The following discussion of the financial condition and results of ouroperations should be read in conjunction with the financial statements and thenotes to those statements appearing elsewhere in this Annual Report on Form10-K.Some of the information contained in this discussion and analysis or set forthelsewhere in this report, including information with respect to our plans andstrategy for our business, includes forward-looking statements that involverisks and uncertainties. You should read the Risk Factors set forth in Item 1Aof this Annual Report on Form10-Kfor a discussion of important factors that could cause actual results to differmaterially from the results described in or implied by the forward-lookingstatements contained in the following discussion and analysis.OverviewWe are a biopharmaceutical company focused on the discovery, clinicaldevelopment and commercialization of innovative, small molecule drugs thataddress underserved medical needs primarily in neuropsychiatric and neurologicaldisorders by targeting intracellular signaling mechanisms within the centralnervous system, or CNS. In December 2019, we announced that CAPLYTA(lumateperone) has been approved by the FDA for the treatment of schizophreniain adults (42mg/day). We expect to initiate the commercial launch of CAPLYTAlate in the first quarter of 2020. In support of our commercialization efforts,we expect to deploy a national sales force consisting of approximately 240 salesrepresentatives. At the time of launch, CAPLYTA will be priced in line withother currently marketed branded antipsychotics indicated for the treatment ofschizophrenia. As used in this report, "CAPLYTA" refers to lumateperone approvedby the FDA for the treatment of schizophrenia in adults, and "lumateperone"refers to, where applicable, CAPLYTA as well as lumateperone for the treatmentof indications beyond schizophrenia.Lumateperone is also in Phase 3 clinical development as a novel treatment forbipolar depression. Our lumateperone bipolar depression Phase 3 clinical programcurrently consists of three monotherapy studies and one adjunctive study. In thefirst quarter of 2020 we initiated our third monotherapy Phase 3 study, Study403, evaluating lumateperone as monotherapy in the treatment of major depressiveepisodes associated with Bipolar I or Bipolar II disorder. We anticipatereporting topline results from Study 403 in the second half of 2021. On July 8,2019, we announced topline results from our first monotherapy study, Study 401,conducted in the U.S., and our second monotherapy study, Study 404, conductedglobally, evaluating lumateperone as monotherapy in the treatment of majordepressive episodes associated with Bipolar I or Bipolar II disorder. In Study404, lumateperone 42 mg met the primary endpoint for improvement in depressionas measured by change from baseline versus placebo on the MADRS total score(p<0.0001; effect size = 0.56). Study 401 tested two doses of lumateperone, 42mg and 28mg along with placebo. In this trial, neither dose of lumateperone metthe primary endpoint of statistical separation from placebo as measured bychange from baseline on the MADRS total score. There was a high placebo responsein this trial. Lumateperone was generally well-tolerated in both bipolardepression studies, with a favorable safety profile. The rates ofdiscontinuation due to treatment emergent adverse events for both doses oflumateperone were low. Our global study evaluating adjunctive lumateperone inbipolar depression (Study 402) is ongoing and we anticipate reporting toplineresults from this study inmid-2020.Subject to the results of Study 402 and our interactions with the FDA regardingour bipolar depression program, in late 2020 we expect to submit a supplementalnew drug application, or sNDA, to the FDA for potential regulatory approval oflumateperone for the treatment of bipolar depression.In the second quarter of 2016, we initiated Phase 3 development of lumateperonefor the treatment of agitation in patients with dementia, including AD. OurITI-007-201trial was a Phase 3 multi-center, randomized, double-blind, placebo-controlledclinical trial in patients with a clinical diagnosis of probable AD andclinically significant symptoms of agitation. In the fourth quarter of 2018, anindependent data monitoring committee, or DMC, completed apre-specifiedinterim analysis of theITI-007-201trial, and concluded that the trial was not likely to meet its primary endpointupon completion and therefore recommended the study should be stopped forfutility. As a result, we determined to discontinue theITI-007-201trial. Lumateperone was generally well 56-------------------------------------------------------------------------------- Table of Contentstolerated in theITI-007-201trial and the decision to discontinue the study was not related to safety. Weare analyzing the data set from this trial and will determine the next steps inour program following completion of this analysis.We are also pursuing clinical development of lumateperone for the treatment ofadditional CNS diseases and disorders. We believe lumateperone may have utilityfor treating agitation, aggression and sleep disturbances in diseases thatinclude dementia, AD, Huntington's disease and autism spectrum disorders. At adose of 42 mg, lumateperone has been shown effective in treating the symptomsassociated with schizophrenia, and we believe this higher dose range may meritfurther investigation for the treatment of bipolar disorder, depressivedisorders and other neuropsychiatric diseases.Within the lumateperone portfolio, we are also developing a long-actinginjectable formulation to provide more treatment options to patients sufferingfrom mental illness. Given the encouraging tolerability data to date with orallumateperone, we believe that a long-acting injectable option, in particular,may lend itself to being an important formulation choice for patients.We may investigate the use of lumateperone, either on our own or with a partner,as a treatment for agitation, aggression and sleep disturbances in additionaldiseases that include autism spectrum disorders, depressive disorder,intermittent explosive disorder,non-motorsymptoms and motor complications associated with Parkinson's disease, andpost-traumatic stress disorder. We hold exclusive, worldwide commercializationrights to lumateperone and a family of compounds from Bristol-Myers SquibbCompany pursuant to an exclusive license.We have a second major program calledITI-002that has yielded a portfolio of compounds that selectively inhibit the enzymephosphodiesterase type 1, or PDE1. PDE1 enzymes are highly active in multipledisease states and our PDE1 inhibitors are designed to reestablish normalfunction in these disease states. Abnormal PDE1 activity is associated withcellular proliferation and activation of inflammatory cells. Our PDE1 inhibitorsameliorate both of these effects in animal models. We intend to pursue thedevelopment of our phosphodiesterase, or PDE, program, for the treatment ofseveral CNS andnon-CNSconditions with a focus on diseases where excessive PDE1 activity has beendemonstrated and increased inflammation is an important contributor to diseasepathogenesis. Our potential disease targets include heart failure, immune systemregulation, neurodegenerative diseases, and othernon-CNSdisorders.ITI-214is our lead compound in this program. We believeITI-214is the first compound in its class to successfully advance into Phase 1 clinicaltrials. Following the favorable safety and tolerability results in our Phase 1program, we initiated our development program forITI-214for Parkinson's disease and commenced patient enrollment in the third quarter of2017 in a Phase 1/2 clinical trial ofITI-214in patients with Parkinson's disease to evaluate safety and tolerability in thispatient population, as well as motor andnon-motorexploratory endpoints. In the fourth quarter of 2018, we announced that thePhase 1/2 clinical trial ofITI-214has been completed and topline results demonstratedITI-214was generally well-tolerated with a favorable safety profile and clinical signsconsistent with improvements in motor symptoms and dyskinesias. In addition, inthe first quarter of 2018, the investigational new drug application, or IND,went into effect forITI-214for the treatment of heart failure. Clinical conduct of the first clinical studyin this program, a randomized, double-blind, placebo-controlled Phase 1/2 studyof escalating single doses ofITI-214to evaluate safety and hemodynamic effects in patients with systolic heartfailure, is ongoing and we anticipate reporting topline results from this studyin the first half of 2020.Our pipeline also includes preclinical programs that are focused on advancingdrugs for the treatment of schizophrenia, Parkinson's disease, AD and otherneuropsychiatric and neurodegenerative disorders. We are also investigating thedevelopment of treatments for disease modification of neurodegenerativedisorders andnon-CNSdiseases, including ourITI-333development program.ITI-333is designed as a potential treatment for substance use disorders, pain andpsychiatric comorbidities including depression and anxiety. There is a pressingneed to develop new drugs to treat opioid addiction and safe, effective,non-addictivetreatments to manage pain. Preclinical safety studies withITI-333are currently ongoing and we expect to initiate a clinical program in 2020. 57-------------------------------------------------------------------------------- Table of ContentsWe have assembled a management team with significant industry experience to leadthe discovery, development and potential commercialization of our productcandidates. We complement our management team with a group of scientific andclinical advisors that includes recognized experts in the fields ofschizophrenia and other CNS disorders.Results of OperationsThe following discussion summarizes the key factors our management believes arenecessary for an understanding of our financial statements.Discussions of year-over-year comparisons between 2018 and 2017 that are notincluded in this Form 10-K can be found in Part II, Item 7, "Management'sDiscussion and Analysis of Financial Condition and Results of Operations" ofthe Company's Annual Report on Form 10-K for the fiscal year ended December31, 2018.
Revenues
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Table of Contents
fees paid to external parties who provide us with contract services, such
as
pre-clinical
testing, manufacturing and related testing, clinical trial activities and
General and administrative expenses are incurred in three major categories:
Selling expenses are incurred in three major categories:
Total Research and Development Expenses $ 89,125$ 132,167
Total Research and Development Expenses $ 89,125$ 132,167
completion of extensive
pre-clinical
laboratory tests, animal studies, and formulation studies in accordance
submission to the FDA of a New Drug Application, or NDA, after completion
inspection of the manufacturing facility or facilities at which the active
pharmaceutical ingredient, or API, and finished drug product are produced
and tested to assess compliance with current Good Manufacturing Practices,
assure that data supporting the safety and effectiveness of product
candidates has been generated in compliance with Good Clinical Practices;
FDA review and approval of the NDA prior to any commercial marketing or
10-K.
By Period
2014-09,
2016-01,
2016-13,
2018-02,
2018-07,
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INTRA CELLULAR THERAPIES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K) - marketscreener.com
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