Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Q3 2023 Earnings Call Transcript
Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) Q3 2023 Earnings Call Transcript November 2, 2023
Intra-Cellular Therapies, Inc. beats earnings expectations. Reported EPS is $-0.25, expectations were $-0.57.
Operator: Thank you for standing by, and welcome to the Intra-Cellular Therapies 3Q 2023 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 call is being recorded. I would now like to turn the call over to your host Dr. Juan Sanchez, Head of Investor Relations at ITCI. Please go ahead, sir.
Juan Sanchez: Good morning, and thank you all for being here. Joining me on the call today 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. As a reminder, during today’s call, we will be making certain forward-looking statements. 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 might 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, and the company disclaims any obligations to update such statements. I will now turn the call over to Sharon. Sharon?
Sharon Mates: Thanks, Juan. Good morning, everyone. I’m pleased to report on our continued progress and the strong third quarter results we delivered. The positive trajectory for CAPLYTA we have seen over the past few quarters continues bolstered by positive reports from both prescriber and patients. In the third quarter, CAPLYTA total prescriptions increased by 71% compared to third quarter of 2022. Third quarter total revenues increased to $126.2 million. CAPLYTA net sales increased to $125.8 million, a 75% growth versus the same period in 2022. Demand for CAPLYTA has been strong, and we expect to sustain forward momentum. As such, we are increasing our CAPLYTA net product sales guidance for the full year 2023 to $460 million to $470 million from our previous guidance of $445 million to $465 million.
As CAPLYTA use continues to expand and patients and physicians continue to gain positive experience, we remain confident in CAPLYTA’s growth potential. Looking ahead strong fundamentals fuel our confidence about CAPLYTA’s growth prospect, including its clinical profile, its broad label in schizophrenia and bipolar depression, as well as our proven commercial strategy. Both existing and new prescribers help to drive CAPLYTA’s growth. Since CAPLYTA’s launch in bipolar depression, we’ve built a solid base of consistent prescribers, allowing us to help an increasing number of patients. Mark will share more details about our commercial performance. In addition to maximizing the existing market opportunity for CAPLYTA, our strategy includes expanding CAPLYTA beyond its current indications.
To this end, we continue to generate clinical data to further establish lumateperone as an important treatment choice across broad patient populations with mood disorders. This is exemplified by our programs including our pivotal program for adjunctive treatment of MDD and our recently announced positive results from Study 403 in two important mood disorder patient populations those with MDD and mixed features, and those with bipolar depression on mixed features. These results are one of many clear signs of CAPLYTA’s potential across broad patient populations with mood disorders. We have submitted our meeting request to the FDA to discuss the results from Study 403. We expect this meeting to occur later this year or in Q1 2024. We have begun to share this important data at medical conferences including Psych Congress and the European College of Neuropsychopharmacology.
We will continue to present our findings at other major medical meetings. We will also be submitting a manuscript for publication soon, which will help to further educate prescribers about CAPLYTA and mixed features. Let’s now turn to lumateperone adjunctive MDD clinical program. We continue to make progress in our Phase 3 efficacy Studies 501, 502 and 505, as well as Study 503, our open-label safety study. We are on track to report pipeline results from Study 501 and Study 502 in the first and second quarter of 2024, respectively. Subject to those results, we expect to file a supplemental new drug application with the FDA in the second half of 2024. Turning to our lumateperone long acting injectable program, our goal is to develop long acting injectable formulations that are effective, safe, and well tolerated with treatment durations of one month or longer.
We conducted a Phase 1 single ascending dose study with our initial LAI formulation. This study evaluated the pharmacokinetic, safety and tolerability of lumateperone LAI in patients with stable symptoms of schizophrenia and lumateperone was safe and generally well tolerated. We have been evaluating several additional LAI formulations with treatment durations of one month and longer. We have completed all non-clinical studies to support the initiation of Phase 1 study with four formulations. We expect to commence clinical conduct in this study in the first half of 2024. Given the encouraging tolerability data to date with oral lumateperone, we believe that an LAI option may provide a convenient treatment for appropriate patients. I’ll now share updates across the remainder of our pipeline.
Starting with ITI-1284. ITI-1284 is a deuterated form of lumateperone, a new chemical entity formulated as an oral disintegrating tablet for sublingual administration. We completed the toxicology studies requested by the FDA and have initiated our phase programs evaluating ITI-1284 in generalized anxiety disorder or GAD in psychosis, in Alzheimer’s disease, and agitation in Alzheimer’s disease. We expect clinical conduct in these ITI-1284 Phase 2 studies to begin in the first half 2024. Our first study will be an adjunctive study to SSRIs and SNRIs approved for GAD. This is a condition with around 10 million diagnosed adults in the U.S. with half of these patients not responding adequately to initial therapy. There are currently no approved antipsychotics for GAD, and only a minority of these patients are being treated off-label with antipsychotics.
We see a major opportunity for an effective, safe and well tolerated treatment for these patients. Our phosphodiesterase inhibitor clinical programs continue to advance. We are enrolling patients with Parkinson’s disease in our lenrispodun Phase 2 clinical trial, which will evaluate improvements in motor symptoms, changes in cognition and inflammatory biomarkers. We expect to complete enrollment for this study in late 2024 with top line results anticipated in the first half of 2025. ITI-1020 is our highly selective PDE1 inhibitor being developed for oncology indications. Our Phase 1 single ascending dose study is ongoing, evaluating the pharmacokinetics, safety and tolerability of different doses in healthy volunteers. Next, our novel product candidate, ITI-333 is being developed to the treatment of opioid use disorder and pain, a multiple ascending dose study and a PET study looking at receptor occupancy are both currently ongoing.
We anticipate completing our MAD study in 2024 in the doses tested to date, ITI-333 is safe and generally well tolerated. Last quarter, we introduced ITI-1500, our new program focused on the development of novel non-hallucinogenic psychedelics. This program is focused on treating mood, anxiety and other neuropsychiatric disorders, notably without the liabilities of known psychedelics, such as hallucinogenic potentials and risk for cardiac valvular pathologies. Our lead product candidate in this program, ITI-1549, continues to advance through IND-enabling studies and is expected to enter human testing in late 2024 or early 2025. We plan to present data on this preclinical program at a scientific conference later this year. In summary, we are excited about the progress being made across our company.
We are confident about CAPLYTA’s commercial growth prospect and its potential to expand across different mood disorders. We are proud to continue building our company with our very novel pipeline. All of our efforts underscore our continuous commitment to transforming the lives of patients with complex neurologic and neuropsychiatric diseases through effective, safe and tolerable treatments. We are in a strong financial position, ending the third quarter with approximately $495 million in cash, cash equivalents and investment securities, and no debt. We look forward continuing to share our progress with you. I’ll now turn the call over to Mark. Mark?
Mark Neumann: Thanks, Sharon. Good morning, everyone. It’s really great to be with you today. CAPLYTA continues to establish itself as a major therapeutic option in the treatment of bipolar depression and schizophrenia. In the third quarter, our commercial team drove strong growth, increasing total prescription 71% compared to the same quarter last year and 7% sequentially compared to Q2 of this year. We are pleased with CAPLYTA’s prescription growth this quarter considering the impact of the typical summer seasonality that saw the overall oral antipsychotic market register zero growth for the quarter. Looking more broadly, in the first nine months of 2023, CAPLYTA total prescriptions grew 100% compared to the same nine months in 2022.
A growing number of physicians and patients continue to try CAPLYTA and experience positive results. During the quarter, we continued to increase both the breadth of our prescriber base and their depth of prescribing. As of the end of the third quarter, there were over 32,000 cumulative prescribers of CAPLYTA since launch. Importantly, we are also increasing their depth of prescribing every quarter, as prescribers see the benefits that CAPLYTA provides for their patients. As Sharon mentioned, this strong permanence in Q3 has led us to increase both the top end and bottom end of our full year CAPLYTA revenue guidance range to $460 million to $470 million. And this strong performance also adds to our confidence that we will see continued long-term growth.
On the market access front, we continue to benefit from broad coverage across all three payer channels. Our market access for CAPLYTA covers approximately 90% of commercially-insured lives and greater than 98% of the Medicare Part D and Medicaid lives. We also recently improved the quality of our coverage. Toward the end of the third quarter, two of the largest Medicare Part D plans changed their utilization criteria for CAPLYTA from a prior authorization and two step edit to unrestricted status, boosting CAPLYTA to 50% unrestricted coverage overall in the Medicare Part D channel similar to established products in this category. Our salesforce and broader commercial team continues to execute extremely well, maintaining high productivity with our 43,000 HCP targets and complementing that effort with well attended peer to peer medical education programs, comprehensive digital promotion and on the consumer side our lead in the light direct-to-consumer national advertising campaign continues to raise awareness of CAPLYTA among prescribers and to prompt more patients to ask their physicians about CAPLYTA.
Our brand messaging of proven efficacy and FDA approved indications across schizophrenia and both bipolar I and bipolar II depression, favorable safety and tolerability profile and a single once daily dose continues to resonate well in the marketplace. CAPLYTA has an extremely compelling product profile and we are well positioned for consistent growth in coming years. I look forward to continuing to update you on the successful launch of CAPLYTA. Now I’ll pass the call over to Larry to walk through our financial performance. Larry?
Larry Hineline: Thank you, Mark. I will provide highlights of our third quarter financial results. Total revenues were $126.2 million for the third quarter of 2023, compared to $71.9 million for the same period in 2022. Demand for CAPLYTA remains strong. Net product sales of CAPLYTA were $125.8 million in the third quarter of 2023, compared to $71.9 million for the same period in 2022, representing a year-over-year increase of 75%. In the third quarter, CAPLYTA net sales increased 14% sequentially over the second quarter of 2023. Our gross to net percentage during the quarter remained in the low 30s as previously guided. We expect our gross-to-net percentage to increase modestly, but remain in the low 30s for the fourth quarter of 2023.
During the quarter, days on hand of CAPLYTA, at the wholesale level remained stable, maintaining channel inventory at adequate levels to meet growing demand. CAPLYTA’s strong uptake continues. And as previously mentioned in this call, we are raising our CAPLYTA full year 2023 net product sales guidance range to $460 million to $470 million. Selling, general and administrative expenses were $105.2 million for the third quarter of 2023, compared to $88.4 million for the same period in 2022. Research and development expenses for the third quarter of 2023 were $41.6 million compared to $33.3 million for the same period in 2022. For 2023, we are lowering our estimated full year SG&A expense range to $405 million to $420 million, and we’re lowering our estimated full year R&D expense range to $185 million to $200 million.
Our financial position remains strong. Cash, cash equivalents investment securities, and restricted cash totaled $494.8 million at September 30, 2023. This concludes our prepared remarks. Operator, please open the line for questions.
See also 10 Best Social Media Platforms For eCommerce and 30 Most Interesting Cities in America.
To continue reading the Q&A session, please click here.
