Neurocrine Biosciences, Inc. (NBIX) Q1 2021 Earnings Report, Transcript and Summary

Good day, everyone, and welcome to today's Neurocrine Biosciences Reports First Quarter Results. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. [Operator Instructions] Please note, this call may be recorded. I will be standing by, if you need any assistance. It is now my pleasure to turn the conference over to Vice President of Investor Relations, Todd Tushla. Please go ahead.

Thanks, Clay. Good afternoon, and thank you for joining us on our First Quarter 2021 Earnings Call. Here with me today is Kevin Gorman, our Chief Executive Officer; Matt Abernethy, our Chief Financial Officer; Eiry Roberts, our Chief Medical Officer; Eric Benevich, our Chief Commercial Officer; and Kyle Gano, our Chief Business Development and Strategy Officer. I'll remind everyone that during today's call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. Following our prepared remarks, we'll then head into Q&A. With that, I'll turn the call over to Kevin.

Thanks, Todd. Yes, it's good talking to you all today. Our remarks will be very brief, so we have plenty of time for questions this afternoon. As we've discussed for four years now, Q1 has always been a challenging quarter with many TD sufferers needing reauthorizations. Each year, we've learned from the previous year and have improved our ability to prepare prescribers and our specialty network of pharmacies for the onslaught of these prior authorizations. However, this year, despite our best efforts, the lack of direct access and communication between prescribers, patients and pharmacies, led to a much more protracted delay in refills than what we normally see. Now, while that's the bad news, the very good news is patients did receive their refills, and we did not lose them. Now, we traditionally see looking forward that Q2 as a stronger quarter, and we expect Q2 versus Q1 sales growth will be in the range of what we saw last year, not quite as strong. But certainly, there will be a great deal of growth. Now both Eric and Matt will discuss our Q1 experience in more detail in a moment. Importantly, we've made considerable progress in a number of our clinical programs. If you recall, at the beginning of the year, I told you about our ambitious goal of starting eight new mid to late stage clinical programs this year, and I'm – Eiry is going to take you through our pipeline on this call. So without any further comments, I'd like to turn the call over to Matt.

Thanks, Kevin. Good afternoon, everyone. First quarter INGREZZA sales were $230 million, reflecting the payer-related seasonal dynamics Kevin just mentioned, and also the seasonal impact from gross to net. Importantly, the team did an excellent job ensuring patients remained on INGREZZA. However, the extended insurance reauthorization process due to the pandemic resulted in a lower-than-normal refill rate per patient. As the quarter progressed, we saw strengthening NRx performance and commercial activity. Although encouraged, lack of in-person care continues to impact the growth trajectory of the TD market, given greater than 50% of patient visits to psychiatrists are still being conducted virtually. As physicians and patients return to visits in person, we expect TD diagnosis rates will increase, leading to improved INGREZZA performance. Based upon what we've seen so far in April, we would expect on an inventory adjusted basis, sequential dollar growth from Q1 to Q2 to be somewhere in the ballpark of what we saw in 2020, reflecting both improved gross to net and refill rates. We have a strong financial position with over $1.1 billion in cash, and are deploying our capital towards growing INGREZZA and advancing our pipeline. We increased our 2021 operating expense guidance to reflect our INGREZZA-branded DTC campaign called TD Spotlight, which Eric will cover next. With that, I hand the call over to Eric Benevich, our Chief Commercial Officer. Eric?

Yes. Thanks, Matt. I'm happy to provide additional commercial insight into our Q1 performance. And today, I'll keep my prepared remarks focused on INGREZZA. First off, there has already been discussion of our Q1 business dynamics during Kevin's and Matt's prepared remarks. But it's important to note right upfront that we exited the quarter with more patients on INGREZZA treatment than when we entered the quarter. In many ways, Q1 represented the most challenging quarter we've had since launching INGREZZA just four years ago. Typically, Q1 performance is characterized by the first portion of the quarter being impacted by seasonal payer dynamics, and then an increase in new patient starts -- occurs over the latter part of the quarter. Over the past few years, our field teams have done a great job helping patients, healthcare providers, and their office staff managed through this annual process where many continuing patients need insurance reauthorization to get their INGREZZA refills. However, the external environment was different this year. The surge in COVID-19 pandemic in January made it, especially, difficult to support our HCP customers and the TD patients they care for. With many clinics restricting access or even closed altogether, this limited our ability to mitigate the typical Q1 payer dynamics. In short, the pandemic exacerbated the impact of seasonal payer reauthorization requirements causing higher-than-normal, delayed refills and treatment interruptions for many INGREZZA patients. However, it was encouraging to see continued strong persistence rates throughout Q1, and that we finished the quarter with more patients treated with INGREZZA than when we started the quarter. In addition to these payer and pandemic-related external factors, we saw a tick down in gross to net price as additional health plans added INGREZZA to their formularies, as Matt noted. During the latter part of Q1, as COVID cases waned and the HCP practices started to open up again, our field teams did an excellent job of reengaging with customers, and we saw improved performance metrics across all fronts, including in-person sales calls, peer-to-peer speaker programs and product sampling. Looking ahead, we expect to build on our momentum with key initiatives, including launching our first ever INGREZZA-branded direct-to-consumer campaign, which we call TD Spotlight later this month. In addition, we will be introducing a new INGREZZA 60-milligram dose strength, which provides healthcare providers, and their TD patients with increased flexibility by offering three effective dosing options, while maintaining the simplicity of one pill, once-a-day dosing with no mandatory or complex titration required. We believe this will be a meaningful enhancement to our INGREZZA franchise, and we're excited to roll out the new 60-milligram dose to HCPs later this quarter. In reflecting back on where we were at this time last year, much has changed, but there are some things that remain the same. INGREZZA, with its attractive product profile, is still the most preferred and most prescribed VMAT2 inhibitor for TD. Our commercial team remains strong, energized and as committed as ever. And there remains a huge unmet need to diagnose and treat the roughly 600,000 patients in the US who suffer from Tardive Dyskinesia. We're firmly committed to continuing shining a spotlight on the substantial impact TD has on patients and their care partners, and the meaningful benefits of treatment with INGREZZA. So with that, I look forward to answering your questions during the Q&A portion. And I'll go ahead and turn the call over to my colleague, Eiry Roberts, our Chief Medical Officer.

Thank you, Eric, and good afternoon to everyone on the call. I'm happy to provide a quick update on recent progress with our clinical portfolio. At the beginning of the year, I indicated that we plan to initiate a total of eight new mid to late-stage clinical programs in 2021. We're making good progress and continue to be on track with this plan, with the potential to add a ninth new program start by the end of the year for luvadaxistat in the treatment of cognitive impairment associated with schizophrenia. Since our last earnings call, we have initiated two important programs, namely the pediatric registrational study of crinecerfont for the treatment of classic congenital adrenal hyperplasia, and the Phase 2 study, evaluating the efficacy and safety of the T-type calcium channel antagonist, NBI-104 for the treatment of essential tremor. Essential tremor, or ET, represents the second potential indication for NBI-104 acquired through our partnership with Idorsia. T-type calcium channels have been identified as having a critical physiological and pathological role in ET, where abnormal oscillatory activity occurs in the brain. As background, ET is the most common neurological movement disorder and is associated with physical and cognitive impairments, avoidance of social settings and related difficulties that negatively impact the lives of patients. ET affects approximately 2.5% of the population worldwide, with the prevalence of more than 5% in adults aged 65 years or older. In addition to essential tremor, the Phase 2 study for NBI-104 in the rare pediatric epilepsy indication of continuous spike in wave during sleep continues to progress in the clinic. Shifting gears now, I'll provide an update on our luvadaxistat program, formerly known as NBI-844. Following a thorough review of the clinical data from the recently completed Phase 2 INTERACT study, we are moving forward to initiate a Phase 2 study for the treatment of cognitive impairment associated with schizophrenia, with the goal of replicating the potential signal of cognitive improvement that we saw within the INTERACT study. Cognitive impairment is an area of significant unmet need in schizophrenia with no currently approved treatments in the United States. We're currently on track to initiate this new study by the end of the year. In closing, I want to thank the many teams who are helping advance our large, growing and diverse pipeline. With two new mid to late-stage programs now ongoing in patients and an additional seven more planned this year, the momentum for our pipeline is strong. So with that, I'll turn things back to you, Kevin.

Thank you, Eiry. So while the operator is getting the questions to the teed up right now, I'd be remiss if I didn't note that this month is mental health month. And this week is tardive dyskinesia awareness week, or TDA for short. This year marks the fourth year we've partnered with the Mental Health Community to recognize TDA by spurring conversations about TD and the importance of seeking a diagnosis and treatment. This year, 48 states and Washington, D.C. have formally declared this first week in May as TD Awareness Week, and I'm very happy that our hometown here of San Diego has done the same. So Chloe, I think we're ready for the questions now.

[Operator Instructions] And we will take our first question from Brian Abrahams with RBC Capital. Please go ahead.

Hey, guys. Thanks so much for taking my question. So, unpacking the INGREZZA dynamics a little bit more. By our rough math, it looks like inventory adjusted TRx were down about 7% sequentially, which will imply about 5% to 6% lower revenue per script. And so, I'm wondering if you could give us a sense of the degree of seasonality to this gross to net change versus how much of this change we should expect to persist throughout the rest of the year with additional formulary access. And then, along these signs, I'm just curious how quickly and meaningfully you'd expect to see pull-through from the DTC investment to TD diagnosis and new patient starts, and whether that's baked into your second quarter dollar growth expectations? Thanks.

Hi Brian, this is Matt. Thank you for the question. As it relates to growth to net dynamics, we did see an increase in discount during the quarter, and that's largely seasonal driven by the Medicare Part D donut hole as well as co-pay assistance programs on the commercial side. We did have some incremental discounts come from contracting. But I would say, by and large, the majority of that gross to net discount increase should recover throughout this year. I believe I guided last quarter, we would expect a sequential down -- or a sequential increase in gross to net discount of around 5%. It landed just north of that, around 6% during the quarter. So hopefully, that gives you the right line of sight there. On the DTC investment, the big aspect here is to accelerate TD diagnosis and ultimately, allow more patients to have benefits with INGREZZA. As you know, there's a lag time between when you do a direct-to-consumer advertising campaign and when it actually translates to patients receiving medicines. So you would expect some level of a return later this year, but more meaningfully in 2022.

Next question from Paul Matteis with Stifel. Please go ahead.

Great. Thanks so much. Hi, Matt. I wanted to ask a little bit more about the 2Q kind of -- sort of guide. I'm a little bit confused by it, because historically, you've talked about average script per patient fluctuating in 1Q, maybe decreasing by 0.1 or 0.2. And so, let's say, it decreased by 0.2. That's about a $20 million headwind. So even right there, with the reversion of that, you can get close to what you're implying for 2Q based on last year, and adjusting for inventory. So I guess, maybe you could just respond to that. And then in terms of this 2Q number kind of guide you provided, what's behind it in terms of actual organic patient growth? Thanks.

Yes, Paul. This is Matt. Happy to answer that question for you. If you look back at what occurred last year, we had a tremendous Q1. We did a great job keeping patients on medicine. And then we also actually had a record number of new patients, a great trajectory entering out of or exiting Q1 and heading into Q2. So, the benefits that we saw in Q2 were really reflective of how our performance was in Q1 of last year, and just to reiterate, the record number of new patients. When you adjust for inventory, sequentially, last year, I believe that was around a $28 million, $29 million increase. So when you think about the different dynamics this year, as you said, we did have a bit more of an impact on refill rate per patient. But on the NRx front, we're still operating in a market where patients aren't going physically into clinicians' offices, yet. And so that does mute the NRxs that we're able to generate. So we would expect to have decent growth, but getting new patient additions back up to historical pre-pandemic levels is really what's going to allow us to kick in growth. On the new -- on the patient side, we actually had a bit more patients exiting the quarter than we entered. And I think that was a really positive sign, and we expect something similar to that when you exit Q2. However, our growth will be somewhat capped based upon the patients not going into the office. However, we have many tactics that Eric can illuminate that we're working on to both drive commercial activity as well as in -- as you can see in the DTC engaging patients in this process. Eric, anything you want to add there on the commercial side?

Probably the only thing that I would add, and I mentioned this in my prepared remarks that normally we do see the first portion of the Q1 with a lot of focused effort around reauthorizations and getting patients going on refills. And typically, we see the second part of the quarter more focused on new patient starts, and we did see that dynamic here this year as well. But with a more interruption in those refills than what we've seen in years past because of the challenges related to communication caused by the pandemic. And, therefore, the pickup in the lift from NRx is kicking in a little bit later in the quarter than maybe what we've seen in prior years. So similar kinds of dynamics happening, but the pattern was a little bit different this year because of the external environment. And the timing of new patient starts makes a big difference when you think about how many potential refills you might get over the course of a quarter.

Question from Phil Nadeau with Cowen & Company. Please go ahead.

Good afternoon. Thanks for taking my question. I'm also going to ask about the Q2 dynamics, I apologize. But Matt, I just want to make sure I understood what you just said. So last year, it looks like the revenue actually went up by $35 million, $36 million, but there were inventory effects in both Q1 and Q2 of last year. Based on the comments you just made, it seems like you're saying back out the inventory effects when we determine what the quarter-over-quarter growth is -- was last year and therefore will be in Q2. Is that correct? And if so, can you just repeat what that number is? And I guess the broader question is, why not just give a specific guidance for Q2 with the revenue range? It seems like this is much more complicated than it needs to be.

Yes. Thanks, Phil. Yes, you have the numbers correct. Last year, there was an increase on an inventory adjusted basis. We had $227 million in Q1, and we went up to about $255 million. So that's a $28 million increase on an inventory adjusted basis. We felt it important to be really direct this quarter as to what we would be expecting out of the second quarter, given the dynamics we saw in Q1. And the evolving landscape of the pandemic. We're going to continue to think about providing a more formal guide. It would likely be an annual guide, if and when we ever provide, that guidance. But for right now, Phil, we just wanted to give as much clarity as possible, but not provide an annual guide.

Question from Brian Skorney with Baird. Please go ahead.

Hey. Good afternoon guys. I'm going to only ask the part from the Q2 dynamic question for a second here. And just ask a little bit about ET. We've seen some recent results on competitive Phase II programs, in ET that showed some interesting efficacy that seems to have had a very lukewarm investor response due to some of the safety signals seen there. So I guess maybe you can just kind of try and help characterize, in terms of what you're looking for in Phase II, what you want to see out of 104? And how to really think about an appropriate therapeutic index for an indication like a essential tremor? Thanks.

Sure. Thanks very much. That's great. I'm happy to answer that. So, in terms -- you're right, in terms of the recent read-outs in essential tremor, I think given the prevalence of the disorder and the age of the population as well, the therapeutic index and the safety profile for new medications is very important in this realm. What I can say is with 104 up to this point, we're very pleased with the profile that we saw in terms of tolerability, in the healthy subject data that was generated in the Phase I environment. So that is encouraging for us, as we enter into the -- this first Phase II study. The study itself is a study -- proof-of-concept study, actually, which will be taking place 28 -- 14 of those subjects are under the age of 65 and 14 will be over 65. And that study is being conducted currently in Europe, just started. What we thought was important was to get some objective efficacy and tolerability data in that older population as early as possible. And so from that point of view, we will have good information exiting this study. The other element of the design, which we believe is powerful, is this is a crossover study. So there will be an opportunity to look at it within subject change comparing 104, to placebo in that setting. And we are looking at -- in addition to obviously more quality of life type outcomes, we are looking at objective measure in terms of the actual amplitude of tremor at the end of the 28-day period. And so we'll have both objective and more subjective measures of efficacy in the study in addition to, obviously, an initial look at tolerability.

Question from Josh Schimmer from Evercore ISI. Please go ahead.

Great. Thanks very much. With regard to your comment that, 50% of psychiatry visits are still telehealth, it feels like that number has been benching around a little bit. Have there been any recent trends or updates into the second quarter to start to normalize that? And then separately for your -- for the DTC campaign that you're planning. Have you tried any pilot approaches to gauge what kind of an impact the DTC campaign might have on INGREZZA adoption? Thanks very much.

Yes. So I'll tackle both those questions. And so yes, the there are different syndicated data sources out there that give estimates for the use of telehealth across different physician specialties. What we've seen from the data, what we hear directly from our customers and through our field sales team is that, use of telehealth in psychiatry is substantially higher than it is in other specialties, including neurology. And even though it's not as high as what it was, let's say, last summer or fall, more than half of all patient visits in psychiatry still are via telehealth, either video plus voice or voice only. And so to that end, we've certainly made great strides in adapting our business model and our educational content to accommodate providers that are seeing their patients remotely. And in fact, I would encourage you, if you want to learn more to visit mind-td.com, M-I-N-D dash TD.com, and you'll see some of the tools and resources that have been developed in conjunction with thought leaders in neurology and psychiatry to help them become more comfortable and adapt at recognizing and diagnosing TD in virtual patient visits. So telehealth is certainly prominent today. We think it will continue to be prominent in the future. And we're -- we've made great strides in terms of our ability to adapt to that -- into that new mode of delivering healthcare. And then with regards to the Spotlight -- the TD Spotlight campaign. The way that we're thinking about it is that, this is a process of really developing the market over time. Early on in the launch, a lot of the educational focus that we had with patients and their care partners was via outreach through the patient advocacy organizations. And then as we progressed, you may recall that we launched an unbranded disease state educational TV campaign called Talk about TD. That's been on the air for about two years. And we are very pleased with the response to it, in terms of website visits, registrations to receive more information, et cetera. And importantly, we've been monitoring all along how we're doing in terms of raising awareness with the target population of patients that are on antipsychotics experiencing these abnormal movements. And we've seen, over time, that awareness has increased of TD and the understanding of TD and its relationship to their underlying psychiatric illness and the medications that treat their psychiatric illness. And so we felt like it was -- we were at the point where it made sense to transition into a broader campaign that incorporated not only the TD educational component, but also introducing the idea of treatment. And in fact, our market research indicates the number one reason that patients don't pursue treatment for their TD is they're unaware that there are treatment options. So we're excited about the opportunity to launch the TD Spotlight campaign later this month. And we're very optimistic based on the testing and the work that we did to show it to thought leaders in the psychiatric and neurology community, as well as the patient advocacy groups. That it will be an effective way of helping to, once again, allow TD sufferers to get effective treatment.

Question from Neena Bitritto-Garg from Citi. Please go ahead.

Hey, guys. Thanks for taking my question. And I apologize if somebody already asked about this earlier. But just on the crinecerfont, the pediatric study for CAH, I thought that, that was posted, and so the primary endpoint there is change from baseline and serum anderson dione versus the glucocorticoid burden reduction in the adult study. So I guess, can you just walk us through kind of the rationale there in terms of the different end point? Thanks.

Yes. Thanks very much for the question. We were very excited to launch the crinecerfont pediatric registrational trial. And in doing so, we gained insight into the design and background in that trial globally from many of our key stakeholders, including regulators, patients, clinicians, payers. And as a result of that, and in determining the primary and secondary endpoints, I think it's important to note that both the hormone levels, particularly androgen levels and the glucocorticoid dose remain very important in pediatric patients in the treatment of their crinecerfont -- of their congenially adrenal hyperplasia. However, in pediatric patients, the androgen levels are a very significant importance because of issues such as growth and other developmental aspect of the development of patients in that pediatric age group. And so with that in mind, the primary endpoint for the study is the four-week androgen level and other hormone levels. In addition, you'll see from the design of the study, though, that we are still interested very much in the six months glucocorticoid dosing level for these pediatric patients. And we will be similarly following the ability to reduce the overall glucocorticoid dosing for patients in the context of treatment with crinecerfont. So the endpoints, overall, align very closely with those within the adult program. It's just that in the pediatric setting via the four-week measurement of androgen levels is the primary.

Question from Jay Olson with Oppenheimer. Please go ahead.

Thanks for taking the question. Since you grew INGREZZA, pretty rapidly to $1 billion -- nearly $1 billion in annual revenues last year, just on TD and just in the US and now you have another indication on the way potentially in Huntington's Korea and potentially new market in Japan, and you've got two other new indications you'll be studying in neurology and psychiatry. Can you talk about how important those are for the future growth of INGREZZA? And how long it might take to get to $2 billion? And can you get to $2 billion on TD alone in the US? Or do you need the new geographies and the new indications? Thank you.

Yes. So Jay thanks for the question. We haven't talked about what we believe is the ultimate market revenue that can be attained here. TD -- as Eric said, the vast majority of patients have yet to be diagnosed let alone be treated appropriately. As a matter of fact, with the 20% or so that have been diagnosed, only half of them are being treated with the VMAT2 antagonist at this point. So even within the diagnosed population right now, that small fraction of the total population. You should have a doubling of the amount of patients who are on medication. One of the things that we had talked about early on, and you'll remember, you've been covering us for quite a while here, was that there -- we believe that there were going to be a number of indications for the VMAT2 mechanism, and that's coming to fruition at this point. And so we look to constantly extend to the number of different patient types that this mechanism is going to be important in managing the diseases and disorders. And I think we've got several very important ones here. And the last thing that I would say here is, is that, that actually extends to almost everything in our franchise that when we go after a target, we're generally going after it, not just for a single disease state, but we're going after it because we think it's a very important biological system for a number of disease states. And that's both with our internal programs and with the ones that we do with partnering. So Eric, do you have anything to add too?

No. I mean other than just reinforcing that TD market alone represents significant potential for us. It's in, as yet, mostly undeveloped market. There are many patients that are undiagnosed and untreated. And we're certainly excited about the mechanism of VMAT2 in its potential utility in additional disease areas, in neurology and psychiatry and the potential to help many more patients. And so that's what gives us a lot of energy and passion.

To Anupam Rama from JPMorgan. Please go ahead.

Hey, guys. Thanks for taking the question. Maybe I'd just like to ask a little bit more of a clarifying type of question sort of [Technical Difficulty]. With everything, Matt, that you've kind of said about, how we should be thinking about 2Q and get to last year. You're essentially guiding to like mid-250 to kind of high 250s kind of range if you could confirm that. And then why wouldn't it be greater than what you saw last year of the script trend that you're seeing exiting [Technical Difficulty] like, what was holding you back from saying, you know what, the quarter is going to be better than what we observed last year? Thanks.

Yes. Yes. You're breaking up a little bit, Anupam, but I think I made my way through what you were asking. In general, yes, in the 250s is – in mid-250s is what we would be anticipating based upon what we're seeing right now. The piece that – I know it's difficult to understand. But our performance last year, for example, in Q1 is what drove our Q2 results. Q2 was a derivative of Q1 activity. In Q1, we had record numbers of new patients last year. So you added the new patients, heavily concentrated in the back half of the quarter last year. And then you get a full quarters of refill rates from those patients. Now when you think forward into what happened last year in Q3, that's when the impact from the patients not going in person into the offices really kicked in. And so those were activities that were being done in Q2, and that showed up in our Q3 revenue more – in a more pronounced way. So similarly, this year, what we saw in Q1, we did see nice growing new patient additions. We also saw record levels of commercial activity. So our expectation is, yes, we performed pretty well in Q1. Our NRxs should continue to improve in Q2, and that should set you up for a much better Q3 or Q4, as compared to what we saw last year. So it's a delayed reflection in our sales results.

And all of that is with the assumption that this improving environment for COVID continues in the direction that it has been going, which we all hope.

Next to Carter Gould with Barclays. Please go ahead.

Great. Thanks for taking the questions. I guess, first, on the DTC campaign, I just wanted to -- it sounds like you're kind of characterizing this as a sort of a natural evolution of your broader awareness and education campaign. But I guess, why now in terms of just specifically on timing? And is this going to -- does this come with sort of like a pre-determined or a finite magnitude or length? Or should we just consider this sort of business as usual going forward as we think about your SG&A spend? Thank you.

Yes. So I guess, I would agree that it makes -- the way that we know what we're thinking about it is a natural evolution in terms of our overall effort to reach, educate and motivate patients and their care partners. We've been trying and piloting different types of initiatives over the last four years. And we felt like we were at the point where it made sense to transition into a broader campaign that introduced the concept of INGREZZA directly to patients. And this was a decision that we made some time ago, but we're just rolling it out now. In terms of is there going to be sort of a finite cycle for this? The way that we're looking at is we're going to be carefully monitoring the effectiveness of the ad campaign, looking at key performance metrics, et cetera, and then making adjustments as we go forward. Normally, when you look at the life cycle of a branded ad campaign, it's effective for a few years. And so I wouldn't expect TD Spotlight to be any different. Sometimes it could be extended and refreshed. But ultimately, we're going to be looking at this as an important lever for educating and motivating patients to talk to their doctor. And certainly, we're very optimistic about the way that we develop the campaign and the way that the testing results came out. And we look forward to rolling it out later this month.

Next to Myles Minter with William Blair. Please go ahead.

Hi. Thanks for taking the question. Just a question on luvadaxistat and cognitive impairment for schizophrenia. Very curious about the type of patients you're going to be enrolling in that trial. Are they stable on all other in symptoms and predominantly have cognitive symptoms? And are you going to be meeting with regulators before you start that trial? I just understand there's a little bit of conjecture around that metric's end point. What a talking academic circles about whether it's the right one to use, and there's no formal FDA guidance here to my knowledge. So any color you can provide there would be great?

Yes. Thanks for the question. So yes, we have been -- obviously had a lot of -- spent a lot of effort analyzing the information coming out of the INTERACT study. And just as a reminder, the cognitive measures included in the INTERACT study, which were responsible for the positive signals that we saw there were secondary endpoints. And it was the back, the brief assessment of cognitive symptoms and the scores. And those 2 measures, measure something a little different. One is actually a kind of a pure score that's generated by the patient themselves and the clinician. And these scores is more of a functional interpretation of the cognitive impairment and includes the caregiver as well. And so, what we were most struck by in the finding from the INTERACT study, which encouraged us to move forward into the next-generation of testing here, was the fact that we saw in both of those measures. And to our knowledge, that has not been demonstrated in the context of a clinical trial before. As you quite rightly said, the data in this field has been very mixed with negative and a few -- very few positive signals on the matrix or the back historically. So with that in mind, we are designing a study essentially to replicate -- an attempt to replicate that finding using those appropriate end points and at an appropriate time, we will then engage with the agency then to understand, if successful, the path forward into a registration plan. And so, I think the key goal in our minds right now is that we're intrigued by the signal we saw. We recognize the very significant unmet medical need in cognitive impairment within schizophrenia, and we're seeking to, as rapidly as possible, replicate that finding and work out whether it's really a real finding.

Question from Vamil Divan with Mizuho Securities. Please go ahead.

Okay. Thanks for taking the question and color you provided so far in the 2Q dynamics. So I guess, maybe one other product, which I think is maybe covered as much as ONGENTYS has been approved for about a year. I know you didn't launch until, I think, September or so. Can you maybe just share any details there around kind of the progress you had with that product? I don't think you get great fuller position 3 months ago. I'm just curious if you made progress there and sort of how the initial sort of reception into that product in the market? Thank you.

Yes. I'll give some insight there. And then perhaps, Eiry, you might want to add some color. So yes, from a timing perspective, we launched ONGENTYS right at the end of Q3, really effectively at the beginning of Q4. And we recognize that launching a product during a pandemic environment was less than optimal, but we also felt obligated. We had an improved product. We had sufficient commercial supply and patients that could benefit. And so we pressed forward. The fact that so many of these practices are limited in terms of their ability to see patients in person, does hamper the initial trial and adoption of ONGENTYS, but it's not unexpected. And certainly, we recognize that it would be challenging to introduce ONGENTYS in this environment. The feedback that we're getting from neurologists and from Parkinson's specialists is very favorable. They -- the feedback that I'm hearing is that, they really are pleased with the convenience with the once-daily dosing. In many instances, the efficacy is stronger than what they might have expected. And certainly, we continue to see steady growth week-from-week in terms of the number of new patient starts. Importantly, for us, ONGENTYS also creates an opportunity for us to get additional time with neurologists for INGREZZA and TD. And so we're leveraging both products when we are in front of neurologists. So we're now two quarters into the launch. And as with all new branded products, they don't have coverage, from a payer perspective when you watch. So our payer team has been very busy, presenting ONGENTYS to the various Medicare and commercial and Medicaid formulary committees. From a Medicare perspective, we launched right after the bid cycle, and so -- for 2021. So effectively, the expectation is that you would see ONGENTYS added to Medicare formularies in 2022. For commercial and for Medicaid, that would occur throughout the year of 2021. So near-term, we're continuing to help our customers in terms of securing approval for those prescriptions through the formulary exceptions process. And then as we move through the year and into next year, we'll see what that pattern looks like for coverage from -- especially a Medicare perspective. Eiry, do you have anything to add?

Yes. What I would just add is just to echo what Eric said in terms of for our medical affairs organization out in the field. Certainly, as we've engaged with neurologists around their first set of experiences with ONGENTYS, we are hearing feedback consistent with what we might have anticipated from what we've learned from BIAL in Europe when ONGENTYS was launched there that the efficacy profile that clinicians are experiencing for their patients is -- tends to be maybe better than was experienced in the clinical trial setting and the -- in terms of tolerability that the patient experience is evolving in a reasonable way. And in that regard, we also have a trial that we have ongoing now to generate real-world data and evidence for patients within the United States receiving ONGENTYS. That's called the OPTEON study. It's currently enrolling. And the enrollment in that program is going very well, which I think also reflects the interest in -- for patients and for clinicians and experience with the medication.

Next to Paul Choi with Goldman Sachs. Please go ahead.

Hi, everyone. This is Charlie on for Paul. Thank you so much for taking our questions. Just a quick one from us going back to NBI-104. You say with enrollment progressing. We were just wondering how that enrollment is progressing, what rates are you seeing currently and when we might be able to see some pediatric epilepsy data from that study of 104? Thank you.

Yes. So that study is ongoing. We have centers open in the United States, and a couple of centers in Europe as well. We have guided that the data from that study, which is a 24-patient study would be available sometime next year. And as we continue to progress with that study, we can give updates as required.

All right. Thank you so much.

Clay? I think you cut out. I know we are moving to David, if you're not.

Hi. Can you hear me?

Yes, hi.

Okay. Sorry about that. I didn’t hear the operator. Okay, all right. I thought it wasn’t me again. Okay. Well, just real quick, just looking at the trajectory of INGREZZA, and then just looking at the trajectory of Teva's AUSTEDO, it kind of struck me that it seems just looking at the volume trajectory that INGREZZA has struggled a little more amid the pandemic compared to AUSTEDO. It's not lost on me that AUSTEDO, of course, is approved in Huntington's chorea. But is there an explanation for that? Is this simply just that AUSTEDO has Huntington's in the label and INGREZZA doesn't? Or is there another reason why it seems that INGREZZA has seemed to struggle more over the past year, where AUSTEDO perhaps hasn't?

I would say that there is the dynamic that they do have the Huntington's indication. What also I would state is that neurologists came back into the office seeing patients full-time actually a while ago. So, there's better than 90% of the patient's visits in the neurology office are in person. The -- and as we talked about, that's not been the case with the psychiatrist. So, basically, I think that may account for the differences that we've seen during the pandemic. We've always been the market leader. We continue to be the market leader in everything that we do here is to retain that dominant position.

Question from Marc Goodman with SVB Leering. Please go ahead.

Yes hi. Matt, can you give us a sense of how we should be thinking about net price per Rx for the full year? Obviously, there's a big step-up in the quarter. But -- and I don't know, Kevin, maybe just since I'm kind of nearing the end of the call here. Can you talk about your goals a little bit and whether you're just comfortable with everything that AbbVie is doing and what's going on there? It just seems like that product is not really doing much. Thank you.

Yes. I'll take the first one. The last question first is that I think that we all have expected, and we continue to expect to see much better performance out of Algolux for the indications now, the two indications that it's proved for. That has been taking longer than what any of us would have thought for that to start picking up. It is completely in AbbVie's hands. They continue to invest in it. We're just -- unfortunately, much like you, we're waiting to see what happens with that drug. I do have to say that it is addressing two very important disorders in endometriosis and uterine fibroids. And I do have to say that we still have a lot of belief in that drug. It is a very good medication. Matt?

Yes. On the net revenue per TRx, what I would expect something, like I said earlier, similar to last year. Last year was around 5,600. I would expect this year would shake out around, call it, 5,500 to 5,600, so somewhere in that 5,500s range is what we would be anticipating right now based upon what we saw in the quarter as well as contracts that we payers in place.

Question from Yatin Suneja with Guggenheim. Please go ahead.

This is Evan Tadio [ph] on for Yatin. Congrats on the quarter. And thanks for taking our question. If you get positive data in the Korea and Huntington study, would this be enough to support filing? And what else, if anything, would you need from this program to file? Thanks.

Thanks. It's Eiry here. So our goal is to complete this study and read out the results, and to your point, if positive. And if we're successful there, we plan to go forward to the agency with the supplemental NDA submission for Huntington's in Korea. In addition, we do have an open-label longer-term tolerability study ongoing in parallel, which would -- and that additional safety information would be added to the package.

Question from Laura Chico with Wedbush Securities. Please go ahead.

Thanks very much for taking the question. I just wanted to follow-up. I don't think I heard this ask, but what is the typical duration for folks on treatment now, I guess, relative to what it was pre-pandemic? It sounded like there were a lot of efforts made to keep folks on therapy during this quarter. And then you've kind of answered this question a little bit throughout the call, but I just wanted to maybe more explicitly ask, what gives you confidence in the size of the addressable TD market as it stands now? Thanks so much.

So I'll take a first crack at this, Laura, and then Eric can chime in. We have always seen great persistence and adherence to our drug. Back when we launched it, we had looked at these patients and the psychiatric patients and set up all the medications they're on what's the average duration that they're on. They -- and I'll use a rough shorthand that they would take them about 50% to 60% of the time. So that means six to a little over seven months out of the year, they're on their medications. And that doesn't mean just their antidepressant anxiolytic antipsychotics, not just their mental health med but all of their meds, whether it be diabetes meds, cardiovascular meds or whatnot. In our clinical trials, these patients were on an average of seven daily medications. So we didn't expect INGREZZA to perform any better than that. We just thought this was a feature of this patient population. However, we were very pleased to see that the adherence and persistence of patient's right from the get-go was much, much better than that. I would say that probably for the first two years of our launch, I said this isn't going to last. It is maybe just the fact that, it's a new drug, and there is so few new drugs that are introduced into this patient population. But then after years three and years four, where it is continued like that. It truly is the fact that this is a very simple drug for a very complicated set of patients. And I think that's very much appreciated by the patients and their caregivers and the physicians and the other advanced practice practitioners. So yes, there was a blip in Q2 of last year, just as the pandemic, it just as we put our sales force had to go totally virtual. And as we had discussed in previous calls, they then did the only thing that they could do at that moment in time is make sure that the patients who are on drug back continuity of care state, and they did an excellent job of that. So we did even above an extremely high baseline of persistence, and here it saw a bit of an increase there. That increase I said is not sustainable because our efforts had to go back into generating new patients to the drug. And so we saw that go back to what the very high historical norm was in Q3 and Q4. Q1 was a completely different situation. You did have an interruption in the number of refills there. It just took longer than what it normally takes. But there's no reason for us to believe that now -- and as we've said, we exited with more patients on INGREZZA than what we exited Q4 on. So there's no reason to expect that we're not going to continue with that extremely high rate of adherence and persistence.

Yes. And I'll tackle the second part of your question. But I do want to tack on to Kevin's comment here, really two things. One, the persistence numbers that we saw in Q1 were consistent with what we've seen in prior quarters and remained very high. And one other thing that we've looked at is we've tracked the persistence of various cohorts of patients, really from the very beginning of the launch. And so looking at patients that might have started in 2018 versus patients that started in 2019, haven't seen any meaningful differences in terms of the expected duration of treatment and that continues really all the way to the present. In terms of what gives us confidence around the market size, you might have heard me mention that we're estimating currently that the TD market is around 600,000 prevalent patients. How do we get to that number? Well, there's a number of different things. Certainly, we continue to look at the various prevalence publications in the peer-reviewed literature that all point towards numbers in that range or even higher. We continue to do market research with healthcare providers. And importantly, we're seeing an increasing trend in terms of the number of TD patients they think they have in their practices. We look at claims databases, and we're certainly seeing an uptrend in terms of the claims related to TD treatment. And really, what's the underlying driver here? There continues to be an increased use of antipsychotics, which are associated with causing TD. So these are all indicators for us that give us confidence that the size of the prevalent population is at least as big as we think it is. And importantly, for us, our near-term focus remains to drive recognition and diagnosis and bridge the gap between the diagnosed population and the TD treated population -- excuse me, the prevalent population. And as Kevin mentioned, of those that are diagnosed today, only about half you even get offered of VMAT2 inhibitor. So there's a lot of upside potential for us to not only improve diagnosis, but to improve the rate of people that are treated for their TD, and that's really the core part of our mission.

So that brings us to the end of our call. I think what you've heard this afternoon is the fact that we have a total belief, and it's based in data that we have a growing market here that we have a patient population that is needlessly suffering; probably 80% at least of TD patients are needlessly suffering. So that is where our mission lies. That is what we're going to work on. And we're using every avenue that we have at our disposal, in order to do that. You've seen a lot of that, efforts that we put in place over the last four years. You've seen us treat -- take this marketplace from something that, physicians four years ago denied that even TD existed. To now, there are a great number of TD patients that are on treatment and being helped in every aspect of their life. That is going to continue. And that will only grow overtime. And that's what we're dedicated to. And we're going to keep going with that. So with that, I would like to thank you all for your attention today. And we look forward to talking to you in the near future.

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