Welcome to the Karuna Therapeutics First Quarter 2023 Financial Results Conference Call. All participants are in a listen-only mode. Please note this call is being recorded. I will now turn the call over to Alexis Smith, Senior Director of Investor Relations. Thank you. Good morning, everyone, and thank you for joining our first quarter 2023 financial results conference call. I'm joined on the call today by Bill Meury, President and Chief Executive Officer, and Troy Ignelzi, Chief Financial Officer, who will begin our call with prepared remarks, as well as Andrew Miller, Founder and Chief Operating Officer, and Will Kane, Chief Commercial Officer, who will join Bill and Troy for the Q&A portion of our call. Before we begin, I encourage everyone to visit the investors page of our website at investors.karunatx.com to find our press release and presentation related to today's call. Forward-looking statements related to our product development, regulatory, and commercialization plans, our research activities, and financial outlook may be presented during this call. Please refer to today's press release and our SEC filings for important risk factors that could cause our actual performance and results to differ materially from those expressed or implied in these forward-looking statements. Now I'll hand it over to Bill. Thanks, Alexis. Good morning, everyone. In the beginning of this year, we outlined three strategic and operational priorities. The first is to build the core, which means maximizing the value of KarXT through our continued development efforts, submitting the NDA in the third quarter, securing FDA approval, and successfully launching KarXT in 2024. The second is to expand our pipeline organically and inorganically. The third is to scale the company and build the operational capabilities needed to support our transition to an integrated R&D and commercial organization. As we sit here today on May 4th, I can say we've made excellent progress in all three areas. Let's start with the important development and regulatory updates for KarXT. In the first quarter, we announced positive data from EMERGENT-3, our third consecutive positive efficacy and safety trial evaluating KarXT in schizophrenia. In the trial, KarXT demonstrated a statistically significant and clinically meaningful 8.4 point reduction in the PANSS total score at week five, with a P- value less than 0.0001 and a Cohen's d effect of 0.6. KarXT has now demonstrated clear and consistent antipsychotic activity across three registrational studies, whether one looks at the PANSS, effect size, or P- values. In the trial, KarXT was generally well-tolerated with a side effect profile substantially consistent with our prior schizophrenia trials. As expected, mostly cholinergic side effects, which were mild to moderate in severity and generally transient in nature. Just as important, as we didn't see weight gain, EPS, and somnolence, which are common with many atypical antipsychotics. These side effects can be burdensome for patients and reduce compliance, leading to relapse and hospitalization and negatively impact overall treatment outcomes in schizophrenia. The lack of these side effects can be meaningful for patients. We look forward to presenting additional data at medical congresses this month, including new efficacy and safety results such as CGI-S, AE rates, and vital sign data from EMERGENT-3, as well as the exploratory endpoint analysis evaluating KarXT in cognition from the EMERGENT-2 and EMERGENT-3 trials. The totality of the data generated to date reinforces the potential of KarXT to be a completely new and differentiated pharmacological treatment of schizophrenia that should be very well received by the psychiatry community if approved. In addition to EMERGENT-3, we made significant progress advancing EMERGENT-4 and EMERGENT-5, our 52-week open-label trials evaluating the long-term safety of KarXT in schizophrenia. EMERGENT-4 completed enrollment at the end of last year, we anticipate wrapping up enrollment for EMERGENT-5 this quarter. Both trials are designed to provide long-term safety data as well as contribute to overall safety exposures to support our NDA. There's a great deal of valuable information that can be garnered from both studies, not only for the NDA, but also for medical education. We'll plan to share data from these trials in 2024. Outside the trials in the EMERGENT program, our phase I-B trial evaluating the effect of KarXT on 24-hour ambulatory blood pressure is well underway. We initiated the trial in April and are very pleased by our enrollment numbers to date, and we expect top-line data in the fourth quarter of this year. On the regulatory front, we had a positive pre-NDA meeting with the FDA this quarter, which reinforced our key assumptions related to our data package and timing. We continue to target our NDA submission to the third quarter of this year. We expect formal meeting minutes later this month. We will provide more information as appropriate. In the meantime, the organization is well on its way to preparing our submission and getting ready for the potential approval of KarXT in the second half of 2024. Turning to our second indication, adjunctive treatment of schizophrenia and its respective program ARISE, which is evaluating KarXT on top of standard of care in adults who experience an inadequate response to their current atypical treatment. The phase III program includes a six-week outpatient trial evaluating the efficacy and safety of KarXT compared to placebo and an optional 52-week open-label extension trial that evaluates the long-term safety of KarXT as an adjunctive therapy. This morning we announced that we now anticipate top-line data from the ARISE trial in the second half of 2024, an update to our previous guidance of the first half of 2024. This is primarily driven by enrollment. Our clinical development and clinical operations teams are implementing several measures to increase enrollment. First, we're in the process of activating more than 20 ex-U.S. sites in Bulgaria and Serbia on top of the existing 30 or so active sites in the United States. A few of these ex-U.S. sites are recruiting as of last week, and more will be activated in the coming weeks and months. Changes have been made to support site operations, recruitment, and physician and patient experience. This includes enhanced site communications, changes in technology and marketing support. Third, clinical trial site budgets have been reviewed and adjusted where necessary to reflect additional efforts. Timely completion of this study is important, and we're taking all the necessary steps to shore up execution in a timely manner without compromising quality. Briefly on our ADEPT program, which is evaluating KarXT in psychosis and Alzheimer's disease, for which there is no FDA approved treatment. The ADEPT program, which consists of three clinical studies, ADEPT-1, 2, and 3, remains on track. ADEPT-1, our randomized withdrawal trial, is underway and actively enrolling patients, and we expect to have ADEPT-2, the 12-week acute efficacy and safety trial, and ADEPT-3, the optional open-label extension, up and running in the second half of the year. Data from these trials are expected in 2025. Now on to building our pipeline. In February, we announced an exclusive global in-license agreement for TRPC4/5 inhibitors for the treatment of mood and anxiety disorders, including lead clinical-stage candidate KAR-2618. This transaction met all of our criteria. Scientifically, TRPC4/5 represents a completely novel pharmacological approach in mood and anxiety, with validation in preclinical and early clinical models. Strategically, it expands and diversifies our psychiatry portfolio. Lastly, it could be an important source of value for the company in the future. We look forward to sharing more details on KAR-2618's planned development program later this year. Turning to our operational priorities for this year. We've made excellent progress building our capabilities and team. Our 2023 staffing plan includes over 100 new hires. We've already successfully filled 45 of those roles, including our Chief Commercial Officer, Will Kane, who brings a great deal of launch experience in neuroscience, including schizophrenia and Alzheimer's. We've expanded teams such as our medical affairs and market access groups to support our pre-commercialization activities with the medical community and payers, among others. We plan to engage in scientific exchange at over 30 different national and regional medical meetings, and in parallel, develop and publish several key posters, publications and review articles. These are important efforts that require effective planning, and we have the team in place to do it. I'd like to turn this call over to Troy to expand on our first quarter financials and how we're thinking about our cash runway for the years ahead. Thank you, Bill, and good morning, everyone. I'll begin with an overview of our current cash position and financial results for the first quarter of 2023, followed by our financial outlook for the remainder of 2023 and 2024. In March, we completed a follow-on public offering that resulted in net proceeds of $436.7 million, increasing our cash position from $1.1 billion at the end of 2022 to $1.5 billion as of March 31st, 2023. We expect the current cash to fund our operations through the end of 2026. Importantly, our cash runway extends at least two years after our expected commercial launch of KarXT in schizophrenia in the second half of 2024, if approved by the FDA. Total operating expenses for the first quarter were $109.7 million, compared to $58.6 million the year prior. Operating expenses were slightly offset by $11.3 million in interest income and less than $1 million in licensing revenue associated with sales of clinical drug supply to Zai Lab. R&D expense for the first quarter was $85.5 million, an increase of $41.7 million versus the prior year period, which was primarily driven by expenses related to the EMERGENT, ARISE, and ADEPT clinical programs, NDA supporting activities, the $15 million dollar upfront license payment for Goldfinch Bio's TRPC4/5 channel candidate, as well as increased employee headcount and higher stock-based compensation expense. G&A for the first quarter was $24.3 million, an increase of $9.5 million versus the prior year period, which was primarily driven by an increase in commercial prep activities, professional fees, employee headcount, and again, higher-based stock compensation expense. We expect our R&D expense to remain relatively consistent on a quarterly basis for the remainder of the year and for SG&A expense to increase modestly quarter- over- quarter as we continue to build commercial capabilities and corporate infrastructure. We are reiterating our previous financial guidance for the full year 2023, with overall operating expenses ranging between $430 million and $470 million, which includes up to $70 million in non-cash stock-based compensation expense. Of this, we anticipate R&D expenses to range between $310 million and $340 million, which includes up to $35 million in non-cash stock-based compensation. We expect SG&A expenses to range between $120 million and $130 million, which also includes up to $35 million in non-cash stock-based compensation. We expect total OpEx for 2024 to be similar to 2023, with a decrease in R&D and a corresponding increase in SG&A. With that, I'll hand it back to Bill. Thanks, Troy. As I mentioned earlier, I'm encouraged by the progress we've made. A really strong start to the year from development, regulatory, and operational perspectives. We're well-positioned and well-capitalized with the management team and in-house expertise needed to execute against our three strategic priorities. I look forward to providing future updates across our programs and business. With that, I'll turn it over to the operator to begin Q&A. At this time, I would like to remind everyone, in order to ask a question, press star then the one on your telephone keypad. Please limit your question to one initial question. We'll pause for just a moment to compile a Q&A roster. Your first question will come from Salveen Richter. Your line is open. Hi. Thanks for taking our question, and congrats on the progress. This is Tommy on for Salveen. Just one on the pre-NDA meeting here. What came out of this meeting, and what are the remaining gating items here? Could you help frame expectations into the cognition data? Thank you. Yeah. Thanks for the question. I'll answer it and ask Andrew Miller to expand on it. As it relates to the pre-NDA meeting, we've communicated this in the past, it was largely procedural. We wanted to confirm, reinforce key assumptions related to our data submission and timing, our statistical analysis plan, among several other things. It was a very positive and productive meeting. As we said in the opening remarks, we're on track to submit our NDA in the third quarter of 2023. There were really no surprises at all in the meeting. That being said, we expect to have the formal meeting minutes at the end of the month. As it relates to the cognition data, we'll share that information at the ASCP meeting in May. It was a pooled analysis of EMERGENT-2 and EMERGENT-3. The unmet need here is high. Cognition is an essential feature of schizophrenia. There's no FDA-approved treatment right now, and it's one of the major predictors of long-term functional outcomes. We're encouraged by what we see. When I look at the data, I think it leads me to wanna do additional clinical development work, and that'll be something that comes into focus over the next several months and quarters. Net, net, I believe it was a positive. Andrew? Yeah. Maybe just quickly add to that. I mean, I think from the cognition perspective, obviously this is an exploratory endpoint as part of our study. I think we are encouraged when you look across the arc of all information that's available to us to date around xanomeline and KarXT from the biological rationale to the preclinical data to the data from, you know, historical studies with xanomeline and Alzheimer's and schizophrenia and the studies with KarXT as part of the EMERGENT program. We look forward to presenting more details of that here at the end of the month. Great. Our next question comes from Paul Matteis. Your line is open. Thanks. That was Paul Matteis here. That was an interesting pronunciation. Thanks again for taking the questions and congrats on all the progress. I had one question on the on your FDA meeting. Did it come up at all as to whether your your approach to submitting the ABPM data in some sort of safety update during the review, did you get any confirmation that that's an acceptable strategy with the FDA? I guess just how do you guys plan on articulating those data and sharing that result? Thank you. Thanks, Paul. It's Bill. I'll let Andrew answer the question regarding ABPM. Sure thing, Bill. Now of course, obviously as part of the pre-NDA meeting, we really discussed the overall development program including all of our studies across EMERGENT, a variety of phase I studies, QTc, hepatic renal impairment, as well as specifically the ABPM study. You know, we do think based on that discussion it's a reasonable strategy to present the ABPM data at the day 120 safety update, which would be our current plan. Really, I think that's consistent with precedent and consistent with the idea that presenting additional data from a phase I safety trial such as the ABPM study would be a reasonable plan. We of course have clinical vital sign assessment as part of all of our clinical studies. So this is really just an enhancement of that data set, a complement to that data set. We do think that's a reasonable strategy to provide alongside all the other safety data that will come at that day 120 safety update. Thanks, Andrew. Any comment on just how you guys will articulate those data to the street? I mean, I think we haven't gotten into specifics at this point. Obviously, typically with the top-line data release would be some sort of communication of the primary endpoint or potentially key secondary endpoint. We'll keep thinking about that, but obviously we wanna get the information out in a timely manner once we receive it. Makes sense. Thanks so much. Your next question comes from Jessica Fye. Your line is open. Hey. This is Nick on for Jess. Thanks for taking our questions. Kind of mentioned this, but on the NDA filing, can you just kind of recap some of the activities that remain ahead of the potential filing time? In particular, I know you mentioned this associated with E3, E4, but in terms of the exposure data, like are you on track to recruit adequate amount of that data ahead of it? Thanks. Yeah, absolutely. With respect to the long-term safety studies, EMERGENT- 4 and 5, you know, I think we've been communicating really for the last, you know, almost a year that long-term safety was from a data perspective, was likely to be the gating factor. I think honestly, as we approach the submission, very close at hand now in quarter three of this year, that shifts really from anything about recruitment and retention to, you know, cleaning that data, analyzing that data, writing it all up for submission. Obviously, it's a tremendous amount of information that goes into that submission. Our projections certainly do include our current status where we are from a recruitment perspective. You know, I think we're in a position where that's not the limiting factor as we go forward. Our next question will come from Jason Gerberry. Your line is open. Hey, guys, it's Jason. Thanks for taking the question. One for Bill. Just curious how you're thinking about KarXT indication stacking beyond, you know, where the product's currently in the clinic. You know, this is common playbook for CNS drugs, and I'm curious sort of the interplay with the IRA drug pricing legislation and does that in any way make you think differently about future development programs and perhaps maybe advancing them through your pre-clinical other muscarinic targeting agents, just to sort of navigate sort of the implications of IRA? I imagine that the ADP could start to tip you into IRA exposure. Just any color you can provide on that would be great. Thanks. Yeah, Jason, it's a good question. I do think you have to think about lifecycle management and the portfolio holistically. Of course, the IRA is a component of it. I will just say up front, I think it's difficult to hide from the IRA if you're running a biopharma company of any size. As it relates to KarXT, look, we have potentially three indications on the drug, which will be clearly the primary drivers of value. That includes, of course, schizophrenia, an adjunctive treatment indication, which I think could serve as a fundamental change in the approach of schizophrenia and an important value driver. We have Alzheimer's psychosis. There are other indications in psychosis, broadly speaking, that we're examining and we continue to analyze. Of course, you have Parkinson's, there's autism, there's aspects of bipolar, mania that also could be interesting. We'll continue to analyze those opportunities, and they should come into focus as we get closer to the end of the year, early 2024. I think we certainly have an indication set right now that could result in broad adoption in the psychiatry community. You know, as it relates to how we think about it in the context of IRA, Karuna does not have a great deal of concentration risk as it relates to the IRA. The big reason is that roughly 75% of the utilization of KarXT will be outside of Medicare Part D. If you consider the fact that even in the Medicare Part D channel, there's an LIS component, which also would be an advantage for KarXT. While an indication for Alzheimer's psychosis could shift us more into it, I just don't think you can't shy away from it. As we develop the portfolio, we do think about diversification, not just by therapeutic area or sources of growth, and revenue, but also just in terms of our payer mix. I think, you know, with a compound like our TRPC4/5, while it's still early, we'll have more information about that at the end of the year, early 2024, that would actually move you into depression and anxiety, where there isn't as much impact from the IRA. We just take all these factors into consideration, think carefully strategically about the opportunities, obviously scientifically, and then, of course, financially, where is the best return on our investment. Thanks, Jason. Yep, thanks. Our next question comes from Neena Bitritto-Garg. Your line is open. Hey, guys. Thanks for taking my question. Just curious going back to the cognitive data that you're going to present in the next couple of weeks here. Can you just walk us through, you know, kind of what you would consider to be encouraging? I know you said that the data are encouraging and how it's going to impact your plans for indication expansion. I know you did just talk a little bit about additional indications, but any additional details on, you know, formal plans to conduct a study in CIAS would be great. Thanks. Andrew can take that question. Sure. Maybe to just take the last, the last part first. Yeah, I think it'd be premature at this moment to sort of comment on exactly what the plan is going to be. I think as Bill mentioned, there's obviously a lot of different potential indications for KarXT, and some of them we have existing initial data, and some of them we have mechanistic rationale for other things. We're putting all of that together in the mix. Certainly the cognitive data, as we see that from EMERGENT-2 and EMERGENT-3, will play a part in that with respect to cognition and schizophrenia. You know, in terms of the data itself, yeah, I think what you should expect to see from us is the same type of analyses that we completed around the EMERGENT-1 study. Again, the study design, from a dose and randomization treatment duration is all the same in EMERGENT- 1, 2, and 3. We did make some updates to the cognitive battery that was used in EMERGENT- 2 and 3, but is identical between EMERGENT- 2 and 3. Allows us to look at the individual studies as well as the aggregate of that data. You know, we're obviously interested in sort of two different groups. One is the overall group of the studies, but of course, the studies were not recruited specifically on the basis of cognitive impairment. They were recruited on the basis of a total PANSS vary assessment focused on positive symptoms. One of the things that we did with EMERGENT-1, and you'll see this again with EMERGENT-2 and 3, is to look specifically at the subset of patients who are one standard deviation below the mean of age-matched normal controls with respect to cognitive performance on the battery that we used in the study. The idea being you would wanna look specifically at patients that would be the target group to enroll if you were looking specifically at cognition. You know, we're encouraged by the results across those groups. Again, we look forward to being able to share more details here in the near future. You know, the one thing I would add, if you think about the near term when we introduced KarXT to the psychiatry community, is what we know is that KarXT does not appear to impair cognition. In any survey of psychiatrists or patients, one thing that you hear even more commonly or frequently than impact on weight gain or EPS, which are problematic side effects of the current D2 antagonists, is cognitive impairment, which can really impact functional outcomes. At minimum, we have something that's not impacting cognition. I think the pro-cognitive effects, whether you look at things pre-clinically or clinically, there's certainly a signal there. For the launch, the real-world experience of this is also very important. I think it should be positive. Got it. That's super helpful. Thank you. Your next question comes from Laura Chico. Your line is open. Hey, good morning, guys. Thanks very much for taking the question. Bill, I'm wondering if you could speak a little bit more about recruitment trends in the schizophrenia clinical trial space. You made some comments about changes you're making. I imagine the disruption in Eastern Europe is still challenging, but are there other structural dynamics that are posing headwinds on study recruitment? Then one quick follow-up. What's your appetite for securing a PRV for use in the KarXT filing? Thanks, guys. Yeah. I'll start with the second question, then probably turn the first question over to Andrew. You know, as it relates to a PRV, I'd say we're looking to get KarXT reviewed and approved under the most expedited path possible. There are a number of different procedures that we can access with the FDA. Of course, the priority review actually shortens the review period. We'll learn about that 60 days after the submission, and we'll continue to evaluate a PRV and make a decision at the appropriate time. Clearly, speed to market here is important. I think that's obvious, and we'll exhaust every possibility to do that. Yeah. With respect to recruitment, specifically around studies in patients living with schizophrenia, you know, I don't think there's a lot of specific factors to that at this moment. Obviously, the more studies that are ongoing, from a competitive perspective, you're competing in large part with the same sites for the same patients, so that can be a factor that ebbs and flows over time. I don't think we would point out anything specific to patients with schizophrenia at this point. You know, there's obviously a myriad of factors that go into the execution of any clinical study, from sites to specific protocols, all sorts of different dynamics that we manage, frankly, across every clinical study that we run. you know, we've been able to, I think, very successfully execute the EMERGENT program, which includes both inpatient and outpatient studies in EMERGENT- 4 and 5, that have, you know, recruited well as, you know, noted by the support they'll provide for our NDA submission here next quarter. I don't think we would point out anything at this point specific to schizophrenia. Thanks, Bill. Your next question comes from Jay Olson. Your line is open. Hey, congrats on all the progress, and thank you for the update. Could you talk about the adjunctive therapy setting for schizophrenia and how the novel mechanism of KarXT could be synergistic with dopamine-based atypicals and also the unmet need and size of the commercial opportunity for adjunctive therapy as compared to monotherapy of schizophrenia? Thank you. Jay Olson. It's a great question. To set the stage a little bit, today, we estimate 25%-30% of patients with schizophrenia are receiving two D2 antagonists. I think that is probably the best illustration or example of the unmet need here. In terms of psychiatry, it's completely intuitive to a psychiatrist to use two compounds that mechanistically are different and probably complementary, which is why we're doing the adjunctive study. If you look at adjunctive treatment options in other areas, for example, in depression or in Alzheimer's, they can garner up to a third or more of a market. If you really were to put sort of numbers behind this, the adjunctive treatment approach in schizophrenia could be a substantial opportunity. Physicians, patients, and of course, and then, of course, commercially. I do believe early on, psychiatrists who are accustomed to polypharmacy approaches are going to use KarXT on top of a D2 antagonist. If they're using two D2 antagonists that are pharmacologically more similar than different, I think it's pretty clear here that the opportunity for the muscarinic class, we're going to lead the class, is pretty significant. Andrew, do you want to add? Yeah, just add quickly, just from a scientific perspective, obviously, the pharmacology, the primary pharmacology is substantially different. We do think there's the opportunity for it to be complementary. Obviously, we're exploring that as part of the ARISE program. We've also looked at that pre-clinically. We presented at scientific conferences over the last, you know, 12 months or so data where you can take a subtherapeutic dose of xanomeline and use that in combination with a subtherapeutic dose of sort of representative atypical antipsychotics, namely risperidone and aripiprazole, and see true synergistic benefits of preclinical models of psychosis. So, obviously, we want to generate the human clinical trial data and ARISE to support that. I think at first blush, you know, scientifically it's intuitive, and I think we have some nice data, albeit preclinical at this stage, to support that idea. Super helpful. Thank you. Your next question comes from David Amsellem. Your line is open. Thanks. Just a couple. Can you talk about when we might see clinical work commence in mania, how you're thinking about that, how big of a priority that is? Secondly, as you think about lifecycle, management, what's a bigger priority, a long-acting injectable or getting to a once-daily oral formulation? Thank you. Yeah, David. Thanks. This is Bill. I'll answer the question. As it relates to mania, it's part of a larger analysis of additional indications beyond the three that we're already developing. Certainly, I know that mood and anxiety market fairly well. There's certainly a psychosis component to mania, and it's something that we're looking at, you know, very seriously. I think it'll come into focus, as I mentioned earlier, at the end of the year, early 2024. We have a lot on our plate right now. We can do more than one thing at a time, but our single focus right now is ensuring that the NDA is submitted on time, and it's of the highest quality. Additional indications will be sort of the next step in that. We're certainly intellectually well down the path. As it relates to making an operational decision, we have a little bit more work to do in thinking about those types of investments. You know, as it relates to QD dosing or the LAI, I don't know if it's an either/or. I think if there's an opportunity to improve the dosing of any product, you take advantage of it. Physicians want flexibility as it relates to dosing regimens and formulations. I don't think I will say, and I'll just turn this over to Andrew in a minute. I don't see BID as an impediment. I also don't see dose titration as anything else but commonplace to psychiatrists. You know what psychiatrists want right now is not necessarily a new dosing regimen. They want a better product with efficacy at the upper end of the range, and a product with less weight gain, EPS and sedation. We of course, through the EMERGENT program of dose KarXT in 1,500 patients and have three very convincing, you know, efficacy and safety trials. If we have an opportunity to get to a different dosing regimen or a different formulation, we'll do it. You know, out of the gate, as I think about creating value with KarXT, I think the data set that we have here is pretty impressive, and I think we've also set a fairly high bar. Andrew, you want to talk a little bit more about LAI? Yeah, sure. Can speak to that a little bit. I mean, obviously that continues to be a small portion, but a growing portion of the overall prescription market in the U.S. as well as outside of the U.S. in schizophrenia. It is something that's of interest to us. Obviously from a timing perspective, the LAI is really something that you would envision being used as a switch from the oral medicine. You know, from our perspective, obviously the focus out of the gate is to really establish the oral product for KarXT as something that can hopefully be very helpful to patients from both an efficacy and overall safety and tolerability perspective. To the extent we're able to do that, which we certainly have confidence in, that will establish a, you know, potential opportunity for an LAI formulation. It is something that we are actively working on, and hopefully we'll be in a position in the not too distant future to provide some updates about how we intend to push that into clinical development. Great. Thank you. Your next question comes from Yatin Suneja. Your line is open. Just one question for me. Could you just talk about the size and scope of the ambulatory study? I don't see it on ClinicalTrials.gov. You know, maybe articulate for us what are the key risks to that study. Thanks. Yeah. I I can speak to that a little bit. As you noted, you know, the ABPM study is a phase I study. It doesn't require a ClinicalTrials.gov listing. We have spoken previously about some of the high-level details. I can recap some of that here. The study has a target enrollment of 103 patients. It's an eight-week study. It is one dose arm of KarXT. There's no placebo group. The dosing of KarXT is identical to what we use in EMERGENT-1, 2, and 3, so a flexible dose. There's a two-day titration, and then 100/20 and 125/30 being the dose levels that patients would continue on after the first week, respectively. The primary endpoint is the statistical hypothesis that KarXT is less than a 3-mm systolic blood pressure change from baseline to endpoint. That's consistent with how ambulatory studies are conducted across really all indications per FDA guidance. You know, again, if you look at the data we've put out already for EMERGENT-1 and EMERGENT-2, we'll be able to put out additional blood pressure and vital signs data for EMERGENT-3 here, of course, next month. We make measurements in EMERGENT-1, EMERGENT-2, and EMERGENT-3 at Cmax of the drug, as opposed to a 24-hour average assessment which you use in the ambulatory blood pressure monitoring study. Even if you take that data from EMERGENT-1, EMERGENT-2, and EMERGENT-3, and if we got the same thing in the ambulatory study, we would be successful on that primary endpoint. That's kind of what gives us confidence that given the similarities between EMERGENT-1, 2, and 3 in the ambulatory study and the data we have so far, that's why we really look at this as just a confirmation of what we've already seen. Doing that in a more definitive way, the same way that you would, say, do a dedicated thorough QTc study, which is a typical drug development program, even though you already have ECG assessments across your entire clinical program. We put it really in that same type bucket. Your next question comes from Myles Minter. Your line is open. Hey, thanks for taking the question. Just got a few inbounds this morning on what the definition of an encouraging pre-NDA meeting is. Does it pretty much just mean the path you've laid out to NDA is valid, you're just waiting on safety data? Or were there other things that the regulators recommended that you complete before the filing? Also, in the pre-NDA meeting, did you discuss the FDA's want for outpatient data as well as inpatient, just knowing the bulk of your clinical package has been generated in the inpatient setting? Great. Thanks for the question. I'll just define positive as the meeting simply reinforced the key assumptions that we had for preparing the NDA and then for submitting it in the third quarter of 2023. There's no reading between the lines. We of course, need to get the meeting minutes at roughly the end of this month, but the meeting is what we expected it would be, and that was reassuring to me as we have an entire team of people preparing the submission. Andrew? Yeah. I think it really spoke to, you know, the preparation plan that we had already put forward. I think it was really a confirmation of that. I think we feel good about that from a regulatory perspective. Could you repeat the second question? Yeah. Just if you asked the question of the regulators specifically whether they wanted to see outpatient data as well as inpatient data, just knowing the majority of your clinical package is in the inpatient setting. Yeah, happy to speak to that. Obviously the EMERGENT program is a mix of both inpatient and outpatient studies. Importantly, you know, 52-week safety studies in EMERGENT-4 and 5, which are completely outpatient. EMERGENT-1, 2, and 3, the five-week placebo-controlled acute psychosis studies are inpatient. That's not reflective of anything unique to KarXT. It's reflective of the fact that you have patients with acute psychosis and a portion of them are randomized to receive placebo. That is the standard practice for acute psychosis studies. If you look back over the previous 20- 30 years, that inpatient placebo-controlled paradigm is the only type of study that's been used to support registration of the current atypical medicines. It's really reflective of the clinical setting and design, nothing specific to KarXT. Said another way, the type of data we're providing to support our NDA submission is exactly the type of data that's been used to support the submission and approval of really all of the antipsychotics that have been approved for the last 20 years. Great. Thanks for the clarification. Your next question comes from Jason Butler. Your line is open. Hi. Thanks for taking the questions. Just a real quick follow-up on the blood pressure study. Is there any limit on or what is the limit on patient ages being enrolled into the study? Can you just talk a little bit about your payer engagement and how payers are thinking about a novel mechanism being introduced into schizophrenia in in in terms of, you know, for example, prior authorizations and in the context of monotherapy versus adjunct therapy? Thanks. The first question? Patient agents. Yeah, sorry, go ahead. I thought you might. Well, we'll start with the payer one. Obviously we are building our market access account team, and they have started some interactions with payers in collaboration with our medical affairs team. I would say that the initial reaction is a positive one. They appreciate the novelty of the mechanism because it's been so long since there has been any novelty in this class. They also put it in the context of the overall clinical data, which we'll be able to share with them in more detail later this year as per the pilot that allows us to have a more detailed discussion pre-launch to enable them to make earlier decisions about access and coverage. I'd say the initial signs are encouraging, but it'll be put in the context of the total clinical profile, et cetera. Prior authorization steps are pretty standard in this market for new psychiatric drugs. There is some encouraging news, particularly at the state level, where state legislators are moving to potentially reduce some of those hurdles through mandating quicker review times or by reducing utilization management techniques such as PAs and step edits. We'll monitor that. There seems to be a recognition that we as a society need to do more for patients with serious mental illness, and that I think will play out in terms of our launch planning and how we engage both government and commercial payers. I would add that there's still a balanced conversation or dialogue between the companies and the payers in the area of mental health, which I think is a real positive. The other point I would make is that if you look at the formulary coverage rates for the currently available branded atypical antipsychotics, they're quite high. You know, you're looking at 70%- 80% of formularies covering these products. The difference between what they're dealing with and what we'll deal with is we have something that is actually pharmacologically different. If coverage for a 5-HT2A antagonist can be secured, which is a one of 12 market, I think there's a strong likelihood that we're going to be able to achieve access for physicians and patients at a price that does not create budget problems for the payers and at the same time rewards Karuna for its innovation. I think that balance we can achieve, and that's our aim. Yeah. Just quickly with respect to the AVM study, that study enrolls patients aged between 30 and 65. That's also representative of how AVM studies are typically done, including in schizophrenia, consistent with guidance. The idea that that's really the age group among the 18- 65 that typically tends to be more of the focus with respect to vital signs. I would add to that it is also representative of the age group that we enrolled across the EMERGENT program. That, of course, allowed patients aged 18 up to 65. When you look at the EMERGENT-1, 2, and 3 studies, they all have an average age of between 42 - 47 with a standard deviation of about 10. The vast majority of patients fit into that 30- 60 age range. you know, a relatively small number at the upper end and lower end of that range. The AVM study, we would expect to have a very similar age distribution to EMERGENT- 1, 2, and 3. Thanks for the question. Thank you. Your next question comes from Brian Abrahams. Your line is open. Hi, this is Joan for Brian. Thank you for taking our question. We talked to several physicians, and they were all excited about the potential of KarXT to have differentiation of the cognition versus atypicals. Just wondering if there are ways to highlight KarXT's potential cognitive advantages over atypicals beyond the conference presentations. Can you potentially do additional analyses or phase III work, or are there smaller studies that you can do, and timelines for that relative to initial launch? Thank you. Listen, I think it's a really important question. I think the answer to your question in short is yes. There are additional analyses that we will do. There's also additional clinical work that we can do. That could be, as you said, for publication purposes, it could be investigator-initiated trial. Then, of course, you have registration work, which would be a larger commitment and investment. I think all of those options are important. If the unmet need for an antipsychotic that has a pro-cognitive effect wasn't so high, the answer of course, would be different. Clearly in every survey we've ever done and every advisory board we've ever conducted, this is important. The medical community is interested in exploring this, and so are we. I think Andrew can make a few more comments about it. Yeah. I mean, I think, you know, obviously part of what we did across EMERGENT- 1, 2, and 3, we have the opportunity to do similar data collection analysis across ongoing and future studies as well. I think there continues to be additional sources of information around cognition that could be available, you know, across the next year or two. As Bill said, you know, I think the idea of pulling together the entire story, looking at all of the data, kind of sitting down and saying what would be the best way to continue to pursue the pro-cognitive effects of KarXT and demonstrate that in, you know, schizophrenia or other populations. You know, again, I think this most recent piece of data, we'll be able to talk more about the details here at the end of the month, with respect to EMERGENT-2 and 3. Fits very nicely into that story. Really reinforces the idea that, you know, again, xanomeline was originally developed as an M1 agonist for cognition. That was the original hypothesis. Obviously, we've, you know, come to understand a lot about the antipsychotic effects, of a dual M1/ M4 agonist, and wanna continue to pursue the potential broad spectrum of benefits that we think it could have. Thanks for the question. Your final question will come from Marc Goodman. Your line is open. This is Rudy on the line from Marc. Thanks for taking our question. Regarding the Alzheimer's psychosis indication, for ADEPT-1 study, can you maybe remind us the rationale for the randomized withdrawal trial design? Like, how to select the 12-week and 26-week duration for the two parts, why do we select NPI-C as the primary endpoint instead of CMAI? Yeah, I can speak to that quickly. Maybe the last part first, though. With respect to the CMAI, the Cohen-Mansfield Agitation Index, that is a data that we collect, an endpoint that we collect as part of ADEPT-1, 2, and 3. It is not the primary endpoint. CMAI is really focused on agitation and aggression, as opposed to the core psychosis around hallucinations and delusions, of which we take the portion of NPI-C, the Neuropsychiatric Index Clinician Version, as our primary endpoint. That really reflects the core of psychosis, as opposed to agitation or aggression, which are somewhat related, but can be, I'd say, treated with or potentially treated with different types of medicines, taking advantage of their sedative effects. That's sort of the rationale for that. With respect to the randomized withdrawal design in EMERGENT-1 or, sorry, ADEPT-1, and then ADEPT-2 being a parallel group, double blind placebo-controlled study more similar to EMERGENT-1, 2, and 3. We think the two of those provide a really nice complement to each other. The randomized withdrawal design is a very common design. It is typically used actually in schizophrenia as a post-market commitment or something that can enable maintenance therapy labeling. It's commonly used in depression. It's been used as a pivotal study to support substantial evidence of effectiveness for approval of antidepressant medicines. It tends to be a study design that is a little more resistant to potential placebo effects. Obviously it does require a longer protocol. 12 weeks of open label treatment, we think that's more than sufficient amount of time to have a clinical response on KarXT, given the results of EMERGENT-1, 2, and 3, as well as the original Lilly Alzheimer's study, where you saw substantial benefits towards psychosis appearing as early as the first couple weeks of treatment. 26-week randomized withdrawal period. That's really about allowing a long enough period of time to have substantial number of relapse events on placebo. When you look out there at the literature, we believe 26 weeks is more than sufficient to see that. It's really those relapse events that is the basis of the primary endpoint analysis. That's just a little bit of additional background on kind of the fundamental construct of those studies and the time frames that we chose. Appreciate that question. Got it. We will now turn it back over to Bill Meury, President and CEO, for final remarks. I just want to thank everyone for joining the call. We look forward to giving you updates in the future on our progress. Thank you very much. This concludes today's conference call. You may now disconnect.