Acadia Pharmaceuticals (ACAD) Q4 2019 Earnings Call Transcript

Acadia Pharmaceuticals (ACAD -1.19%)
Q4 2019 Earnings Call
Feb 26, 2020, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day ladies and gentlemen. And welcome to Acadia Pharmaceuticals' fourth-quarter and full-year 2019 financial results conference call. My name is Liz, and I will be your coordinator for today. [Operator instructions] I would now like to turn the presentation over to Mark Johnson, vice president of investor relations at Acadia.

Please proceed.

Mark Johnson -- Vice President of Investor Relations

Thank you Liz. Good afternoon and thank you for joining us on today's call to discuss Acadia's fourth-quarter and full-year 2019 financial results. Joining me on the call today from Acadia are Steve Davis, our chief executive officer, who will provide an overview of our Q4 and full-year 2019 financial performance and share our 2020 guidance and priorities. Also joining us today is Michael Yang, our chief commercial officer, who will provide updates on our commercial initiatives; and Dr.

Serge Stankovic, our president, who will discuss our pipeline progress. Our chief financial officer, Elena Ridloff, will then discuss our financial results in more detail before turning it back to Steve for final remarks and opening up the call for your questions. I would also like to point out that we are using supplement slides which are available on the events and presentations section of our website. Before we proceed, I would first like to remind you that during our call today, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements including goals, expectations, plans, prospects, growth potential, timing of events or future results, are based on current information, assumptions and expectations that are inherently subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially. These factors and other risks associated with our business can be found in our filings made with the SEC. You are cautioned not to place undue reliance on these forward-looking statements which are made only as of today's date. I'll now turn the call over to Steve.

Steve Davis -- Chief Executive Officer

Thank you Mark. Good afternoon everyone and thank you for joining us today. Please turn to Slide 5. 2019 was a year of strong growth for Acadia, as we continued to transform the standard of care for patients with Parkinson's disease psychosis or PDP.

Since launching in 2016, Nuplazid, with its breakthrough selective serotonin inverse agonist profile, has been helping patients, caregivers and families with the very high burden caused by Parkinson's disease psychosis. We continue to drive growth of Nuplazid in PDP and achieved $98.3 million in net sales in the fourth quarter of 2019, a 65% increase over the same period in 2018. Net sales for the full-year 2019 were $339.1 million which represents a 52% increase year over year. This growth was fueled by our commercial and medical initiatives including the inclusion of Nuplazid in the Movement Disorder Society guidelines, completing our transition to the 34-milligram capsule and continuing our education efforts to help encourage much needed and appropriate dialogue between physicians and patients regarding the signs and symptoms of PDP.

2019 was also a year of strong execution for Acadia on the research and development front. We announced positive results from two pivotal studies, one in dementia-related psychosis or DRP, and one for the negative symptoms of schizophrenia. In addition, in 2019, we Advanced our Phase 3 programs in two other indications. We initiated two new studies for the adjunctive treatment of MDD based on our positive pivotal study from 2018, and we initiated our Phase 3 program for trofinetide in Rett syndrome.

On Slide 6, we highlight the breadth and depth of our pipeline which is generating a multiyear cadence of pivotal study readouts and potential regulatory approvals that position Acadia for significant and attractive long-term growth. In 2020, we are driving toward a potential approval in DRP by year-end and three additional approvals over the next three years. In the 2021, '22 time frame, we could see approvals for adjunctive treatment of MDD. Trofinetide for Rett syndrome could get an approval in 2022.

And in 2023, we can see approval for the negative symptoms of schizophrenia which could be the fourth indication for pimavanserin. Let's turn now to our strategic focus for 2020, beginning on Slide 7. The momentum we have going into 2020 sets us up for a transformational year. It's transformational on two fronts, first, the investments we are making for the continued growth in PDP as well as for the potential approval and launch of DRP will transform the Nuplazid opportunity in the very near term.

And second, in 2020, we'll also be making foundational investments in our future with our late-stage clinical development programs in MDD, Rett syndrome and negative symptoms of schizophrenia. These investments will continue to further drive our mid- and longer-term growth. In 2020, look for us to continue to execute on these three strategic pillars. And as we turn to Slide 8, I will highlight priorities within each of these areas.

First, we will drive the continued growth of Nuplazid. Based on our growth in 2019, we are providing Nuplazid net sales guidance of $440 million to $470 million for the full-year 2020. At the midpoint of the range, this represents net sales growth of 34% year over year. Second, we plan to meaningfully expand our commercial and medical footprint with a second indication for pimavanserin, dementia-related psychosis, a market expansion opportunity 10x larger than PDP today.

Here, we are on track with our regulatory time lines, and Michael will provide you with more color on our commercial investments as we prepare for potential approval and launch. Third, we'll also set the stage for our potential third indication for pimavanserin as the adjunctive treatment for major depressive disorder. The top-line results from one of our ongoing Phase 3 studies is before the end of this year. For the negative symptoms of schizophrenia, where we've recently announced positive results from our Advanced study in this very difficult-to-treat patient population, we'll be initiating a second pivotal study, Advance-2, this summer.

We will also continue to invest in our future through focused business development and opportunities that shape our long-term growth strategy. I'm incredibly excited about the year ahead, as we prepare for new indications and progress the clinical milestones in our pipeline. With that, I will now turn it over to Michael to discuss our commercial performance and highlights.

Michael Yang -- Chief Commercial Officer

Thank you Steve. Please turn to Slide 10. We had a very successful 2019 from a commercial execution standpoint. Our underlying growth dynamics remain strong, and we look forward to continuing this momentum throughout 2020.

We have plenty of opportunity for continued growth in PDP from our current market share in the high teens. Our new patient share continues to exceed our overall market share, and additional growth will be driven by the following key initiatives including our ongoing focus to elevate Nuplazid as the standard of care by highlighting new and relevant information with the medical and patient caregiver community, increasing awareness of the inclusion of Nuplazid in the MDS evidence-based guidelines, sharing new long-term patient safety data, highlighting data on the positive impact of Nuplazid therapy on the caregiver burden scale, continued investment in our integrated patient/caregiver consumer campaigns which help drive awareness of Nuplazid and connect the dots between patients, caregivers and their physicians with the need to treat. We also expect to leverage the benefits of the 34-milligram capsule, as we continue to observe high compliance and long-term adherence rates with Nuplazid. The leading indicators such as new patient starts and new prescribers remain strong for Nuplazid across both the specialty pharmacy and the specialty distribution channels.

These dynamics support our 2020 net sales guidance which reflects approximately 25% volume growth at the midpoint of the range. Looking ahead, we are excited about being the first and only FDA-approved therapy for dementia-related psychosis and the difference we can make for patients and caregivers, on Slide 11. As we prepare for a DRP launch, one of the most important aspects we can focus on now is to educate the medical community on the high burden of disease. Our HCP website, MoreThanCognition.com, will help physicians better understand the important aspects of dementia-related psychosis.

Dementia-related hallucinations and delusions represent a high burden and significant unmet need. Psychosis is one of the most common reasons why patients end up in a long-term care facility. The burden on caregivers, who are most often close family members, is especially challenging when dealing with a loved one already struggling with dementia with the difficult addition of hallucinations and delusions. In the Harmony study, pimavanserin demonstrated clinically significant reductions in hallucinations and delusions and the maintenance of that effect when continued on therapy.

Patients who continued on therapy demonstrated almost a threefold reduction in the risk of relapse of this psychosis when compared to placebo over six months. Furthermore, pimavanserin did not show negative impacts on cognition, motor function or sedation. As we evaluate the DRP market, I'd like to discuss some of the key similarities and differences on Slide 12 to highlight how we will be leveraging and expanding commercially. In both PDP and DRP, there is, unfortunately, a high use of off-label dopamine-blocking antipsychotics that could exacerbate the core symptoms of disease.

In PDP, blocking dopamine is the last thing you want to do for a Parkinson's patient and is associated with the worsening of their motor symptoms. For DRP, the negative impact on cognition is particularly worrisome in patients with dementia. Importantly, a key difference and significant opportunity in DRP is that for physicians treating dementia patients, the association between cognition and narrow psychiatric symptoms such as hallucinations and delusions is dramatically greater than it is for physicians treating PDP, particularly more focused on motor symptoms. Pimavanserin's unique profile, with its high selectivity and the robust clinical study results we observed to date, will be a welcome new treatment option for DRP in a market where nothing else is approved.

Our preparations to deliver the DRP opportunity to the market are well under way, and the commercial team is excited about the transformational year ahead. With that, I'd like to turn it over to Serge to discuss our R&D pipeline.

Serge Stankovic -- President

Thank you Michael. I'm very pleased with the R&D progress in 2019 and our ongoing and planned development for 2020. Please turn to pipeline chart on Slide 14. Last year, we made significant Advancements in R&D pipeline.

We initiated the Phase 3 Clarity program for MDD and the Phase 3 Lavender study for Rett syndrome. We announced positive results from the pivotal Harmony study in DRP and the pivotal Advance study for the negative symptoms of schizophrenia. Starting with MDD program on Slide 15. There remains significant unmet need in depression, with millions of patients having an inadequate response to their SSRI or SNRI therapy.

Please turn to Slide 16 for a review of our clinical development program. The first Clarity study evaluated MDD patients using pimavanserin as adjunctive therapy, for which we achieved robust efficacy results. In addition, we observed a broad range of meaningful secondary outcomes. Due to enthusiasm among investigators, the Phase 3 studies have continued to enroll well, and we expect to announce top-line results from one study by the end of this year, with our second study reporting out shortly thereafter.

If we are successful, our Phase 2 Clarity study, combined with at least one of the Phase 3 trials, would be the basis of a supplemental NDA submission. Turning to negative symptoms of schizophrenia on Slide 17. About 40% to 50% of schizophrenia patients experience predominant negative symptoms. These symptoms are prominent residual symptoms often observed with antipsychotic therapy in spite of adequate control of hallucinations, delusions, agitation and other so-called positive symptoms.

Unlike positive symptoms, the negative symptoms of schizophrenia are characterized by the degradation and loss of important psychological and functional abilities resulting in blunted affect and lack of emotions, loss of interest, cognitive symptoms and ultimately severe social withdrawal. In many cases, this results in a profound deficit syndrome, where these symptoms become predominant clinical presentation, very difficult to treat and very challenging for patients and their caregivers. On Slide 18, we review the positive Advance data and our next steps. As a reminder, the Advance study was a 26-week Phase 2 study evaluating pimavanserin as a treatment for schizophrenia patients with predominant negative symptoms while controlling for their positive symptoms on a stable antipsychotic background therapy.

All patients started on 20-milligram dose of pimavanserin and could titrate up to 34 milligrams or down to 10 milligrams within the first eight weeks. We're extremely pleased to have observed positive results in the primary end point, improvement in Negative Symptom Assessment-16 item scale, in this very difficult-to-treat population. Importantly, at the 34-milligram dose, we saw robust efficacy with a p-value of 0.0065, as shown in the graph on the right. The second pivotal study, Advance-2, will commence in the summer of this year, utilizing a fixed dose of 34 milligram and will be conducted exclusively in sites outside of the United States.

Rett syndrome is a debilitating disorder with the unmet need highlighted here on Slide 19. There are about 6,000 to 9,000 patients in the United States. These young girls start life with normal development and then at about six months to a year begin to experience neurocognitive decline. They often lose their independence and can experience the loss of purposeful hand movement and spoken communication.

We initiated a Phase 3 program with Lavender in the fall of last year and expect top-line results next year. Slide 21 highlights why 2020 will be a transformational year for our team. We will be submitting a supplemental NDA for DRP, the second indication for pimavanserin, this summer. Before the end of the year, we expect to announce top-line results from a Phase 3 MDD study, a potential third indication for pimavanserin.

In addition, we will initiate this summer a second pivotal study for the negative symptoms of schizophrenia, potentially pimavanserin's fourth indication. I will turn now the call to -- over to Elena to discuss our financial performance.

Elena Ridloff -- Chief Financial Officer

Thank you Serge. Today, I'll discuss our fourth-quarter and full-year 2019 results and our 2020 financial outlook. Please turn to Slide 23. In the fourth quarter of 2019, we recorded $98.3 million in net sales, an increase of approximately 65% compared to $59.6 million of net sales in Q4 of 2018.

This was driven by 42% volume growth year over year. The gross-to-net adjustment for Q4 2019 was 15.4%. At the end of the fourth quarter, days-on-hand channel inventory increased relative to the third quarter. This increased Q4 2019 revenue by approximately $2.5 million.

Sequential volume growth in the fourth quarter was 9%. Without this increase in channel inventory, sequential volume growth in Q4 would have been approximately 6%. Moving down the P&L. GAAP R&D expenses increased to $57.5 million in Q4 2019 from $48.2 million in Q4 2018.

GAAP SG&A expenses increased to $91.9 million in Q4 2019 from $74.3 million in the fourth quarter of last year. Non-cash stock-based compensation expense during the quarter was $19.8 million compared to $20.4 million for the same period in 2018. Cash used in operations during the quarter was $29.7 million compared to $39.1 million for 4Q 2018. Please turn to Slide 24.

For the full-year 2019, we recorded $339.1 million in net sales, an increase of 52% compared to $223.8 million of net sales from 2018. This was driven by 34% year-over-year volume. Gross-to-net adjustment for the full-year 2019 was 15.6%. GAAP R&D expenses increased to $240.4 million in 2019 from $187.2 million in 2018.

The increase was primarily due to additional clinical study costs incurred, as we continued to invest in additional pipeline programs for pimavanserin and trofinetide. GAAP SG&A expenses increased to $325.6 million for 2019 from $265.8 million in 2018. The increase was primarily due to increased general and administrative expenses including charitable contributions and personnel costs. Noncash stock-based compensation expense for 2019 was $82.3 million compared to $81.6 million for 2018.

Cash used in operations during the year was $151.1 million compared to $167.5 million in 2018. We ended the year with $697.4 million in cash and investments on our balance sheet compared to $473.5 million at year-end 2018. This increase reflects our successful equity offering with net proceeds of $271.5 million and proceeds from employee option exercises of $91.6 million. Please turn to our financial guidance on Slide 25.

For the full-year 2020, we expect continued strong growth for Nuplazid with net sales guidance of $440 million to $470 million. At the midpoint of this guidance range, this represents 34% growth in revenue year over year and 25% volume growth year over year. We expect gross-to-net adjustments in the range of 17% to 18% for 2020. We project this to be higher than the full-year 2019 adjustment as a result of a manufacturer's obligation for the donut hole increasing in 2020.

As you model 2020, there are two considerations for the first quarter. First, as a reminder, gross-to-net is typically highest in the first quarter due to the annual reset of the donut hole manufacturer obligation for Medicare Part D patients. In addition, as I just mentioned, the manufacturer obligation is increasing in 2020. As a result, we expect sequential gross-to-net to increase from 15.4% in the fourth quarter to approximately 30% in Q1.

Second, we expect the $2.5 million increase in channel inventory we saw at the end of the fourth quarter will be reduced to our historical average inventory levels in Q1, and that this will impact sequential revenue and volume growth. As a result of the higher gross-to-net and the reduction of channel inventory in Q1, we expect first-quarter net sales to be down sequentially. As Michael mentioned, with our leading indicators such as new patient starts and new prescribers, strong, we expect growth in net sales to resume in the second quarter and continue throughout the year. On the expense side for 2020, we expect GAAP R&D expenses to be between $270 million and $285 million.

The increase compared to 2019 is a result of advancing four pivotal studies in 2020. We expect GAAP SG&A to be between $440 million and $460 million for the full year. The increase compared to last year reflects a similar level of investment in PDP as well as our strategic investments we are making to prepare for the DRP launch including disease-state education and expansion of our commercial and medical affairs team. For 2020, we expect noncash stock-based compensation expense to be between $90 million and $100 million.

We anticipate ending 2020 with a strong balance sheet. Our cash balance is expected to be between $470 million and $500 million at the end of 2020. And with that, I'll turn the call back over to Steve.

Steve Davis -- Chief Executive Officer

Thank you, Elena. Please turn to Slide 27. In closing, we expect 2020 to be another great year for Acadia, as we drive continued growth in the net sales of Nuplazid in PDP, deliver the DRP opportunity to the market with a potential approval around year-end and develop new and innovative treatments with our ongoing and planned pivotal studies. We look forward to keeping you updated on our transformational year ahead as we drive toward the future, where the breadth and depth of our pipeline is generating a multiyear cadence of pivotal study readouts and potential approvals that positions Acadia for long-term growth.

As always, we appreciate the dedication and hard work of all of our employees. We made 2019 such a success, and that we are committed to our 2020 goals in improving the lives of those with CNS disorders. I'll now open up the call for questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Your first question comes from Ritu Baral with Cowen. Your line is now open.

Ritu Baral -- Cowen and Company -- Analyst

Good afternoon, guys. Thanks for taking the question and congratulations on the continued growth through '19 into 2020. I wanted to ask about sort of the evolving patient. Is the new-start patient in 2020 looking different than it was two years ago? Is that profile changing at all? And is that a result of some of these refinements of the commercial strategy Michael that you outlined?

Steve Davis -- Chief Executive Officer

Thanks for the question, Ritu. Michael, do you want to take the question?

Michael Yang -- Chief Commercial Officer

Yeah. Hi Ritu. Thanks for the question. I think that I would take in kind of two parts.

Like in long-term care, I don't think the profile of that patient has changed. And as you know, because we're getting a more severe and later-stage patient, I don't know that we have exact statistics. But my impression is that we are starting to get a younger, more functioning patient in the context of Parkinson's in the community. That is to say, we still get -- where psychosis occurs is in the later stages.

But we often are seeing examples anecdotally of a younger patient in the profile of PDP, of Parkinson's, and they're more functional and perhaps will have a longer period of time on the drug. But more to come on that later.

Ritu Baral -- Cowen and Company -- Analyst

Great. A very quick follow-up. The sNDA for DRP, what's left to do before the summer submission?

Steve Davis -- Chief Executive Officer

Serge, do you want to take that question?

Serge Stankovic -- President

Yes. Hi Ritu. We have all of the data that will constitute our supplemental ANDA. The pivotal Harmony study results will be the basis of the sNDA submission which was previously agreed upon at the end of Phase 2 meeting.

And in addition, we will have supportive efficacy results from our previous short-term studies which provided evidence of acute efficacy of pimavanserin in Alzheimer's disease and in Parkinson's disease psychosis for patients -- with patients with dementia. And finally, we plan to submit our extensive safety data from completed and ongoing studies. So what is left for us is to essentially put that all together in the format required for the supplemental NDA, all the study reports and summary documents and once we agree with FDA on that to submit.

Ritu Baral -- Cowen and Company -- Analyst

And so you've generated all the safety data and safety analysis used for that NDA -- sNDA, sorry.

Serge Stankovic -- President

Yes. We generated all the -- both efficacy and safety data that we will be submitting with that supplemental NDA.

Ritu Baral -- Cowen and Company -- Analyst

Great. Thanks for taking the question.

Operator

Your next question comes from Tazeen Ahmad with Bank of America. Your line is now open.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Hi. Good evening guys. Thanks for taking my questions. Maybe a commercial one on DRP.

I think in the prepared remarks, you talked about upsizing the size of your marketing team from its current roughly 200 to let's say roughly 500. Have you already commenced adding those new folks to your marketing team? I guess that's the first part of the question. And then secondly, how much overlap is there based on your market analysis of the doctors who are treating PDP patients versus those that you're going to be detailing for DRP? Thanks.

Steve Davis -- Chief Executive Officer

Michael, do you want to take that?

Michael Yang -- Chief Commercial Officer

Yeah. Great question. And I just want to reframe. We're not hiring or planning to hire those as marketing people.

What I'm referring to the 200 commercial roles, they include a variety of roles, our patient services, our field sales team, our long-term care, etc. So it's not marketing in that context. And we are appropriately planning for the expansion to be aided in times to the regulatory milestones. So at this juncture, we're well prepared to execute for a potential launch at the end of the year.

But for the most part, we are thoughtfully going after, say, leadership positions, so that they can be prepared to cascade the variety of different roles that we have to hire. So that has, from a hiring perspective, not started. From a PDP to DRP perspective obviously the physicians in neurology and the psychiatry physician base will have an overlap of DRP. But we'll be going into a much broader audience of psychiatrists and additionally these -- what we're calling dementia care specialists or geriatric PCPs, who are acting as like pseudo-specialists.

So we'll be expanding into an audience. So it's kind of a both a current footprint penetration but also an expansion of our opportunity.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK. And just as a quick follow-up, as it relates to how we should think about SG&A throughout the year. If we assume that a good percentage of the increase in SG&A this year is going toward prepping for DRP, should we assume that it's evenly spread throughout the year or maybe is that more back half-related? And maybe that's an Elena question. Thanks.

Steve Davis -- Chief Executive Officer

Elena, you want to take that?

Elena Ridloff -- Chief Financial Officer

Yes. Sure, Tazeen. So our SG&A expense will be relatively consistent throughout the year, but it will be highest in the fourth quarter, as we ramp up a little further at that point for the DRP launch.

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

OK. Thank you.

Operator

Your next question comes from Marc Goodman with SVB Leerink. Your line is now open.

Marc Goodman -- SVB Leerink -- Analyst

Elena, maybe just to continue on with the spending. Just give us a sense of when you're thinking about adding the additional reps in the year, when should we put that in the year? How much of the year are we going to have that, half the year, full year? Also, can you give us a sense of, for direct-to-consumer advertising, will you be spending an equal amount of money in 2020 as you did in 2019? What are the other push-pulls? I mean obviously it's a pretty significant step-up. We can all figure out -- if you're adding 200 sales reps, we know what that costs. What else is going on? And just give us a sense of when the reps are coming in so we understand the run rate for the following year.

Elena Ridloff -- Chief Financial Officer

Sure. So a few questions in there. So first, with regard to DRP spend for the year, a portion of the spend is related to expansion of the field team. But we're also making investments in medical affairs as well as disease awareness initiatives.

So the increase in spend is related more broadly to our preparations for DRP and not the field team alone. With regards to PDP, our investments are going to be pretty flat year over year. We don't specifically comment on our DTC spend. But overall, from a PDP investment perspective, we're having similar year-over-year spend.

Steve Davis -- Chief Executive Officer

And Marc, I think you also asked about the timing of reps. And as Michael mentioned, that's mostly in the second half as we get closer to the launch.

Operator

Next question comes from the line of Yatin Suneja with Guggenheim. Your line is now open.

Unknown speaker

Hey guys. This is Derek on the line for Yatin. I was hoping if we could just have a couple about MDD. Can you just maybe talk a little bit about the confidence of the study design and maybe what you've done to avoid the professional patient problem at U.S.

sites? And then to any changes that you may have done just to enrolling patients, like if you could respond?

Steve Davis -- Chief Executive Officer

Serge, do you want to take that question?

Serge Stankovic -- President

Yes. Yeah. Let me start first by saying that we are doing our Phase 2 pivotal trials, two trials for essentially one positive trial. The design of both trials are identical, and they are very similar to the design of Stage I of the Phase 2 Clarity study, where we showed a sizable effect size of 0.63 and p-value of 0.0003.

So we feel quite good about the design of the studies. And in these studies, we are applying a variety of quality and compliance measures that we utilized in all of our trials, and that served us very, very well until now in the execution of our clinical trials. Most importantly I would say when you talk about professional patients, we are quite careful about applying independent, blinded interviews with every subject potentially to be enrolled in our trial. So that there is, in addition to investigators' assessment, there is an independent assessment on the suitability of the patients in terms of their diagnosis, in terms of the sufficiency of duration of inadequacy of the dose of the underlying SSRI or an SNRI.

So we are quite careful about making sure that the appropriate patients are enrolled in the trial. We also, from the compliance perspective, have a unique opportunity in the adjunctive trial to actually measure levels of the background SSRI or SNRI during the screening period which gives us quite a good view on the patient's compliance with the medication, even before they are randomized in the trial. And we are doing that in this trial as well. And finally we monitor very carefully the ratings throughout the trials with the opportunity to intervene when there are -- when we observe that the raters are not either spending sufficient time in evaluating patients for their depression symptoms or there are some conflicting ratings in the -- so we are really putting quite a bit of energy in trying to make sure that we have a proper patients in the trial, that they are appropriately evaluating and then continuously have really a close contact with our collaborators in research sites.

Unknown speaker

That's very helpful. Maybe just a quick clarity on that. Part of that process is also -- I assume it's looking at baselines and the existing therapy and compliance, so you're able to kind of tease out patients who are not so severe that the refractory does sort of all new therapies.

Serge Stankovic -- President

Yeah. We are applying the independent evaluation. It's called a safer evaluation, where the assessment is done not only on the appropriate diagnosis but appropriate severity of depression as well as the appropriateness of the treatment -- background treatment thereon in terms of are they sufficiently long and at the appropriate therapeutic dose on that medication and still experience inadequate symptoms. And as I said, unique feature is that we also measure plasma levels of those background medications.

And of course, the people that are not compliant with their medication and not taking it are not randomized into the trial.

Unknown speaker

OK. That's very helpful. Thank you for taking the question and congrats on the good quarter and the progress going forward.

Serge Stankovic -- President

Thank you.

Operator

Your next question comes from Cory Kasimov with J.P. Morgan. Your line is now open.

Unknown speaker

Thank you. This is Gavin on for Cory. Thanks for taking our questions. Maybe one on commercial -- the commercial metrics.

You mentioned that the penetration is in the high teens. It seems like it's been there for maybe the last couple of quarters. Any color on moving the needle there? And then secondly, on adherence, any reason why we shouldn't think that the compliance rate in DRP label expansion should differ from PDP? Thank you.

Steve Davis -- Chief Executive Officer

Two questions. Michael, do you want to take both of them?

Michael Yang -- Chief Commercial Officer

Sure. So the second question, from a compliance perspective with DRP and PDP, we think that will be a very similar dynamics. Obviously, there is a little bit more long-term care in the DRP patient population, so they tend to take a little less because of their medical conditions. So we'll weave that into the whole denominators of the patients that we get both from the community and for long-term care.

In regards to the PDP market penetration, as I mentioned before, the thing that we're focused on is winning the dynamic patient population. And in that case, our market share, our numbers are higher than our overall share. So as we continue to drive greater acquisition of both the new and the switch patients, that will then begin to add to our total patient penetration.

Steve Davis -- Chief Executive Officer

And maybe just to add to that. I don't think -- it may seem like a couple of quarters because we mentioned high teens at J.P. Morgan. But a quarter ago, it was mid to high teens, yes.

So we actually have continued to gain share throughout -- for the last two or three quarters.

Unknown speaker

Great. Thank you.

Operator

Your next question comes from Charles Duncan with Cantor Fitzgerald. Your line is now open.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Hi guys. Thanks for taking the question and congrats on a good year in '19. I had a quick question perhaps for Michael. If you think about the guidance of call it 25% volume growth, I'm wondering if you could identify one key lever that would make it on the lower end versus the upper end of that? And then I have to follow up on a couple of earlier questions regarding the sales footprint that you're talking about going forward.

Just kind of wondering what the increased number of field roles will pick up for you. What is the key goal of that expansion?

Michael Yang -- Chief Commercial Officer

Sure. Thanks for the question. And I think in regards to where we sit on PDP, I think you could hear the enthusiasm that I have for more data. We're now executing on some expanded data sets, I would call that more evidence-based communication.

We launched with a lot of awareness, and we had our pivotal study. But now showing long-term -- our long-term extension data, where we're well over 300 and well over a year worth of patient exposure on the drug, and we have caregiver burden data, the MDS guidelines, all that starts to build a mountain of evidence to I would say the lagging adopter to try Nuplazid. And I just would remind folks out there that we're competing here with historical generic products that are kind of habitual in the doctor's practice. So that takes quite a bit more effort to extract their habits.

And so I think we're -- that, to me, would be the fulcrum of higher or lower volume guidance. The second question, just regards to the commercial footprint. So the roles that we have today are multifactorial. We've become much more sophisticated in our approach to the market, meeting the physicians and the customers where they are.

And so many of the roles, the bulk of those roles are what I would call traditional blocking and tackling, demand-generating sales representatives both in long-term care and the community. But we do have a very sophisticated group of people that help with patient pull-through. They work with the offices to make sure they can get on product. We have a center of excellence team that works with the academic teaching hospitals.

We have new business development folks that work into the market not in terms of new products but in terms of emerging business partnerships and models so that we can stay at the forefront of how medicine is evolving. And so all of those roles that I just described are woven into the expanded, what I would call, commercial field role footprint.

Charles Duncan -- Cantor Fitzgerald -- Analyst

OK. And if I may, Steve, ask one question of Serge, and that is for an asset that I'm sure you won't get any other questions on, this trofinetide and the Lavender study. I'm wondering if you could characterize your ability to identify those patients and enroll them in the study. And if it's run long enough, so any of them have actually come off and gone on to the open-label expansion? And what is governing the timing you -- I think you mentioned data in 2021, but that's full 12 months.

So any granularity on that would be great.

Steve Davis -- Chief Executive Officer

Thanks for the question Charles. It's a very important study to us. So Serge, do you want to take that question?

Serge Stankovic -- President

Yeah. Yes. First, the important factor in the level of enthusiasm that we are seeing out there in the Rett community for those -- for Lavender study is the fact that the Phase 2 study was conducted in the United States. And so the Rett community already has an experience with trofinetide.

And so even before we started with the study, we have, from very beginning, have a good involvement with both the Rett community as well as key opinion leaders in the area, people that actually were instrumental both in the conduct of the Phase 2 study as well instrumental for our Phase 3 Lavender program. And that was extremely helpful. So the interest for the study, enthusiasm for the study is very high, and we are enrolling exactly as planned. There are -- there is a definite number of centers of excellence in terms of the treatment of Rett disease.

We are involved with all of them. They are participating in our program, and these are primarily academic centers. So they are doing a really extremely careful job in enrolling the patients. So study is going very well, exactly as planned.

And to your sub-question, yes, there have been patients that have completed and rolled over into the -- our extension trial, open-label extension trial. So we -- as usually we don't -- we are still at the beginning of the enrollment. And until we have a better sense of the pace and cadence of the enrollment, probably sometimes by midyear or later in the year, we will be more precisely defining the time line for the completion of the trial in our NDA submission.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Thanks. Thanks Serge. Congrats on the progress in the year.

Serge Stankovic -- President

Thank you.

Operator

Your next question comes from Salveen Richter with Goldman Sachs. Your line is now open.

Unknown speaker

Yeah. Thanks for taking the question. This is Andrea on for Salveen. Maybe just a follow-up on the DTC campaign.

Just any insights if there's been any new learnings gained from the second one compared to the first. And then where, if you have a sense, of which channels are being impacted by this effort.

Steve Davis -- Chief Executive Officer

I'm sorry. Andrea, you were a little bit garbled. Could you repeat the question?

Unknown speaker

Sure. Just with respect to the DTC campaign, if there are any new learnings or observations that you've seen in the second one compared to the first. And then in which channels you're seeing the most impacts from?

Steve Davis -- Chief Executive Officer

Got it. OK. Thank you very much. Michael, do you want to take that?

Michael Yang -- Chief Commercial Officer

Yeah. Great. So we have, and we continue to learn, campaign to campaign. I think the first thing I'd say is the need has not subsided in regards to the education and awareness.

And predominantly, that's because from a dynamic point of view, new Parkinson's patients, when they're diagnosed, are still not necessarily told, as part of their disease spectrum, that there's a 50% chance over the course of their disease that they're going to get hallucinations and delusions. And so consequently, we have to have this campaign and we pulsed the TV campaign to broaden the awareness. So that when those symptoms do occur, both with the patient and the caregiver, they're appropriately primed to have those appropriate conversations on treatment conversations with their doctors. We support those campaigns on a pulsing strategy with TV.

We support those campaigns with digital and other tactics. The learnings that we've gotten though I think, are more in regards to how we approach the mix, the types of programs they're running, the rhythms of them. And I think we are more efficient in capturing greater value with less money or less -- we're more efficient with our capital allocations from a media buy perspective. And I think that's some of the things that we're -- we continue to look at in our ROI assessments.

Unknown speaker

Great. And then just I guess maybe if you're seeing impacts in any particular channel?

Michael Yang -- Chief Commercial Officer

Are you referring to, say, do we see an impact in like our long-term care channel versus...

Unknown speaker

Right. Right.

Michael Yang -- Chief Commercial Officer

Yeah. We see impact -- I would say the overwhelming impact we see is in our specialty pharmacy which is basically reflecting the office space environment. But we do see an impact in long-term care when we run the commercials because caregivers are seeing it there. Staff is seeing it there.

Maybe the patients aren't able to articulate it, but it does help us with our initiatives there in long-term care.

Unknown speaker

Got it. Thanks so much.

Operator

Your next question comes from Jason Butler with JMP Securities. Your line is now open.

Jason Butler -- JMP Securities -- Analyst

Hi. Thanks for taking the question. Steve, I just wanted to come back to a comment you made on the prepared comments about business development. Can you maybe give us a sense of how you view new business development opportunities as a priority for 2020 versus 2019? And then maybe touch on how you think you could best leverage R&D versus commercial capacity.

Thanks.

Steve Davis -- Chief Executive Officer

Yeah. Thanks for the question, Jason. I'll just start by reiterating that it is one of the key -- a key component of one of our pillars of our business strategy, to grow the company through transactions and through business development. You've heard me say before that we started early.

We did a survey to determine when companies typically do this, and we started way before those companies knew. We did have our reason. We wanted to be in a position where we could assess more opportunities over a longer period of time, being more strategic and more judicious, and that's what we've done. As you know, we completed a deal in 2018 to acquire the North American rights for trofinetide.

And that deal, we said at the time and we'd say again today, is -- represents kind of an ideal strategic fit in seeing this embedded, as it leverages both our development and commercial expertise. So I would just simply say we will be doing more transactions. You'll see that coming. It remains a high priority for us, but doing the right deals remains a deeply high priority.

Jason Butler -- JMP Securities -- Analyst

OK. Great. Thanks for taking the question.

Operator

Your next question comes from Danielle Brill with Piper Sandler. Your line is now open.

Unknown speaker

Hey everyone. Thanks for taking my question. This is Nirav on for Danielle. Just a quick question from me.

If you could provide us with just some color on the trends that you saw over 4Q and 2019 in the growth between various channels? And how do you expect that to sort of evolve going forward?

Steve Davis -- Chief Executive Officer

Thanks for the question. Michael?

Michael Yang -- Chief Commercial Officer

Yeah. Great. Thanks. Thank you.

Throughout 2019 and in the fourth quarter, both channels, and that's to say specialty pharmacy and specialty distribution channels, continued to grow, and we would anticipate that to be the same throughout 2020.

Unknown speaker

Great. Thank you.

Operator

Our next question comes from the line of Paul Matteis with Stifel. Your line is now open.

Unknown speaker

Hey thanks. This is Alex on for Paul. Just a quick question on your upcoming sNDA meeting. Just wondering if you could sort of give us a sense of what your goals are for the meeting, what you expect to discuss with the FDA just generally? And if you'll provide us with an update once that's occurred? Great.

Steve Davis -- Chief Executive Officer

Serge, do you want to take that?

Serge Stankovic -- President

Yes, happy to. As I mentioned earlier, we are meeting with the FDA primarily to review the content and format of our application, meaning we will be discussing with the totality of the data. We are bringing both efficacy and safety data. We are bringing to the sNDA as well as the different ways of analysis and pooling of the data in order to present better and enable reviewers to do their review both on the efficacy and the safety side.

So discussing then that content and the format of that data presentation is -- are our main objectives in the discussion with the FDA.

Unknown speaker

Great. And do you expect to update us once that's occurred?

Steve Davis -- Chief Executive Officer

I'll take that. I could approach this, Serge. We typically don't talk about our interactions with FDA. And I think provided we continue to stay on track to submit the sNDA in the summer of this year, there's probably not maybe a lot to talk about from this meeting.

And again, just to reiterate, our plan is to submit it this summer and have a breakthrough therapy designation. We think there's a very high likelihood we'll get priority review and should be looking at a PDUFA date by the end of the year.

Unknown speaker

Great. Thanks.

Operator

Your next question comes from Gregory Renza with RBC Capital Markets. Your line is now open.

Gregory Renza -- RBC Capital Markets -- Analyst

Hey guys. Thanks for taking my question and congratulations on 2019 as well as the path forward. Steve, maybe I'll just start with a broader question. Certainly, when -- years ago, you pointed to and recently pointed to, just looking at years ago, the risk in perhaps unconventionalism of launching several pivotal trials, maybe something unique to the industry at the time and really yielding kind of the growth that it has and the growth forward.

I'm just curious if you could perhaps point to where you are now. Any analogous strategic steps or decisions that you're taking in this new phase of the company that perhaps would be similar to those decisions in the past about launching trials, whether it's in the context of really the execution that you have over 2020 or something more broadly? Thank you very much.

Steve Davis -- Chief Executive Officer

Yeah. Thanks much for the question. I'll take a little bit of a running start at it. When we got an approval for Nuplazid in PDP, we immediately turned toward a life cycle management program that we commenced about nine months earlier to really explore where should we go with this drug.

And we picked the indications that we've pursued. And we said at the time, this is the kind of investment we'd love to make. We know a lot about this drug. We know the drug-drug interactions.

We know the safety profile. But one thing we don't really have a full data set on yet is the full extent of the utility of the molecule. So fast-forwarding today, what we see today is we see in multiple clinical studies a molecule with a very strong pharmacology and a very favorable safety and tolerability profile. And what we see on the efficacy side is we see in multiple patient populations a robust antipsychotic effect.

And we see a robust effect on mood, as manifested in depression or in negative symptoms in schizophrenia. So we've really filled in a lot of the banks. And throughout all this, this doesn't always happen. We've continued to see a very consistent clinical profile.

Usually, when you go to more and more patients, broader and broader populations, particularly when you get on the market, things emerge. And what we've seen is this very consistent profile. So as a consequence of all of that, what we have today is a molecule that has a very different profile than previous generation antipsychotics, that work primarily by blocking dopamine. So as we look forward to where we stand today, we now see these opportunities ripening.

And what we need to deliver on is the same kind of execution that we've had in R&D on the commercial front and to deliver these opportunities. Look, I know we all look at these things by design, so I can't tell you how excited we are to do that. We've got very high confidence that this is going to be an extremely important drug. It is a game-changing drug.

And I think when we all look back and look back at the history books in a decade or two, we'll all agree that this was a real turning point from a medical perspective in terms of opportunities for these patients.

Gregory Renza -- RBC Capital Markets -- Analyst

That's great Steve. Thank you very and congratulations again.

Operator

Your next question comes from Jay Olson with Oppenheimer. Your line is now open.

Jay Olson -- Oppenheimer and Company -- Analyst

Hey. Congrats on all the progress and thank you for taking my question. I wanted to follow up on the sNDA for DRP. And I think you mentioned PDUFA by the end of the year.

So I apologize if I missed this. But I was wondering if we should expect a priority review. And then also, if you think there will be an advisory committee meeting? And then separately, with regards to MDD, I was wondering if maybe you could just talk about where pimavanserin might fit into the evolving landscape of both existing and new MDD treatments currently in development? Thank you.

Steve Davis -- Chief Executive Officer

Serge, do you want to take the first question?

Serge Stankovic -- President

I'm sorry. I missed the -- I didn't quite hear. Can you repeat it please?

Jay Olson -- Oppenheimer and Company -- Analyst

Yeah. I thought I heard you mention that there could be a PDUFA for the sNDA for DRP by the end of the year. And I was wondering if we should expect a priority review and whether or not you're expecting an advisory committee.

Serge Stankovic -- President

Yes. Yes. Historically, all of the drugs with a breakthrough designation or almost all of the drugs, to our knowledge, have received the priority review once the NDA is filed. So we do expect, considering that pimavanserin has a breakthrough therapy designation for dementia-related psychosis, that we will be receiving a priority review as well.

Having said that, obviously FDA will inform us about that and make that decision once we file. So we fully expect that that will happen, but we'll confirm once after we file.

Jay Olson -- Oppenheimer and Company -- Analyst

OK. Great. And do you expect an advisory committee meeting?

Serge Stankovic -- President

Because this -- there is nothing approved for dementia-related psychosis, we think there is a high likelihood that we will have advisory committee. Again, the FDA will let us know about that in during the review process. So we -- again, we cannot say for sure, but we are preparing and expecting that there will be advisory committee.

Jay Olson -- Oppenheimer and Company -- Analyst

OK. Great. And...

Michael Yang -- Chief Commercial Officer

I think your other question, related to where does pimavanserin potentially fit in the MDD landscape, let me take that. I think today, there's 17 million patients in the United States that have depression. A majority of them do not respond adequately to standard SSRI or SNRI therapy. It is a consequence that a majority of the not adequately responding 2.4 million patients take adjunctive therapy on top of those baseline therapies.

And of those patients, the adjunctive therapies that are approved today are the same dopaminergic antipsychotics that are also approved for adjunctive depression that we see used in schizophrenia and bipolar disorder, etc. So as a result, those therapies and the side effect profile that those drugs have present, we think, a very ripe opportunity for a different kind of drug. And so with pimavanserin, what we've seen so far in the clinical work that we've done is a very robust antidepressive effect. We saw a rapid onset of action results within a week.

We do not see weight gain which is a significant issue with available therapies today. We do not see sedation. In fact, we saw an increase in daytime wakefulness. We do not see impairment on motor function in those patients.

And importantly, where depression patients many times have sexual dysfunction which can be exacerbated by the therapies they're on, not only did we not see an exacerbation of sexual function, we actually saw an improvement in sexual function. So our view is, we think pimavanserin, based on the profile we have observed so far in the clinic, is ideally situated to move right to the head of the class of adjunctive therapy. And so we're very excited about getting results of our first of the two pivotal studies that we're running currently by the end of this year. And if one of these studies is positive, that'll serve as basis when combined with the one pivotal study, the positive pivotal study that we already have, serve as basis for an sNDA next year.

Jay Olson -- Oppenheimer and Company -- Analyst

Great. Thanks so much for taking the questions.

Operator

This concludes the Q&A session. Mr. Davis, please proceed to closing remarks.

Steve Davis -- Chief Executive Officer

Great. Thank you so much for joining us today. As always, we appreciation -- appreciate the hard work of our employees, and we look forward to updating you on our next progress -- on our progress next quarter.

Operator

[Operator signoff]

Duration: 65 minutes

Call participants:

Mark Johnson -- Vice President of Investor Relations

Steve Davis -- Chief Executive Officer

Michael Yang -- Chief Commercial Officer

Serge Stankovic -- President

Elena Ridloff -- Chief Financial Officer

Ritu Baral -- Cowen and Company -- Analyst

Tazeen Ahmad -- Bank of America Merrill Lynch -- Analyst

Marc Goodman -- SVB Leerink -- Analyst

Unknown speaker

Charles Duncan -- Cantor Fitzgerald -- Analyst

Jason Butler -- JMP Securities -- Analyst

Gregory Renza -- RBC Capital Markets -- Analyst

Jay Olson -- Oppenheimer and Company -- Analyst

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