YIGAL NOCHOMOVITZ, ANALYST, OPPENHEIMER & CO.: We'll have time for Q&A at the end. I'm Yigal Nochomovitz; I'm one of the biotech analysts here at Oppenheimer. The next presenting company is ACADIA and presenting for the Company is the CEO, Uli Hacksell. Uli?

ULI HACKSELL, CEO, ACADIA PHARMACEUTICALS INC: Thank you and good afternoon. Let me first say that I'm going to make some forward-looking statements today and because of the uncertainty related to such statements, I encourage you to read the risk factors that we have filed with the SEC.

ACADIA is a CNS-focused company with a lead product, NUPLAZID, which we are preparing for submission as an NDA to the FDA in the first quarter next year for an indication called Parkinson's disease psychosis, or PDP. This is the first in its class of molecule. It's a molecule that came out of ACADIA's internal research. We have worldwide rights to this new type of treatment for Parkinson's psychosis where there is essentially nothing today.

We are very excited about the opportunities related to this molecule and we believe that we can build a strong neurology -- US focused neurology company based on the success with NUPLAZID.

NUPLAZID is the trade name for pimavanserin. Pimavanserin is also in development for Alzheimer's psychosis, as you can see on this slide. We have also conducted Phase II studies in schizophrenia and intend to do additional studies in schizophrenia with pimavanserin.

ACADIA also has two collaborations with Allergan in clinical stage programs and we have two very early stage internal programs, which are not partnered. But the focus of this presentation will be very much on NUPLAZID.

As I mentioned, we think that the commercial phase of NUPLAZID can form the foundation for a successful neurology company in the US and perhaps also outside of the US. We clearly have our strategy very clear. We want to commercial NUPLAZID ourselves in the US. We believe that it has a tremendous potential; can serve as a platform, essentially, for a wide range of indications far beyond Parkinson's psychosis.

We believe that outside of the US, we may or may not partner pimavanserin. That's something that we will decide down the road. We are not in a rush to do anything ex-US currently. We are just building value in the molecule for the time being.

NUPLAZID itself is a selective serotonin inverse agonist that preferentially targets the receptor called 5-HT2A receptor. In contrast to other drugs that are used to treat psychosis, it does not touch any of the other monoaminergic receptors. It's a very selective and that's the reason why it has such an attractive side effect profile. It lacks the problems that you see with the current typical or atypical antipsychotic agents.

We have generated a very strong IP foundation for the molecule that takes us into mid-2028 in the US. And these patents relate to polymers, to compositional matter, and to generic claims covering a wide range of chemical space around pimavanserin and covers a wide range of indications as well.

Importantly, we have demonstrated very strong efficacy data in Parkinson's psychosis. We have also demonstrated a safety and tolerability profile which is outstanding. And as I mentioned before, NUPLAZID, which is the trade name for pimavanserin again, has the potential to become the first drug to be approved for Parkinson's psychosis in the US.

The FDA has given us earlier this year a Breakthrough Therapy designation. It really shows that the FDA, first of all, appreciates the attractive clinical profile of NUPLAZID and, second, that the FDA realizes that there is a high unmet medical need in Parkinson's psychosis.

Importantly, with NUPLAZID we see a wide range of indication of broadening opportunities into Alzheimer's psychosis, into other neurological indications with psychotic problems, as well as into the psychiatry area like schizophrenia, bipolar mania, and perhaps even pediatric indications in the psychiatric area. Very exciting to look at these opportunities for us.

But the initial indication, the lead indication is Parkinson's disease psychosis. This is a serious condition characterized by hallucinations, most frequently visual hallucinations, so patients see things that don't exist.

And they also tend to have delusions, frequently paranoid delusions with a sexual component. It's quite common that patients accuse their spouse, who is most frequently their caregiver, of infidelity, for example, which causes a lot of stress in the relationship between patient and caregiver.

Parkinson's psychosis, or PDP, is the leading cause of nursing home placement of Parkinson's patients. Obviously, it's a major unmet medical need. There is nothing approved for this indication and psychotic drugs are sometimes used off-label here, but they are used despite the fact that they lack demonstrated efficacy and have a number of safety problems.

The reason why the antipsychotics are not suitable for this indication is very easy to understand. They all block the dopamine D2 receptor that you see here in the table in red, so they are blocking the target for the therapy that the patients used to treat their motor symptoms. The L-dopa therapies, the dopamine agonist therapy.

NUPLAZID has the great advantage that it does not touch the dopamine receptor. It blocks the 5-HT2A receptor, different receptor, which is really responsible for the visual hallucinations of these patients and for the delusions.

We have demonstrated very attractive profile of NUPLAZID in a pivotal study, the [-020] study where we saw highly significant antipsychotic activity. Very nice effect on motoric tolerability; it was just the same as placebo. We saw improvements in [sleep], improvements in daytime wakefulness, and we saw a decrease in caregiver burden, importantly.

This was a 200-patient study which was designed to really minimize placebo responses because we wanted to give the drug a big chance of really showing its efficacy. So we introduced a number of things in the study to minimize placebo response. We compared placebo -- one placebo arm with 40 milligrams of pimavanserin we treated patients for six weeks and we got outstanding results.

These are the data on the primary endpoints and psychotic activity as measured by the SAPS-PD scale, which is a scale that reflects psychosis specifically in Parkinson's patients. As you can see in blue the reduction in psychosis in the patients on 40 milligrams of NUPLAZID and in yellow the patients on placebo. So the effect at six weeks was highly significant and clinically meaningful, which is important to mention. And we also saw a similar kind of good effect after four weeks of therapy.

Now this was measured using one scale and one type of assessors, in fact, centrally-placed raters that interviewed caregivers and patients independently of the site through a video link. We also asked the investigators to assess the psychosis independent of the centralized raters and they assess the psychosis using the CGI scale. And you can see that also there we had a highly significant effect of NUPLAZID.

So regardless how we measured the psychosis improvement and who measured it, we still got very, very strong data and I think that is one of the reasons why the FDA feels so positively on this study.

Another important outcome of the study was that the outcome was not driven only by effects on hallucinations or delusions, but by both components of the psychosis as you can see on the SAPS H and SAPS D components of the SAPS-PD scale.

We had a key secondary endpoint in the study and that was to demonstrate that we did not have any worsening of motor symptoms of patients on NUPLAZID compared to placebo. And we didn't, as expected, because we do not interfere or interact with the dopamine D2 receptor. So this treatment with NUPLAZID allows for maintained motor function which is something that we believe neurologists appreciate a lot.

We also asked the patients to rate the effects on sleep. You can see on the left-hand side that we saw a significant improvement in nighttime sleep and this was, by the way, expected, because NUPLAZID allows you to sleep deeper. It's not a sedating agent, so it doesn't help you to go to sleep, but when you fall asleep you sleep better, you sleep deeper. You don't wake up at night.

And we also saw a corresponding improvement in daytime wakefulness, another important characteristic of NUPLAZID therapy, because Parkinson patients tend to suffer from excessive sleepiness. So this is another beneficial effect of NUPLAZID.

What, in my opinion, was perhaps the most impressive outcome of the study was the reduction in caregiver burden that we observed. So caregiver burden was assessed by the caregivers themselves and you can see here that after six weeks we had a highly significant reduction in caregiver burden, something that we believe may be possible to translate into delayed time to nursing home placement. Recall that PDP is the major reason why Parkinson patients have to go to nursing homes.

Of course, the health economical benefits can be translated into dollars and euros depending on what you're talking about in terms of market. We also have generated a very impressive long-term safety database through open-label studies where some patients have been on the drug for more than nine years now.

We have more than 250 patients that have been treated for more than one year, and throughout we see a very favorable picture of safety and tolerability with this drug. It doesn't get any better than what we see with NUPLAZID. It's a complete differentiation from what you see with antipsychotic drugs in this type of old patients that are very sensitive to antipsychotics and don't seem to have at all that kind of sensitivity to NUPLAZID.

We have had very good interactions with the FDA regarding NUPLAZID throughout the years. The first key thing was that the FDA allowed us to file based on only this pivotal study that I just showed you data from, the -020 study. That's not usual. I think that in itself is rather unique for the psychiatry division of the FDA.

And, secondly, that they gave us a Breakthrough Therapy designation. Both of these decisions by the FDA are important and I think reflect their positive view of NUPLAZID and also their understanding of the severe unmet medical needs in PDP. And we are targeting NDA submission in the first quarter of next year; that's very exciting for us.

The last year we have also done a lot of work on market research trying to prepare for the commercial phase. One of the things that we have done is really to characterize the patients, the Parkinson's psychosis patients in great detail. As we have said before, about 40% of Parkinson's patients suffer from PDP and we know that the prescribers consider that about half of those patients suffer from disruptive symptoms that make them think about prescribing an atypical antipsychotic agent despite the fact that they know that these agents are unsuitable for the patients.

Our kind of statistical patient is 74 years old, is male, needs a caregiver to take care of him or her and, as you see at the bottom, about 50% are considered to have disruptive symptoms. That means that there are approaching a situation where their caregiver finds it very difficult to deal with them.

We have interviewed the doctors who treat Parkinson's patients and asked them what do you think about your current treatment options. And they have said that they have a number of concerns related to safety, tolerability, the black box warning, which is there because of the known fact that the current antipsychotics increase the mortality and the morbidity of the patients. And also they worry about the potential impact on the motor control and they use antipsychotic agents because of their dopaminergic activity.

When we asked them what kind of profile would you like to see in an ideal drug therapy for Parkinson's psychosis, they provide attributes which are really very similar to what we see with NUPLAZID. So we think that we will be able to provide a product which is what the doctors really want to prescribe.

There are about 11,000 physicians that treat PDP. The largest group are neurologists, but there are also a fair amount of psychiatrists that are involved in prescribing drugs for PDP today. About 20% of the PDP patients are in long-term care, so long-term care prescribers are also a group that we want to target with our sales force.

We have done a lot of payer research as well. The payers we have interviewed represent about -- payers that cover about half of the American population and when we present NUPLAZID's product profile to them, they really like it. You can see they obviously like the reduction in psychosis. They like the safety and tolerability profile, but we don't worsen the motor function. And they also appreciate the reduction in caregiver burden that we saw in the -020 study.

We're currently building out a commercial organization. We will obviously not hire the salesforce itself until we have approval of NUPLAZID, but we know that we were hire 135 people, that that will cover the prescribers really well. So those will be focused on: neurologists, psychiatrists and those prescribers that are relevant for the long-term care.

We have done a lot of work and we think that we really have done sufficient work to ensure that we are preparing just right to successfully launch NUPLAZID when we get approval.

So we -- that's an exciting phase for ACADIA. We are transitioning from having been an R&D company to more of a commercial organization, and it's an excitement -- an exciting journey for all of us.

One of the things that we will start as the result of the commercial group's effort -is a disease awareness campaign that will start early next year and will focus very much on disease education, disease awareness. We think that's quite important and it will be focused primarily on prescribers.

Now one reason why we are so excited about NUPLAZID is, of course, that we don't see only PDP as an indication in the future. We see a much broader range of indications. We obviously see Alzheimer's psychosis as the next indication because we are conducting this Phase 2 study with Alzheimer's patients having psychosis. This is a 3 to 5 times larger indication than PDP.

We have many other indications in the neurology area with patients that suffer from psychosis. One special one is Lewy body dementia psychosis, but we also see multi-infarct dementia psychosis, etc., etc. Throughout the neurology area there is the need for an acceptable therapy for the psychosis that these patients tend to develop, so very exciting future for our efforts with NUPLAZID.

Alzheimer's disease is, obviously, larger indication than Parkinson's disease and about 25% to 50% of the Alzheimer's disease patients suffer from psychosis and there are about 5 million Alzheimer's patients only in the US. That's an increasing number, by the way, as I'm sure you're aware.

Just like PDP there is no drug approved for ADP. There is major unmet medical need. Symptoms are pretty similar. The ADP patients, just like the PDP patients, tend to have visual hallucinations which really link the psychosis to the 5-HT2A receptor and we are very excited about being in a Phase II study for ADP.

This is a study where we compare 40 milligrams of pimavanserin with placebo. We are looking at a range of behavioral symptoms in this study including psychosis, but also agitation, anxiety, aggression, sleep, activities of daily living, and cognition, because we believe that we can demonstrate in this study that in contrast to the antipsychotics, we will not worsen cognition in these patients.

So we are very excited about the study; it's about 200 patients. We started this study late last year and we expect that it will take around two years to study. Exciting data and we think that -- because of the design of the study and the scales we use in the study, we may be able to capture additional benefits of pimavanserin.

In addition to the antipsychotic effects and the sleep benefits, there may be something else there. That's what we hear anecdotally from our long-term studies and we may be able to catch those additional benefits in this study as well.

Schizophrenia is another area where we have lots of hope for pimavanserin. It's an area where there is the need for better therapies that do not negatively impact cognition, that are more tolerated for the patients. We have already Phase II data that demonstrate that when we combine pimavanserin with a low sub-therapeutic dose of risperidone, we get a fully effective antipsychotic therapy with better side effects than you see of the traditional risperidone dose.

What we want to explore further is the use of pimavanserin as a stand-alone therapy for maintenance treatment of schizophrenia. And we are planning to conduct such a study in the second half of next year or to initiate such a study in the second half of next year. We think that's the optimal way of clearly differentiating the effects of pimavanserin in this population from that of the antipsychotic drugs that are used currently and which are poorly tolerated, which suffer from really bad compliance.

And, therefore, we expect to have a delayed time to relapse in patients treated with pimavanserin as a standalone therapy -- maintenance therapy.

Few words about ACADIA. We are based in San Diego. We are still small, but we have doubled the size in the last year and the year before that. And we will probably double the size next year as well, in particular when we add the salesforce.

We have an attractive cash position. The end of the third quarter we had $338 million in cash, so we expect to have more -- well over $300 million at the end of this year and that will take us comfortably through the launch period with NUPLAZID.

Just to summarize our key upcoming priorities, obviously to complete and submit the NDA in the first quarter next year is our key target, but also to ensure that we are prepared for a successful launch. We also want to start further explore the lifecycle of pimavanserin.

We have the ongoing ADP study; we will start the schizophrenia study. Next year we will start the sleep study in the first half of next year and we will plan for additional studies to cover additional indications for the drug. Finally, we will submit market application for NUPLAZID to the EMA six to nine months following the submission of the NDA to the FDA.

So that completes my presentation and I am happy to take any kind of questions you may have.

Questions and Answers

UNIDENTIFIED AUDIENCE MEMBER: Could you tell us what differentiates psychosis in Parkinson's patients from Alzheimer's patients?

ULI HACKSELL: The psychoses are in fact quite similar and very different from the psychosis in schizophrenia. So the most -- the visual hallucination is something that's very similar, both PDP and ADP patients see things that don't exist. They also have paranoid delusions; it's very common.

Both conditions are very different from the psychosis that we see in schizophrenia where, for example, the most common hallucination is auditory, so people hear voices rather than to see things that don't exist. Now Alzheimer's patients also have numerous other behavioral disturbances, but the psychosis is very similar to the PDP and that's one of the reasons why we believe strongly that we will be effective in treating the ADP psychosis as well.

UNIDENTIFIED AUDIENCE MEMBER: A follow-up question. Would you venture that when the drug is approved for Parkinson's patients because of the strong beneficial effects, that it would also be used off-label for schizophrenia and for Alzheimer's patients?

ULI HACKSELL: Yes, so we do not comment -- we cannot comment on off-label use of NUPLAZID for drugs outside of PDP. Obviously, we are not going to promote NUPLAZID for anything else but PDP. When we get approval for ADP in schizophrenia, then we start promoting for that indication. And we -- so our apology, we don't comment on off-label use of the drug.

UNIDENTIFIED AUDIENCE MEMBER: A question on the safety profile. Obviously, right now antipsychotics is used often, even though it's not supposed to. But just from the caretaker/practitioner point of view, can they really see the difference in terms of safety, how the patient behaves, compared to antipsychotics?

ULI HACKSELL: Well, statistically it's very easy because you see an increase in mortality in patients that are on antipsychotics. And we have, in fact, presented a poster last year which clearly demonstrated the tremendous difference in both death rates and in SAEs between antipsychotics in this type of population and what we see with NUPLAZID. So it's a big, big difference.

When it comes to the specific side effects of antipsychotics, that's something that the caregiver and the patient obviously observed, first of all. You think about the PDP thing that the drugs that are used currently -- Seroquel, predominantly, but also other atypical antipsychotics -- they have already been demonstrated not to be effective in controlled clinical trials.

So effectiveness is one major problem; sedation is the second problem that is very, very clear when you use these agents. I think caregivers, doctors, patients will see a big difference between NUPLAZID therapy and the current off-label use of antipsychotics.

UNIDENTIFIED AUDIENCE MEMBER: Okay. Then a cognitive aspect. In the PDP trial, did you see a -- did you look out for the cognitive effect of the drug?

ULI HACKSELL: We did not look at cognition in that study, but we are obviously looking for that in the ADP study. What we have seen preclinically is no effect -- no negative effect on cognition. We have seen indications of a synergistic effect between cholinesterase inhibitors and NUPLAZID, or pimavanserin, in animal experiments, but the reality is that we don't expect to see any negative impact on cognition. Maybe a positive impact, but that's something that remains to be seen.

UNIDENTIFIED AUDIENCE MEMBER: Okay. So the ADP study, that's going to have data the end of 2015/early 2016 timeframe, or --?

ULI HACKSELL: Yes, as I said, when we -- about the two-year study from the initiation which was late last year.

UNIDENTIFIED AUDIENCE MEMBER: Okay.

YIGAL NOCHOMOVITZ: Uli, if I could just ask one question. On the SAPS-PD scale, could you just share with us a little more detail on what that scale measures and what aspects of the scale -- where did you see the most benefit on that scale from pimavanserin? Thanks.

ULI HACKSELL: I don't have a slide on that, but -- so the SAPS scale itself, the H and D domains of the SAPS scale was developed for schizophrenia and it consisted of 20 different items. We focused in on the items in the SAPS-PD scale which are really related to PD psychosis, and those include visual hallucinations predominantly but also some other hallucinations.

But when you look at the items we have, you see paranoid delusions, you see visual hallucinations, you see some other hallucinations, and you see something called the global assessment of hallucinations and delusions as well. So these are the things that really come out important in the SAPS-PD scale.

YIGAL NOCHOMOVITZ: And one other question the audience might be interested in. Do you have any expectations for an FDA panel for -- following your application?

ULI HACKSELL: We do expect to have the panel, simply because of the fact that nothing has been approved for this indication before, so we do expect that and we plan and prepare for a panel.

YIGAL NOCHOMOVITZ: Okay, great. Thank you very much.

ULI HACKSELL: Thank you.

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