Good day, ladies and gentlemen, and welcome to ACADIA Pharmaceuticals Third Quarter 2017 Financial Results Conference Call. My name is April, and I will be your coordinator for today. [Operation Instructions] I would now like to turn the presentation over to Lisa Barthelemy, Senior Director of Investor Relations at ACADIA. Please proceed.

Thank you, April. Good afternoon, and welcome to ACADIA's Third Quarter Financial Results Conference Call. This conference call is being recorded, and an archived copy will be available on our website at www.acadia-pharm.com through November 21, 2017. Joining me on the call today from ACADIA are Steve Davis, our President and Chief Executive Officer; Todd Young, our Executive Vice President and Chief Financial Officer; Michael Yang, our Executive Vice President and Chief Commercial Officer; and Dr. Serge Stankovic, our Executive Vice President and Head of Research and Development. 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 strategy, the timing, results or implications of clinical trials, other development efforts or regulatory approvals; the benefits or advantages to be derived from the future approval of, and the future development or commercialization of, our products and product candidates, in each case, including NUPLAZID or pimavanserin; and future commercial and financial results. 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'll now turn the call over to Steve Davis, our President and Chief Executive Officer.

Thank you, Lisa, and thanks to everyone for joining us on the call today. Today, I'll briefly discuss our quarterly performance and recent operational highlights. Following my remarks, Todd will review our third quarter financial results. Michael will then discuss our commercial progress and Serge will discuss recent important developments in R&D. We'll then open the call up for questions. NUPLAZID continues to deliver strong performance with quarter-over-quarter revenue growth of a 32% in the third quarter. The number of patients receiving NUPLAZID treatment continues to grow and based on these results, we are increasing our 2017 guidance for NUPLAZID net sales to be between $124 million and $127 million. On the commercial side, we are seeing important progress on multiple fronts. Access to NUPLAZID remains strong. The feedback from physicians, advocacy groups in the Parkinson's community and patients and caregivers continues to be very positive. We continue to make strong progress on our promotional efforts for NUPLAZID with increased brand awareness. We're working hard to increase the awareness of Parkinson's disease psychosis with patients and their caregivers and have important initiatives underway in this area. Michael will expand on this in his remarks. Additionally, we continue to expand our business in long-term care where a significant number of patients with Parkinson's disease psychosis reside. On the R&D side, we continue to advance our clinical development efforts with pimavanserin in multiple indications. We initiated our Phase III HARMONY Study in dementia-related psychosis or DRP in October. There are several important items to note here. First, we received Breakthrough Therapy Designation from the FDA for pimavanserin for the treatment of dementia-related psychosis. This is an important acknowledgment by the FDA of this serious medical condition for which no drug is currently approved, together with the potential for pimavanserin to address this need. The Breakthrough Designation was granted in large part based upon results of our Phase II-019 Study in Alzheimer's disease psychosis and our Phase III-020 Study in Parkinson's disease psychosis. This is the second breakthrough designation for pimavanserin. Second, we are pleased that the FDA has agreed to an efficient development path for this important program. Following an End-of-Phase II meeting with the FDA, we believe that robust positive results from one Phase III Study, together with supported data from prior studies with pimavanserin could serve as the basis of a supplementary New Drug Application. And third, we are excited about the relapse prevention study design that we are employing in HARMONY. It is a very powerful and efficient study design. These types of studies typically have a higher probability of success than acute studies. Serge will share more details about the design later on in the call as well as the recent presentation of our Phase II-019 Study at the Clinical Trials on Alzheimer's Disease or CTAD meeting in Boston. In summary, we had a strong quarter with continued excellent execution across the company. Let me now turn the call over to Todd, who will discuss our financials.

Thank you, Steve. Today, I'll discuss our Q3 financial results and provide net sales and expense guidance for the last quarter of the year. For the third quarter of 2017, we recorded $35.6 million of net sales, an increase of $8.7 million or 32% growth compared to the $26.9 million, a pro forma sell-in revenue recorded in Q2. Our gross-to-net in Q3 was approximately 12%. As a reminder, we transitioned the sell-in from sell-through for revenue recognition in Q2, and as a result, we recognize $3.6 million of previously deferred revenue as a one-time item last quarter. In today's press release, we have provided a table that presents our net sales for each quarter of 2017 on a comparable sell-in basis. From a cash flow perspective, cash used in operations was approximately $58 million for the third quarter. We ended the quarter with $366.6 million of cash and investment securities on our balance sheet. On the expense side of the P&L, total operating expenses, including cost of goods sold were $101.9 million. This amount includes $19.7 million of noncash stock-based compensation. Our R&D expense in Q3 increased to $36.4 million from $34.2 million in the second quarter of 2017. Our SG&A expense was $62.3 million in Q3 versus $61.5 million last quarter. As Steve noted, we expect 2017 full year net sales of $124 million to $127 million, which is an increase from the guidance provided last quarter of $105 million to $115 million. For Q4 expenses, we expect R&D to be in the mid-$40 million range and SG&A to be in the high-$60 million to low-$70 million range. As a reminder, all expenses provided in our press release and on the call today are U.S. GAAP amounts that include noncash stock-based compensation expense. And with that, I'll turn the call over to Michael.

Thanks, Todd. We're pleased with the strong growth of NUPLAZID in the third quarter. We continue to make significant strides in establishing NUPLAZID as a standard of care for PD psychosis. We are working closely with healthcare practitioners to identify appropriate new patients. At the same time, we are continuing to build disease awareness and brand engagement with patients and caregivers as well as optimizing our approach to ensure patient compliance. Let's start with our promotional efforts for NUPLAZID. I'm pleased to report that NUPLAZID is considered the first line choice for PD psychosis by 43% of movement disorder specialists which, as a reminder, is our most important physician segment. This represents a significant increase from prior ways of market research. Another important strategic objective for us is to the close the PD psychosis awareness gap. Although it's well accepted amongst physicians that Parkinson's is a chronic and progressive disorder in which symptoms such as psychosis, emerge over time, our research shows that patients and caregiver awareness of psychosis as a condition related this is a Parkinson's is actually quite low. We are executing a number of programs targeted at patients and our caregivers designed to aware -- raise awareness of hallucinations and delusions associated with Parkinson's. An important addition to our approach is the initiation of a national direct-to-consumer disease awareness campaign to further stimulate patient and caregiver conversations with their physicians about hallucinations and delusions associated with Parkinson's disease. This targeted campaign will be introduced by the end of this month with television commercials featured in programs commonly viewed by our patients and their caregivers. We've conducted extensive market research and believe this is the right approach to stimulate PD patients and their caregivers to discuss this condition with their Parkinson's specialists as a result of seeing the…

Thank you, Michael. This has been a very exciting time on the R&D front with the initiation of our Phase III HARMONY Study of pimavanserin in dementia-related psychosis and the receipt of Breakthrough Therapy Designation for this program. In addition to HARMONY, we continue to advance our pipeline in CNS areas of large unmet need with ongoing studies in schizophrenia inadequate response, schizophrenia negative symptoms and major depressive disorder. My comments today will focus on recently initiated Phase III HARMONY Study in dementia-related psychosis, and on the presentation of Study -019 data in AD psychosis at the CTAD meeting in Boston. I would like to start with a few important data findings directly relevant to the design of our Phase III HARMONY Study. Let me start with durability of pimavanserin effect. This is a very important consideration in our study design. We have seen consistency and durability of antipsychotic effect with pimavanserin in AD Psychosis. And for that matter, in PD psychosis as well. We see this in the shape of the curve in the pimavanserin previous group in the -019 Study. We also see it in Parkinson's patients, when we look at patients who rolled from our -020 Study into long-term extension study, and this is also consistent with the reports we're getting from physicians using pimavanserin in the real world setting. This, in contrast to marked variability and placebo response observed in Phase II Study -019 in AD psychosis. By the way, this variable placebo response may be attributed to the typical waxing and waning in severity of psychotic symptoms as shown in naturalistic studies of this disease. So as I'll discuss in greater detail in a moment, in the HARMONY Study, we are essentially contrasting two things. The durability of effect we've observed in patients on pimavanserin,…

Thanks much, Serge. In closing, we are very pleased with ACADIA's strong performance this quarter and our progress towards making NUPLAZID the standard of care for every patient with Parkinson's disease psychosis who would benefit from it. And with that, I'll turn the call back over to Lisa.

Thank you, Steve. At this point, we'll begin the Q&A portion of our call. April, please open the call for questions.

[Operator Instructions] And your first question comes from the line of Tazeen Ahmad. Please go ahead.

Serge, I just wanted to clarify things for the explanation again on the trial design for the pivotal going forward and what you learned from Phase II. Is there any reason in your mind to believe that pimavanserin has a lower chance of working in, let's say, Alzheimer's? Would there be agitation or psychosis patients relative to the other indications, albeit smaller indications, but indications that could potentially have more potential for benefit, just based on the results that you've seen so far? And then I have a couple of follow-ups.

Thanks, Tazeen, for the question. I just want to clarify what smaller indications, are you referring to your question…

Like say, for example, Lewy body dementia. I guess, based on the addressable population, that would be smaller in terms of number of patients. Is that right, relative to Alzheimer's?

Right, yes. Thank you. I understand. The last body of evidence in the scientific literature clearly points down that in terms of the psychotic symptoms and response to a treatment to psychotic symptoms, neurobiologic differences or underlying neuropathology between different dementia times -- types is not really meaningful for, as I said, a secondary symptom of a psychosis. And that is after all practically confirmed by the simple fact that currently, psychosis in all dementia are treated in the same way with atypical antipsychotics and there are no differences in response between different subtypes. So we do not, in short, expect any differences in response significantly between these different subtypes of dementia.

Okay. And then for the trial itself in the first 12 weeks where you'll effectively be screening patients. Can you just give us a little bit more detail? Are they going to be screened at 12 weeks or with frequent intervals in between?

Thank you for that question. I think it's important clarification. We will be evaluating patients throughout this period. In the first four weeks, physicians will have opportunity to actually adjust the dose on a basis of their clinical adjustment -- clinical judgment. Everybody will start with 34-milligram, but they will have opportunity to pull back to 20-milligrams if that's clinically warranted. Following those four weeks, everybody will maintain on the stable dose. They will be periodically evaluated. But very important fact that often gets overlooked is that we are looking in our criterions for randomization for a stable response. Meaning, that we will be evaluating patients at week 8 and week 12 and only patients that have a stable response and meet improvement criteria at both time points will be randomizing to the double-blind phase. I hope that clarifies a little bit your question.

Yes, that does. And then I guess, moving back to NUPLAZID results for the quarter. Maybe this is a good question for Michael. I did note that you took a price increase or ACADIA took a price increase. I'm just hoping to understand kind of what signals you look for in the environment for sales to make you comfortable that increasing the price doesn't potentially put you at risk of maybe slowing down the launch with insurance companies putting up barriers. Maybe you can give us a little bit of visibility on that.

Tazeen, this is Steve. I'll take a first crack at it and Michael feel free to jump in, if you like. I think the first point to make is that, in terms of pricing the drug, our objective is always to price the drug based upon the value that we're delivering. I think as we are now 1.5 years into launch, we have an even more tangible feel for the value we're delivering. And I would add to that, that throughout the preparations we did before the drug is approved and before the drug was launched, as well as throughout the course of commercialization that we've been through so far, payers get that. They understand the value of the drug. They understand there's nothing approved. They understand the potential for off-label use of atypical antipsychotics to interfere with the mode of therapy, they're very sedating and they get the picture. So I think we feel that the price is very appropriate at this point in time.

And so, I guess, that leads me to my next question is, as you try to gain traction into long-term care -- I'm sorry if I missed it, but did you say what percent of your sales are coming now from long-term care?

Long-term care as defined by VA, TRICARE and long-term care, 30%, Tazeen.

And do you expect that to keep increasing?

Well, we're still in the early innings as you know of our expansion with our sales force. They've only been in the market six months. We're very optimistic about the future growth opportunities in that channel. As we commented in past, this is a place where there's a lot of patients who are with Parkinson's who have psychosis. So yes, I'm anticipating that, that will be a very important channel for us in the future.

Okay. And then -- I'm sorry if I missed this. But what was your gross-to-net this quarter?

Yes. It was approximately 12%, Tazeen.

Your next question comes from the line of Charles Duncan.

So one question regarding commercial. And then one on development. The one on commercial is kind of a follow-up to one that was just asked. And that is that, Michael, I believe you said 30% of business, is that 30% of revenue, is it 30% of new patients? Just a little bit more clarity on that if you will.

Well, that's -- Charles, thanks for the question. That's 30% of revenue.

Okay, great. And then I think, Steve, you mention value that you've created and increasingly reimbursement authorities are really paying attention to that. What aspects of value are you keen on? Is it the new patient starts? Is it initial responses or is it durability of patients that have been on the drug?

Well, it's, frankly, all of the above that you've mentioned. I think the -- as we poll the medical community, we get very high satisfaction levels with the drug. It's clear that we're delivering a real benefit that physicians like and they appreciate. I don't want to make too much out of anecdotes, but I will tell you that we have had a number of patients who have gone home from nursing homes. They got on NUPLAZID, they went home for a visit and they didn't have to go back to the nursing center. So it's just an example of the kind of benefit that we can provide and we feel like we have -- across all fronts, very strong indicators of very high value.

That's pretty cool. If I could just ask a question also for Serge, in terms of development. Congrats on the Breakthrough Therapy Designation and neat risk reduced study design. But I'm wondering, as you consider the primary endpoint for time to relapse in the HARMONY Study, what are you assuming for the control arm? Could it be weeks or just a couple of weeks? And then how much do you think is needed to create real clinical value? What kind of change would you like to see out of that trial?

Thank you, Charles. A great question. First, let me say that time to relapse is a primary outcome in this study -- studies is a customary way of doing a primary analysis because it offer continuous variables and more variable and most power. However, in powering this study, because it's very difficult to predict how the Kaplan-Meier curve will look at the end. We powered this study on the proportion of relapses between the active treatment and drug over this period of 26 weeks of the follow-up. So you're assuming a certain number of relapses, total number and the certain difference. So based on the difference that we assume, we are calculating number of events that we need to do. Because that's the only way how we can actually determine when the trial is over and when is -- where we have sufficient power in this case, 90% power to detect the difference we are assuming. We assumed the difference we modeled based on the data in the similar relapse prevention trials in Alzheimer's disease psychosis for placebo data. And then we looked at our own data on the active treatment and assumed the difference -- that there's a standard a usual difference of -- between placebo and drug that is observed in all relapse prevention trial as it is considered meaningful. And that is usually not less than 20%. But we are not specifically sharing the -- our assumptions on the trial. I'm just giving this as an example.

That makes sense. Last question, on the effect size. You talked about a pretty robust effect size of almost 75% or 0.74 in the moderate to severe patients. I guess, when you look at the control arm in the previous study, it seems like that might -- must have been for the moderate to severe patient much less variable or less waxing and waning which kind of makes sense if you think about psychosis. But was that the case that you saw in that control arm?

What we saw and what is particularly impressive too, is that when we looked at the responder rates, and usual cut-offs for responder rates, 20%, 30% and 50% decrease on the scale, on the severity scale, what we saw going from overall population to the severe -- moderate to severe population, we saw tremendous increase in the percentage of responders. We are seeing 70% to 80% response rates even above 80%. So however, when we looked at the placebo group, we don't see that parallel increase. We are seeing somewhat a larger response, but a difference between two groups that is tremendous, about 35% to 40%-plus difference between treatment arms. It actually mostly comes from the increased response in the active arm, in the pimavanserin arm. So you are right. We are seeing little less. Although in general, in placebo group, you would see this waxing and waning.

And your next question comes from the line of Jason Butler.

Again, I'll add one commercial, one clinical. Just on the commercial and long-term care. Michael, can you just talk to the average amount of time or effort it's taking to get a new center to write a NUPLAZID prescription? And then if you could even talk in broad terms talk about what percentage or what proportion of long-term care facilities you've had contact with at this point?

Yes. Thanks for the question. It's a challenging thing to answer in regards to long-term care as a kind of a heterogenic channel. They're not very homogenous. And, therefore, when we expanded the sales force, that was recognized that we needed to get a tighter span of control and more local insights on impacting the facilities. Certainly, we're doing better at the more standardized larger facilities. We have good contracts with all the GPOs, and we're making strides every day, really, penetrating the channel in a better way. But it's very difficult. I wouldn't really want to quote on how long it takes. It's very variable. There's -- some of these are longer-term sell cycles and some of them are shorter-term sales cycles and a lot of it is predicated on access to physicians and facility dynamics. So I really wouldn't want to quote a standardized timeframe. Yes, and just in regards to the number, I mentioned earlier, we have -- we're growing. We had 25% quarter-over-quarter growth of the amount of long-term care pharmacies who are stocking or carrying NUPLAZID. Even that statistic is challenging in regards to one pharmacy may be supplying drug from multiple facilities. So even that is a difficult -- it's not one-for-one basis as you would say in a hospital. So -- but anyway, look, we're looking to penetrate and broaden and deepen our penetration of places carrying NUPLAZID. That's our objective in the coming months.

Great. And then for Serge. For the HARMONY trial and the Phase II ADP trial, can you just clarify for us how you defined moderate to severe psychosis severity in terms of the NPI psychosis scores? Just what the different thresholds you're using for the two studies are?

We -- obviously, in the ADP trial, we use NPI Nursing Home version for the qualification. And we assumed in that trial that the patient has to have a score of 3, either on hallucinations or delusions, or the combined score of 6. So we did not require -- I'm sorry, score of four or one or the other, or a combined score of 6. We did not incorporate any of the other requirements for severity, let's say, the global clinical assessment of severity of psychotic symptoms or other things. And the overall patient population that was qualified in that study was, I would say, mild to moderate with about 1/3 of the patients that fell into really category or more severe patients as we presented. In the HARMONY Study, we -- there is a whole list of requirements in terms of the severity that is described by the total score of SAPS hallucinations and delusions, than the global item on hallucinations, global item on delusions. As well as the clinical global impression of severity. And only that combination that clearly defines moderate and severe patients and exclude patients with mild symptoms of psychosis is what would qualify patients to enter the trial.

And your next question comes from the line of Cory Kasimov.

One commercial and one clinical one. So commercially, NUPLAZID for PDP. Your 4Q guidance implies good continued growth into the end of the year. I'm curious if you're expecting any sort of seasonality impact around the holidays?

Cory, we're -- we saw it last year, with some pull-through of scripts by individuals. Now with the change to the sell-in revenue recognition, it would be more in terms of inventory held by our distributors. And we saw a small amount of days on-hand grow, generally in line with demand, Q3 over Q2. But clearly, inventory stocking could affect us at the end of the year. We're generally assuming it will be pretty stable at the range they are holding today as at the end of Q3, going into Q4.

Okay, that's helpful. And then regarding HARMONY for the 12-week lead-in period. Can you talk about the response criteria for entering into the double-blind portion? And maybe what percentage of relevant high-risk patients from the Phase II Study would have qualified as a responder based on the Phase III criteria? I'm just kind of curious how different that might be.

Serge, do you want to take that?

Yes, absolutely. Thanks, Cory. We did model about our Parkinson's disease psychosis as well on Alzheimer's disease psychosis trial. And in order to assume a certain response over the 12-week period, we'd look particularly at the ADP data where we had a 12-week period responder. And applied -- it's very difficult to directly apply these criteria, but we did apply approximation of the criteria and we found that it would be -- we anticipated there will be certainly more than 60% of patients that would actually qualify for that. I mean, for the respond -- to the response that we have. Let me just make sure that there is no misunderstanding. In terms of the severity of symptoms that we are required, you know there was a 1/3 of the patients that had these moderate to severe symptoms. And the symptoms we are applying that would probably be about 1/2 of the patients that would qualify for HARMONY Study. So there are two elements to this question. One is how many patients would qualify and another is how many of those would actually qualify for randomization and be considered as a responders to treatment after 12-weeks.

And your next question comes from the line of Salveen Richter.

Just in regard to the HARMONY Study and the severity of these patients. If you look at ClinicalTrials.gov, I think you have an MMSE score of about 6 to 24, which would include mild patients. So are you going to exclude the mild portion of those patients? And also in the study, are you going to stratify by severity? I have a follow-up.

Serge?

Yes. One clarification, Mini-Mental Status Exam score is not a qualifying factor. We are measuring Mini-Mental Status Exam as an indicator of the cognitive abilities primarily from safety perspective to demonstrate, once again, as we demonstrated before, that there is no negative impact of pimavanserin treatment on a Mini-Mental Status Exam. Mini-Mental Status Exam is not a measure of psychotic symptoms, it is a measure of cognition. We are qualifying patients for our study on the severity of psychotic symptoms, which is determined with the SAPS-PD, scales for assessment of positive symptoms, hallucinations and delusions domain and clinical global impression here for psychotic symptoms.

Salveen, this is Steve. Thanks so much for the question because I've realized maybe we probably were not using the term precisely enough. When we talk about enrolling moderate to severe patients, we're talking about on psychosis, not moderate to mere -- not moderate to severe Alzheimer's patients. So thanks very much for the clarification.

To follow up, are you stratifying by severity here? And then just my follow-up question is around the pipeline read-outs we should be looking for in 2018. Are we going to get any depression data or schizophrenia data?

Serge?

Yes. Certification that we're doing in the trial is on a basis of dementia subtype, so that we assure a balanced randomization between these trials -- these different subtypes. In terms of the read-outs, we expect read-outs from the ongoing trial to start sometime in the mid- to second half of 2018 and then continue in to 2019. And the first trial, we expect the read-out will be our major depression trial.

And your next question comes from the line of Ritu Baral.

This is Alex on for Ritu. One question on HARMONY. What are your plans to engage EU regulators here? Have they provided any feedback, either on the relapse withdrawal trial design or the inclusion of the broader DRP indication?

Serge, do you want to take that?

Yes, absolutely. Are you referring to U.S. regulators, to FDA or ex-U. S?

Ex-U. S. regulators.

Okay. We are -- we plan to do that in the first half of next year, to approach the EMA and win the discussion through our scientific advice procedure to get the feedback on our program and their position on that.

Got it. And then one question on commercial. Have you guys seen any stocking ahead of the price increase that you took in October?

Alex, no, we did not give any headline up in front to the distributors or the specialty pharmacy. So no, there was nothing related to stocking with price.

And your next question comes from the line of Paul Matteis.

I was wondering if you could clarify a couple of quick commercial items. And then I just have one clinical question. On the gross-to-net, this is the second quarter where it's really improved substantially. I was wondering if you've gotten kind of better long-term visibility into the trajectory of gross-to-net? And then separately, how that could at all be influenced by the price increases that you've taken so far or might take in the future?

Sure. With respect to Q3, we're basically at the low -- for gross-to-net for us has given the distribution cost being relatively fixed. And obviously, as we get into Q4, the donut hole, which is the biggest variable liability in gross-to-net is less of a factor, just given where the price is relative to when a patient enters the donut hole on a bottle basis. So we're expecting again to be in the same general range here of 12% to 13% in Q4. The price, obviously, is a factor in totality only because of the donut hole which, as I mentioned, is the biggest liability, is a fixed dollar amount for each patient. So to the extent they have more dollars of drug from ACADIA or otherwise, we'll have a bigger drop through going forward. So again, Q1 will have the full reset. All of our patients that are on drug at the end of the year, who are Medicare Part D, will start over. So this 12%, 13% range certainly will not occur in Q1, despite a higher price for NUPLAZID.

Okay, all right. And then I'm wondering if you could talk about today, relative to say the first few quarters of the launch, what you're seeing in terms of switches from Seroquel and patient new starts as they sort of comprise the mix of pimavanserin growth?

I'll start and, Michael, feel free to jump in. So no new news on switching. We continue to see very -- as I mentioned earlier, very strong satisfaction levels with the drug from all the surveying that we're doing. The one thing that's probably a little bit better clarity on today than we would have in two or three quarters ago is the -- what we often refer to internally, is kind of stickiness of the drug. Once we get past the natural degradation you have with all drugs of this sort in the first month or 2. And once you get beyond that, we're seeing a very good stickiness of the drug, which again I think is indicative of the benefit the drug is delivering and we're seeing that all the time. So that's one thing that stands out that we really didn't have good -- really didn't have any clarity on who wants the drug and had limited clarity as of a couple of quarters ago, but had a little bit better now.

Yes, Paul, thanks for the question. I would just add that the mix of all products are a mix of both switching patients who are either on another therapy and also treatment naïve as we -- and we strive to get more treatment naïve patients. That's our goal. But we're sourcing patients also from dissatisfied or lack of efficacy in other products. Just recall, though, that, that mix at an individual doctor level can vary as we move into deeper penetration of the physician base. Those people are then beginning to see the new product in a newer light. We end up on those kind of physicians getting more switch versus the ones who have maybe moved it into more of their treatment armamentarium and where we get more trib naïve. And the rollup of all of those gives you a mix of treatment naïve and switch and, therefore, that's a dynamic process for most -- any drug there is.

Okay. And then just one clinical question for Serge. I'm wondering what went into the decision for the dose -- for the inclusion of the dose adjustment option in the DRP study? The safety of pimavanserin, I mean, this was definitely talked about at CTAD, has been pretty good so far especially compared to atypicals in this population. So what was the thought process there?

Yes. Thanks, Paul. The reason for including the option to pull back one step on the dose is really in two elements. One is, regardless of the very favorable tolerability profile that we've seen with pimavanserin. On an individual basis, some patients may experience some side effect that, that would benefit from lowering the dose. We don't have in mind any specific side effect because we didn't see much of that, but we still know that this patient may benefit efficacy-wise from that. Second, the more important element is that we wonder why it is in the interests of the success of the trial, attrition of patients in the course of the trial. So we want to have more successful responders in the 12-week period and then continue them into a double-blind. So in interest of that, we are allowing this option at the beginning. That's really the rationale for allowing that. We still require a stable treatment of eight weeks with the dose that is achieved, and we do not believe actually and expect that there will be a whole a lot of patients that will have that step down in dose.

And your last question comes from the line of Alan Carr.

Coming back to gross-to-net. It did come in lower than I think you suggested for the rest of the year on the last conference call. And Steve, I missed some of your opening comments. I'm wondering, does it relate to any changes in promotions and that sort of thing? And then also, maybe you could talk a bit more about building awareness in a little more on the direct-to-consumer program here and the costs associated with that.

Todd, do you want to take the first one?

Yes. On the gross-to-net, Alan, we're seeing the increase in long-term care that Michael spoke about. A lot of those patients are Medicare Part D low income subsidy where we don't have the liability for the Medicare. So as we added new patients there, that certainly helps the gross-to-net. The stickiness that Steve spoke about on our patients as well, if we continue to have patients staying on the drug and continue to have more bottles, they're outside of the donut hole and so that creates a faster drop through on the gross-to-net side as well.

Before you get to the second part, have you changed any of your promotions, free drug and that sort of thing for starts? Has that changed at all or is that stable?

No. We're continuing to have our 14-day initial prescription that goes without charge. And again, in the long-term care VA setting, not many patients actually take advantage of that, that's more of a straight prescription. And so there is, I guess, from a proportionality as that side grows a little faster, there's less free drug coming out through the 14-day. But generally speaking, that continues to be an important program to get patients started quickly on the drug.

I see, okay. And then around the awareness and the direct-to-consumer.

Yes, Alan. It's a great question. We have a, as I mentioned, a television campaign that is -- we're very excited about. I think it's going to be hitting all the right marketing levers. The campaign though, as you know, is targeted to our patients and caregivers and, as such, we think it's a very responsible campaign. But I don't think you have to be concerned that it's a kind of campaign that's got to reach mass audiences. The total Parkinson's audience, as you know, is about 1 million patients in total and so, thus, we can be very targeted in our approach.

Mr. Davis, please proceed to closing remarks.

Great. Well, thanks, everyone for joining us on today's call and for your continued support. We look forward to updating you on our future progress.

Thank you for your participation in today's conference call. This concludes the presentation. You may now disconnect. Good day.