ACADIA Pharmaceuticals Inc. (ACAD) Q4 2025 Earnings Report, Transcript and Summary

Thank you for standing by. My name is JL, and I will be your conference operator today. At this time, I would like to welcome everyone to the ACADIA Pharmaceuticals Inc. Fourth Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Al Kildani, Senior Vice President of Investor Relations and Corporate Communications. You may begin.

Good afternoon, and thank you for joining us on today's call to discuss ACADIA's fourth quarter and full year 2025 financial results. Joining me on the call today from ACADIA are Catherine Owen Adams, our Chief Executive Officer, who will provide some opening remarks; followed by Tom Garner, our Chief Commercial Officer, who will discuss our commercial brands, DAYBUE and NUPLAZID. Also joining us today is Elizabeth Thompson, Ph.D, Executive Vice President, Head of Research and Development, who will provide an update on our pipeline programs; and Mark Schneyer, our Chief Financial Officer, who will review the financial highlights. Catherine will then provide some closing thoughts before we open up the call to your questions. We are using supplemental slides, which are available on our website under the Events and Presentations section. On today's call, both GAAP and non-GAAP financial measures will be discussed, including non-GAAP NUPLAZID net sales and non-GAAP total revenues. The non-GAAP financial measures that are also referred to as adjusted financial measures are reconciled with the most directly comparable GAAP financial measures in our earnings press release and slide presentation, which has been posted on the Investors page of the company website. Before proceeding, I would like to remind you that during our call today, we will be making several forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including goals, expectations, plans, prospects, growth potential, timing of events, future results and financial guidance are based on current information, assumptions and expectations that are inherently subject to change and involve several risks and uncertainties that may cause results to differ materially. 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, and we assume no obligation to update or revise these forward-looking statements as circumstances change, except as required by law. I'll now turn the call over to Catherine for opening remarks.

Thanks, Al, and good afternoon, everyone. I'm pleased to report that ACADIA delivered another strong quarter, capping off a milestone year for our company. We achieved adjusted total revenues of $298 million in the fourth quarter, up 16% from the prior year. And for the first time in our company's history, annual revenues exceeded $1 billion, reaching $1.08 billion in adjusted 2025 revenue, which represented 14% growth from the prior year. This achievement underscores the strength of our commercial execution and positions us for sustained growth in the coming years. We are presenting adjusted revenues because during the fourth quarter, we received our Inflation Reduction Act invoices from CMS for NUPLAZID, which were higher than anticipated and required a nonrecurring accounting change in estimate that you see reflected in our financials. Mark will walk you through the details later in the call. As a result, we delivered adjusted NUPLAZID net sales of $189 million in the fourth quarter and $692 million for the full year. These results were up 17% and 15%, respectively, and in terms of volume represented 13% in the fourth quarter and 9% for the full year. together demonstrating the continued strength of NUPLAZID and further reinforcing our confidence in its long-term growth trajectory. So now looking forward to 2026, we expect NUPLAZID net sales of $760 million to $790 million, which would represent between 10% and 14% growth over 2025 adjusted net sales, placing the brand on a strong trajectory towards our expectation of achieving blockbuster status with $1 billion of net sales in 2028. Turning to DAYBUE. We delivered net product sales of $110 million in the fourth quarter and $391 million for 2025, representing 13% and 12%, respectively, year-over-year sales growth. This growth was driven primarily by our expanded reach into the community physician setting in the U.S. and our ex-U.S. named patient supply programs, including countries outside the European Union, where we're seeing strong interest to access DAYBUE. We're excited about the launch of DAYBUE STIX, our new powder formulation, which is still in the very early stages, but already generating significant interest from both health care providers and caregivers. Tom will share more details on how this new formulation is being received and the opportunities we see ahead. I do want to briefly address the regulatory developments in the EU. As we shared, following our oral explanation to the Committee for Medicinal Products for Human Use, or CHMP, which we gave to support our trofinetide marketing application, we were informed that the outcome was a negative trend vote. Liz will provide details on our plan to request a reexamination subject to the formal opinion. Our commitment to advancing access to trofinetide in the EU remains unchanged. Importantly, our named patient supply programs remain active, ensuring patients maintain access to treatment as we move through the regulatory process. For our 2026 DAYBUE guidance, we expect global net sales between $460 million and $490 million, which would represent between 18% and 25% growth over 2025, driven by contributions from the STIX launch in the U.S. and continued growth of our named patient supply outside the U.S. Due to the current status of our application within the EMA, this 2026 guidance does not include potential commercial sales that would result from this regulatory approval. However, it does include contributions from our global named patient supply programs, including countries within the EU where we continue to see strong interest. Longer term, we continue to project 2028 global net sales for DAYBUE of $700 million, inclusive of the EU, and we'll update our expectations after clarity on the final EMA opinion. Just for perspective, of our projected $700 million in 2028 sales, the EU sales represent less than 15% of the total, meaning we have ample opportunity for growth ahead under any scenario. Turning to our robust R&D pipeline. We are excited for the Phase II readout of remlifanserin in the August through October 2026 time frame as this presents a key event for our company this year. Beyond that, we see several important catalysts, which Liz will detail. Importantly, we have 4 unique molecules targeting large addressable markets with a combined full peak sales potential of $11 billion. Approximately $4 billion of that potential is specifically attributable to remlifanserin across both the Alzheimer's disease psychosis and Lewy body dementia psychosis indications, highlighting the transformative potential this asset represents for ACADIA's future growth trajectory. I'll now turn the call over to Tom for an update on our commercial brands.

Thank you, Catherine. I'm pleased to share the strong fourth quarter performance delivered by our commercial portfolio, beginning with NUPLAZID. NUPLAZID delivered another outstanding quarter with adjusted net sales of approximately $189 million in the fourth quarter. Importantly, as Catherine mentioned, underlying quarterly volume growth remained exceptionally strong at 13%, accelerating the momentum we've built throughout the year. This growth was broad-based with strength across all channels. For the full year, volume increased 9%, reflecting sustained and durable demand for NUPLAZID. Several key metrics underscore this commercial momentum. New prescriptions led the way, growing 18% year-over-year in the fourth quarter. This performance reflects continued traction in the marketplace and validates the effectiveness of our commercial strategy to improve awareness and diagnosis of Parkinson's disease psychosis while positioning NUPLAZID as the preferred treatment option earlier in the course of the disease. This has been supported by a refined approach to targeting and segmentation. While on the direct-to-consumer front, our new branded campaign launched in the fourth quarter, and we expect pull-through benefits to build throughout 2026. From an execution standpoint, we have now completed a 30% expansion of our customer-facing teams to better support our evolving prescriber base with representatives now fully deployed in the field. Based on our experience with DAYBUE, we expect a 6- to 9-month ramp before the full impact of this investment is reflected in results. Our expanded team is now equipped with enhanced tools and resources to engage a broader and evolving prescriber base. Notably, 40% of NUPLAZID's prescribers in fiscal year 2025 were new to brand, and we are now even better positioned to meet the needs of this growing group of HCP writers. Overall, 2025 was a very strong year for NUPLAZID, and we are well positioned to build on this momentum in 2026 and beyond. As reflected in our guidance, we expect another year of solid growth. And as Catherine noted, we remain confident in NUPLAZID's path to approximately $1 billion in annual sales by 2028. Now turning to DAYBUE. We delivered another quarter of meaningful progress across multiple growth drivers. Fourth quarter sales were approximately $110 million, driven primarily by strong U.S. performance with growing contributions from our rest of world programs. This represents 13% year-over-year sales growth, supported by 12% volume growth. In the fourth quarter, 1,070 patients received DAYBUE shipments globally, which represents record highs in both the U.S. and outside the U.S. This milestone highlights our continued success in reaching more patients who can benefit from therapy. As the business matures, we expect to increasingly emphasize sales-based metrics over patient counts as our primary performance indicator. Core business fundamentals remain consistent with what we reported last quarter, including strong persistency, low discontinuation rates and continued penetration within the approximately 6,000 diagnosed Rett syndrome patients in the United States, reinforcing the significant opportunity that remains. We continue to see growing momentum from our community expansion strategy. In the fourth quarter, 76% of new prescriptions originated from community-based physicians, validating our strategy on expanding access beyond specialty care centers and bringing DAYBUE closer to where patients receive their ongoing care. Now turning to DAYBUE STIX, one of our most exciting recent developments. In December, the FDA approved this new formulation of DAYBUE, a powder for oral solution. We believe this represents a meaningful advancement in how we can serve patients and families. DAYBUE STIX has been developed based on the feedback we've heard directly from caregivers and HCPs. The powder formulation allows flexibility in mixing with different liquids and adjusting volume based upon patient preference. It requires no refrigeration, offers enhanced portability through compact packaging and contains low sugar and carbohydrate content with no red dye or preservatives. Based on our analysis, we believe there's an incremental opportunity of over 400 patients, including treatment-naive and those who have previously discontinued DAYBUE due to formulation concerns. We've been very encouraged by the early response to the approval of DAYBUE STIX across the Rett community. Initial product is already in channel, and the first patients have already begun receiving shipments. Early patient mix is tracking in line with our expectations, and we remain on track for a broader commercial launch in early Q2 as we ensure appropriate inventory levels and a smooth transition for patients. Outside the United States, we continue to make progress expanding global access to trofinetide. DAYBUE liquid is now approved in 3 markets, including Israel, following recent approval by the Ministry of Health, further expanding our international footprint. Looking ahead, we see a strong growth outlook for DAYBUE reflected in our 2026 guidance. Key drivers include the U.S. launch of STIX, continued benefits from the expansion of our customer-facing teams and ongoing contributions from the named patient supply programs internationally. Overall, the fundamentals of the DAYBUE business remains strong with multiple demand drivers in the U.S., coupled with a runway for continued growth as we expand access globally. I'd like to thank the ACADIA commercial organization for their outstanding commitment to both NUPLAZID and DAYBUE in 2025. I look forward to further building on the strong momentum we've established as we head into 2026. And with that, I'll turn the call over to Liz.

Thank you, Tom. I'm pleased to have the opportunity to discuss progress on our robust R&D pipeline, where we continue to see real momentum building across multiple programs and to provide some regulatory updates. As we updated last month, across our 8 disclosed programs, we anticipate initiating 5 additional Phase II or Phase III studies by the end of 2027, demonstrating the breadth and depth of our development portfolio. Over recent quarters, we've achieved several important milestones with new study initiations. Among these, we initiated a Phase II study of remlifanserin in Lewy body dementia psychosis, initiated a Phase III study of trofinetide in Japan and launched our Phase II study of ACP-211 in major depressive disorder. Soon, we expect to initiate our first-in-human study of ACP-271 in healthy volunteers, marking an important advancement for this novel asset into clinical development. As a reminder, our current target indications are tardive dyskinesia and Huntington's disease. We continue to expect to deliver 4 Phase II or Phase III study readouts by the end of 2027. The next milestone will be top line results from our Phase II study of remlifanserin in Alzheimer's disease psychosis. Based on the pace of enrollment, we remain confident in the updated August to October 2026 time line we shared last month. Recruitment in our remlifanserin study for Lewy body dementia psychosis is getting off to a solid start and is tracking in line with our expectations. Turning to our trofinetide regulatory and international development updates. As we announced earlier this month, we were informed of a negative trend vote from the CHMP. We expect to receive the final opinion this week, which we expect will be adopted following the CHMP meeting currently taking place. Based on the trend vote, we do anticipate that final opinion to be negative. We are currently intending to follow the normal regulatory process for reexamination. In total, this process would be expected to take approximately 120 days from the adoption of the negative opinion. Assuming that time line holds, we would expect the reexamination process to lead to a new final CHMP opinion around the end of Q2. Again, our intention to request reexamination is based on our current understanding of the trend vote, but we will need to review the final opinion to determine our optimal path forward. While we look to bring trofinetide to patients in the EU, we continue to make progress on other fronts. In Japan, as I mentioned, we recently initiated our Phase III study, which represents an exciting opportunity to bring trofinetide to Japanese patients with Rett syndrome. We anticipate results from this pivotal study between Q4 2026 and Q1 2027, which would position us for a potential regulatory submission in 2027 in this important market. The strength and diversity of our pipeline continues to position ACADIA for sustained growth with multiple potential opportunities to bring truly meaningful innovation to underserved patients living with rare and neurological diseases. 2025 was a milestone year for ACADIA in many ways, and I am particularly proud of what the R&D team has done to continue to move our science and our pipeline forward. And with that, I hand the call over to Mark.

Thank you, Liz. I'm pleased to walk you through our strong financial performance for the fourth quarter and full year 2025. Fourth quarter total revenues were $284 million and for the full year were $1.07 billion on a GAAP basis. Turning to NUPLAZID. Fourth quarter GAAP net product sales were $174 million and for the full year 2025 were $680 million. We are also reporting results on a non-GAAP basis to adjust for the accounting impact on NUPLAZID from receiving our first invoices for inflation cap rebates under the Inflation Reduction Act, or IRA. While we've been accruing for inflation cap rebates since Q4 2022 based upon historical data that we received from the federal government and our customers, the invoices we received from CMS indicated that our Medicare volume for NUPLAZID was higher than we had been accruing for. This volume difference required us to make a change in estimate for our IRA rebate accruals in fiscal year 2025, which is accounted for as an increase in gross to net and resulted in a nonrecurring $20 million reduction in net sales. A reconciliation from our GAAP results to non-GAAP adjusted NUPLAZID net sales and total company revenues is presented on Slide 15. The adjusted net sales methodology apportions the previously described $20 million change in estimate to the years in which the applicable NUPLAZID net sales volumes occurred. As you can see on this slide, the change in estimate is only a modest change in net sales when looking over the entire 4 fiscal year period. For the fourth quarter, adjusted NUPLAZID net sales were $189 million, up 17% year-over-year. For fiscal year 2025, our adjusted NUPLAZID net sales were $692 million, up 15% year-over-year. For the quarter, gross to net for NUPLAZID was 29.4% on a reported basis and 23.6% on an adjusted basis. Our gross to net for NUPLAZID for the full year was 25.9% on a reported basis and 24.6% on an adjusted basis. For DAYBUE, we achieved $110 million in net sales in Q4, up 13% year-over-year, demonstrating continued strong momentum in this brand. The gross to net adjustment for DAYBUE in the quarter was 19.5%. Full year DAYBUE net sales were $391 million, up 12% year-over-year. DAYBUE gross to net was 22.3% for the year. Turning to our operating expenses. R&D expenses for the fourth quarter were $85 million, down from $101 million in the fourth quarter of 2024. The decrease was primarily attributable to the $28 million upfront payment for ACP-711 in the fourth quarter of 2024. SG&A expenses for the fourth quarter were $156 million, up from $130 million in the fourth quarter of 2024, primarily driven by increased marketing investments to support NUPLAZID and from our DAYBUE field expansion and marketing investments. With regard to taxes, we released the valuation allowance on the company's deferred tax assets, resulting in a onetime noncash income tax benefit of approximately $250 million in the fourth quarter. Our cash balance at the end of 2025 was $820 million. Looking ahead to fiscal year 2026, I'm pleased to provide our financial guidance, which reflects our confidence in the continued growth trajectory of both NUPLAZID and DAYBUE. While we will be making some foundational SG&A investments this year, we expect them to deliver meaningful top line and operating income growth as we move forward into 2027 and 2028. For total revenues, we expect to achieve between $1.22 billion and $1.28 billion, representing meaningful year-over-year growth that builds upon our strong 2025 performance. For NUPLAZID, we're guiding to net sales between $760 million and $790 million Sales growth is primarily expected to be driven by expanding volume. Gross to net is expected to be in the range of 22% to 24%, and this aligns with the Medicare volume mix implied by our IRA inflation cap invoices received from CMS. For DAYBUE, we're guiding to net sales in the range of $460 million to $490 million, driven by DAYBUE STIX and continued growth in our named patient supply programs. Given the delay to any potential EMA approval, this guidance range does not assume EU commercial sales. Gross to net is expected to be in the range of 22% to 24%. We expect R&D expense to be between $385 million and $410 million. The increase in R&D spend expected in 2026 compared to 2025 is primarily attributable to an increase in clinical and personnel costs as we advance and have broadened our R&D portfolio. Our R&D expense guidance assumes our remlifanserin program continues into the Phase III portion of the program. We expect SG&A expense to be between $660 million and $700 million for the full year. The growth in SG&A year-over-year is primarily due to our expansion of customer-facing personnel and marketing investments for NUPLAZID and increased spend to support the launch of DAYBUE STIX as well as the annualization of our DAYBUE field force expansion that took place in Q2 2025. This guidance reflects our confidence in the underlying strength of our business and positions us well for continued growth as we advance towards our 2028 objectives. And with that, I'll turn the call back to Catherine.

Thank you, Mark. Looking ahead, in addition to the strong revenue growth we've highlighted on this call, we have a series of exciting milestones to support our growth in 2026 and beyond. Our most significant catalysts arrived later this year with top line results from the Phase II study of remlifanserin in Alzheimer's disease psychosis expected between August and October, an opportunity with the potential to meaningfully shift our long-term growth profile. We also plan to initiate our first-in-human study of ACP-271 before the end of the first quarter. With a strong balance sheet, we also have the flexibility to pursue business development opportunities that complement and support our future growth. Taken together, our commercial execution, advancing pipeline and financial strength, ACADIA is well positioned for sustained growth and value creation. And with that, I'll turn the call back to the operator to begin our Q&A session.

[Operator Instructions] Your first question comes from the line of Tess Romero of JPMorgan.

So how should we be thinking about ramp to your 2028 global net sales targets that you outlined at our conference last month? Any additional color you can give us now that your 2026 guidance has been outlined for both DAYBUE and NUPLAZID?

Thanks, Tess. I'll give you a top line view and then maybe ask Tom to add some specifics. So if we take NUPLAZID and we look at our midpoint guidance for '26 at $775 million, that's about 12% above this year's growth on the adjusted basis. And so would indicate we're expecting low to mid-teens growth out to the $1 billion. So we feel very confident in that incremental growth that we see, and Tom will explain maybe a bit more about how that tracks through to the marketing execution. And then with DAYBUE at the midpoint of our guidance, 21% over last year, again, expecting for next year and out to '28 sort of low 20% growth to continue. So those -- that's how we bridge between today and our guidance for 2028. Overall, the company's CAGR during that time will be about 16%. But Tom, in terms of the confidence to ramp, perhaps you'd add some stuff for Tess.

Sure, absolutely. So as you can see by our results through 2025, both brands are coming off a very strong year. And just looking at NUPLAZID and in particular, our Q4 performance, you can see the acceleration that we actually saw in some of our metrics through Q4. This gives us real confidence going into 2026 but now with our 30% expansion of the field force in place, we can really begin to further capitalize upon the underlying demand that we are seeing in the market for NUPLAZID. Obviously, we mentioned on the call that we are really kind of positioning NUPLAZID earlier in the treatment paradigm for these patients with PDP. We are continuing to focus on our unbranded efforts. We think awareness for this patient population is incredibly important. And as we begin to tap into just some of the underlying dynamics that we see on a weekly and a monthly basis, especially as it relates to kind of our expanding a new writer base, that gives us real confidence that our strategy moving forward is going to continue to pay dividends for us. Turning to DAYBUE. We obviously got the approval for DAYBUE STIX back in December. We've been really encouraged by the early signals that we're seeing through January. And just recall, we're not anticipating a full launch for that formulation until Q2. But what we're seeing already, I think, really underpins the excitement that we had leading up and then through that approval just given the encouraging stories we're hearing both from caregivers, but also HCPs and their interest in continuing to use DAYBUE and try the new formulation, either for those patients who are naive to therapy or potentially may have discontinued due to formulation concerns. So there's 2 big opportunities that we see for DAYBUE in the U.S. Outside of the U.S., obviously, it's going to be a continuation as we further bolster our named patient supply programs. So we continue to see plenty of inbound interest from across the various countries where those programs are available, and we'll support those patients where we can.

Your next question comes from the line of Ritu Baral of TD Cowen.

I wanted to ask the team what good remlifanserin ADP data will look like later this year. What are you hoping to show on the primary endpoint that SAPS-HD at week 6? And if you could go through some of the powering. And in the January presentation, you noted a key exploratory endpoint of the NPIC. Is there anything in particular that you're looking for in that exploratory endpoint of note that sort of fills out the clinical story of what remlifanserin benefit in this population could be? And then I have a quick follow-up.

I'll get Liz to give you her response.

Sure. Thanks for the question, Ritu. So broadly speaking, what we're looking for in our Phase II study with remlifanserin is continued evidence that we are developing a molecule that's in line with our target product profile, what we think a drug really needs to be meaningful in this patient population. And that has a number of different components to it. And then I promise I will come to your questions about powering. But some of the components are, we know that we think it's important here to have a drug that's going to be easy for people to take and easy for them to be compliant with, particularly in this patient population. You can imagine the challenges in having people take their medicine appropriately and the potential big impact if they don't. And so something that is once a day, something that can be taken with or without food, something that doesn't have significant DDIs with other medicines or beyond. Those are all things we think are important that we feel pretty good about with remlifanserin to date. We think it's going to be important, obviously, to show efficacy and a good safety profile. And frankly, if we see something that's in line with the established NUPLAZID safety profile, I think we'll be very pleased with that. And finally, certainly, we're not going to answer this just with this Phase II trial, but we think it's going to be important to see data that's directionally supportive of other things that we think matter that we're not going to have a negative impact on motor, for example, that we're not going to have a negative impact on cognition. So those are all the kinds of things that we're going to be looking for in this study. In particular, around powering and the SAPS-HD, from a primary endpoint perspective, what we have powered for here is a moderate effect size, so 0.4 in particular. We'll be pleased, of course, if we see statistical significance on that at week 6. Around NPIC, I'm not really ready at this point to comment on specifics of what we're looking for there. That is a more recently added endpoint, and so we certainly did not power the study around that. So it's more exploratory in nature, and that's reflected in where it is in our hierarchy at this point.

Your next question comes from the line of Marc Goodman of Leerink.

Yes. Can you just give us a sense of what's going on behind the scenes with DAYBUE and just the persistency and how patients are being compliant with the drug, just how that's changed? We haven't heard you talk about that at all today.

Yes. I think Tom talked to it at a high level in his comments. So Tom, do you want to add any more color for Marc?

Yes. I mean, essentially, Marc, everything is kind of in line with what we shared in previous quarters. Our discontinuations remain in the pretty low single-digit range. They've really stabilized. Consumption kind of remains as we've shared before, which I think for the full year was kind of the high 60% range. Yes, I mean, our story really now is -- now we've stabilized the business. I think now we're kind of back on a growth trajectory. Now we're kind of really seeing the benefits from the expansion that we made back in Q2. And our strategy as we expand into the community is working for us. It's really now a case of utilizing STIX to really unlock that next wave of growth, and that's what we anticipate doing as we head into 2026.

It's been single digits all year. Is that what you're saying, all 4 quarters?

Yes.

Yes.

Your next question comes from the line of Rudy Li of Wolfe Research.

I have a follow-up question for the upcoming Phase III trial in ADP. Can you maybe just talk about the time line, how long it would start -- it would take you to start and finish the trial? And a second question regarding the EU opinion for DAYBUE. What specific concerns regarding the pathway? And how do you plan to fix that with the upcoming request for reexamination?

So Liz, I think that's clarity on the ADP II/III enrollment time line and then you can fill them in on EU.

Sure. Rudy, welcome and thanks. So first, on the remlifanserin Phase II to Phase III. So when we originally designed this program, we were building it on a wealth of information from pimavanserin. And so we took an assertive approach to clinical development, where we've got a combined program, a master protocol that includes the Phase II and 2 Phase IIIs. And the advantage of this is that they're statistically separate. So I've been talking about how we're going to provide detail or we're going to provide top line results on the Phase II in the August to October time frame, but they are operationally seamless. And so what that means is that as soon as we stop enrolling in the Phase II portion of the ADP program, sites can start enrolling in the Phase III portion of the ADP program. So we look to move from Phase II to Phase III enrollment later in the course of this year. Switching over to the reexamination. So we don't have the final opinion in hand. We expect that to show up over the course of the coming days. So I can't tell you exactly what is going to be in it. What I can say is that we do anticipate, throughout the process, we have gotten questions on things like the relevance of the endpoints to the patient population, the clinical meaningfulness of the results that we saw on our endpoints, the duration of therapy and the mechanism of action of DAYBUE and how that could be extrapolated to the kind of impact you might expect to have on the disease. So those are the types of things that we anticipate we're going to see in the final opinion. But again, that's going to come in the following days, and we'll put out a press release that provides more information on it when we have more information on it to share. In terms of -- I think there was also embedded in there a question about what we might do differently this time around. Some of that is going to depend on the nature of the questions that we actually wind up seeing. But I will say in terms of reason to believe, there is precedent for reexaminations taking a negative opinion and turning it into a positive opinion. If you look over the last 5 years, depending on how you cut it, you get something like 20% to 30% of reexaminations result in a positive opinion. There are a number of factors that can go into this. Certainly, part of the process is that you do have a new rapporteur and co-rapporteur. You have an opportunity to come in specifically addressing only those grounds that are the grounds for refusal of the application, and we have an opportunity to potentially bring some new voices into it. We're really committed to the EU patient population and are looking for ways to get our way through this regulatory process.

Your next question comes from the line of Yigal Nochomovitz of Citi.

This is Caroline on for Yigal. Could you tell us how remlifanserin is differentiated from Cobenfy, which has upcoming Phase III readouts in ADP this year?

Sure. So mechanistically, these are different approaches to coming at psychosis. Overall, psychosis is really understood to result from an excessive ratio of your serotonergic -- sorry, I'm having a hard time talking today, serotonergic versus your cholinergic signaling, neurotransmission pathways. And we come at that from sort of different angles of the seesaw, if you want to think of it that way. One is taking down one side versus increasing the other side. So there's reason to think that either could be impactful in psychosis. Certainly, there are going to be a number of differentiators in terms of how the drugs are taken. We have a good understanding, I think, of what the dosing paradigm looks like for remlifanserin as well as what it's likely to look like for Cobenfy. And you need to think about the profile of each of these in the context of an elderly frail patient population. So we think that remlifanserin could be a good treatment option for patients if we see a safety profile that continues to be consistent with what we've seen for NUPLAZID.

Your next question comes from the line of Sean Laaman of Morgan Stanley.

As DAYBUE STIX rolls out more broadly in early -- I think it's early Q2 '26, you said, how should we think about net new patient capture versus switching? And do you think STIX meaningfully expands the addressable Rett population over time?

Yes. Sean, it's Tom here. Thanks for the question. Yes, I mean, first off, just to reiterate, we've been really, really encouraged by the early excitement that we're seeing from the Rett community regarding STIX. As we mentioned on the call, by our own internal estimates, we think there's around 400-plus patients that we could unlock in addition to just having the liquid on the market with the STIX formulation. And that's made up of both patients who are naive, but also those that may have discontinued or maybe never started due to formulation concerns. So you take that in totality, and we believe that there is clearly additional upside that we can capture over the next few years. Worth noting that, that 400 patients that we're talking about, we don't think we're going to see all of them in 2026. We anticipate unlocking those over the next 2 to 3 years. But taken together, coupled with all of the efforts that we've already employed in 2025, obviously, we have the expanded field team. We now are doing more in terms of direct-to-consumer, we've been doing a significant amount of education, especially as we move into the community setting, we believe that there is an opportunity to further penetrate the Rett marketplace with DAYBUE, and potentially continue to expand it further. We now estimate that there's around 6,000 Rett patients diagnosed in the U.S., which is a modest increase in what we've shared previously. So I think taken together, absolutely, we believe in the long-term growth outlook for DAYBUE.

Thanks, Sean. We are excited about STIX and getting patient stories in already with a few -- the patients now in the channel and look forward to really giving you a full insight into DAYBUE STIX at our next call.

Your next question comes from the line of Brian Abrahams of RBC Capital Markets.

This is Nevin on for Brian. Just a couple of questions on 204 remlifanserin. So I think at the R&D Day last year, you had shown that there was a dose dependence in the exposure response signal with pimavanserin in the ADP and Lewy body patients where some of that higher exposure have correlated to greater symptom reduction. So I guess what drives your confidence that the 30 mg and 60 mg doses of remlifanserin would reproduce that exposure response relationship in the same way in the RADIANT trial. And is there any way to maybe quantify that target gap or target efficacy gap versus pimavanserin's marketed dose based on some of the preclinical and Phase I PK data that you have?

So all right. Let me think how to come at this one. So yes, first off, we do -- part of our reason to believe with remlifanserin is based on the fact that with PIM, we did see what appears to be an exposure response from an efficacy perspective. And in neither ADP nor Lewy body, do we appear to be at the maximum or near maximum plateau level of that efficacy. I will say that, frankly, even if we were able to just reproduce similar levels of efficacy with remlifanserin that was seen with 34 milligrams of pimavanserin and do it in a more robust study that is focused specifically on the Alzheimer's population, we think that, that would be meaningful in and of itself. And so additional efficacy, I would say, is sort of the cherry on top. We do think that there are good reasons to believe that, that exposure response relationship is true and will play out when we're able to really actually test it with 2 different doses, but we do have to do that test. So I would say that even if we don't see as much of a differentiation between the 30 and the 60 as you might expect based on that exposure response, we still could have a meaningful therapy here just in the context of a more robust, more specifically designed therapy or designed trial.

Your next question comes from the line of Ash Verma of UBS.

So as we think about the increase in the OpEx this year, does that mostly now enable you to get to your 2028 goals? Or is there more incremental investments coming in the subsequent years that would be key to delivering that? And then just secondly, I know like on Cobenfy ADEPT-2 trial, there's been just a lot of focus on the irregularities that they saw in terms of clinical trial execution. Just can you give us some confidence that when you look at your study execution, you don't necessarily see any type of an issue like that?

Thanks, Ash. I'm going to get Mark to talk about the OpEx strategy and then Liz can further discuss Cobenfy. So Mark?

Yes. Thanks, Ash, for the question. So I would say that from an SG&A standpoint, kind of you'll see incremental increases from here. this is kind of the foundational investments that we're making to achieve our goals in 2027, 2028 and beyond. From an R&D standpoint, it certainly is how the portfolio advances as it continues to be successful with the broader and bigger portfolio, it can increase. And if we see normal rates of attrition, it will increase less. We do think our margin achievement will significantly expand from here. And our expectation is really depending upon how the R&D portfolio evolves that we could see kind of mid-teens operating margins with no attrition. But if you think about normal rates of attrition in the R&D portfolio, you'd be in the low 20% operating margin in 2028.

As far as the question about the BMS situation and the irregularities, I mean, I'll note, like everyone else, we don't know the specifics of the irregularities that we're seeing in the BMS situation. That said, on an ongoing basis, we do look at blinded data in a number of ways. And what I can say is, at this point, we're not aware of any substantial irregularities that suggest that we have a problem. Obviously, this is an ongoing thing. We're very committed to good clinical practice. And so we do continue to look on an ongoing basis, but so far, so good.

Your next question comes from the line of Evan Seigerman of BMO Capital Markets.

Hi, I'm Malcolm Hoffman on for Evan. I know this study is early, but can you take a second to talk about what you are looking to see from the Phase I ACP-271 healthy volunteer study that you expect to initiate this quarter? Given the mechanism and preclinical work, it seems obvious that you want to see improved levels of sedation relative to the VMAT2 inhibitors. But I just want to get a sense of whether there's other key measures you're looking to assess here.

Very exciting. This may be the first 271 question I've gotten, well, maybe ever. No, thank you for the question. So it is early here. But what I will say is we're -- this is some of the most novel biology we've got in the pipeline. And so part of it is we're just -- it's -- this is the first step of a GPR88 agonist into humans in clinical trials. So we are interested in understanding overall how that behaves in humans. We're interested in understanding PK and to whatever extent we can, the PK/PD disconnect that we did seem to see in some of our animal models, suggesting the potential for a long PD effect that outlasts the PK. So some initial exploration there. And yes, obviously, understanding what this looks like from an adverse event potential profile is going to be important in terms of the degree to which it bears up our hypothesis of how this could work in people. So thank you for your interest. Looking forward to talking more about this as we go through the upcoming months and years.

Your next question comes from the line of Sumant Kulkarni of Canaccord Genuity.

I know you mentioned a couple of times today that you're running 2 Phase III trials for ACP-204 in Alzheimer's disease psychosis. But what does the FDA's recent publication of its official position on needing one robust pivotal trial plus confirmatory evidence mean for ACP-204 in ADP and Lewy body dementia psychosis, especially if your Phase II data turn out to be "very good."

That is -- sorry, shall I just go -- that is a great question. We are obviously really excited to see any regulatory innovation that could mean that safe and effective products could get to patients faster. That is great. There's a lot that at this point, this has been discussed in a journal article and certainly in some presentations, there are a lot of questions that I think we don't know the answer to yet that makes it hard to know exactly what this could mean for ACADIA's future development program. So obviously, we're watching this very closely. Things like what the impact is on the required safety database as an example. And of course, we always do have to think of this in terms of globally acceptable development program. So there is a fair bit to work through there. That said, I do think this, I would always want in a situation where one had amazing data to think about whether there were ways to bring something to patients further, faster. I think this gives us a little bit of additional reason to think we should try having those conversations, if nothing else.

That's great. And just to reiterate, as we come through our top line results in between August and October and Liz and team develop the Phase III protocol from those results, we will continue to inform you how those Phase III trials will be redesigned or designed according to what's happening in the policy environment as well as also what's driven by the data.

Your next question comes from the line of David Hoang of Deutsche Bank.

So maybe first, just one on remlifanserin commercial opportunity. I think you've mentioned a potential $4 billion peak sales number for ADP and LBDP combined previously. Could you just help put some arms around that number in terms of anything like what would be the split between ADP and Lewy body? Is that just the U.S. market? Does that contemplate competition from Cobenfy? What would ramp to peak sales potentially look like? And then just to come back on the IRA rebate accrual for NUPLAZID. Could you just help reconcile what is actually cash versus noncash for the quarter and full year? And is this a situation that may repeat in the future and would require another reconciliation?

So let me just talk to ADP and LBDP in terms of the $4 billion, and then we'll move to the next part of the question. So we haven't disclosed the split that we see exactly between the 2 indications, but we have said that they're roughly equally weighted. Obviously, the populations are slightly different in the U.S. and the unmet need is different as well as the population fragility. So there are some differences between the 2 indications that we will work through both commercially and financially as we come through our clinical trials. But overall, we feel this is a very strong opportunity for us in much larger markets than we are in now. And with the confidence that we have behind the design of remlifanserin for these specific populations, we feel like if the data bears out, they're going to make a huge difference to this patient population and provide us a robust value story for both our health care environment, but also patients more broadly, both in the U.S. and hopefully beyond the U.S. In terms of NUPLAZID and the IRA, do you want to talk a little bit more about it, Mark?

Sure. Thanks for the question. As far as kind of cash versus noncash, we did pay our invoice in the quarter. And for the first 2 years of the program, that was $108 million payment that went out. Over the course of the year, if we factor in the payment plus additional accruals that we made, it was kind of a net cash flow over the year of about $30 million. The adjustments that we made to net sales, those are all kind of noncash adjustments, but they're meant to be reflective of our operational performance so you can compare periods when we shared the data going back to 2022 that if we had full information, these were the accruals that we would have made rather than needing to make the change in estimate that we made now that we got the information from CMS for the first time this year.

Hopefully that answers the questions, David.

Your next question comes from the line of Jason Butler of Citizens.

Just understanding it's still early. Any initial comments you can speak to out of the increased NUPLAZID field force? And how are you on an ongoing basis, assessing ROI on the full commercial investment for NUPLAZID, specifically the non-field force components?

I'm going to get Tom to talk to you about the field force. But just to reiterate that we assess ROI on our marketing and commercial mix on a very regular basis. That's the basis of how we manage the business and the decisions that we make in order to ensure that our investments are really driving both efficiency and effectiveness. But in terms of the team, Tom, why don't you share a little bit more about how it's going?

Sure. So as we mentioned, Jason, we fully executed the expansion of the field team in January of this year, and I'm very pleased to announce, obviously, that the team are now out in the field. We've actually been really encouraged that they've hit the ground running, probably in a manner that was maybe kind of earlier than we thought, quite honestly. I mean, we are already seeing a very nice uptick in terms of their activity. Just as a reminder, with this expansion, we're able now to kind of capitalize on or meet the needs of around 60% of the overall PDP market in terms of prescribers. So we've kind of increased our target universe from about 7,000 writers to about 11,000 writers. And we believe that, that additional 4,000, 5,000 that we're now going to be targeting is really going to help us unlock this incremental growth that we anticipate seeing through 2026, '27 and '28. So I think very pleased with the early activity, early metrics that we're seeing. And we're following our top of the funnel metrics very tightly, as you would imagine, and we're actually beginning to see already a noticeable increase just in terms of referral volumes. So excited to see that, that will carry on through the year and looking forward to seeing the continued impact of that expansion and that investment over the next 2 to 3 years.

Yes. And just to reiterate, you can see the step-up in SG&A for 2026 versus '25, and that is being contributed by both the annualization of the DAYBUE expansion as well as the NUPLAZID expansion. And as Mark said on a previous question, we don't expect that to continue to ramp at the same rate. We expect this to be the step-up this year and then a more sort of incremental increase as we head into '28. We sort of feel like we've got a good base right now. And this will be our base with minor adjustment moving forward. So again, just to reiterate that point in terms of the OpEx to support this incremental growth.

Your next question comes from the line of Jack Allen of Baird.

Congrats on the progress made over the course of the quarter. I wanted to ask on DAYBUE and the $700 million in sales expectations by 2028. Can you just help us understand a little bit more about the assumptions that are going in behind that number that you're throwing out there, $700 million? Does that include ex U.S. sales? And what are your thoughts around potential competition for gene therapies within that period?

Yes. So I'll answer it at a high level and then maybe either Tom or Liz can have a response on gene therapy. So the $700 million consists mainly of the U.S. business, which is driven through growth of STIX and liquid and expanding the patient population from where we are now into the community. It does include global sales from the named patient programs. And so that is within there where we have the ability legally and through the regulatory framework to supply the named patient programs. And it does include EU commercial sales for now. Our current assumption is that we will have an EU approval before 2028. However, obviously, once we get the decision from the final decision, we will reguide for that 2028 number. But to reiterate, now the EU commercial sales within that $700 million number is less than 15%. I hope that's a good explanation. And then...

I can make a couple of comments and then if there's anything you want to add, Tom. So generally, I guess there's a couple of components to your gene therapy question. One is it's probably better for you to ask the gene therapy companies when they're speculating that they're coming to market. I'll just note that the developmental milestones do take some time to mature. So whether that's going to feature into 2028 or not, we probably should leave for them to comment. In terms of the, I guess, the implied idea of whether there is room for more than one type of agent out there. I mean, I think what I'd say is that the data that we've seen so far suggests that there is -- while we all wish that these would be cures, I don't think that the data so far suggests that they are. And so I think that the predominant likelihood is that patients are going to require more than one aspect to their care.

Your next question comes from the line of Paul Matteis of Stifel.

This is Julian on for Paul. Just wondering what you guys think is the biggest risk to the ACP-204 readout? And are there different sort of indication-specific considerations for ADP versus LBDP that you've thought of? Any chance that you plan on sharing baseline information ahead of the Phase II or anything else that you could share would be helpful.

Okay. So a few things here. So we're not currently anticipating that we would be sharing baseline information prior to the readout. So just to get that out there. In terms of any specifics of ADP versus Lewy body, I think there are a few things that we think about, one, of course, is psychosis is obviously impactful in both patient populations, but it is very frequent in Lewy body. So I think we do see that being a much more substantial proportion of that patient population. That's something that's important to keep in mind. And I think that while in both cases, you're generally dealing with obviously a more elderly population, I think it is also considered that the Lewy body population may be a bit more frail. And so we are especially mindful of appropriate safety profiles in that patient population. In terms of biggest risks, I mean, I think that we have done a great deal to build upon pimavanserin in terms of how we put the molecule together, how we put the program together. In these kinds of spaces, of course, you always have to be concerned about placebo effect. We are doing what we can to manage it in terms of good training of investigators, looking for outliers, all that good stuff. But that is something that you always have to be mindful in these kinds of trials.

We've run out of time for any further questions. I will now turn the conference back over to Al Kildani for closing remarks.

Thank you, everyone, for joining us today. We look forward to speaking to you on our next conference call.

This concludes today's conference call. You may now disconnect.