There was a good discussion in the $ACAD earnings call on the market experience with DAYBUE. I’ll pick out some of the key messages.

• Recent months demonstrating seasonality
• Real world experience continues to outperform clinical trials
• Benefits improve over time
• 2024 Forecast considers a range of scenarios
• New market timelines are unchanged
• Culver Research report not discussed

My valuation is unchanged. (Noticing the market pullback this morning, I might do a cheeky top-up. I'm assuming the pullback is focusing on the softer recent months data and, if so, is an over-reaction.)

Details follow.

Recent months are demonstrating seasonality

Over the holiday period, a reduction in Centre-Of-Excellence (CEO) clinic-days meant that new patient prescriptions fell in December and January. Equally, with payors, there were delays to registrations and re-registrations in January as a result of holiday delays.

In terms of numbers, the number of patients has progressed as follows as a result:

• End Q3: 800
• End 2023: 900
• End-Feb: 860

$ACAD reported that with everyone back in February, they have seen a continuation of the growth trend (“snap back”), and that this seasonality has been considered in preparing the Annual FY24 guidance.

When they talk about a continuation of trend, they are referring to the "linear growth" they saw in new patients from Q3 into Q4.

I suspect that herein lies the reason to move to annual guidance. Q1 is going to be soft, and so I think $ACAD want the degree of freedom of having to report a soft 1Q number, while being able to hold to an overall longe range guidance number, with a suitably wide range as, in truth, they cannot know how the trend will continue.

 Real World Experience continues to outperform Clinical Trials

The chart below shows that Persistency (which include BOTH confirm cessations as well as refills 60-days overdue) is running at >10% ahead of the Lilac-1 CT experience. Management puts this down to the growing clinician experience and familiarly with treating patients with the drug.

In terms of their forecasting, LILAC-2 indicates 40% persistence, and so $ACAD are modelling 50% persistent at 24-months. They say this is excellent for rare disease treatment adherence. (It will be interesting to hear Jon Pilcher’s view on this in a day or so.)

Benefits Improve Over Time

LILAC-2 is showing that the benefits of taking DAYBUE continue to improve over time, now out to 24-months. This evidence supports the persistency assumptions in the forecast.

(@Nnyck777 – I think this chart is new, as it wasn’t shown at JPM Conference in January? Again, interesting to hear Jon’s interpretation.)

2024 Forecast has considered a range of scenarios

Management discussed how the 2024 guidance range of $370-$420m was developed considering many scenarios taking into account: New Starts, Persistency, and Overall Compliance.

New Markets

The plans and timeline for EU, Canada and Japan are unchanged from that presented at JPM Conference in January. Canada approval expected by year end.

At this stage they don’t expect to have to do clinical work for the EU, however, they won’t know the answer on this until the approach the EMA formally for scientific advice. That’s a key milestone to watch during the year.

Culver Research Short Report Not Discussed.

Unsurprisingly, there was no reference to the Culver Research short report. Equally, I didn’t detect any changes in the behaviour of the analysts during the Q&A. They seemed to ask and probe on the same things. Overall, I think neither management nor the investment community are giving and credence to the report.

My Key Takeaways

Overall, Daybue is progressing well. What is most encouraging is that real world experience appears significantly better than indicated by the clinical trials, and drug benefits appear to improve over time.

Valuation

I’m holding to my current valuation of $31.00.

While the 2024 guidance range is lower than my model, my downside scenarios are now looking less likely as are the highest cases. I need to do a complete rebuild of the model, as it is a bit unwieldy and complicated, and I also need to incorporate an explicit module for NNZ-2591 scenarios.

Thanks so much @mikebrisy I am missing the Acadia call and really looking forward to your views and insights. We all suspected the short report was nonsense.

After doing more research on PAA and understanding more about what a poor performance Rylevrio was having due to huge drop out rates from diarrhea the penny dropped for me. The ALS drug was touted to be a blockbuster and certainly is disappointing investors due to declining qrt sales. The diarrhea side-effect for Daybue was a golden opportunity to sew doubt given the recent events in the pharmaceutical world. I am very pleased that Acadia gave guidance, if I remember correctly they said they were unlikely to do this. However given the short attack I am pleased that they may have changed their perspective.

Thanks so much @mikebrisy I am missing the Acadia call and really looking forward to your views and insights. We all suspected the short report was nonsense.

After doing more research on PAA and understanding more about what a poor performance Rylevrio was having due to huge drop out rates from diarrhea the penny dropped for me. The ALS drug was touted to be a blockbuster and certainly is disappointing investors due to declining qrt sales. The diarrhea side-effect for Daybue was a golden opportunity to sew doubt given the recent events in the pharmaceutical world. I am very pleased that Acadia gave guidance, if I remember correctly they said they were unlikely to do this. However given the short attack I am pleased that they may have changed their perspective.