Q4 2016 Real-Time Call Brief

Highlights

We continue to see solid growth and uptake of NUPLAZID and reported fourth quarter net sales of $12 million and $17.3 million for the full year 2016.

As we now started for this year, we're expanding our sales force from 133 to around 155 reps.

We estimated based on scientific literature that AD psychosis supports approximately 25% to 50% of patients diagnosed with Alzheimer's Disease.

For the fourth quarter of 2016, we generated net product sales of $12.0 million, with a growth to net percentage in the low 20s.

Total operating expenses including cost of goods sold for the fourth quarter of 2016 were $90.2 million.

R&D expenses for the quarter increased to $30.2 million from $20.5 million in the fourth quarter of 2015.

SG&A expenses increased to $57.7 million for the fourth quarter from $22.6 million in the fourth quarter of 2015.

For the fourth quarter, cash used in operations was approximately $63 million and we ended 2016 with $529 million in cash and investment securities on our balance sheet.

We expect our gross to net percentage in Q1 to be in the high 20% range, which should be the highest percentage for the year.

In terms of the expenses for the first quarter of 2017, we expect our R&D expense to be in the high $30 million and our SG&A expense to be in the high $60 million range as we continue to invest in the life cycle management of primavanserin and the NUPLAZID launch.

In terms of prescriber mix to-date, about two-thirds of our prescribers are neurologists, a little less than 15% are psychiatrists, and the remainder are nurse practitioners and physicians' assistants supporting these decisions.

Moving on to NUPLAZID brand performance in the market; we are pleased to see brand awareness continue to increase with unaided awareness going from 62% of September to 74% in December, and aided awareness increasing 76% to 88% over the same time period.

Currently, NUPLAZID prescriptions are approximately 70% switches from current therapy and approximately 30% are treatment of naive patients.

NUPLAZID is our Medicare formularies, coverage of NUPLAZID by commercial insurance plans increased from 35% to over 60% of covered lives and continues to grow.

Our payer mix has filled out 75% Medicare, 15% to 20% commercial and the remaining 5% to 10% VA, Tricare and Medicaid.

It is a 26-week randomized double-blind placebo-controlled multi-center study with a flexible dosing regimen between 10 and 34 milligram primavanserin.