Paul Matteis: I had one direct and then just one business question. On orexin, can you talk about the multi dose pharmacokinetic data that you’ve generated? And I guess when you look at the exposure levels over time, in the evening, how low do drug levels get? And are you comfortable that they get low enough where you’re going to avoid an insomnia or sleep latency signal? And then second, just on business development, it was interesting to kind of hear a comment there slipped in. I know it’s something you’ve probably said before, but what’s your current thinking on BD? And if you think about a deal, what’s your scope right now on deal size and also whether it would or wouldn’t be important for a deal to accretive or dilutive?
Craig Hopkinson: I’ll take the PK question first. Obviously, for competitive reasons, we haven’t disclosed too much in terms of our profile. But the profile that we set out to achieve was achieved in our Phase 1 study. It’s a profile that obviously supports once daily dosing. And importantly, one of the most important aspects that we were focused on was really a profile that mimics the natural sleep/wake cycle. We achieved that. We’ve got a half-life of 8 to 10 hours which I think is ideal for once daily dosing and to achieve that sort of natural sleep/wake cycle. And essentially, this has been borne out in our Phase 1b, as you can see, with our dose response as well as the durability as you’ve seen at the 3 and 8 milligram doses.
Richard Pops: Paul, it’s Rich. On the deal size, I think that if you think deals in terms of pure pipeline expanders on the R&D side, our long range forecasts with our profitability targets accommodate expansion of R&D spend to some extent. Not heroically, but we could pick up something in development stage and [indiscernible] into our existing R&D activities and still hit our profitability targets which are critical for us. On the commercial side, to the extent that we acquired something to leverage the commercial side, we would want and expect that to very quickly to go to an accretive transaction.
Operator: The next question is coming from Chris Shibutani of Goldman Sachs.
Chris Shibutani: Two questions on the orexin and just thinking about the difference between NT type 1 patients and NT type 2. Would you expect that the perhaps lesser sensitivity that’s requiring higher doses to also manifest on the safety side as well in terms of lesser likelihood of being exposed to some of the AE aspects that we’re seeing? Are they correlated, in other words? Secondly, with NT type 1, can you comment about your thinking about cataplexy? In particular, what do you perceive as the potential there to influence that profile as we think about differentiating the different treatment options going forward? Any learnings you’ve had thus far would be helpful.
Craig Hopkinson: In terms of the read through on doses for NT2, patients obviously are far less sensitive to orexin with NT2. I think that’s based off of some of the Takeda data already published. Our expectation originally was that there may be up to a three to five fold increase in dose needed to cover that population. I think, given the potency that we now have established for the compound and our very clear dose response, we believe we can narrow that down to two to threefold increase in dose in that population to see the required efficacy. Our read-through on the safety side is exactly as you stated, and that is basically that because of the decreased sensitivity, you will probably only see sort of dose-limiting side effects at much higher exposures as well in that population.
So I think they will be pulled through there as well in terms of the dose. In terms of your question on cataplexy, while we didn’t collect data or analyze data on cataplexy in our Phase 1b, we did collect sleep diaries. The sleep diaries were really intended to help us inform our powering for Phase 2, as well as eventually for Phase 3. And essentially, what I can tell you there is that, anecdotally, patients that see a trend towards a decrease in cataplexy in terms of single dosing, some anecdotal information from our investigators was that in some of the patients that were able to watch a two-hour comedy movie without [indiscernible] sort of an event. It’s encouraging. And once again, we will be fully evaluating cataplexy in the design of our Phase 2 study, but this was not analyzed as an endpoint such as more just for planning purposes for [indiscernible] 1b.
Operator: The next question is coming from Jason Gerberry of Bank of America.
Jason Gerberry: Just want to follow-up on Umer’s question. So can you share the rate of 8 milligram healthy volunteer MAD, especially for visual disturbance and insomnia? It seems like a potentially relevant dose in all the settings that you’d study your OX2R. And given an NT1, I think the insomnia rate on the small end is 75%, visual disturbance is an AE of interest. I think this is important. And if you can’t share with that, I imagine you have all eight patients of NT1 data inhouse. Any observation that the AE profile is consistent with what’s been shared so far? Lastly, just a competitor, Wakix, missed an IH. Wondering how you think about IH now. I guess I wonder Wakix is more of an alerting agents. Orexin deficiency is not an issue in IH. Is this disease more druggable with something that helps with sleep consolidation, like a Xywav. So, just wondering how you’re thinking about IH mechanistically in lieu of the Wakix update?
Craig Hopkinson: In terms of our experience in the SAD and MAD, we only saw the four visual distances, two in the SAD, two in the MAD. These were sort of largely sort of mild events, were transient, self-resolving. All healthy volunteers had normal neurologic exams. And so, I wouldn’t read too much through into the actual doses of the MAD. We’ve got an acceptable safety profile and maximum tolerated dose has not been reached as well. We’re moving to even higher exposures in both the SAD and the MAD program. Bear in mind that these are non-sleep deprived healthy volunteers. So, they are not sensitive to orexin. In terms of actual patient experience to date, we haven’t seen any visual disturbances in our NT1 cohort to date. In terms of your question around Wakix and IH, obviously, we’re in the very early stages of collecting data in idiopathic hypersomnia.
And I think the profile that emerges from our 1B will inform us as to where 2680 falls in terms of addressing that particular indication? I think, once again, mechanistically, we’re pretty excited about the potential for an orexin agonist in IH, but that will need to be informed by the data as those data come in. Orexin The next question is coming from Marc Goodman of Leerink SVB.
Marc Goodman: Can you comment on the orexin, the blood pressure increase that we saw in that patient? How much increase in blood pressure did we see? And is this something that we should be watching for? And are you planning to do a blood pressure monitoring study? And then, secondly, just on LYBALVI, can you just comment on gross to nets going forward and whether this is the process that you’ve had last quarter?
Craig Hopkinson: I think it’s especially important to note that we did hourly blood pressure measurements throughout our SAD, MAD and NT1 patient experience. So we were measuring blood pressure really frequently. We only saw one increase in diastolic blood pressure in the NT1 cohort. This was an increase to 96 diastolic and normalized within two hours of the blood pressure increasing. So, once again, it was a very transient increase in one or two reads. Similarily, we saw a single blood pressure increase in the single ascending dose, and once again within a couple of measurements that have returned back to baseline as well. So, really not seeing any signals there at this point in time. These are just two individuals with one or two individual readings that were in the elevated range.
Todd Nichols: Let me take a crack at the gross to net question. So I think for LYBALVI gross to nets, as I said in the prepared remarks, slightly lower in Q3, 25.1%, really driven by a one-time favorable Medicaid adjustment of about $800,000. I think gross to net has been really consistent over the last few quarters. I think the second half of 2022, we were around 26%, first half of 2023 26%. And that’s the expectation through the remainder of the year. We’re not providing guidance specifically for 2024 today, but I think the one thing that would potentially change gross to nets would be more on the commercial contracting side. Up to now, we’ve been very much focused on profitability of LYBALVI units. And we’ve had a pretty disciplined approach to the contracting strategy.
