Neurocrine Biosciences, Inc. (NBIX) Earnings Call Transcript

Good morning, and good afternoon. My name is Todd Tushla, I'm the Vice President of Investor Relations at Neurocrine Biosciences. And on behalf of our entire company, welcome to our 2025 R&D Day, whether you're here in person, on the webcast or reading the transcript, we're grateful for your time. We will be making forward-looking statements today. So I refer you to our latest SEC disclosures. Our speakers for today from Neurocrine will be Kyle Gano, Chief Executive Officer; Sanjay Keswani, our Chief Medical Officer; and Jude Onyia, our Chief Scientific Officer. As far as tenure at Neurocrine, Sanjay joined us in June. Jude joined us in 2021, and Kyle joined us in 2001. Wow, that was a long time ago. We're also fortunate to have with us today Dr. John Krystal, a world-leading expert in the field of neurology and psychiatry and a Professor at Yale University. Dr. Krystal, thank you for being here. Dr. Krystal will be joined on stage by Jaz Singh, our Vice President Of Neuropsychiatry Development for a KOL discussion. The agenda over the course of roughly 3 hours. I'll be turning things over shortly to Kyle, who will provide opening remarks. We'll then have Sanjay come up and provide an overview of our industry-leading neuropsychiatry portfolio. We'll then have Dr. Krystal and Jaz come up for a moderated KOL session. Following that session, we'll open it up to the audience for questions to Dr. Krystal. They're going to cover a lot of ground on osavampator and direclidine. So hopefully, you find that engaging and ask some good questions for Dr. Krystal. We'll then take a quick 5-minute break. After that 5-minute intermission, we'll transition to Jude, who will come up and provide an update on Neurocrine's R&D transformation progress since he last spoke to the investment community 2 years ago. We'll then open it up for the second round of questions from the audience, and then Kyle will provide closing remarks. Now for those of you who have made the track to Southern California, and I know it wasn't easy, but for those who have made it, there's nothing quite like having tacos from world-famous seaside market for lunch. So we'll provide you launch out in the quad outside. It's a beautiful day here in San Diego, and you'll have a chance to interact with Neurocrine leadership in a very informal friendly setting. So with that, that's the agenda. It's time to turn it over to Kyle Gano, Chief Executive Officer of Neurocrine.

Thanks, Todd, and good morning, and welcome, everyone. Thanks for being here today. It's great to have you all here with us together on this occasion, Neurocrine's 2026 R&D Day. In case you're wondering, for those of you coming in from New York, I think it's supposed to be about 32, 34. It's going to be 30 degrees warmer than that here, 35 degrees warmer than that today. So I hope you're able to get out and enjoy a little bit of the weather here in San Diego. If you came just in time or if you're here earlier this week, hopefully, you got some time out and to enjoy what San Diego has to offer. So a couple of things. Welcome to our beautiful new campus here. I'm reminded 2 things every day when I come into the office, I'm reminded how far we've come over the years. The company was created back in the early 1990s, and some of the members of that team are in this room today, but we started in a garage about 5 miles down the road. So if you think about starting in a garage to coming to this campus, you really do get reminded on how far you've come. The other one is, is that many years ago, I was a chemist, and I come into this campus every day and I see our labs, and I think to myself, boy, I could have really been something if I would have had these labs when I was going through graduate school. But those are all things now that our employees get to enjoy here. And the other point that I'd bring up about this campus is that it represents this year the first time all the departments from research to development to commercialization are all under one roof. And I know I'm incredibly excited to have us all here. I think many of the employees feel the same way. As we move into 2026 that would be the first full year that will all be together. So going to meetings, walking across campus. These are all things that we used to have to drive to because many of our labs were not located in the same spot of our previous headquarters. So a very exciting time. We're hoping to share that with you today. We've got some tours planned, I think, this afternoon. So I would encourage you to take part in those and see what we have ongoing here at Neurocrine. A couple of pieces of just housekeeping for me. I do want to thank you for your time and interest in coming out all this way, especially this time of year, especially some of the difficulties in traveling. We know you have other things that you could be doing. And for Neurocrine really is an opportunity for us to share with you why we think we're moving into a new era here. So to that end, today is going to be all about really showing you the depth, the momentum and the focus and future of our science and pipeline. I think given our success with INGREZZA and CRENESSITY, we're actually going to pause and also reinforce our ability to convert innovation, innovative science to life-changing medicines. And you're not going to hear a whole lot about INGREZZA and CRENESSITY today, and that's by design. It's all about research and development today. So beyond a few opening remarks about these in my introduction, you're not going to hear much from Sanjay or Jude. Again, that's deliberate. But as we think about the future then, it's going to be sharing with you today what's in store in terms of our innovation across research and development, our near to midterm value drivers, and then we'll give you a feel for where the R&D is pointed in terms of the future. Now before I get into my opening remarks, I would like to pause a little bit. Todd mentioned who's going to be joining me today, colleagues wise, to help me speak and share with you what's going on. He's very formal in his presentation of Dr. Sanjay Keswani and Dr. Jude Onyia. Our management team, we travel a lot together. In many ways, I spend more time with them than my family. So the reason why I'm saying this is that when I refer to them in my introduction and my close, you're going to hear me say, Sanjay and Jude. That's how I know them. So you may hear that as we go through the presentation. So I just want to give you that heads up that that's the familiar way that we refer to each other here at Neurocrine. It's part of our culture. But together, Sanjay, Jude and our entire research team, really across our enterprise, past couple of years, in particular, we've transformed our research and development capabilities into a real competitive advantage. And it's with that view that me personally and others, we believe we're well on our track of becoming that next great U.S. biopharmaceutical company. So like most R&D days, there's always themes, takeaways I'd like to frame the discussion here for you as well. First, kind of going back to my opening remarks and theme, I believe Neurocrine's is entering a new era. We're moving away from a single product biotech company to a multiproduct diversified biopharmaceutical company with scale. And by scale, I mean here's our headquarters, you're seeing it today. We have 2,000 employees. We have capabilities across research, development, commercialization, and we have 2 commercial products. That's very rare. In our space, we did all that here in San Diego, and it's rare for San Diego itself. If you think about INGREZZA, CRENESSITY, there's a few more times you're going to hear this. Both of these products provide revenue and revenue diversification growth for the near to midterm, long term and really provide durable cash flows. Those 2 pieces give us a strong foundation from which to invest in R&D. And that's really why we're here today. Second, we're executing on an industry-leading neuropsychiatry portfolio. It's positioned to deliver multiple best and first-in-class medicines this decade. So before 2030, that's what we're looking at here. Programs like osavampator for major depressive disorder, direclidine in schizophrenia, our next-generation VMAT2 inhibitor programs. These all anchor a differentiated neuropsychiatry portfolio and I haven't even touched the muscarinics yet. Our scaled muscarinic franchise focuses on orthosteric agonist and antagonist. We're the only company that has these. So it does provide a competitive advantage as well versus other companies in this space. Third, we have an R&D engine that's fully transformed, fully operational. And in my view, it's over delivering on innovative science today. In fact, you'll see through some of the work from Sanjay and Jude when they present it. We're delivering more high-quality programs faster and across more modalities than ever before. I'm only going to have one more slide on the R&D engine because I don't want to steal Jude's thunder. I'm going to let him go through the updates that he has from the last time he presented on our R&D engine. But needless to say, I'm very excited about what's going on in the research side of the organization. Fourth, we're going to be leaning into our 30 years of experience and expertise in CRF biology, by CRF, I mean corticotropin-releasing factor. It's the same underlying biology that is tied to CRENESSITY's success in CH. We're going to lean into that, and we're going to have a two-pronged strategy moving forward. One is we're going to have next follow-on medicines that will combine with CRENESSITY over time, employing and utilizing the CRF1 mechanism, antagonists in particular, and we're going to be expanding that portfolio into CRF2 agonist, in particular peptides. And this is going to take us into a range and metabolic disorders, including obesity, and our first program is going to be targeting weight loss with muscle preservation. You'll see some really interesting data on that today. So our lead program, NBIP-2118 is going to be in the clinic in the first half of next year. So if you put all these pieces together, I hope it paints a picture of a time of sustained catalyst between now and end of this decade. Now of course, we're going to have an early-stage pipeline that's always going to deliver Phase I data. It's pretty rich today. That's going to be important because that's going to define the mid-stage pipeline. But more importantly, in 2027, you're going to see all of our Phase III trials start reading out osavampator in MDD, direclidine in schizophrenia. You're going to hear today that direclidine has already started its bipolar mania Phase II trial that's going to read out the same type frame. And we also just initiated a Phase II trial in schizophrenia with our dual M1/M4 agonist that will read out in the same time frame as well. And then I just mentioned NBIP-2118, which will deliver data in patients over that same time frame. So a lot going on over the next few years. It does require very exquisite execution, and that's something that we'll continue to do over time. So those were the key messages. I would like to take a moment and remind the audience, those listening in that my history here at Neurocrine you heard I was -- I've been here for about 25 years. In fact, some of you know, I started here as a summer intern, which funny joke there is probably that our HR program really has a really good program for entrants coming into Neurocrine if you're interested. But in terms of our history as well as my own, it is founded in neurology, psychiatry, endocrinology and immunology. In fact, I'd like to spend a little -- a few minutes telling you about that history because I think it's important here. It does take us back to the 1990s -- early 1990s, I mentioned, we started in a garage, now on the road. But with foundational contributions across the 4 therapeutic areas, and with help from our founders, Dr. Wylie Vale, the Salk Institute, brought us in all that corticotropin-releasing factor biology. And that took us into a lot of areas that spanned neurology to immunology. And then the other half of our founding technology came out of Dr. Larry Steinman's lab at Stanford. He contributed what we called ultra peptide ligands and that took us into endocrinology and neurology via multiple sclerosis. So if you look across the field today, you'll see their science still influence a lot of companies and the work that they're pursuing. And if I think about Neurocrine, we followed that science ourselves over the past 30 years, and we follow the science that's come from that. And that's taken us to areas that's required patience, persistence and original thinking to stay true to those therapeutic areas that we're investing in. So a couple of pieces that I'd mention about that time being a company that's been around for 30 years, you develop a culture. You develop a focus on how you tackle problems, and that's what this was able to allow us to do. The culture that came from these 30 years, 3 decades worth of work served as a basis, stayed true to those areas that our teams can innovate at the highest level. It also gave us the insights on what it takes to win on complex biology. And what we did over this time frame before you know, you wake up and you find out that you have deep institutional knowledge that no other companies possess. So for us today, if you think about kind of the sequence of things, it's INGREZZA, it's neuropsychiatry, deep institutional knowledge, there around that movement disorders. It's VMAT2 biology, which is tied to INGREZZA. If we look at CRENESSITY, deep institutional knowledge and endocrinology in CRF biology. And an area that we don't often talk about, but is near and dear to my heart because it's why I learned about drug development. Endocrinology again, but on the Gnrh 8 receptor that ultimately led to the approval of ORILISSA who AbbVie now commercializes, excuse me. It's a lot of institutional knowledge that we created over the years. What most companies do, what we do is we follow the science that we learned from that, and we take that into new areas. So continuing on that theme, let's look at the snapshot of a presentation from Neurocrine in 2000. Now the reason for showing you this snapshot is not to show you our rough PowerPoint skills from back then or to the poor choice of colors, which I did try my best to match it to Jude's suit. So see if you can compare those colors when we break this afternoon. But really is to show you a couple of things. One is you can see at this earlier stages of our pipeline, programs across neurology, psychiatry, endocrinology and immunology. Number two, you see programs of different modalities. Small molecules, peptides and biologics. The third thing requires you to pull out and focus on 2 programs here: Type 1 diabetes and multiple sclerosis. If you go at a 10,000-foot level, a program in endocrinology and a program in neurology, seemingly, disparate therapeutic areas. These are programs that came from Dr. Steinman's lab at Stanford. But the one thing that requires for their success conversion to -- from a Th1 to a Th2 immune response. So 2 unrelated therapeutic areas requiring something to happen from an immune-based perspective to win. And that view on science following the science is what drives our R&D engine today. Sometimes it takes you into other areas, you exploit, you win, you see how that applies to your institutional knowledge. So going beyond that, looking at our pipeline in 2005, a couple of things pop up here and expand an endocrinology portfolio, moving a program in Phase II for endometriosis. That program became Orilissa. You see a program in obesity. You see early investments in immunology, in this case, chemokines, an important class of immune-based targets and therapeutics back then and even today. And you also see the expansion of our CRF biology from CRF1 antagonist to CRF2 agonist. In this case, we're developing Urocortin II, which is the endogenous ligand of the R2 receptor for acute decompensated heart failure. And of course, as I already mentioned, over the entire history of Neurocrine, we've been steady investors within CRF. We took 6 CRF1 antagonist clinical development. One of them became CRENESSITY. I just mentioned the CRF2 investment as an agonist in heart failure. We also had an effort on binding protein, small molecule inhibitors of the binding protein of the CRF receptor. This developed our early institutional knowledge across neurology, psychiatry, endocrinology and immunology with just one mechanism. The other thing that we've learned over the years that's applicable today when you hear from some of our R&D interest in the near term is the value of being in endocrinology. For the most part, you get biomarkers, you get objective endpoints and the ability to see activity early on in the development with the molecules that you're developing and investing in. So compare and contrast that to our portfolio today, industry-rich, leading neuropsychiatry program, we don't have all those same benefits. So diversification can also give you benefits on probabilities of technical success as well. So how do we bridge this past to our present and future? I guess a couple of things before I jump into that. For those of you that already know Neurocrine in our pipeline, that's probably most of you here because you have seen our pipeline, we have talked about it with you over time. There are many similarities in the pipeline today that I've shown you in years past, 2000 and 2005. But there are a lot of things that are different about our company today than back then. First of all, some of the programs that we had in our pipeline became medicines, valbenazine, our CRF1 investments became CRENESSITY. Our investments in endometriosis became Orilissa. But there are other programs that we had to pause. We had to pause because at moments in time we didn't have the right team. We didn't have the right capabilities or we had to focus on medicines like INGREZZA or CRENESSITY or helping a partner to get Orilissa over the finish line. But that's not the case today. Today, we have the team, we have the capabilities, and we have the financial profile of a company to follow that science that I mentioned before, all the way through. And that's the difference about Neurocrine today versus Neurocrine in the years past. Now when we think about connecting our past, present and the future, there's 2 things that you should take away from this slide. What we're investing in today and the cadence of investments we're making over time and where that's taking us. So it makes sense. Our first medicine approved INGREZZA in 2017 in neuropsychiatry, there was a lot of value that came out of that approval. Most of that value in my opinion is for patients in tardive dyskinesia and in Huntington's disease chorea. But the other value comes back to Neurocrine, allows us to reinvest in the company. And of course, with the team that we have, the capabilities that we had at the time, you're going to build out your neuropsychiatry portfolio, and that's what we did. That brings osavampator, the muscarinic, direclidine, our next-generation VMAT2 inhibitors. The next product that we got over the finish line was CRENESSITY. Obviously, a lot of endocrinology experience. There are a lot of experience in CRF. So where do we go next from an R&D perspective? We stay in endocrinology, and we pursue adjacent therapies within CRF to expand our reach there. And then over time, we have a very strong financial profile as a company, as you know. That gives us the ability to steadily invest in R&D, both now and in the future and across all of our therapeutic areas. And not many companies can say that. And I've said we have certain competitive advantages in different areas. Our profile as a company, our size is also a competitive advantage. And I believe it's only one that's going to compound with the continued expansion and evolution of our pipeline. So there you go, you get the connection of our path to our present and where we're going in terms of our future and in what order. So we talked about the commercial portfolio previously kind of outlined at the top there. We got in INGREZZA, CRENESSITY, our medicines partnered with AbbVie and then our clinical pipeline and how that's evolving. How do those 2 areas inform our R&D strategy? Well, it all starts by putting our purpose at the center of everything, which you can see here, to release suffering for people with great needs. Then as we think ahead, our company has come together over time, and we put together defined our strategic R&D pillars. And they're actually on the slide here. They kind of go in the sequence as I just told you where our investments are going lead the VMAT2 category. What that means is our leaning into our institutional knowledge on VMAT2 biology on neuropsychiatry, take those learnings and apply those to our next-generation VMAT2 inhibitors. We've got 2 molecules in that space, and you'll hear about that from Sanjay. In terms of delivering on the promise of CRF, we know there are areas in this biology that we missed in years past. We had to pause because we didn't have the right team, the right capabilities. We had to focus on getting CRENESSITY over the finish line in CAH. We don't have those constraints today. So delivering on the promise of CRF means doing all we can for next-generation molecules for CAH and R1 or CRF1 and then moving into adjacent areas in particular, metabolic diseases and conditions, with CRF2 agonist. So that's a two-pronged strategy there for our CRF R&D strategic pillar. And then lastly, we want to maximize and evolve the pipeline. So there's 2 sides of the coin here. First side, obviously, maximize everything that's in the pipeline today, and there's a lot. There's 12 programs. You're familiar with those. But we got to make sure we do right by those. Number two, the other side of the coin, we want to do the same, maximize and evolve the pipeline for the pipeline of the future. That takes us into our therapeutic areas, our next-generation molecules, et cetera. So that's the goal for that strategic pillar. But the thing I would say about that, and I'm sure you can agree with me that innovation here at Neurocrine hasn't always been internal. It's been external as well, and we'll continue to lean into that. And by that, I mean business development has served us well over the years. In fact, I believe it's yet another one of those competitive advantages. There have been times in our history in the early 1990s, going back to when the company was created that will use business development to boot strap the company up to the next stage of its evolution, and that was done with a deal with a larger pharmaceutical company for example. We've also filled pipeline gaps in years past recently to build our pipeline. More recently, we've used business development to bring in new technology to act as an accelerant for research interest. If you look across all those categories, here's a representation of recent partnerships that we struck up, mainly in new technologies to help accelerate our research interest, but obviously, we've identified those companies that we partner with to bring in tangible assets from the outside as well. Business development will continue to be an active role, play an active role here at the company moving forward. Now I talked about our R&D engine previously as one of the key takeaways for you today. one being fully operational and delivering as promised, right, I said over-delivering. But a couple of things about this. When Jude came on board in 2021, we all sat down around a table, it was in our old campus and we tried to think about ways we could really transform our R&D organization. It was working. It was being successful. It's hard not to say things were in not a great shape because we had multiple medicines that have gotten over the finish line or we can see that view. But really wanted to really give us some more horsepower and transforming in a way that we can get more productivity over time. So there's 2 areas that we identified that we could do this. One is, historically, we've been a small molecule company, which has really served us well over our future. But you can see -- in our early days, we actually had expertise in other modalities. And I can tell you, when we had to pause those other modalities, we still worked on targets of interest, but in many cases, the small molecules and the targets that we're interested were compatible. Despite our best efforts, we couldn't get candidates that we can move forward into clinical development. We made a list of all those targets and we made a list of that biology that was difficult, and we saved those for another day, another day where we had the right team, great capabilities to attack that biology in the right way. We brought in that team, some of them are here in the audience today. We brought in the right capabilities to expand into peptides and biologics. That was point one. The other 2 -- the other point was that we wanted to reconfigure our pipeline. So I had the right mix, not weighted to one side or the other, but the right mix of nonvalidated to validated targets. And by validated, I mean, genetically or clinically. When we put those together almost immediately, we saw a multiplier effect on the probability of technical success, in particular, of our earlier-stage programs that were of interest at the time. And we saw those start propagating through earlier stages of research, to later stages of preclinical and now moving into clinical development. And with that productivity, we drew a line in the sand, we saw where the company was headed, and that's shown on this slide here. Remember 4, 2, 3, we're expecting a steady state 4 new Phase I starts, 2 new Phase II starts, 3 programs in Phase III. And we're sitting here at least this depending on the productivity that's coming out of our labs. So this puts us in a pretty rare air in terms of other companies of our size. And I'll tell you now, I'll kind of steal the thunder of both Sanjay and Jude, we hit this Phase I/II Phase III metric for the first time this year after starting this in 2022. So very good productivity thus far. It's the first time we've been this productive ever in our history. And if we do this year after year, we have very high conviction that we'll be able to deliver one new medicine every 2 years. That's the plan. This is a snapshot of the pipeline today. This is the one that you're familiar with. We're not at steady state yet for the R&D engine that I just presented. So this does represent the programs that we're advancing now. You can see that there is molecules that span small molecules themselves as well as other biologics. We believe this is an innovative pipeline that we'll deliver a lot of value creation just this decade alone, not to mention everything that's coming behind it. So that's the pipeline. I think that as we turn it over here, just a couple of parting thoughts. Today, you're going to hear a few themes. I mentioned them already, but you'll hear words like execution, why that's important, evolution, repeatable innovation. These are not words that are aspirational. These are things that we're seeing pop up in our pipeline today. We're seeing these being the source of the catalyst that will -- what we'll observe for the remainder of this decade. So before I hand it over to Sanjay, I would like to say thank you to our research and development teams and really everyone across our organization. It's their commitment to scientific rigor and delivering medicines for patients that is why we're here. Many of the leaders across our therapeutic areas are in this room, as I mentioned just a moment ago. Hopefully, you will get a chance to meet some of them today. They're great people. They have a lot of information about what we're working on here in science that we're trying to deliver. I would encourage that. I think with that, I'll turn it over to Sanjay.

Great. Hello, everyone. Firstly, thank you, Kyle, for the introduction. And thank you to everyone who actually managed to get here. I know it was an arduous journey for many of you, particularly from the East Coast because of inclement weather. I really appreciate your time today. So I joined Neurocrine about 6 months ago. So I'm kind of the newbie here. Really excited to have joined the Neurocrine team and hopefully, it will become evident over the course of today or this morning about why I joined Neurocrine. It wasn't because of the fantastic weather here, but clearly, that was an important factor as well. In terms of my background, I'm a physician scientist, a neurologist trained in Queen Square London as well as John Hopkins, Baltimore, I was on the academic faculty, Hopkins for a while where I saw patients with a wide variety of neurological diseases as well as RAN and R1 funded immunology basic science lab as well, and then joined the industry about 20 years ago, initially big companies, like BMS, Lilly, where I had the pleasure to encounter Jude, our Chief Scientific Officer; as well as Eiry Roberts, who I am transitioning from. From there, I went to Roche, where I was Senior Vice President, Head of R&D for a number of therapeutic areas. And then I joined small biotech. I've been doing that for the last few years. I think that's been really helpful in terms of having a relatively hands-on approach with this ever prevalent mindset of time and cost efficiency. So hopefully, I can bring some of those skill sets to this company. So today, I'm going to be talking about our neuropsychiatry pipeline. Really excited by this. It's broad and specifically, it's driven by validated biology, and we'll be talking about validation a lot this morning because we believe that relates to high probability of success. Admittedly, the psychiatry therapeutic area has been associated with a low probability of success, but we feel we can mitigate this risk by utilizing highly validated targets and mechanisms. So we have 3 pillars here. The first one is glutamate modulation and the validating mechanism here is ketamine. So the premise here is to have ketamine like efficacy in patients with depression but avoid the baggage of safety and tolerability issues, particularly the [ psychometic ] ones, the memory issues, et cetera. So we're very excited about what we've seen so far with osavampator, which is an AMPA potentiator, got some terrific Phase II data, which I'll present. We feel it leverages ketamines mechanism, but is a much more convenient oral option, which touchwood has a great safety and tolerability profile. 770 is another molecule in our 2b NAM, which we recently talked about or at least presented in the press release. We did complete a small signal-seeking study. We got some signals of efficacy, and we're currently deciding about next steps going forward. With respect to the middle pillar, we have a whole slew of muscarinic agonist. The validating mechanism here is Cobenfy or xanomeline, which has efficacy in the schizophrenia indication. We have direclidine, which is a specific M4 orthosteric agonist, is currently in Phase III development in schizophrenia. As Kyle mentioned, we've just initiated a Phase II study in bipolar mania. And we feel by targeting only M1 in the context of some of these other molecules, we have 570 and 569 M1 and avoiding M2, M3 and M5, we actually avoid a lot of the issues associated with GI in tolerability. We actually have safety data for all of these molecules and we haven't seen much in the way of GI issues. And I'll be talking a bit more about that. In terms of other indications, we're exploring with these follow-on molecules. So really, this is a psychosis platform. In addition to schizophrenia and bipolar mania, we're also very interested in Alzheimer's psychosis, a huge unmet need. Clearly, it's a difficult area in terms of trial execution and we're learning from the field. Clearly, the others are in front of us, who hopefully will inform the whole field in terms of how to do successful trials in Alzheimer's psychosis. I should mention that 570 has a potential of being a long-acting injectable which may be very helpful in terms of improving compliance in patients with schizophrenia, where potentially an oral medication might be difficult on a long-term basis. And then on the right, we have our VMAT2 inhibition platform. This is validated by our own molecule, INGREZZA, which obviously has done really well. We think that it's a really good medicine for Tardive dyskinesia and Huntington's chorea. We know from a receptor occupancy point of view, that has very high levels of VMAT2 receptor occupancy. And to be candid, we know a lot about this area in terms of drug development, specifically how to correlate serum exposures with receptor occupancy in the brain because we've done that correlation multiple times with both preclinical species as well as humans and patients. There, we have 2 molecules, 890 and 675. And excitedly, they have the potential also to be long-acting injectables. So again, we feel that we can continue to be very present in the tardive dyskinesia community for the long term. So I'm going to start with osavampator. I'm sure you're familiar with this, to some extent. It's a first-in-class AMPA positive allosteric modulator or otherwise referred to as potentiator. This slide really relates to the huge unmet need in depression. And again, I'm sure you're very familiar with it, but I make no apologies here in terms of emphasizing the mental health crisis that we are facing, really globally. United States, 1/3 or the 16 million plus people who have depression don't respond at all to available antidepressants. And if one thinks about individuals who have had an inadequate response to antidepressants, this proportion rises to just over half of individuals. So this is a substantial number. And again, I don't need to remind this audience about the alarming suicide rate in our young people. I know there's a debate about the contribution of social media and the COVID pandemic. But what is not debatable is how alarming and real this statistical -- these statistics are with respect to this tremendous unmet need. So clearly, a lot of unmet need or room to improve, which is back to efficacy. In terms of safety and tolerability, there are side effects with many of the standard of care molecules, including weight gain, sexual dysfunction and sleep disturbances. And lastly, cognitive impairment is increasingly recognized as a big problem in major depression. It's something we're specifically interested at Neurocrine. Indeed, we have some interesting Phase II data with respect to osavampator. This is with respect to improving available memory and processing speed. And again, this is something we'll look further in larger-scale studies. This slide depicts the mechanism of ketamine. This is on the left of this slide and where osavampator acts in this cascade. So ketamine blocks NMDA receptor on inhibitory GABAergic into neuron. So it inhibits the inhibitory neurons. So essentially, it releases the brakes on glutamate. And hence, with ketamine, you see a burst of synaptic glutamate release and that results in an increase in AMPA activity, AMPA being another glutamate receptor with an increase in mTOR signaling and release of an important neurotransmitter called brain-derived neurotrophic factor. And that results in synaptogenesis or the formation of new connections between neurons. And this is thought to be really important in depression efficacy. This rewiring helps to break these continual endogenous negative feedback loop circuits that one sees in depressed patients. Now there are issues with a burst of synaptic glutamate, particularly it might be associated with side effects such as [ psychometic ] issues and memory deficits, which one sees after treatment with ketamine and esketamine. So we're hoping to avoid that with osavampator, which acts directly at AMPA receptors. So it does not increase synaptic glutamate. Indeed, it leverages endogenous physiological levels of glutamate at the AMPA receptors. It's a potentiator, not a true agonist. This is super important because again, to be candid, we've been trying to have a molecule like this in industry. This is not just Neurocrine. I'm talking about industry in general for decades. And it's been really hard to have a molecule with low intrinsic agonistic activity but be a true potentiator. And I believe we actually have that molecule. So I'll show you the Phase II data, which essentially validates to some extent, the safety tolerability profile that we're seeing. Specifically, we're not seeing any evidence of psychometic and memory deficits. So the Phase II study is called the SAVITRI study. This evaluated the efficacy and safety of adjunctive osavampator. That's our AMPA potentiator versus placebo in individuals who had an adequate response to antidepressants. So that's important to know this population. This is what -- these weren't naive patients. These are patients who already had an adequate response of up to 5 antidepressants. And this was a double-blind treatment trial, 8 weeks in duration placebo and 2 active arms of osavampator, 1 milligram and 3 milligrams, and we had some safety follow-up to that. And this slide shows the results. So on the left, we see the efficacy as judged by the MADRS scale, that's the vertical scale. The MADRS is an important endpoint, a regulatory endpoint for depression. So as you can see, versus the orange line, which is placebo, with both our active arms, we're actually separating from placebo, and we're seeing the best separation with our 1 milligram arm, which is the black line at the bottom and these effect sizes are actually quite striking. As you can see on the right, at 1 month, we see a decrease of 4.3 on the MADRS. And that increases to 7.5 at 2 months with a p-value of 0.0016. So highly statistically significant. And this effect size is 0.73, again, is striking in the depression field. We typically used to effect sizes but efficacious agents in the depression field of some are ranging from 2.5 to 4. So 7.5 is a big effect size. Now what was just as important was how well tolerated this molecule is. And I'm sure Dr. John Krystal, who'll be speaking later will comment on the importance of safety and tolerability for prescribing psychiatrists with respect to keeping patients compliant in the long term with their medications. In fact, the adverse event profile for osavampator at both doses were comparable to placebo, no evidence of glutamate toxicity with seizures, specifically, I've mentioned the psychometic and memory associated issues, no evidence of that. And the discontinuation rate was similar to placebo. So really happy with this tolerability profile. So based on the Phase II study, we've initiated Phase III studies, specifically 3 Phase III studies, which are 8 weeks long, testing in a double-blind manner, in a placebo-controlled manner at 1 milligram of osavampator. This is one-to-one randomization, which I think is very important in terms of minimizing patient expectation and minimizing a placebo response. And this slide captures the entire Phase III clinical program. So at the top, you have the 3 Phase III studies, which are all identical. Of note, there are only 200 per study is absolutely deliberate. What we're trying to do here is keep the Phase III studies, roughly similar to the Phase II studies and that minimizes site heterogeneity. We're expecting top line data in the 2027 time frame. We're also doing a randomized withdrawal study or otherwise known as a maintenance effect study here. Everyone has started on active treatment, 1 milligram for about 4 months, and then stable responders are randomized to either continuing the drug or going on placebo. And lastly, we're getting some long-term safety data as well. So we would be able to file shortly after receipt of the Phase III data. By that time, we'll also have some long-term safety, randomized withdrawal study is not necessary for approval, but clearly, it would be potentially very important for payers and potentially prescribers down the road. Okay. So we're going to move on to the second pillar, which is our muscarinic agonist portfolio. So I think the first thing here is that we have a whole spectrum of muscarinic agonist. Arguably, we have deep expertise in this area over a number of years. We've been able to dial in essentially what we wish with respect to how much M1 and M4 with some of these molecules. We're avoiding the other muscarinic receptors, specifically no M2, M3 and M5. So very unlike xanomeline, for example. And that means that we essentially avoid GI tolerability issues, and there's no concomitant need to administer a peripheral antagonist, which carries baggage in its own right. So for example, trospium is a reason for the food effect with the Cobenfy formulation because its AUC is changed by food. So on the left, we have direclidine, which I'll be speaking about a bit more. That's our M4 orthosteric agonist, which is currently in Phase III trials. I'll be showing you that Phase III program as well as the Phase II data. It's a once-daily drug. We're in schizophrenia right now, also started a bipolar mania study. Again, we're very interested in creating a psychosis franchise with this portfolio. With 570, we have the potential for long-acting injectables. That just started a Phase II study in schizophrenia. So that's moving quite quickly. That's a balanced M1 and M4 agonists. Moving along, we have 569, which is also a dual M1/M4 agonist, but with very interesting PK properties. So there's a half-life of up to 50 hours, has a delayed T-max of 6 hours. And that confers a really nice, and again, this is with our data so far. So clearly, we'll be doing more safety testing over time. But so far, really good tolerability in the elderly population. And that's why we're interested in targeting that drug for Alzheimer's psychosis because we feel we'll have a good enough safety profile to actually prosecute that indication. So Alzheimer's psychosis, I'm sure many of you are familiar with it, huge unmet need, half of Alzheimer's patients eventually develop psychosis. And there's going to be really troubling for patients and their families. It's dominated by delusions. And often, these dilutions are directed at their most close family members, like my husband is having an affair or my children are stealing my money, et cetera, and there could be agitation and aggression associated with it. And particularly the caregiver might be relatively infirm and frail, there are safety issues as well here. So it's a major cause for institutionalization or nursing home placement of Alzheimer's patients. So as I mentioned before, we'll be learning a lot about this area from others who are proceeding us, but very keen to use this specific molecule in Alzheimer's psychosis. And on the right, we have an M1 preferring agonist, 567. M1 agonism is thought to confer cognitive properties and Alzheimer's is a good indication for that, particularly in individuals where cholinesterase inhibitors may not be working well. And the reason they may not be working well is because one sees cholinergic denervation in many patients in Alzheimer's disease so they lose the capacity to actually even make acetylcholine. So by having an M1 agonist, we essentially bypass the need for acetylcholine because we're working postsynaptically. Schizophrenia is an enormous unmet need, a devastating disease, 3.5 million people in the U.S. suffer from schizophrenia. It's devastating because it affects patients early in their lives, often their teens in 20s. It's essentially a lifelong disease, if you have it. And it impacts essentially your identity -- human identity and functioning. And again, very sobering data on homelessness and incarceration, social isolation, et cetera. And I think it's particularly tough for these patients because the drugs that we use to treat them have such significant safety issues. I think it would be difficult, frankly for anyone in this room to have long-term compliance with these medications just with even the best motivation and will power. So these side effects include weight gain, metabolic issues such as type 2 diabetes, extrapyramidal issues, so that's becoming Parkinsonian with a mask like facies, a flat affect and also potentially irreversible disorder that, obviously, we're all very familiar with in this room, which is tardive dyskinesia. So we can do a lot better for these patients with respect to safer medications, which ultimately will confer hopefully greater compliance. And then we can do better in terms of efficacy, particularly with respect to negative symptoms and cognitive impairment. I mentioned the prevalent social isolation that is consequent in these individuals, the inability to have functional employment for many, negative symptoms and cognitive impairments are thought to be key drivers of that. So the more we can do in that space, the better. So this is our Phase II data with direclidine. I'm showing the 20-milligram dose. Here, we see an improvement in PANSS, which is the regulatory approval endpoint for schizophrenia. The effect size is pretty large, 0.61. Again, that ranks pretty highly with medications in this field at the top range. And the absolute mean difference with respect to PANSS is 7.5. Here, the p-value at Week 6 is 0.011. And then with respect to secondary endpoints and the reason I bring this up is when you have a Phase II study, you're trying to figure out if you have a real signal or not, is this a good enough efficacy profile for you to invest in Phase III. And one of the things you look at is what about the secondary endpoints? Do they match the primary endpoint? And with all the secondary endpoints, we just had compelling improvements to that 20-milligram dose, and you can see these p values. I mean I'd like to see all these zeros after the decimal point. So these are highly statistically significant. And again, these are important approval endpoints as well recognized by regulators, CGI severity and the Marder Factor is both positive and negative. Now with respect to safety and tolerability, again, I keep going on about this, but it really is important, particularly in the psychiatry space. So here, we have the different doses that were tested. At 20 milligrams, the dose utilizing in our Phase III studies, that's in the left column. And on the right, you have placebo. And the only thing that stands out from placebo is somnolence and dizziness, which are relatively mild in these individuals. Headache for some reason is enriched in placebo. And from a GI perspective, again, as expected or by design, we didn't see any GI issues that were different from placebo. And the rate of discontinuation was also similar. So this is a summary of the Phase II data on the left. We have the efficacy data. I've mentioned the effect size of 0.61. The impacts on both primary and key secondary endpoints. On the right, the safety and tolerability profile and highlighted the GI adverse events, but also other adverse events that are really important for patients with schizophrenia. So although admittedly, a relatively short study, we didn't see any weight increase versus placebo or any of the extrapyramidal issues or that one sees, particularly with antipsychotics. So on the left of this slide, we have kind of intra-muscarinic competition. Some of the key features. These are highlighted as specificity at muscarinic receptors. So at the top, we have our drug, direclidine, which has high selectivity only for M4, orthosteric agonist of M4 and because of that high selectivity in contrast to the middle row xanomeline, one doesn't need to add trospium or a peripheral muscarinic antagonist to treat all the side effects and you don't have GI issues. Now in contrast to emracladine, which is the bottom row, which also is specific with respect to targeting M4. We're an orthosteric agonist, so we activate these receptors regardless of the endogenous ligand, but emracladine needs acetylcholine to work. It's a potentiator. So we do feel we have an advantage there. But clearly, I think the proof in the pudding will be over time when those trials get up and running potentially. And that selectivity has advantages from a patient prescriber point of view, that's in the right box on this slide. So once daily, no titration can be taken with or without food. There's no food effect by itself may sound trivial, but it's actually a massive issue for patients with schizophrenia. No significant GI issues, and I mentioned in contrast emracladine, we do not need a presence of acetylcholine. Okay. So our Phase III studies are simple, short studies, 5 weeks in duration, double-blind, 1:1 randomization versus placebo. We're measuring or testing the 20-milligram dose. And this is a snapshot of our Phase III clinical program. So we're doing 2 acute studies, not too big, again, deliberate 280 patients each at relatively limited sites, about 20 sites each, top line data expected in the '27, '28 time frame. Also doing a randomized withdrawal. Here, everyone is on the 20-milligram dose for 20 weeks and then the stable responders are randomized to placebo continuing the drug for a further 6 months. And the endpoint there is time to relapse, an event-driven analysis. Again, not needed for approval but may be very helpful data down the road in terms of prescribers and patients because it relates to more longer-term or chronic treatment. And then clearly, we're getting long-term safety data as well. The last pillar that I'd like to speak before I turn it to Jude is our next-generation VMAT2 inhibitors. So we have a very successful INGREZZA franchise. We think that relates to -- it has good safety and tolerability in the context of high levels of VMAT2 receptor occupancy here with these 2 molecules, 819 and 675, which we already have clinical data and indeed for 890 we'll be shortly starting a Phase II study in tardive dyskinesia. We have the potential for a long-acting injectable administration. That's why we've designed these molecules, specifically for these LAIs. And we think that will unlock new patient populations where oral therapies are challenging on a long-term basis. So in summation, my sense is that we are advancing an industry-leading neuropsychiatry portfolio. I do feel good that we are tackling really important diseases important for society, important for patients, important for families. And if we can make a dent here in this neuropsychiatry space, I think the world will be a better place. And this is one of the major reasons I actually joined Neurocrine. Now I mentioned psychiatry space has been difficult. With a relatively low probability of success for a number of reasons. I introduced our own portfolio with respect to how we've mitigated that risk by utilizing validated mechanisms and targets. But what's really important as well with respect to success in psychiatry is knowing how to run successfully psychiatry studies. And we believe we do have that expertise and knowledge largely because we have a terrific team, and I'll be introducing Jaz Singh soon. but Jaz, who is our Head of the psychiatry therapeutic area was the lead developer of esketamine, J&J and also has done a whole bunch of other things in the psychiatry space, including haloperidone and risperidone. So we're very fortunate that he's assembled really a great team over the years. So 2 main factors here. Firstly, optimizing trial design. As I mentioned, keeping it simple, and there's actually good data showing that the more visits you have, the more frequent visits, more intensive, the monitoring is, the more procedures you have, the higher the placebo response. So there's some intentionality in terms of keeping the study simple. Secondly, one-to-one randomization, the higher the patient expectation that they're going to receive an active treatment again, the higher the placebo response. Great data, is not theoretical, is all fact-based. So we've kept our studies 1:1 randomization to minimize that expectation by us keeping the studies relatively small with a high degree of selectivity in terms of which sites and investigators to choose is also a really important factor and we are also conducting iterative blinded data analysis to ensure that sites are enrolling the right patients. So with that, I can see that we have Jaz and Dr. John Krystal waiting. So I think I've already introduced Jaz. He is kind of a drug developer extraordinaire in the psychiatry space. And I think he will introduce Dr. Krystal. So I'll hand it over to you, Jaz.

Thank you, Sanjay. And I want to welcome Dr. Krystal, who is joining us today from Yale University. He's the Chairman of Psychiatry at Yale University with a number of distinguishing things in his career, but I think the ones I really want to highlight because it was a huge part of the work I did. So Dr. Krystal, you started work on ketamine back in the 1990s and quite an interesting story there, which is well published, but that was really a huge part in the development of ketamine as antidepressant as well as fostering the development of Esketamine or Spravato since then. Having seen the journey, I think we're really in a very fortunate time that the development of these new mechanisms really fostered renaissance, if you will, for novel mechanism sort of going past the 50 years of monoaminergics. So let's talk a little bit starting with depression then we follow with other things. As a practicing researcher and clinicians, what do you think are the current unmet needs primarily for depression?

Sure. No, we have dozens of antidepressant medications. We have a number of approved antipsychotic strategies for augmenting the effectiveness of antidepressants. We have TMS. We have ECT and we have esketamine now, and yet the depression remains a tremendous unmet need in our society where people are inadequately treated commonly in clinical practice where patients have low expectations about the possibility of getting better from available treatments. And so that depression remains one of the most substantial public health burdens in our society and around the world with inadequately treated depression associated with about a 10-year reduction in life expectancy. If we were talking about cancer, everybody in the room would nod their heads, but it's a surprise for many people to think about depression is something that takes such a terrible toll.

Yes. 10 years reduction is putting us back in the 1930s as overall life expectancy has increased, and it's pretty shocking. Now your lab has done a tremendous amount of work in characterizing the mechanism. In fact, Ron Duman, I think one of the earliest folks really laid out the pathway that it wasn't just monoaminergic changes, but the downstream changes. Having done all that work on elucidating the mechanism of monoaminergics and then ketamine, I think that's going to pave the pathway for some of the work we're doing now with osavampator and AMPA-positive allosteric module. What do you think about this mechanism and how it differentiates from the effects that we see with ketamine?

Sure. Well, Sanjay laid out the work that Husseini Manji first identified AMPA receptor as a key mediator of antidepressant effects of ketamine then Ron Duman worked out the circuitry of that, sadly Ron has since passed away. But our group has been studying -- trying to translate these animal research findings into humans. And we've used a number of novel neuroimaging strategies to do that. And so we've been able to show, for example, that the magnitude of the increase in corticaglutamate produced by ketamine relates to the magnitude of the antidepressant benefits that it produces. And we've also been able to show that a single dose of ketamine can in depressed patients with synaptic deficits as measured with SV2A-PET can increase synaptic density in those patients and that the magnitude of this restoration is related to the benefit of the antidepressant effects of ketamine as well. So the scenario that Sanjay laid out earlier related to antidepressant effects, which highlights a potential role for AMPA-receptor stimulation in producing these beneficial antidepressant effects associated with ketamine can be targeted potentially more directly with the drug that selectively activates or facilitates the function of AMPA glutamate receptors.

What do you think would be the -- I mean, ketamine and esketamine clearly are effective, but there are significant limitations in terms of adverse events, which require monitoring of use which limits its accessibility. Where do you think having sort of a mechanism like AMPA PAM clinically would mean in terms of safety monitoring, accessibility?

Sure. You're absolutely right, which is that ketamine, esketamine are best administered within the clinic because it has to be administered at the dose range where it can produce associative symptoms, nausea and vomiting and some other side effects. And so while the access to ketamine and esketamine is growing rapidly esketamine now in over 6,000 clinics and a market of, I don't know, almost $1.8-or-something billion a year, that still constitutes only about 1.7% of the patients with treatment-resistant depression in the United States. And so treatments that are delivered in the clinic will probably not -- there probably won't be sufficient access to address the major problem of inadequately treated depression and a drug that is so well tolerated like osavampator. I've been practicing saying that drug name. Osavampator can -- has the possibility of reaching a large number of patients that really can't come into the clinic or won't come into the clinic to get their treatments.

And I think since you speak of this, we would love to get your thoughts on what you saw from the study in terms of its efficacy as well as the safety data from the Phase II study.

Yes. Very impressive data. Almost -- or over a 7-point drop relative to placebo at 56 days for the 1 milligram dose is very impressive and kind of interesting that at 26 days, both doses had a kind of a similar degree of improvement, 28 days, excuse me. So I think that's pretty impressive improvement, particularly since these are patients who have an inadequate response to treatment and probably would have a very poor response if they were treated with another standard antidepressant medication.

And what do you think about the safety features and especially in concern with the ketamine and esketamine and the accessibility.

Yes, it's really striking that these drugs don't produce the kind of dissociated profile, the abuse liability associated with ketamine or esketamine. And while the abuse liability is managed in the clinic, there's a very little misuse of these drugs prescribed in the clinic, both the safety and tolerability profiles and the abuse liability are drawbacks of a drug like ketamine. And this drug doesn't seem to have any of those effects.

Why don't we switch very quickly then to direclidine or the muscarinics for this thing. So starting with a similar question, where do you think are the largest unmet needs for treatment of schizophrenia?

Well, I think that there are a number of domains that are really critical in schizophrenia. One is around efficacy. Second is around safety and tolerability. And safety and tolerability are really important in relation to adherence to treatment, which is a major challenge for patients with schizophrenia. Around efficacy as you were talking about our work with ketamine, we were convinced by about the mid-1990s that there were domains of schizophrenia psychosis that were not dependent on increased dopamine release. Some of this came from our work with ketamine, some from a study we did where we measure dopamine release and found that dopamine release following amphetamine administration is not found in about 1/3 of patients with schizophrenia. So that we needed other mechanisms besides dopamine D2 receptor antagonism to reach the kinds of symptoms that people -- many people with schizophrenia had. The second part of this is something that I think everybody in this room already knows, which is that one of the reasons that we all have been seeking drugs that treat schizophrenia using other mechanisms is to avoid the extrapyramidal symptoms, including tardive dyskinesia, but Parkinsonian symptoms that people have talked about. But the problems of things like bradykinesia and akinesia which look a lot like the negative symptoms of schizophrenia and make people who have schizophrenia feel dulled and slowdown and not quite themselves. These side effects make many people reluctant to continue the medications once they start them and medication discontinue is a big problem in schizophrenia. So one of the things that's really nice is that the direclidine is so well tolerated, we saw the side effect profile presented. And one of the things that these -- drugs that target these mechanisms have that distinguish themselves from D2 is people don't feel dulled. They don't feel drugged. And that's something that I think is very attractive to a lot of people.

So now that we actually have a different mechanism as in Cobenfy approved on the market, how are clinicians actually picking between a D2 antagonist as opposed to Cobenfy.

Well, for whatever reason, I think access to Cobenfy has been really relatively slow to roll out. I mean, we have it in our -- approved in our medical center, and we've treated a modest number of patients with it. Our P&T committee has mostly restricted us to using it for patients who have refractory extrapyramidal symptoms on traditional D2 antagonists. And so I think we're not yet realizing the most important benefit that these medications can have which is to get people started on these medications early in their career -- illness careers and get them to establish good medication adherence practices. And that will augment the pharmacologic impact of the benefits of these medications.

So the P&T committee sort of really limiting access to a certain degree, right?

To some extent, yes, I think as more data rolls out that shows the benefits around adherence early in the course of schizophrenia that the prescribing practice will broaden.

So Cobenfy works primarily both on M1 and M4 for its efficacy in addition to the other muscarinic receptors. Now you've seen the direclidine works primarily on -- as an M4 agonist and then we have others in our portfolio that work on M1 and M4. In terms of efficacy for psychosis, what are your thoughts on M1 versus M4. And then downstream from the potential role for some of the other mechanisms that we have on M1/M4.

Sure. Well, I think Cobenfy, for example, is a drug that -- its potencies for the M1 and M4 receptors are not that different, but in terms of its efficacy at those receptors, it's severalfold more potent or more effective in activating M4 receptors than it is activating M1. So it's hard to know exactly how relevant activity of Cobenfy is to its clinical profile for psychosis. But even for cognition, given the Cobenfy in overall analysis was not significant in their Phase II published paper. It was only positive in a secondary analysis. The fact that there were hints of efficacy from emracladine in their Phase Ib study that are echoed and amplified in the study that you all conducted where you map out the nice dose-related effects of direclidine, really, I think argues that a lot of the antipsychotic efficacy that we've seen Cobenfy is probably related to M4 receptor activation. This issue of M1 and M4 is something that's going to need a lot of -- a lot more research to better understand because M1 receptor stimulation from the work of Amy Arnsten and Vijay Raghavan in nonhuman primates, it tends to have an inverted U dose response curve in terms of enhancing prefrontal cortical activity related to working memory. And that suggests that in order to get a cognitive procognitive benefit from these drugs, you have to kind of get the ratio of M1 to M4 right at the dose that you're prescribing the drug. So I think this is a really interesting and potentially promising area, but the M4 story seems a little simpler at this point, a little clearer than the M1/M4.

Certainly. Before I get to the dose response for M4, I think that's very encouraging at least the M4, you spoke about the different muscarinic efficacy. I would love to get your thoughts also on the different muscarinic receptors and its relationship to safety.

Sure. The challenge that Cobenfy has had is that its lack of selectivity for M1/M4 has contributed a lot to tolerability issues. And it was a brilliant thing to combine xanomeline with the trospium to block the -- some of the peripheral side effects, the GI side effects, the nausea, vomiting, GI distress. Unfortunately, that depends on people actually taking the medication as prescribed, which is skipping breakfast to take the medication and waiting 2 hours after dinner to take the evening dose. And the problem is that many patients with schizophrenia have a hard enough time organizing themselves just to take the 1 pill a day at all, let alone a timing it right for the GI interactions. And so what's happened for some people that have been prescribed Cobenfy is if they don't get it right and they take it on a full stomach, then it makes tolerability a real problem. We've had in our center and other centers have had some patients discontinued due to the GI side effects probably related to not taking it quite in the right way.

Interesting. So going to the -- since you brought up the dose response, when you saw the data for the -- from the Phase II study, what do you think it was a dose response seen with the -- in terms of efficacy from the Phase II study with direclidine?

Well, I think it's really interesting. There are lots of reasons why you might have an inverted U dose response while you might have a more robust signal at lower doses than higher doses. This is a common attribute in terms of cortical function for drugs that enhance cortical function by engaging inhibitory tuning. This is a drug -- M4 receptors are on cholinergic terminals and glutamatergic terminals. It's enhancing the function of the brain by enhancing tuning, inhibitory tuning, but I think there's still a lot to learn about exactly why you have this apparent more robust signal from 20 milligrams relative to the other doses. One of the things, though, that was impressive to me in that gave me greater confidence about the 20-milligram dose, the robustness of the signal there was the fact that, although it wasn't statistically significant, the magnitude of the clinical improvement in the 30 BID dose was practically the same as what you saw with your 20-milligram dose. So I think I'm confident about the robustness of that 20-milligram signal.

No, that's very helpful. What do you think having worked on emraclidine as well? What do you think from an efficacy or safety perspective, sort of contrasting an orthosteric with an allosteric modulator for M4.

Yes. I think the allosteric modulators do depend on the availability of acetylcholine to stimulate the receptor and they facilitate the activation produced by acetylcholine. We don't really know about in vivo acetylcholine release in schizophrenia. So it's hard to know whether these are really comparable approaches or not. An orthosteric agonist removes the acetylcholine from the equation, as Sanjay highlighted, and so that you can directly stimulate the receptor regardless of background levels of acetylcholine stimulation. We don't really have strong evidence or really compelling evidence of acetylcholine release deficits in schizophrenia, but it is a little -- orthosteric certainly gives you a little more direct activation.

Why don't we stop here and let the audience ask some questions.

Thank you. Thank you, Dr. Krystal. Thank you, Jaz. That was excellent. Let's open it up for questions.

We have an awesome mic runner in Matt Abernethy. It gets to you, go ahead and state your name, your firm and fire away to Dr. Krystal.

Brian Abrahams, RBC. Thanks for the really helpful presentation. Two questions on osavampator, one for Dr. Krystal and one for the company. I guess for Krystal, you kind of alluded to this, if you look at the MADRS curves in the study, there's a sharp decline through Day 28 and then the higher dose levels out, whereas the 1 mg continues improving. So I'm curious if there's any mechanistic explanation for this? And is there any risk you might foresee of tachyphylaxis with your longer dosing or higher exposures? And then for the company, I'm curious if you give us some sense of how far along the Phase III studies are at this point in terms of enrollment, just kind of broadly speaking, and the types of safety interim analyses that are built in. I guess I'm sort of wondering when in the course of the pivotal studies, are you going to be comfortable that an epileptogenic signal is unlikely to ultimately crop up?

Sure. I'll start and then Jaz, maybe you can address the epilepsy issue. So first, I usually don't expect as much tachyphylaxis from positive allosteric modulators as you sometimes do for orthosteric agonist. So I doubt that, that's accounting for this I would also say that we have to be really careful about overinterpreting 1 Phase II study in terms of Day 26, they look identical and they just have some divergence for the second part of that study. So I'm not entirely confident that 3 milligrams is really less effective than 1 milligram. But if it is, there are reasons that you can get inverted U dose response curves. I mentioned a couple of them already, maybe you recruit more inhibition at 3 milligrams or something. Hard to know, and I wouldn't really want to mislead you so.

Sanjay, do you want to cover where we're at from an enrollment in the...

Yes, I'm sure you can jump in as well. So the Phase III programs are enrolling well. Indeed, we have to be careful about enrolling too quickly to be completely candid because it's all about quality, not so much speed, but we're certainly keeping to the time line of top-level readouts in the 2027 time frame for all our osavampator Phase III study. So that's great. With respect to safety, obviously, it's iterative in terms of blinded fashion throughout the entire study. Our expectation for seizure is really low because of the mechanism that we described. But clearly, that's something that we'll be looking for throughout the extent of these studies.

Yes. I think just to add to it. So the -- we have a committee starting off, right, there's a more than 15-fold margin of safety from where you see with the dose we're testing with osavampator and where you might see it. And so I don't really want to comment about safety from an ongoing study, but you would see those events as you progress, right, even as I said, is going along. So you don't have to wait for certain time periods before you get an interim analysis. You see that as the study is ongoing sort of continuously.

Go ahead, Sean.

Sean Laaman from Morgan Stanley. I think I got it on the high level, just the M4 versus the M1/M4 debate. It appears that if I got it right, that adding M1, it's not really clear if that adds any M1 efficacy, but what it might do is just introduce the tolerability issues in the periphery, if I got that right. So why bother with M1?

Yes. So I think the main reason to bother with M1 is the possibility of engaging these pro cognitive cortical mechanisms if you get the dose right. So pro cognitive effects of M1 are well described in animals and could translate not only to reductions in cognitive impairments, but potentially also to improvements in negative symptoms. And so I think that there's a lot of interest in trying to optimize that combination. It's just that it's hard to know given the clinical profile of Cobenfy whether they've achieved that, and we'll see whether you're -- whether the Neurocrine drugs can achieve that synergy.

Go ahead, Tazeen.

Okay. Thanks for hosting this. One for the company and then maybe one for Dr. Krystal. So for the withdrawal study that you mentioned, can you just clarify, you do need it or you don't need it for ultimate approval. And then for Dr. Krystal, what kind of clinical advantage with data from a withdrawal study give to you to be able to prescribe the medication. And then maybe one top-level question. I think Marty McCary recently talked about the need for potentially just 1 study across, I guess, everything unless otherwise specified. You guys are well into enrolling multiple Phase III studies, but how does that potentially, if at all, change your game plan for how to seek approval.

Do you want me to take it?

Yes, why don't you start and then I'll...

Yes. I think Dr. Keswani pointed out, the maintenance effect study is not a requirement for approval. So do you want to comment on the potential benefits of it?

Sure. I think the discontinuation studies give you a sense of the durability of clinical efficacy once the medication is stopped, and it tends to give a robust signal that was very -- a very robust signal for esketamine, the discontinuation study and that was helpful for giving added confidence to clinicians that the clinical benefits are real.