ACADIA Pharmaceuticals Inc. (ACAD) Q1 2015 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals' First Quarter 2015 Financial Results Conference Call. My name is Destiny, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to Lisa Barthelemy, Director of Investor Relations at ACADIA. Please proceed.

Thank you. Good afternoon, and welcome to ACADIA's First Quarter 2015 Financial Results Conference Call. This call is being recorded, and an archived copy will be available on our website at www.acadia-pharm.com through May 21, 2015. Joining me on the call today from ACADIA are Steve Davis, our Interim Chief Executive Officer; Dr. Roger Mills, our Executive Vice President of Development and Chief Medical Officer; and Terry Moore, our Executive Vice President and Chief Commercial Officer. We will begin our call today with some introductory remarks and brief comments regarding our recently announced financial results. Following this, we will provide you with an update on our NUPLAZID development program and commercial activities, and we will then open the floor to your questions. Before we proceed, I would first like to remind you that during our call today, we will be making a number of forward-looking statements, including statements regarding our research and development programs and plans; our commercialization plans; our manufacturing quality systems and our strategy, including the timing, results or implications of clinical trials or other development efforts; the benefits or advantages to be derived from future approval of and the commercial potential for our product candidates in each case, including NUPLAZID; the timing, content or likelihood of regulatory meetings, filings or approvals; future development, launch and commercialization of NUPLAZID; the expansion of pimavanserin into additional indication; and our future expenses, cash position and usage. During our call today, we may use words such as anticipate, believe, could, expect, intend, may, plan, potential, predict, project, should or the negative of those terms and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. These forward-looking statements are based on current information, assumptions and expectations that are inherently 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 factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of today's date. ACADIA disclaims any obligation to update these forward-looking statements. I'd like to now turn the call over to Steve, our Interim Chief Executive Officer.

Thank you, Lisa, and good afternoon. Let me take this opportunity first to thank all of you for joining us on today's conference call. Today, my prepared remarks are directed at 3 things: First, I'll address our progress regarding the preparation of manufacturing of quality systems; second, I'll address our priorities for the year, including an update on achievements to date on the medical, clinical and commercial fronts in preparation for our planned launch of NUPLAZID in the U.S; and last, I'll offer comments on our financial results for the first quarter. As noted in the release, we continue to make important progress in advancing our NUPLAZID program for Parkinson's disease psychosis, or PDP, toward registration and in preparation for the planned launch of NUPLAZID in the U.S. I'm pleased to report that we remain on track with completing the preparation of manufacturing quality systems to support commercial manufacturing and supply and as previously indicated, we plan to submit our NUPLAZID New Drug Application, or NDA, to the FDA in the second half of 2015. Importantly, the NDA is complete. The NDA encompasses the body of scientific evidence generated from the NUPLAZID development program and of course, serves as the principal documentation for FDA review. Roger and his team have worked diligently on the NDA and plan to submit it once we've completed the work on manufacturing quality systems. Of course, as a reminder to everyone on this call, NUPLAZID has been designated as a breakthrough therapy by the FDA for the treatment of PDP and has the potential to be the first drug approved in the United States for this disorder. In addition to having that potential to be the first drug approved for PDP, I'd also like to just underscore that NUPLAZID, or pimavanserin as it's known generically, has the potential to change the way we treat psychosis across a broad number of disorders. As a selective 5-HT2A inverse agonist, pimavanserin works in a very different way than any antipsychotic approved today. It has the potential, and again I'll underscore the word potential, to be the kind of transformative advancement we saw over 20 years ago with the introduction of Prozac, which demonstrated a significantly improved tolerability and side effect profile over pre-existing drugs due to its improved selectivity. Today, we treat psychosis in a way that's not too dissimilar to the way depression was treated prior to the advent of Prozac. Psychosis is treated with nonselective drugs that carry significant safety and side effect burden, including significant sedation and the potential for weight gain and metabolic syndrome. With its selective 5-HT2A mechanism, we believe pimavanserin represents an opportunity to improve on this significant side effect burden in today's antipsychotics, and again, with the potential to change the way we treat psychosis. Turning to our priorities for the year and our operations to date. Our #1 priority in 2015 is to complete our ongoing work preparing for an NDA review and inspections to then submit our NUPLAZID NDA for PDP and continue our PDP market launch preparations. Our second priority is to continue to advance our ongoing study in Alzheimer's disease psychosis, or ADP, where we plan to complete enrollment around the end of this year. As is the case in PDP, there's no drug currently approved in the U.S. for the treatment of ADP and current antipsychotics are used off-label to treat ADP despite the black box warnings of increased risks of mortality and morbidity in elderly patients with dementia. Next on our priority list, we plan to continue moving forward with studies to explore -- further explore the potential benefits of pimavanserin in additional areas. On this front, we have undertaken a significant life cycle management assessment to prioritize both our short- and long-term clinical activities. In this arena, we plan to commence a clinical study to further explore the sleep benefits previously observed in pimavanserin. And in keeping with our highest priority of being very focused on PDP, we plan to commence this study in the second half following the submission of our PDP NDA. In addition, and as previously stated, we plan to commence a study in schizophrenia around the end of 2015. With respect to work we've been doing on the medical and commercial fronts, we also have made significant strides in our foundational medical education efforts. This includes expansion of our medical affairs team and initiation of an important disease awareness campaign designed to increase dialogue in the medical community regarding the needs of patients suffering from PDP. In January of this year, we launched the PDP disease awareness initiative, using a multichannel approach to better serve the educational needs of health care professionals. In addition to the launch of the pdpsychosis.com website, in April, we exhibited at the American Academy of Neurology conference held in Washington, D.C. There, utilizing an innovative virtual reality technology, several hundred meeting participants who visited our booth had the opportunity to experience a 3D simulation of what it's like for a patient to have hallucinations associated with Parkinson's disease. This experience was very well-received and provided the health care professionals with greater insight into how alarming and disabling these symptoms can be and in particular, why it's important to uncover the symptoms early. Also at the same meeting, we conducted an industry-sponsored symposium with leading scientific experts in the field of PDP. These experts highlighted that: One, symptoms of PDP are common in Parkinson's disease but may go unreported by patients and caregivers; second, they noted that Parkinson's disease psychosis, if not controlled in the outpatient setting, has been shown to be the leading cause of nursing home admission. They also noted that uncovering PDP symptoms is key because they can quickly worsen and decrease the quality of life for both the patient and caregiver. Later this month, we will have a presence at the American Psychiatric Association Annual Meeting, which will be held in Toronto; and we will also have a presence at the International Movement Disorder Society Annual Meeting, which will be held here in San Diego in June. In addition to these advancements on the medical front, Terry and his team has continued the planned build out of our commercial team, including the hiring of our regional sales management team in the first quarter, and we remain on track with our short- and long-term plans there. Terry will offer additional details in his remarks. These medical and commercial activities highlight the strong efforts that we're putting behind addressing the very significant unmet medical need represented by PDP and the preparations for the planned launch of NUPLAZID. Now let's turn to our financial results. Our financial results for the first quarter aligned with our strategy, which as previously communicated is to build a leading U.S. specialty CNS franchise using pimavanserin as the foundation. Turning to the numbers. Total operating expenses for the first quarter of 2015 were $40.6 million. R&D expenses for the quarter increased to $16.3 million from $11.7 million for the comparable quarter of 2014. This was due primarily to 3 factors: First, increased cost related to our planned NDA submission for NUPLAZID and associated preparations for review and registration of drug candidate; second, costs associated with our ongoing Phase II study in Alzheimer's disease psychosis together with our ongoing open-label safety extension study; and finally, R&D-related stock-based compensation expense increased by over $1 million for the first quarter of 2015 versus the first quarter of 2014. G&A expenses increased to $24.3 million for the first quarter from $6.3 million for the comparable quarter of 2014. This reflected our continued investment in commercial preparations for the planned U.S. launch of NUPLAZID, but also importantly and as noted in the release, G&A expenses for the just-completed quarter include $12.2 million in stock-based compensation expense, of which $9 million is related to the revaluation of our former CEO's outstanding options upon his retirement in March of 2015. Now let's turn to our cash position. We ended the quarter with $297.9 million in cash and investment securities. We expect our cash used in operations to increase in future periods as we execute on our current business plan as described earlier on this call. Under our current plan, we anticipate our cash resources will be sufficient to fund our operations, at least into the second half of 2016, and should fund us through an approval and U.S. launch of NUPLAZID for the treatment of PDP. At this point, I'll turn the call over to Roger, who will provide you with an update on our NUPLAZID program.

Thank you, Steve, and good afternoon. Let me first start with an update on our NUPLAZID program in PDP, and then I will discuss additional studies, either ongoing or in the planning phase. As Steve mentioned earlier, we are making important progress in advancing our NUPLAZID program towards registration. Our NDA is complete, and our team is focused on completing the preparation of manufacturing quality systems to support commercial manufacturing and supply. We're working on ensuring that we have established, tested and evaluated the appropriate manufacturing and supply systems to prepare for FDA review and commercial launch. Again, we plan to submit our NUPLAZID NDA to the FDA in the second half of this year. During the first quarter, we also continued to conduct our ongoing Phase III PDP open-label safety extension trial referred to as the -015 Study. Analysis of data from the open-label safety extension studies has shown that NUPLAZID has a favorable long-term safety and tolerability profile observed to date in patients with PDP. As Steve noted, during the first quarter, we also made good progress in expanding our medical affairs group with high-caliber people and building on our disease awareness educational efforts. On average, our team has more than 14 years of experience in medical affairs. Let's now turn to our program with pimavanserin for Alzheimer's disease psychosis or ADP. We continue to advance enrollment in our Phase II -019 Study, a randomized, double-blind, placebo-controlled trial, designed to examine the efficacy and safety of pimavanserin to about 200 patients with ADP. In addition to assessing the potential benefits of pimavanserin to treat psychosis, we also will be assessing other key efficacy endpoints, including agitation/aggression, sleep/nighttime behavior, as well as additional exploratory endpoints, including the cognitive status of patients. The design of this trial will allow us to explore the potential benefits of pimavanserin in this patient population and will inform us on an optimal design for future studies in this program. We plan to complete enrollment in the ADP study around the end of this year. In addition to ADP, we are planning additional studies in our pimavanserin life cycle management program. Another area that represents a large unmet medical need, and a tremendous commercial opportunity for pimavanserin, is schizophrenia. A large study conducted by the National Institute of Mental Health, which was published in the New England Journal of Medicine, found that 74% of patients with schizophrenia taking typical or atypical antipsychotics discontinue treatment within 18 months because of side effects or lack of efficacy. There's a large unmet medical need for new therapies that have improved side effect and efficacy profiles. We believe pimavanserin's selective blockade of the 5-HT2A receptor may enable it to be used as a monotherapy for the maintenance of schizophrenia that is a period of time between acute psychotic episodes. Pimavanserin avoids interaction with dopamine and other off-target receptors, which may be associated with many of the side effects caused by the existing antipsychotic drugs. We're currently in the planning stage of this Phase II study and plan to initiate it around the end of the year. Now let me turn to sleep disorders in Parkinson's patients. As a way of background, sleep disorders are a major and frequent problem for patients with neurological disorders. In fact, they're a major cause of disability in Parkinson's disease and are associated with other symptoms, including falls, psychosis, dementia and depression, which have a substantial impact on quality of life. Studies suggest that nighttime sleep disturbances occur in almost 70% of Parkinson's disease patients. In clinical studies, we observed non-sedating sleep-related benefits of pimavanserin, including a significant improvement in both nighttime sleep and daytime wakefulness in patients with PDP compared to placebo in our pivotal Phase III -020 Study. We are planning a Phase II study to further explore the potential sleep benefits of pimavanserin in Parkinson's disease patients and plan to initiate it following the submission of our NDA. We will provide further information on the trial design at initiation of the study. Let me now turn the call over to Terry, who will discuss our commercial activities.

Thanks, Roger, and good afternoon, everyone. During the first quarter of 2015, the commercial team made important progress in preparing NUPLAZID for launch in the United States. As mentioned in our last quarterly call, we brought our senior commercial team responsible for sales, marketing, managed markets and sales operations onboard well over a year ago to ensure the product and the organization was well-prepared and poised for the successful launch of NUPLAZID. I'm pleased to report that much of the planning and preparation conducted in 2014 is now in the stages of execution, and we have continued to appropriately staff our commercial organization at a pace that is appropriate and commensurate with an NDA submission in the second half of 2015. In March of this year, we hired and brought on board our field management team consisting of regional sales management and managed market account teams. Our senior field leaders did an excellent job of bringing on experienced and highly-qualified commercial talent. Our highly experienced and seasoned management team has an average of 18 years in the industry and over 10 years of management experience. Since coming on board in March, our field management team has gone through extensive training in Parkinson's disease and PDP in addition to compliant policy training. Over the next several months, they will be introducing themselves to and interacting with Parkinson's disease experts in their regions. In addition to this, the sales managers will be laying the foundation for the screening and recruitment of top sales representatives in anticipation of the acceptance of the NDA filing and the potential approval of NUPLAZID in the U.S. In parallel with bringing our sales management team on board, we are continuing to establish the appropriate data management systems that are needed to successfully run a commercial organization, as well as establishing the key channels of distribution that will be needed at time of launch for all key segments of our business. During 2014, I shared with you that we conducted extensive market research in the U.S. with over 800 PDP-treating neurologists, psychiatrists and long-term care clinicians. During the first quarter of this year, we initiated and have now completed the first stages of our EU market opportunity assessment. To date, this work has confirmed the high unmet medical need that exists for PDP patients in these EU markets, and reinforce that prescribers are in need of safe and effective alternatives to the off-label use of antipsychotics that they often resort to currently. So moving forward, we're continuing to execute on preparations necessary to ensure that we'll have a successful commercial launch and we're excited about the year ahead. And with that, I'll turn the call back over to Steve.

Great. Thanks a lot, Terry. In wrapping up our prepared remarks, let me just say that I'm very pleased with the progress we are making across the organization in advancing our NUPLAZID program for registration and preparing for the commercial launch in the U.S. I think it goes without saying that 2015 is an important year for ACADIA, with the planned NDA submission expected in the second half of this year, and the continued advancement of Phase II ADP study and the planned initiation of new studies with pimavanserin in schizophrenia and sleep disturbances, and preparations, of course, for the commercial launch. We're also preparing, I should note, for a submission of NUPLAZID in Europe, which we expect to complete 6 to 9 months following the NDA submission. So before we proceed to Q&A, I'd also just like to note the shared enthusiasm and purpose that runs through the ACADIA organization in terms of the work we're doing to help patients with PDP. I know it sounds kind of trite, but we really are energized about the potential of NUPLAZID to make a meaningful impact on the lives of these patients and, of course, look forward to advancing it to registration and to the market. And with that, I'll turn it back over to the operator and we'll proceed with Q&A.

Operator come are you there?

[Operator Instructions] And our first question comes from Alan Carr of Needham. Mark Joseph Vignola - Needham & Company, LLC, Research Division: It's actually Mark on for Alan. I wonder if I could sort of ask a question that if there were any positives over the last couple of months. With the delay, is there anything that you guys were able to get ahead on or make more progress on than you would have since before the delay? Is it looking sort of a silver lining?

Let me just first say we -- just to state the obvious, we don't like having these kinds of delays. Look, the reality is we continue to move forward on every front and, quite frankly, one of the -- I guess you could call it a silver lining, perhaps, but one of the things that we've been -- we've just received very strong response from the medical community on is the disease awareness campaign that we've launched. So it certainly gives us an opportunity to lay an even stronger foundation with the medical community and enhance our -- the dialogue that we're having around this disorder.

And our next question comes from Charles Duncan of Piper Jaffray.

Steve, good to hear the progress being made. I just -- I wanted to ask you a question regarding the NDA timing. Second half seems like 6 months. I'm wondering if you can tighten that up, or perhaps help us understand a little bit, is this Gantt chart-type work or is there an experiment being run, not necessarily clinical, i.e. can you speak to the execution of risk on that second half timing?

Yes, so let me just start by saying there's -- I'll zero in on one specific thing you mentioned and then I'll speak more broadly to your question. There's no additional clinical work being done or anything of that sort. There is certainly a Gantt chart element to this. It's important work to be done. It is -- we -- I think we can say today now that we're in the project and moving along very well, that we know what needs to be done. We have a very, very detailed plan, and I think we've got the right team onboard. In terms of the range of submission, I don't plan to narrow that range. We gave the range for I think a very good reason, and that is there are a certain elements to this that we've described before that are -- that rely on the schedules of -- that we don't control, people -- our third-party suppliers. Now let me just emphasize, we have I think a very, very good relationship with each of them. They're working very productively with us. I don't have any concerns about their ability to deliver. But there's just a certain element of the work that is -- you can't predict, and we know that. We knew it when we gave the guidance, and that's the reason we gave the range. So look, the last thing that we will do before we submit is we will have successfully completed the mock inspections that all companies do just before they submit. As Roger mentioned, the NDA is ready to submit. We could push the button on it tomorrow. So once we've done that, once we've completed that work and we feel very comfortable and confident about our readiness for inspections, we'll submit, and we'll announce it at that point in time. So unfortunately, I don't anticipate narrowing that range.

That makes sense to me, Steve. Definitely, I like the under-promise, over-deliver approach. And who knows because the breakthrough therapy designation, the review could go fast in my view. I guess maybe as a follow-up to that, have you had any recent interactions with the FDA? And do you anticipate any before you make the filing?

The answer is -- let me answer the question a little bit indirectly and then I'll answer it directly. So we're at a point in the process where interactions with the FDA -- I just want to manage your expectations as well as everyone on this call. We're not going to give a blow-by-blow account of discussion we have with the FDA. What I can tell you at this point is we haven't had interactions with the FDA around anything other than managing their expectations of when they can see this submission. As we submit and get into the review cycle, we're not going to be able to comment about the interactions that we have with the FDA, I just think it would be imprudent to do that. But at this point, I can tell you there's -- again, just to be crystal clear, there's no issues that FDA has raised. There's actually been no interactions with them or any topic at this point, other than when we plan to submit.

Okay, that's helpful. And last question is perhaps for Terry regarding that demonstration project at the Annual Meeting -- Neurology Meeting. I guess I'm wondering if you could characterize the level of awareness among the clinical community. Was it discovery or was it, yes, we know this, it's symptoms that we're aware of and it really drives home the need for -- profound need for this therapy?

It's a good question. There's a couple of things that popped into my head when you asked the question. When people went through this, even though they are aware of the symptoms, I think actually experiencing it brought it to a new level in terms of concern and an urgency to treat, and that's really the kind of the feedback that we got there. People were literally jerking away from what they thought was an hallucination while standing in the booth. I mean, it just showed them what patients really go through and there was a lot of talk afterwards. And in fact, I can tell you, other physicians brought other physicians over to the booth so that they could experience what it was like for patients to have hallucinations and to suffer the way they're suffering. So I would tell you that it was more than confirmational. I think it heightened their awareness and concern and the urgency to appropriately treat these patients.

And our next question comes from Ritu Baral of Cowen.

The Phase II trials in Parkinson's sleep and schizophrenia that you mentioned, I know you don't have specific details of trial design. But just overall for Phase II trial in these indications, what sort of either duration of treatment and time to enroll would we be talking about? Would it be possible to get Phase II data from either of these trials in 2016?

Roger is going to address this.

Thanks. So Ritu, the 2 studies are -- will be 2 different -- obviously 2 very different studies. We have already got clinical data demonstrating that the pimavanserin has a beneficial effect on nighttime sleep as expected from the mechanism. Both in a volunteer study, but also importantly, in disease patients with psychosis and PD. The sleep study that we're proposing will be -- is a Phase II, but it essentially, both these -- or the PD studies are obviously patient reported outcomes there and the studies weren't designed primarily for sleep. The -- given the sleep issues with patients with PD and especially with psychosis on top of that, we felt important to measures sleep in those studies. But there's no entry criteria, there are no entry criteria to enrich the population to have sleep disorders. So what we really want to focus on now is to do a more objective study. So this will be in a sleep lab using color sonography to really better define and characterize the sleep improvements that we see. And this will be a population of Parkinson's disease, so not just Parkinson's psychosis but importantly, just Parkinson's disease as such, all patients will have reported sleep problems. So it will be a relatively shorter study and we'll give details as we start that study. But it will be a sleep lab study. The schizophrenia is a longer study, undoubtedly, and a larger study. So this is a treatment study of patients with schizophrenia. The aim of the study is to look at the maintenance phase that patients go through and really, I think is the area of the highest unmet medical need. All the current antipsychotics were approved looking at acute schizophrenic episodes and therefore, multiple drugs have shown benefit in that area. But they're not really the ideal drugs -- far from ideal drugs, in fact, to manage patients on a long-term basis. They -- both the dopaminergic activity, which is part of the efficacy, but comes at a large price at these patients over the longer term. And then the off-target receptor activity, histaminergic, the andrenergic, muscarinic effects have many unwanted long-term deleterious effects on the population leading to poor compliance and a fairly hefty, in many cases, side-effect burden. These patients don't comply very well with their meds or they have to rotate through multiple meds to try and balance efficacy versus the weight, and in some cases, given the weight gain, true weight burden of those side effects. Pimavanserin has got a really wonderful tolerability profile, and we've shown efficacy in schizophrenia in a previous study. So it really would be -- it's an exciting opportunity to really change the face of the long-term management of these patients and really give them a different outlook in terms of what's in front of them when they're managing their schizophrenia. So it will be a longer study because its maintenance and we'll, again, give details as we get closer. But it'll be a larger study and a longer study, but a very important one. And not only will it change the -- potentially the benefit and the outlook of patients, but also is a very large commercial opportunity.

Maybe just to echo -- I'm sorry, just really quickly, just to -- I would just echo Roger's comments and I would just say, clearly, with the sleep study being more on the shorter end as these kinds of studies go and schizophrenia on the longer end, much better opportunity, much better likelihood that we could have sleep results in 2016 in schizophrenia.

Got it. And a follow-up on your ADP study that's ongoing. How has trial conduct and compliance been in that study? And are the patient baseline characteristics coming in as you had anticipated?

Yes, we've -- certainly, the quality of the patients coming through is in line with the intended protocol and the objective of the study. It's a very similar population in so many ways to the PDP population, these are later-stage Alzheimer's patients. In terms -- the only probably real difference between them is they're a slightly older population. But looking at them and the characteristics of them in that, they're very similar to the PDP patients, with similar challenges. So it's -- it really is a similar population and we're conducting the study under the same IND as PDP. So from the FDA's perspective, it's a very similar population, too, so the safety characteristics carryover from one population to the other.

Were there any entry criteria or screening criteria for either the agitation subscale, the NPI or any of the NPI or cognitive scales?

No entry criteria. The study, obviously, designed for psychosis, so the key entry criteria are focused on that. However, I think as you are alluding to, that the broader behavioral aspects of Alzheimer's disease are obviously fairly common in patients who have got psychosis. The sort of difference, if anything, between PDP and ADP is really related to the degree of cognitive impairment, and the more demented the patients become, the more prominent delusions really form a component of the overall psychosis. And clearly with patients who've got paranoid delusions, they're more likely to be agitated than patients who don't. If you remember back from the PDP study, our -020 Study, we did show a statistical significant improvement in delusions as well as hallucinations, so it really is a very similar population in that respect. So but yes, there will be a -- certainly, a burden of agitation and broader behavioral issues in these patients as well as their psychosis. And we capture that because we're actually measuring -- we're actually sort of assessing the total NPI.

Our next question comes from Paul Matteis from Leerink.

I had a couple of questions, one is on schizophrenia. Just wondering how much -- whether or not starting schizophrenia study -- whether or not a potential meeting with the FDA is rate limiting. How much sign-off do you need from the agency on whether or not pimavanserin could be approved just in the maintenance setting? Is there any precedent for that?

Roger will take that question.

So there isn't a precedent for just approving for drug in the maintenance setting. And right now, I'm not really going to into detail on our thoughts around the interactions with the agency. I'm not expecting the -- given the profile of pimavanserin, given the both efficacy and also importantly the long-term safety, and given the high unmet medical need and the long-term management of these patients, I don't see -- I'm not anticipating that to be a major issue with the agency. With respect to approval in schizophrenia, obviously, that will involve discussions with FDA, but that will take place in due course.

Okay, got it. That's helpful. And then just one on the ADP study. So it's encouraging to hear that the patient population you're enrolling in that trial is relatively similar to the pivotal PDP study. I'm wondering how the hallucinations and delusions domain of the NPI-NH are both similar and I guess, at a high level, are similar and different to the SAPS-PD in your opinion? How well suited do you think that end point is to capture psychosis symptoms in ADP relative to the measure that you used in your successful pivotal study in Parkinson's?

So the -- I'll just say, the NPI-NH is a validated scale in Alzheimer's patients. It's been well validated and certainly captures the spectrum of the challenges these patients have. And relating it back to the PDP population, in fact, we used the NPI as a screening hurdle for patients coming into the PDP program. So it -- in a very similar way, it captures the psychosis in both the PDP as well as ADP.

Our next question comes from Cory Kasimov of JPMorgan. Cory William Kasimov - JP Morgan Chase & Co, Research Division: I guess first one is for Terry. I wanted to ask about one of the potential future nuances for that commercial marketplace. Given that there's no diagnostic code for PDP, does that potentially complicate matters in terms of getting reimbursement for docs? And does it require any extra work on the doctors' end?

Well, as you know, right now, physicians are using off-label atypical antipsychotics and are successfully getting those medications through. So from an historical perspective, we don't see any problem. Actually I think having an approved indication will make it easier for us moving forward. Cory William Kasimov - JP Morgan Chase & Co, Research Division: Okay. And then the second question's on your EU regulatory strategy. So if the NDA for the U.S. -- the NDA itself is done, is it still necessary to file in Europe 6 to 9 months after the U.S.? Is there any particular reason why the gap can't be shortened?

Let me -- I'll try to address the question as specifically as I can. And by the way, let me just point out that we've said previously and it remains true today that we reserve the right to revisit that. It's possible that we may choose to submit in the EU earlier than our current plan of 6 to 9 months following the submission in the U.S. The factors that -- there are several factors that will feed into that, including the precise timing of submission within the U.S. And I don't want to get into a lot of the detail around that now, but I would simply say from a -- just a bandwidth and mechanical perspective, yes, we certainly could file sooner and we may, but there's -- there'll be some important considerations that will inform our view as to the optimal time to file.

And our next question comes from Bert Hazlett of Ladenburg. Robert Cummins Hazlett - Ladenburg Thalmann & Co. Inc., Research Division: I'll just follow-up on the EU discussion. Terry, if you could maybe characterize how you see the EU adoption for pimavanserin differing or being similar to the U.S.? Obviously, multiple states, but -- in the EU, but if you could characterize it broadly, maybe broad similarities and differences. And then could you confirm -- are you in partnership discussions in the EU? Have you commented on that recently? And then I have a financial question after that.

All right. Well, let me take the first and I'll toss the second one to Steve in terms of partnerships. But in the work that we've done, and we've done it in the big 5 countries, it's amazing how similar physicians feel about the unmet need and their frustrations in using atypical antipsychotics. Despite the fact that clozapine is approved as a second-line agent, what we found is that it is rarely used. And obviously, the safety concerns are the prominent reasons why. They appreciate the value and the differences in what we bring. I think the patient -- what we call the patient journey, how the patient goes through the health care transaction system differs by country, and those are things that we would have to take into consideration when thinking about the opportunity. And obviously, we haven't progressed far enough, but pricing will be something that will be of significance when assessing that market. But in terms of the patient and physicians and caregivers quite frankly, it's very, very similar. We found that just as in the U.S., physicians are frustrated and will resort to the use of Seroquel only when it's absolutely necessary and have shared with us that they're looking for something that will better suit their needs and is something that they could use earlier in the treatment paradigm. The second question, I'll give to Steve.

So in terms of partnering, I'm going to start with what you'd probably expect me to say, and that is we never comment on specific interactions that we have or aren't having with potential partners. What I can do is give you a little bit of color around kind of our thinking about that from a strategic perspective. And I guess I would start that part of the discussion just by reiterating that we've not made a determination where we will partner or when we will partner. We -- I think the -- I think it's highly likely that we probably will partner at least some countries outside of the U.S. We may partner all countries outside of the U.S. What I can tell you is we do have a very clear plan for the optimal timing that we believe -- an adoptable time range, I guess, I should say, for having those kinds of discussions and making those kinds of determinations. And I would just simply note that if we do partner pimavanserin outside of the U.S., I would just remind you that it's not a matter of just partnering PDP, right? You typically don't split indications. That's going to get extraordinarily complicated. It's been done unsuccessfully a number of times in the past. We don't plan to repeat that experience here. And so there's a number of factors that will feed into the precise timing of those discussions and our decisions around them, but I would simply say that we look at it holistically in terms of the program and the potential franchise, which covers multiple indications, not just as a potential PDP partnership. Robert Cummins Hazlett - Ladenburg Thalmann & Co. Inc., Research Division: Okay. And then with regard to the financials, R&D costs dropped quarter-over-quarter. How should we think about the trajectory throughout the year? Obviously, as you kick off Phase II later in the year for schizophrenia and the sleep disorders, or we should I think expect a bump maybe in the fourth quarter, but any additional clarity that you might be able to provide on the R&D line would be helpful.

Yes, there's probably not a lot of additional guidance we can give there at this point. You're right, you should expect cash used in operations as well as R&D expenses and G&A expenses to trend up throughout the year, with one exception, and that is obviously, in the first quarter, we had a very significant noncash charge relating to Uli Hacksell's retirement and so we wouldn't anticipate having that kind of expense recurring through the remainder of the year. But outside of that, if you look at the trend line that we would expect for G&A expenses or R&D expenses and then just cash used in operations, they will be trending up throughout the year.

And at this time, I'm showing no further questions. I'd like to turn the call back to Mr. Davis for closing remarks.

Thanks again to everyone for joining us on today's call and for your continued support. We look forward to updating you in the future on our ongoing progress.

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Everyone, have a great day.