialty pharmacy. We're also seeing that physicians are aware of GOCOVRI.com and they can use GOCOVRI.com to access our treatment form, which gives very clear instructions as to where it needs to go to in order to initiate the reimbursement support process for patients. And we're seeing both of those aspects and, at this stage, it's still early days. We've only had GOCOVRI available for a couple of weeks right now, but so far, we're managing them through the process of reimbursement support, I think, efficiently and well.

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Operator [32]

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And our next question comes from the line of Irina Koffler from Mizuho.

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Irina Rivkind Koffler, Mizuho Securities USA LLC, Research Division - MD of Americas Research & Senior Analyst [33]

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Can you talk about samples? Are you guys sampling? And if so, are they monthly samples or weekly samples? And then the second question I had was on the R&D expense this quarter. At the Analyst Day, you had guided to $21 million to $23 million for 2017, but it looks like we're going to run over that just based on what you reported for this quarter. So was there any accelerated work that you put forward that necessitated the spend?

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [34]

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Thanks, Irina. Richard?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [35]

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So let me deal with the sampling issue. The short answer is no, we'll not be sampling. What we do have is a QuickStart Program that assists patients as they work through reimbursement issues and that will provide access to drug free of charge for a period while those reimbursement issues are resolved. So that's fundamentally in lieu of a sampling program.

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Alfred G. Merriweather, Adamas Pharmaceuticals, Inc. - CFO [36]

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And with regard to the R&D spend, Irina, yes, we probably are running a little bit ahead of that. There's no specific big acceleration alike, but we are probably running a bit ahead of the numbers we gave you [in] September.

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Irina Rivkind Koffler, Mizuho Securities USA LLC, Research Division - MD of Americas Research & Senior Analyst [37]

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Okay. And can I just clarify about the treatment form being used in lieu of the prescription? Is that an electronic form to help with e-prescribing? Or is it something that's just faxed in?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [38]

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It's not an electronic form, no. It still took to format something that will go up with all of the different electronic systems out there. It is a PDF form that is populatable with the bulk of the information, which generally would apply to a physician's practice as a prefilled document. And then it just requires additional patient information and dosing information to be completed and some signatures. So it's an easy-to-use form. The fact of the matter is, it's a single page form, which was always our desire. It's a very easy-to-use form by physicians.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [39]

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And, Irina, it's Greg. We're just not there yet universally, but by the selection that we've made of a single specialty pharmacy partner, which is an affiliate of Walgreens, we feel like we're going to be able to get there quickly, which is actually important to us as we move forward here and make GOCOVRI and our other products available to patients.

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Operator [40]

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And our next question comes from the line of Serge Belanger from Needham.

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Serge D. Belanger, Needham & Company, LLC, Research Division - Senior Analyst [41]

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Just a couple -- pair of questions for GOCOVRI. It sounds like you've started meeting with some of the payers, and I assume these are commercial plans. What are your expectations to be on formulary with these commercial plans by January for the launch? And then any update on the Medicare bidding process?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [42]

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Okay. So, firstly, I mean, most payers now both -- adjudicate both Medicare and commercial plans. It's just different parts of their business. So when we meet with a payer, we're meeting with them both on behalf of both their commercial and their Medicare plans. In terms of the commercial arena, though, and adoption to formulary, typically that process is a 6- to 9-month review process. So my guess is come January, we'll still be very much in needing to go through supporting medical necessity for patient gaining reimbursement support through that mechanism. It's a very well tried and trusted mechanism, which is -- you just need to navigate it appropriately and we think we're able to do that through GOCOVRI Onboard. So we're expecting probably the majority of formulary decisions are going to occur 6 to 9 months post our, sort of, initial intro to the market. That's probably sometime around the middle of 2018. On the Medicare side of things, folks who have a Part D plan are supposed to submit their 2009 formularies to CMS in April 2018. And once they've made a decision on -- including a product for 2019 formulary, we would expect to have this implemented in 2018 as early as possible since they are, obviously, moving towards that end point. And the reality is, as well, even if a plan misses the April 18, 2019, formulary submission date, they will be able to add GOCOVRI to their formulary in the event, anytime, during the course of the year. So we are targeting that April 2018 date to get the majority of plans, including GOCOVRI onto the 2019 formulary submissions. And we would anticipate the majority of those will start to adjudicate Part D requests for reimbursement alongside of that 2019 formulary, fairly quickly after that April date.

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Serge D. Belanger, Needham & Company, LLC, Research Division - Senior Analyst [43]

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Okay. And then have your marketing materials been approved thus far? And will they be approved by the launch in January? And, I guess, Rajiv hinted that there was still a misunderstanding in the market that GOCOVRI is not an extended-release amantadine. Do you feel this could be adequately addressed in your marketing materials or other publications?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [44]

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So I'm not going to comment on the kind of approval process for the materials. What I will say is that the physician experience of amantadine IR is in general that it lacks the designed efficacy to manage patients' dyskinesias, but it's inconvenient to use because it's not effective in the morning hours, but it cannot be dosed after a certain time in the day due to significant sleep-related issues and it doesn't have durability in usage. Against that, there's plenty of data with our product in our label to support the fact that it's very effective, that it's manageable. It gives patients early-morning coverage of dyskinesia. Because it's dosed at night, the sleep-related side effects are minimized and it certainly has durability based on long-term data. So I feel comfortable and confident that, that's enough of a clinical comparison that we can substantiate in the minds of physicians. I don't know if you want to comment any further, Rajiv?

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Rajiv Patni, Adamas Pharmaceuticals, Inc. - Chief Medical Officer [45]

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The only thing I would add is from our publication side, we are very focused on ensuring that when GOCOVRI is discussed in our publications and our posters for conferences, we're very clear to what I said in our prepared comments about how we used extended-release technology.

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Operator [46]

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And our next question comes from the line of Caroline Palomeque from Noble Lifetime Partners.

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Caroline H. Palomeque, NOBLE Capital Markets, Inc., Research Division - Senior Research Analyst of Biotechnology [47]

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So, I guess, this question is for Richard as well. So when you discussed the potential adoption of GOCOVRI, which you mentioned was about 50% with physicians, is this a reflection of the patient population that would need the drug? Or were there any particular concerns or thoughts that physicians had?

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Richard A. King, Adamas Pharmaceuticals, Inc. - COO [48]

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So, in general, it is a reflection of the population that needs the drug. This dyskinesia population is a challenging population to manage, as I said previously. The terrible choice that physicians have to make between having their patients be off by underdosing levodopa or having them be dyskinetic by overdosing levodopa is a terrible dilemma both for the physician as well for the patient. And they really don't have a tool that they can use that adequately addresses that. GOCOVRI is the first time they've actually got a purposeful, meaningful tool to do it. The only patient population that, I think, within the dyskinesia population that is probably a limitation is a truly renally compromised patient that would be contraindicated. And if they have severe cognitive impairment as well, there would be some concern. But other than that, there's a broad utility for GOCOVRI in this population.

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Operator [49]

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This concludes today's Q&A session. I would now like to turn the call back over to Dr. Went for closing remarks.

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Gregory T. Went, Adamas Pharmaceuticals, Inc. - Co-Founder, Chairman & CEO [50]

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Thank you. Listen, appreciate the time everyone has spent with us today. We look forward to interacting with you over the couple -- next couple of months and updating you on our progress as we continue the work here behind the scenes and then the formal introduction of GOCOVRI to the community in January. Thank you very much.

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Operator [51]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.