What changed in this filing

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Item 1. Legal Proceedings

2024-11-07 compared with 2024-08-07 · 116 added, 79 removed, 1000 unchanged (16% of the section changed)

15 unchanged sentences

If this approach ceases to be effective, our commercialization of NUPLAZID and DAYBUE may be adversely affected, and NUPLAZID and DAYBUE may not be profitable.

• If we do not obtain regulatory approval of trofinetide outside the U.S.

or for indications in addition to Rett syndrome, we will not be able to market trofinetide outside the U.S.

or for other indications in the U.S., which will limit our commercial revenues.

• If we do not obtain regulatory approval of trofinetide outside North America or for indications in addition to Rett syndrome, we will not be able to market trofinetide outside North America or for other indications in North America, which will limit our commercial revenues.

• If we are unable to effectively train and equip our sales forces, our ability to successfully commercialize NUPLAZID and DAYBUE will be harmed.

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To the extent we cannot maintain or increase sales of NUPLAZID or DAYBUE, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline.*

In March 2023, we announced FDA approval of DAYBUE for the treatment of Rett syndrome in adult and pediatric patients two years of age and older, and DAYBUE became available for prescription in the United States in April 2023.

In March 2023 and October 2024, we announced FDA and Health Canada approval, respectively, of DAYBUE for the treatment of Rett syndrome in adult and pediatric patients two years of age and older, and DAYBUE became available for prescription in the United States in April 2023.

NUPLAZID has been approved in the U.S.

6 unchanged sentences

The continued commercial success of NUPLAZID and DAYBUE currently depends on the extent to which patients, caregivers and physicians recognize and diagnose the indications for which NUPLAZID and DAYBUE are approved and accept and adopt NUPLAZID and DAYBUE as a treatment for such indications, and we do not know whether our or others’ estimates in this regard will be accurate.

In addition, we have changed the price of NUPLAZID in the past, and in the future we may change the price of NUPLAZID and DAYBUE from time to time.

In addition, we have changed the price of NUPLAZID and DAYBUE in the past, and in the future we may change the price of NUPLAZID and DAYBUE from time to time.

Physicians may not prescribe NUPLAZID or DAYBUE and patients may be unwilling to use NUPLAZID or DAYBUE, due to a number of factors, including if coverage is not provided, coverage changes in the future, reimbursement is inadequate to cover a significant portion of the cost, perception of each product’s clinical profile and clinical benefits or due to the prevalence and severity of any adverse side effects.

1 unchanged sentence

Thus, significant uncertainty remains regarding the commercial potential of DAYBUE.

Additionally, any negative publicity related to NUPLAZID or DAYBUE, or negative development in our post-marketing requirements with respect to DAYBUE, in clinical development of DAYBUE in additional indications or in regulatory processes in other jurisdictions, may adversely impact our commercial results and potential of NUPLAZID or DAYBUE.

Additionally, any negative publicity related to NUPLAZID or DAYBUE, or negative development in our PMRs with respect to DAYBUE, in clinical development of DAYBUE in additional indications or in regulatory processes in other jurisdictions, may adversely impact our commercial results and potential of NUPLAZID or DAYBUE.

Thus, significant uncertainty remains regarding the commercial potential of NUPLAZID and DAYBUE.

6 unchanged sentences

The “boxed ” warning may discourage physicians from prescribing NUPLAZID to patients diagnosed with PDP, including those with dementia.

In connection with the FDA approval of DAYBUE, we agreed to the following post marketing requirements (PMRs):

In connection with the FDA approval of DAYBUE, we agreed to the following PMRs:

a clinical study of renal impairment in healthy volunteers, nonclinical carcinogenicity studies and nonclinical in vitro and clinical in vivo drug interaction studies.

We have completed two of the five PMRs and we are awaiting FDA’s acknowledgement and acceptance of those completed PMRs.

The results of any post-marketing study may cause the FDA to update the label and/or cause the FDA to request additional studies or require risk mitigation plans.

FDA has released us from one of the five PMRs.

In addition, we have fulfilled one of the five PMRs.

Of the remaining three PMRs, we have also completed one and we are awaiting FDA’s acknowledgement and acceptance of that completed PMR.

The results of any post-marketing study may cause the FDA to update the label, request additional studies and/or require risk mitigation plans.

The manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for NUPLAZID and DAYBUE will also continue to be subject to extensive and ongoing regulatory requirements.

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sales forces or any future sales forces in jurisdictions outside the U.S., or maintain and, if needed, expand, our network of third-party specialty distributors and specialty pharmacies, our ability to continue commercializing NUPLAZID and DAYBUE would be limited, and NUPLAZID and DAYBUE may not be profitable.

If we do not obtain regulatory approval of trofinetide outside the U.S.

or for indications in addition to Rett syndrome, we will not be able to market trofinetide outside the U.S.

or for other indications in the U.S., which will limit our commercial revenues.*

If we do not obtain regulatory approval of trofinetide outside North America or for indications in addition to Rett syndrome, we will not be able to market trofinetide outside North America or for other indications in North America, which will limit our commercial revenues.*

While trofinetide was approved in 2023 in the U.S.

by the FDA for the treatment of Rett syndrome in adult and pediatric patients two years of age and older, it has not been approved by the FDA for any other indications, and it has not been approved in any other jurisdiction for this indication or for any other indication.

by the FDA, and in October 2024 in Canada by Health Canada, for the treatment of Rett syndrome in adult and pediatric patients two years of age and older, it has not been approved by the FDA or Health Canada for any other indications, and it has not been approved in any other jurisdiction for this indication or in any other jurisdiction for any other indication.

In order to market trofinetide for other indications or in other jurisdictions, we must obtain regulatory approval for each of those indications and in each of the applicable jurisdictions, and we may never be able to obtain such approval.

For example, we announced in April 2024 that Health Canada accepted for filing our New Drug Submission with respect to trofinetide for the treatment of Rett syndrome;

however, we may still never receive approval to market in Canada.

Approval of DAYBUE by the FDA for the treatment of Rett syndrome does not ensure that DAYBUE will be approved by the FDA for any other indication.

Approval of DAYBUE by the FDA or Health Canada for the treatment of Rett syndrome does not ensure that DAYBUE will be approved by the FDA or Health Canada for any other indication.

For example, although pimavanserin was approved in 2016 in the U.S.

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This will require additional time, expertise and expense, including the potential need to conduct additional studies or development work for other jurisdictions beyond the work that we have conducted to support our existing approvals for DAYBUE.

If we do not receive marketing approval for DAYBUE for any other indication, we will never be able to commercialize DAYBUE for any other indication in the U.S.

receive marketing approval for DAYBUE in other jurisdictions, we will never be able to commercialize DAYBUE in other jurisdictions.

If we do not receive FDA or Health Canada

marketing approval for DAYBUE for any other indication, we will never be able to commercialize DAYBUE for any other indication in the U.S.

If we do not receive marketing approval for DAYBUE in other jurisdictions, we will never be able to commercialize DAYBUE in other jurisdictions.

Even if we do receive additional regulatory approvals, we may not be successful in commercializing those opportunities.

1 unchanged sentence

If we are unable to effectively train and equip our sales forces, our ability to successfully commercialize NUPLAZID and DAYBUE will be harmed.*

NUPLAZID is the first drug approved by the FDA for the treatment of hallucinations and delusions associated with PDP, and DAYBUE is the first drug approved by the FDA for the treatment of Rett syndrome.

As a result, we are and will continue to be required to expend significant time and resources to train our sales forces to be credible, persuasive, and compliant with applicable laws in marketing NUPLAZID and DAYBUE to physicians and healthcare providers, and for NUPLAZID, long-term care facilities and other healthcare providers, as appropriate.

We are and will continue to be required to expend significant time and resources to train our sales forces to be credible, persuasive, and compliant with applicable laws in marketing NUPLAZID and DAYBUE to physicians and healthcare providers, and for NUPLAZID, long-term care facilities and other healthcare providers, as appropriate.

In addition, we must ensure that consistent and appropriate messages about NUPLAZID and DAYBUE are being delivered to our potential customers by our sales forces.

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If we fail to gain the acceptance of patients, caregivers and physicians, or if our estimates are inaccurate, these events could negatively impact our business, results of operations, financial condition and prospects.

Our ability to generate product revenues will be diminished if coverage for our products from payors is decreased or if patients have unacceptably high co-pay amounts.

Our ability to generate product revenues will be diminished if coverage for our products from payors is decreased or if patients have unacceptably high out-of-pocket requirements.*

Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors, including governmental healthcare programs, such as Medicare and Medicaid, managed care organizations and commercial payors, among others, to reimburse all or part of the costs associated with their prescription drugs.

Coverage and adequate reimbursement from third-party payors is critical to product acceptance.

Coverage and adequate reimbursement from third-party payors are critical to product acceptance.

Coverage decisions may depend upon clinical and economic standards that disfavor drug products when lower cost therapeutic alternatives are already available or subsequently become available.

Even with coverage for NUPLAZID, DAYBUE or other products we may market, the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high.

Even with coverage for NUPLAZID, DAYBUE or other products we may market, the resulting reimbursement payment rates might not be adequate or may require out-of-pocket obligations, such as deductibles and co-pay or coinsurance payments, that patients find unacceptably high.

Patients may not use NUPLAZID and DAYBUE if coverage is not provided or reimbursement is inadequate to cover a significant portion of its cost.

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Also, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access to a branded drug when a less costly alternative is available, even if not approved for the indication for which NUPLAZID and DAYBUE are approved.

Third-party payors, whether governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs.

Third-party payors, whether governmental or commercial, whether in the U.S.

or globally, are developing increasingly sophisticated methods of controlling healthcare costs.

The current environment is putting pressure on companies to price products below what they may feel is appropriate.

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Further, one payor’s determination to provide coverage and reimbursement for a product does not ensure that other payors will also provide coverage and reimbursement for the product.

Therefore, coverage and reimbursement for NUPLAZID and DAYBUE may differ significantly from payor to payor.

Therefore, coverage and reimbursement for NUPLAZID and DAYBUE in the U.S.

may differ significantly from payor to payor.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of NUPLAZID and DAYBUE to each payor separately, with no assurance that coverage will be obtained.

1 unchanged sentence

Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

If we are unable to obtain coverage of, and adequate payment levels for, NUPLAZID, DAYBUE or any other products we may market to third-party payors, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them.

In most international markets, where the government is the primary payor, manufacturers must operate in an environment of government-directed cost-containment programs – designs such as price controls, international reference pricing, mandatory discounts and rebates, regulatory hurdles and restrictions on physician-level prescribing.

In these markets, healthcare services and determination of a product’s pricing and reimbursement are impacted by government control.

So, for present and future considerations, if we are unable to obtain coverage of, and adequate payment levels for, NUPLAZID, DAYBUE or any other products we may market to third-party payors, physicians may limit how much or under what circumstances they will prescribe or administer them and patients may decline to purchase them.

This in turn could affect our ability to successfully commercialize NUPLAZID, DAYBUE or any other products we may market, and thereby adversely impact our profitability, results of operations, financial condition, and future success.

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We are currently undertaking ongoing development work for trofinetide.

In the event of approval for additional indications or in jurisdictions outside the U.S., we would need to add significant resources, in order to further commercialize trofinetide, and to conduct the necessary sales and marketing activities, and to conduct further development activities.

In the event of approval for additional indications or in jurisdictions outside North America, we would need to add significant resources, in order to further commercialize trofinetide, and to conduct the necessary sales and marketing activities, and to conduct further development activities.

With respect to NUPLAZID, our current strategy is to continue to commercialize NUPLAZID for the treatment of hallucinations and delusions associated with PDP in the U.S.

using our specialty sales force that are focused on promoting NUPLAZID to physicians who treat PDP patients, including neurologists, psychiatrists and long-term care physicians.

With respect to DAYBUE, our current strategy is to continue to commercialize DAYBUE for the treatment of Rett syndrome in the U.S.

and other jurisdictions in which DAYBUE may be approved, if any, using our specialty sales force focused on promoting DAYBUE to physicians who treat Rett syndrome patients, including those at Centers of Excellence, high-volume institutions and in the community setting.

In selected markets outside of the U.S.

With respect to DAYBUE, our current strategy is to continue to commercialize DAYBUE for the treatment of Rett syndrome in North America and other jurisdictions in which DAYBUE may be approved, if any, using our specialty sales force focused on promoting DAYBUE to physicians who treat Rett syndrome patients, including those at Centers of Excellence, high-volume institutions and in the community setting.

In selected markets outside the U.S.

in which DAYBUE may be approved, if any, we may choose to commercialize DAYBUE independently or by establishing one or more strategic alliances.

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Our drug development programs are at various stages of development and the historical rate of failures for product candidates is extremely high.

For example, we had an unsuccessful Phase 3 trial with NUPLAZID in 2009 and we have had several clinical studies evaluating pimavanserin in other indications that did not achieve statistical significance on certain endpoints, including the unsuccessful Phase 3 ADVANCE-2 study of pimavanserin for the treatment of the negative symptoms of schizophrenia in March 2024 and the unsuccessful Phase 2 study of pimavanserin for the treatment of irritability associated with autism spectrum disorder in pediatric populations (Pediatric Phase 2 Trial) in October 2024.

At this time, we are not planning to conduct any additional clinical studies for pimavanserin.

With the completion of the Pediatric Phase 2 Trial, we believe we have met the conditions of FDA’s written request to qualify for pediatric exclusivity for pimavanserin.

However, there is no assurance that FDA will confirm that such conditions have been met and that the pediatric exclusivity will be granted.

An unfavorable outcome in any of our ongoing or future development efforts or in the post-marketing studies for DAYBUE could be a major set-back for the programs and for us, generally.

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We are currently hiring, and in the future we expect to need to continue to hire, additional personnel as we expand our research and development efforts for pimavanserin and trofinetide, and commercial activities for NUPLAZID and DAYBUE.

We face competition for experienced management, scientists, clinical operations personnel, commercial and other personnel from numerous companies and academic and other research institutions across the U.S.

and other jurisdictions in which DAYBUE may be commercialized, if approved.

Many of the other biotechnology and pharmaceutical companies with whom we compete for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than we do.

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Some of these characteristics may be more appealing to high quality candidates than that which we have to offer.

If we are unable to continue to attract and retain high quality personnel, the rate and success at which we can develop and commercialize products and product candidates, if approved, will be limited.

If we are unable to continue to attract and retain high quality personnel, the rate and success at which we can

develop and commercialize products and product candidates, if approved, will be limited.

If we are unable to attract and retain the necessary personnel, it will significantly impede our commercialization efforts for NUPLAZID and DAYBUE, and the achievement of our research and development objectives.

In September 2024, Catherine Owen Adams became our new CEO, replacing our former CEO, Stephen R.

Our new CEO will be critical to executing on and achieving our strategy.

Further, our new CEO may bring different perspectives, and the future strategy and direction of our business may differ materially from those of the past.

If we are unable to execute an orderly transition and successfully integrate our new CEO into our leadership team, we may experience material disruptions to our operations and our financial condition and results of operations may be adversely affected.

All of our employees are “at will” employees, which means that any employee may quit at any time and we may terminate any employee at any time.

We do not carry “key person” insurance covering members of senior management.

If we receive approval of NUPLAZID or DAYBUE in additional indications or in jurisdictions outside the U.S., we may need to continue to increase the size of our organization.

If we receive approval of NUPLAZID or DAYBUE in additional indications or in additional jurisdictions, we may need to continue to increase the size of our organization.

We may encounter difficulties with managing our growth, which could adversely affect our results of operations.*

As of June 30, 2024, we employed approximately 630 employees.

As of September 30, 2024, we employed approximately 620 employees.

Our current infrastructure may be inadequate to support our development and commercialization efforts and expected growth.

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As a result, we will incur a variety of costs in connection with an acquisition and may never realize its anticipated benefits.

Moreover, any product candidate we identify, select and acquire or license may require additional, time-consuming development or regulatory efforts prior to commercial sale, including preclinical studies, if applicable, and extensive clinical testing and approval by the FDA and applicable foreign regulatory authorities.

Moreover, any product candidate we

identify, select and acquire or license may require additional, time-consuming development or regulatory efforts prior to commercial sale, including preclinical studies, if applicable, and extensive clinical testing and approval by the FDA and applicable foreign regulatory authorities.

All product candidates are prone to the risk of failure that is inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and/or effective for approval by regulatory authorities.

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We have experienced significant net losses since our inception.

As of June 30, 2024, we had an accumulated deficit of approximately $2.4 billion.

As of September 30, 2024, we had an accumulated deficit of approximately $2.3 billion.

We expect to increase our expenses and other investments in the coming years as we fund our operations, in-licensing or acquisition opportunities, and capital expenditures.

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We have consumed substantial amounts of capital since our inception.

Our cash, cash equivalents, and investment securities totaled $500.9 million at June 30, 2024.

Our cash, cash equivalents, and investment securities totaled $565.3 million at September 30, 2024.

While we believe that our existing cash resources will be sufficient to fund our cash requirements through at least the next twelve months, we may require additional financing in the future to continue to fund our operations.

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• the costs of establishing, or contracting for, sales and marketing capabilities for our product candidates, if approved;

• the amount of U.S.

product sales from NUPLAZID and DAYBUE;

• the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions other than the U.S.

and in additional indications other than Rett syndrome, and for our product candidates, as well as the costs required to support review of such applications;

• the costs of manufacturing and distributing NUPLAZID and DAYBUE for commercial use in the U.S.;

• our ability to obtain regulatory approval for, and subsequently generate product sales from DAYBUE in jurisdictions other than the U.S.

or in additional indications other than Rett syndrome, our early-stage pipeline programs and any product candidates, if approved;

• the amount of product sales from NUPLAZID and DAYBUE;

• the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions outside North America and in additional indications other than Rett syndrome, and for our product candidates, as well as the costs required to support review of such applications;

• the costs of manufacturing and distributing NUPLAZID and DAYBUE for commercial use;

• our ability to obtain regulatory approval for, and subsequently generate product sales from DAYBUE in jurisdictions outside North America or in additional indications other than Rett syndrome, our early-stage pipeline programs and any product candidates, if approved;

• the costs of acquiring additional products, product candidates or research and development programs;

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In the past, periods of turmoil and volatility in the financial markets have adversely affected the market capitalizations of many biotechnology companies, and generally made equity and debt financing more difficult to obtain.

For example, as a result of geopolitical and macroeconomic developments,

the global credit and financial markets have experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

For example, as a result of geopolitical and macroeconomic developments, the global credit and financial markets have experienced extreme volatility and disruptions, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability.

These events, coupled with other factors, may limit our access to additional financing in the future.

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• the success of our commercialization of NUPLAZID in the U.S.

for the treatment of hallucinations and delusions associated with PDP and DAYBUE in the U.S.

for the treatment of Rett syndrome;

for the treatment of hallucinations and delusions associated with PDP and DAYBUE in North America for the treatment of Rett syndrome;

• the impact of geopolitical and macroeconomic developments, general political, health and economic conditions, as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and supply chain, pandemics or epidemics, economic slowdowns, recessions, inflation, high interest rates and tightening of credit markets on our business;

• the status and cost of our post-marketing requirements for DAYBUE;

• the status and cost of our PMRs for DAYBUE;

• the variation in our gross-to-net adjustments from quarter to quarter, primarily because of the fluctuation in our share of the donut hole for Medicare Part D patients;

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From time to time, we provide guidance relating to our expectations for net sales of NUPLAZID and DAYBUE and certain expense line items based on estimates and the judgment of management.

If, for any reason, our actual net sales or expenses differ

materially from our guidance, we may have to revise our previously announced financial guidance.

If, for any reason, our actual net sales or expenses differ materially from our guidance, we may have to revise our previously announced financial guidance.

If we change, update or fail to meet any element of such guidance, our stock price could decline.

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Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Similarly, a taxing authority could assert that we are subject to tax in a jurisdiction where we believe we have not

established a taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Similarly, a taxing authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.*

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A severe or prolonged global economic downturn could result in a variety of risks to our business.

For example, inflation rates, particularly in the United States, have increased recently to levels not seen in years, and increased inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital on acceptable terms, if at all.

For example, high inflation may result in increases in our operating costs (including our labor costs), reduced liquidity and limits on our ability to access credit or otherwise raise capital on acceptable terms, if at all.

In addition, the U.S.

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We cannot estimate these delays or costs with certainty but, if they were to occur, they could cause a delay in our development and commercialization efforts, which would have a negative effect on our business, results of operations, financial condition and prospects.

limited control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel to ensure compliance with cGMPs.

The manufacturers of NUPLAZID, DAYBUE and any other product candidates, including Patheon, Siegfried, Corden, FIS and CoreRx, are obliged to operate in accordance with FDA-mandated current good manufacturing practices (cGMPs), and we have limited control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel to ensure compliance with cGMPs.

In addition, the facilities used by our third-party manufacturers to manufacture NUPLAZID and DAYBUE and any product candidates must be approved by the FDA pursuant to inspections that will be conducted prior to any grant of regulatory approval by the FDA.

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For a more detailed description of these matters, see section captioned “Legal Proceedings” elsewhere in this report.

While we intend to defend the validity of such patents vigorously, and will seek to use all appropriate methods to prevent their infringement, such efforts

are expensive and time consuming.

While we intend to defend the validity of such patents vigorously, and will seek to use all appropriate methods to prevent their infringement, such efforts are expensive and time consuming.

Any substantial decrease in the revenue and income derived from NUPLAZID or DAYBUE would have an adverse effect on our results of operations.

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While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and

failure to properly legalize and submit formal documents.

In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

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In addition, U.S.

patent laws may

change which could prevent or limit us from filing patent applications or patent claims to protect our products and/or technologies or limit the exclusivity periods that are available to patent holders.

patent laws may change which could prevent or limit us from filing patent applications or patent claims to protect our products and/or technologies or limit the exclusivity periods that are available to patent holders.

For example, the America Invents Act (2012) included a number of significant changes to U.S.

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Department of Health and Human Services (HHS) released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform.

The plan sets

out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

The plan sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

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These provisions take effect progressively starting in fiscal year 2023.

On August 29, 2023, HHS announced the list of the first ten drugs that will be subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

It is unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

On August 15, 2024, HHS announced the agreed-upon reimbursement prices of the first ten drugs that were subject to price negotiations, although the Medicare drug price negotiation program is currently subject to legal challenges.

HHS will select up to fifteen additional drugs covered under Part D for negotiation in 2025.

Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Centers for Medicare and Medicaid Services (CMS) Innovation Center which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

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If any of the above occur, it could adversely affect our ability to operate our business and our results of operations.

In addition, the approval and commercialization of NUPLAZID, DAYBUE or any product candidates that may be

approved, outside the U.S.

In addition, the approval and commercialization of NUPLAZID, DAYBUE or any product candidates that may be approved, outside the U.S.

will also likely subject us to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

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Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States,

or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including by limiting our ability to conduct clinical trial activities in Europe and elsewhere, the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including by limiting our ability to conduct clinical trial activities in Europe and elsewhere, the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data to recipients outside Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

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For example, the use of NUPLAZID for the treatment of PDP competes with off-label use of various antipsychotic drugs, including the generic drugs quetiapine, clozapine, risperidone, aripiprazole, and olanzapine.

In addition, Anavex has a product, Anavex 2-73, in development for the potential treatment of Rett syndrome and Taysha Gene Therapies is conducting clinical trials of a gene therapy to treat Rett syndrome.

Several academic institutions and pharmaceutical companies are currently conducting clinical trials for the treatment of various symptoms of Rett syndrome.

In addition, Anavex has a product, Anavex 2-73, in development for the potential treatment of Rett syndrome and Taysha Gene Therapies and Neurogene are conducting Phase 1/2 clinical trials of gene therapies to treat Rett syndrome.

Several academic institutions and pharmaceutical companies are currently conducting clinical trials for the treatment of various symptoms of Rett syndrome, including Unravel Bio and Vanderbilt University Medical Center, which are jointly conducting an early stage study with vorinostat (RVL-001).

Other competitors may have a variety of drugs in development or awaiting approval from the FDA or comparable foreign regulatory authorities that could reach the market and become established before we have a product to sell for the applicable disorder.

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The market prices for securities of biotechnology companies in general, and drug discovery and development companies in particular, have been highly volatile and may continue to be highly volatile in the future.

From the period between January 2, 2024 to July 31, 2024, the closing price of our common stock has ranged from a low of $14.62 per share to a high of $30.86 per share.

From the period between January 2, 2024 to October 31, 2024, the closing price of our common stock has ranged from a low of $14.29 per share to a high of $30.86 per share.

Furthermore, especially as we and our market capitalization have grown, the price of our common stock has been increasingly affected by quarterly and annual comparisons with the valuations and recommendations of the analysts who cover our business.

1 unchanged sentence

• the success of our commercialization of NUPLAZID in the U.S.

for the treatment of hallucinations and delusions associated with PDP and DAYBUE in the U.S.

for the treatment of Rett syndrome;

for the treatment of hallucinations and delusions associated with PDP and DAYBUE in North AMerica for the treatment of Rett syndrome;

• the status and cost of development and commercialization of our products and product candidates, if approved, including compounds being developed under our collaborations;

• whether we acquire or in-license additional product candidates or products, and the status of development and commercialization of such product candidates, if approved, or products;

• the status and cost of development and commercialization of trofinetide for indications other than Rett syndrome and in jurisdictions other than the U.S.;

• the status and cost of development and commercialization of trofinetide for indications other than Rett syndrome and in jurisdictions outside North America;

• any other communications or guidance from the FDA or other regulatory authorities that pertain to NUPLAZID, DAYBUE or our product candidates;

• the status and cost of our post-marketing requirements for DAYBUE;

• the status and cost of our PMRs for DAYBUE;

• the initiation, termination, or reduction in the scope of our collaborations or any disputes or developments regarding our collaborations;

67 unchanged sentences

This could have a material adverse effect on our ability to access funding on acceptable terms, or at all, and our stock price may suffer further as a result.

OTHER INFORMATION

Insider Trading Arrangements

No officer or director, as defined in Rule 16a-1(f) under the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Regulation S-K Item 408, during the fiscal quarter.

Entry into a Material Definitive Agreement

On November 5, 2024, we entered into an asset purchase agreement (the PRV Transfer Agreement), pursuant to which we agreed to sell a Rare Pediatric Disease PRV for $150.0 million, payable in cash, upon the closing of the sale.

Pursuant to the Joint Venture and Licence Agreement, dated July 13, 2023, with Neuren, one third of the net proceeds from the sale of the PRV will be payable to Neuren.

We were awarded the PRV under an FDA program intended to encourage the development of certain rare pediatric disease product applications.

We received the PRV when DAYBUE was approved by the FDA in March 2023 for the treatment of Rett syndrome.

The transactions contemplated by the PRV Transfer Agreement remain subject to customary closing conditions, including the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

The PRV Transfer Agreement contains customary representations, warranties, covenants and indemnification provisions subject to certain limitations.

The foregoing description of the PRV Transfer Agreement does not purport to be complete and is qualified in its entirety by the text of the PRV Transfer Agreement, a copy of which will be filed as an exhibit to our Annual Report on Form 10-K for the year ending December 31, 2024.

Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q, filed August 6, 2015).

Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K, filed February 25, 2021).

Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed September 12, 2013).

Form of common stock certificate of the Registrant (incorporated by reference to Exhibit 4.1 to Registration Statement No.

Form of Amended and Restated Warrant to Purchase Common Stock issued to purchasers in a private placement on December 17, 2012 (incorporated by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K, filed on February 27, 2019).

Executive Transition Agreement, dated September 23, 2024, by and between the Registrant and Stephen R.

Davis (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on September 23, 2024).

Employment Agreement, dated September 23, 2024, by and between the Registrant and Catherine Owen Adams (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on September 23, 2024).

Acadia Pharmaceuticals Inc.

2024 Inducement Plan (incorporated by reference to Exhibit 99.1 to Registration Statement No.

Forms of Standard Stock Option Grant Notice and Stock Option Agreement under the Acadia Pharmaceuticals Inc.

2024 Inducement Plan (incorporated by reference to Exhibit 99.2 to Registration Statement No.

Forms of Standard Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the Acadia Pharmaceuticals Inc.

2024 Inducement Plan (incorporated by reference to Exhibit 99.3 to Registration Statement No.

Forms of Standard Performance Stock Unit Grant Notice and Performance Stock Unit Agreement under the Acadia Pharmaceuticals Inc.

2024 Inducement Plan.

Certification of Catherine Owen Adams, Chief Executive Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Mark C.

Schneyer, Executive Vice President and Chief Financial Officer, pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Catherine Owen Adams, Chief Executive Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification of Mark C.

Schneyer, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The following financial statements from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed on November 6, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language), are filed herewith:

(i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements.

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

_________________

a Indicates management contract or compensatory plan or arrangement.

b The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Annual Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Acadia Pharmaceuticals Inc.

November 6, 2024

Executive Vice President and Chief Financial Officer

(on behalf of the registrant and as the registrant’s Principal Financial Officer)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings